June 6, 2002

US $50m Loan for Maize Imports - Arrest of a Journalist

The US government will lend Zambia US$50 million to import maize as part of efforts to avert starvation in the drought-hit southern African country, the agriculture minister said in the first week of June. Minister of Agriculture and Cooperatives Mundia Sikatana said the loan would help Zambia import part of a 630000-tonne maize shortfall, after food assessments showed that four million Zambians faced starvation by July. He added the interest rate on the loan would be seven percent.

President Levy Mwanawasa had declared a national food disaster, saying four million Zambians faced starvation after a mixture of natural calamities slashed Zambia's crop production to 490.000 tonnes from 700.000. Zambia's annual requirement is 1.3 million tonnes.

Zambia, which has for decades relied on copper and cobalt exports for its foreign exchange earnings, is trying to diversify its economy away from metals production to agriculture, tourism and small- and medium-size manufacturing. On June 7, it was told that Anglovaal Mining (Avmin) Limited may bid for the Roan Antelope Mining Corporation of Zambia (RAMCZ) in Luanshya and Baluba to help provide another source of metal for their Chambishi Metals cobalt processing plant. Avmin spokesperson Jullian Gwillim confirmed the intentions but said there had been no official bid made so far. "We've assessed it, we've had discussions," Gwillim said. "No formal bid has been made so far."

The two mines currently under Zambia National Commercial Bank (ZANACO) receivership have been put up for sale although there has been no official bids as yet. ZANACO took over the Baluba and Luanshya mines in year 2000 after their owner, Binani Industries Limited, failed to pay its US $10 million loan. The mines have the capacity to produce 50,000 metric tonnes of copper annually worth US $83 million at the current prices and 900 tonnes of cobalt. Avmin, one of South Africa's oldest mining companies, aims to use Chambishi to become the top supplier of cobalt which is used in steel resistant to heat. Another investment in Zambia may help revive the mining industry adversely affected by Anglo American Plc's impending withdrawal from the Konkola Copper Mines which accounts for two-fifths of the country's export income.

A day earlier, Zambian President Levy Mwanawasa has warned African countries against being in a hurry to privatise key industries. Speaking in South Africa on June 6, Mwanawasa said some industries were important to the development of African countries. He said governments should be careful in handling the privatisation process. He added the New Economic Partnership for African Development (NEPAD) should provide an opportunity for countries on the continent to solve their problems. He said NEPAD members should put the interests of their countries first. (THE FINANCIAL GAZETTE, THE POST)


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