Zambia

Estatus EITI Progreso significativo

Joined EITI in 2009

Datos más recientes desde 2019

Latest Validation 2019

Last updated 17 February 2021

Overview

Zambia, Africa’s second-largest producer of copper, is highly dependent on mining as its major productive industry. Mining contributes to 77% of total export value, and 27.77% of government revenues according to the latest EITI reporting. Zambia has made changes to its mining taxation policies over the past decades, giving rise to much debate and discussion in the sector. In December 2018, the government recently changed its minerals tax regime for the 10th time in 16 years in an attempt to maximise both revenues and foreign investment. Zambia EITI can provide data on the country’s extractive sector to inform the tax debate as it adjusts to fluctuating commodity prices.

Tax and legal framework

Zambia’s tax regime has undergone various changes over the past years. In 2014, the government increased mining royalty rates and temporarily removed the 30% corporate income tax for mining companies with the aim of generating an immediate stream of revenue once mining production starts. This “royalty only” regime led to increased production costs for companies, did not boost government revenue, and made revenue collection more complex for revenue authorities. As a result, the government made new changes to the tax regime in 2015; royalty rate has been lowered to 9% and corporate income tax of 30% was been reintroduced. In December 2018, the government announced another raise of 1.5% on mineral royalties which came into force on 1 January 2019.

Regarding the oil and gas sector, the fundamental law governing upstream activities is the Petroleum (exploration and production) Act of 2008.

Licenses

The Director of Mines Development Department is responsible for granting mineral rights. There are two cadastre offices set up – one at the central level (to process applications for mining rights) and one at the provincial level (to forward applications to the central office). Normally, prospecting licenses are granted by the Geological Survey Department, but auctioning may be undertaken in areas where known mineral resources exist.

Regarding the oil and gas sector, the main regulator is the Minister of Mines and Mineral Development, who is also the issuing authority of all petroleum rights under the Act.

Beneficial ownership disclosure

Objectives of beneficial ownership transparency in Zambia

Promoting good governance and accountability in the extractive sector
Deterring corruption in the allocation of extractive rights
Preventing abuse of Zambia’s tax and incorporation rules
Support of efforts to address money laundering and other financial crimes in the economy
Promoting Zambian citizens’ participation in the monitoring of extractive activities, including local content provisions
Promoting citizens getting the full economic benefit of the nation’s natural resources, especially in communities where extraction is taking place

Progress on implementing beneficial ownership disclosure

In November 2017, the Government of Zambia amended the Companies legislation to include beneficial ownership disclosure. The Companies Act No. 10 of 2017 provides for the disclosure of beneficial owners and also the creation of a register of beneficial owners that will be kept at the Patents and Companies Registration Agency (PACRA). The government developed regulations for the implementation of the legislation in March 2019.

In the past, Zambia has made several attempts at disclosing beneficial ownership, including in their EITI Reports as well as in a separate beneficial ownership report. Despite capacity building and outreach to companies, the response rate has been low. The report notes that PACRA is in the process of developing a beneficial ownership register and will work with the Zambia Mining Cadastre with respect to extractive companies.

Zambia Beneficial ownership roadmap

Beneficial Ownership evaluation report

Production

Zambia is highly dependent on mining as its major productive industry. In 2018, the country was the world's 7th largest producer of copper. The four largest mining companies account for over 80% of copper production in the country. According to the latest EITI reporting (2019), Zambia’s mining sector contributed 77% of total export value and registered a decrease from USD 7,1 billion in 2018 to USD 5,5 billion in 2019 largely due to a decrease in copper export earnings.

The oil and gas companies are still in the exploration phase.

Zambia EITI 2019 Report

Zambia EITI 2018 Report

Zambia EITI 2017 Report

Policy recommendations and reforms

Zambia’s EITI Reports have highlighted the need for the enactment of an EITI law that provides sufficient legal authority to ensure that all selected companies for reporting provide necessary information. The latest EITI report has recommends the development of a public beneficial ownership register as provided for by the Companies Act (No. 10 of 2017), the disaggregation of payment data by project and full compliance with the law with respect to the award, transfer and monitoring of mining rights.

Innovations

The EITI encourages multi-stakeholder groups to explore innovative approaches to make the EITI more relevant and useful.

EITI reports include social payments, payments to the Environmental Protection Fund, and employee taxes. The latest report includes disclosure of collaborations with the Patents and Companies Registration Agency (PACRA) on beneficial ownership disclosure.
The Zambian EITI has worked with the government to explore the use of financial modelling in informing discussions on the mining fiscal regime
The Zambian EITI is undertaking a project to explore the potential for systematic disclosure of extractives data.

Implementation

A ZEITI Strategic Plan (2016-2020) was adopted in 2016. The Strategic Plan provides a guide and identifies priority activities, which will be essential in the effective implementation of EITI to achieve its objectives.The Plan has also taken into account the challenges ZEITI has encountered since inception in its quest to live up to its goals and objectives.

Their objectives include:

Full disclosure of information on the mineral value chain in order to enhance transparency and accountability in the governance of natural resources.
Better management of revenue from the natural resources in order to ensure that it contributes towards socio-economic development and improved livelihoods.
Available information on the mineral value chain and natural resource governance in order to create awareness and stimulate informed decision making.
To monitor and evaluate the effectiveness of the natural resource governance framework and systems in order to assess their impact on the socio-economic development of the country.

Governance

EITI in Zambia is implemented by the Zambia EITI Council, ZEC. The Council is composed of three stakeholders, the Government, Mining Companies and the Civil Society Organisations. ZEC coordinates and oversees the implementation of EITI. ZEC has a total of 18 members and is chaired by the Minister of Mines and Mineral Development. Each of the three stakeholder group is represented by six members. The ZEC is serviced by a Secretariat which is located in the Ministry of Mines and Mineral Development. The Secretariat includes the National Coordinator, Ian Mwiinga and three other full-time staff.

Timeline

Flexible reporting

Recognising the ongoing challenges associated with the COVID-19 pandemic, the EITI Board agreed the extension of measures to provide flexibility in EITI implementation and reporting.

Flexible EITI reporting MSGs may prepare reports based on information disclosed by government and/or companies, subject to MSG endorsement and providing that the flexible reporting requirements are met.

Zambia is preparing its 2019 report using the flexible reporting approach. The report will also include a risk-based approach to reconciliation. To cover the impacts of Covid-19, ZEITI is administering a questionnaire that is covering government relief measures for companies, asking whether companies benefited from these and what are the priorities for recovery, among other issues.

Zambia progress by requirement

EITI Reports and other key documents

Zambia 2019 EITI Report

Published Date:

December, 2020

This EITI Report covers Zambia's EITI sector in 2019. It was published in December, 2020.

Zambia 2018 EITI Report

Published Date:

June, 2020

This EITI Report covers Zambia's extractive sector in 2018. It was published in June, 2020.

Zambia 2017 EITI Report

Published Date:

December, 2019

This EITI Report covers Zambia's extractive sector in 2017. It was published in December 2019.

ZEITI 2019-2020 work plan

Published Date:

December, 2018

Zambia 2016 EITI Report

Published Date:

December, 2018

Editor:

Zambia EITI

This EITI Report covers Zambia's extractive sector in 2016. It was published in December 2018.

2017 Annual ZEITI Progress Report

Published Date:

July, 2018

Editor:

Zambia EITI

General assessment of year’s performance

Training for ZEC on mainstreaming and beneficial ownership

The training for the Zambia EITI Council (ZEC) focused on mainstreaming and beneficial ownership. The session on mainstreaming focused on exploring ways of how information that is already publicly available on government and company systems can be disclosed in line with the EITI requirements. The session established that most of the information is being published online in varying intervals ranging from quarterly reports to annual reports.

Zambia

Overview

Extractive industries contribution to the economy

News, blogs and more

Zambia makes stride in ensuring accountable management of oil, gas and minerals.

Zambia hones in on fiscal sweet spot for mining

Production: Zambia