Photo: Zambian Watchdog President Edgar Lungu signed the Constitution of Zambia bill making a significant step on a matter that had long dominated the political life of the nation.
Photo: Zambian Watchdog President Edgar Lungu signed the Constitution of Zambia bill making a significant step on a matter that had long dominated the political life of the nation.

A ruling by the Constitutional Court that President Edgar Lungu is eligible to seek re-election in 2021 and a standoff between the government and the mining firms on a proposed new mining tax regime capped off what has been a memorable year for Zambia.

On Dec. 7, 2018, a full bench of Constitutional Court judges ruled that Lungu was eligible to contest the 2021 general elections as his first tenure did not constitute a full term of office because he only ruled for one year and six months.

The court ruled that Lungu did not serve a full term between 2015 and 2016, a ruling that makes him eligible to contest the 2021 polls, in line with the country’s constitution.

The judgment brought to an end speculations that have been swirling around that Lungu was not eligible to seek re-election as the constitution only allows for a two five-year term limit.

The matter was brought to the court by four small parties aligned to the governing party who petitioned to determine whether Lungu was eligible to seek re-election.

While Lungu and his supporters have welcomed the court decision, saying it now paves way for him to concentrate on development, opposition political parties are not pleased.

Lungu had made it clear that he wanted to seek re-election in 2021 and had warned judges after the petition was filed that there would be chaos in the country if the judges ruled against his decision to stand for re-election.

Opposition parties have accused Lungu of trying to breach the country’s constitution by seeking a third term in office and have vowed that they will not allow it to happen.
Ten opposition political parties have since decided to join forces and formed an alliance to challenge the governing party.

In a communique, the political parties, including the main opposition United Party for National Development, said they have agreed to work together in restoring fundamental human rights, liberties and freedoms that they say have been eroded by the current government.

And just before the year comes to a close, mining firms issued a statement warning that they will cut down about 21,000 jobs and reduce capital investment by about 500 million U.S. dollars if the government goes ahead with a new tax regime for the mining industry as of Jan. 1, 2019.

The new tax regime was announced by Finance Minister Margaret Mwanakatwe while unveiling the 2019 national budget.

The new regime includes raising mineral royalty rates by 1.5 percentage points and introducing a fourth-tier rate at 10 percent which applies when copper price exceeds 7,500 dollars a ton.
The measures, however, were rejected by the mining firms, who felt it will increase their cost of doing business.

The Chamber of Mines of Zambia, which represents the firms, threatened to curtail operations by cutting about 21,000 jobs and reducing capital investment if the government goes ahead with the new tax regime.

Already, Canada-headquartered First Quantum Minerals has announced that it intends to lay off 2,500 employees in the first quarter of 2019.

The government has insisted that it will go ahead with the implementation of the new taxes, accused the mines of trying arm-twisting.

However, a committee formed by the finance minister to review the situation has not yet revealed its decision, which may make or break the mining industry in Africa’s second largest copper producer.

Copper accounts for about 70 percent of Zambia’s foreign exchange earnings.

A report released by the Chamber of Mines of Zambia said more than half of the mining firms in the country will become loss-making at current copper prices if the government goes ahead with the new tax increases.

It said the situation would be even worse for gemstone producers who have an additional export duty to contend with.

Zambia entered 2018 at the height of a cholera outbreak that had broken out in August of 2017.

The waterborne disease, which was only declared over in June 2018, had not only left 114 people dead and 5,000 others sick but affected business operations during the eight-month outbreak.

Other notable events during the year include the decision by some donors to suspend aid to a major social welfare scheme after an audit reported widespread misuse of funds.

Britain and Finland froze aid amounting to about 4 million dollars for the social cash transfer scheme under which the government relays money to vulnerable households.

While the Zambian leader’s office tried to downplay the development, saying it was actually a government inquiry that unearthed the misuse and that the government would continue with the program using its own funds, analysts said it would have a negative bearing on the poor.

Donors also suspended funding to some projects in the education sector following reports of abuse of resources. Some officials in the Ministry of General Education were suspended. Enditem


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