Reuters has reportedly revealed that Zambia’s copper production had a great increase in 2020 in comparison to the previous year.compared to the previous year, citing the country’s Mines Minister Richard Musukwa. The East African nation produced 882,061 tonnes of copper in 2020 compared to 776,430 tonnes the previous year, according to the minister.
Zambia is Africa’s second-largest copper producer and according to Musukwa, the country is aiming to produce more than 900,000 tonnes of copper in 2021. Zambia has set a target to hit 1,000,000 tonnes of copper in annual production.
“The prospects for the mining sector look positive despite COVID-19,” Musukwa said, as he looks to cash in on a global shift to electronic cars, which use more copper than cars using traditional combustion engine.
Meanwhile, Zambia became the first African country to default on its debt payments to private creditors totaling $3 billion due to COVID-19. The country said its inability to honor its debt commitment is because of challenging macroeconomic and fiscal situations “aggravated by the COVID-19 crisis that has severely affected the country’s public finances.”
The Finance Ministry added that a combination of declining revenues and increase in costs out of budget caused by COVID-19 has affected its available resources to make timely payments on its indebtedness leading to increasing debt-servicing difficulties.
The country has accumulated foreign debt of $10 billion over the past decade. It was reported that the drastic fall in copper price has strained the country’s finances and stalled economic growth, which grew at an average of 6.8% between 2000 and 2014. The country’s public debt reached 80 percent of GDP in 2019 from 35 percent at the end of 2014.
Ever since the outbreak of COVID-19 and the imposition of restrictions on movement, African Finance Ministers have called for the suspension of debt interest payments for free fiscal space for critical investment in health to contain the spread of the virus.
Some African Heads of State have even called for the complete annulment s of all bilateral and multilateral debt.
According to the Mo Ibrahim Foundation, calls for debt relief are complicated by Africa’s range of creditors. Of all Africa’s external interest payments, 55% are made to private creditors while only 17% are made to multilateral institutions, with the same figure going to China.
Mo Ibrahim Foundation further noted that before COVID-19, as many as 30 African countries spent more on repaying public debt than on healthcare. The Gambia, for example, spends as much as nine times its health budget on debt servicing, while Angola and Congo spend six times.
