Zambia

Estatus EITI Progreso significativo
Joined EITI in 2009
Datos más recientes desde 2016
Latest Validation 2016
Sitio web EITI Zambia
Last updated 6 March 2019

Overview

Zambia, Africa’s second-largest producer of copper, is highly dependent on mining as its major productive industry. Mining contributes to 68% of the country’s foreign exchange earnings and 73% of total export value, according to the latest EITI reporting. Zambia has made radical 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. 

Extractive industries contribution to the economy

  • 73 %
    to exports
  • 10 %
    to GDP
  • 26 %
    to government revenue
  • 2 %
    to employment

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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 is currently developing regulations for the legislation.

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 cites lack of legislation requiring beneficial ownership disclosure and difficulty in obtaining the information from companies located in foreign jurisdictions as some of the reasons for non-disclosure. It recommends further work on establishing a beneficial ownership register.

Zambia Beneficial ownership roadmap
Beneficial Ownership evaluation report
EITI Report information is intended to increase citizens’ understanding of the mining sector and help them contribute to informed public debate.
Christopher Yaluma, Minister of Mines and Minerals Development in Zambia

Production

Zambia is highly dependent on mining as its major productive industry. In 2016, the country was the world's 7th largest producer of copper and the 6th largest producer of cobalt. The four largest mining companies account for over 80% of copper production in the country. According to the latest EITI reporting (2016), Zambia’s mining sector contributed 73% of total export value and fell by 11.6% to USD 6,5 billion in 2016 largely due to a reduction in earnings from copper exports and nontraditional exports.

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

Zambia EITI 2016 Report

Mineral Production (Tonnes)

Initializing chart.

Revenue collection

According to the latest EITI reporting (2016), government revenues from the extractive sector increased from ZMW 9.1 billion in 2015 to ZMW 10.3 billion in 2016. The Zambian Revenue Authority collected the largest amount of government revenue representing 98%. Zambia’s extractor sector contributed26.48% of government revenue in 2016 (up from 18% in 2015). The analysis of the receipts by financial flows contribution show that the top 5 taxes contributed 89% of the total government extractive revenue. Mineral royalties account for the highest proportion of total government revenue (30%).

Initializing chart.

Revenue allocation

The Zambia Revenue Authorities (ZRA) collect over 98% of total extractive sector taxes, and transfers these to the national budget. Other payments from the mining sector (such as property rates and annual business fees) are made to local councils, where mining companies are based, to the Ministry of Lands and the Ministry of Mines and Mineral Development.

Social and economic contribution

According to the latest EITI reporting (2016), the extractive sector (predominantly mining) accounts directly for 10% of GDP and 73% of exports in Zambia. Indirectly, the mining sector may contribute as much as half of the GDP. 

Foreign investment has helped drive the growth of the sector, and in 2016 alone more than USD 3 billion was invested in mining, twhile investment pledges in the mining sector increased by USD 147 million (341.86%) from 2015. The extractive sector provides direct employment for about 2% of the population. 

Read more in the Zambia EITI 2016 Report

Policy recommendations and reforms

Zambia’s EITI Reports have highlighted the lack of monitoring of production data declared by the companies. Previous EITI Reports have recommended that the Ministry of Mines develop procedures and systems to collect and control production data. It also suggests to compare the production volumes declared extractive companies with the measurements made by Ministry of Mines throughout the year.

The latest report suggests the enactment of an EITI law that provides sufficient legal authority to ensure that all selected companies for reporting provide necessary information.

From Reports to Reform in Zambia: Production data

Innovations

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

  • Report includes social payments, payments to the Environmental Protection Fund, and employee taxes.
  • Details of the tax regime and production figures included.
  • The Zambian EITI is undertaking a project to explore the potential for more real-time reporting of payments and revenues.

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. Each of the three stakeholder group is represented by six members. ZEC is chaired by the Secretary to the Treasury, Mr. Fredson Yamba. The ZEC is serviced by a Secretariat which is located in the Ministry of Mines Energy and Water Development. The Secretariat has four full time staff.

Timeline

Validation

Zambia's' Validation against the 2016 Standard commenced on 1 January 2017. Zambia was found to have achieved meaningful progress in implementing the EITI Standard in October 2017.

News item on Zambia's Validation

Zambia progress by requirement

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EITI Reports and other key documents

Zambia 2016 EITI Report

Published Date: 
December, 2018
Publisher: 
Zambia EITI

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

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2017 Annual ZEITI Progress Report

Published Date: 
July, 2018
Publisher: 
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.

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2015 Zambia EITI Report

Published Date: 
December, 2016
Publisher: 
Zambia EITI

This EITI Report covers Zambia's extractive sector in 2015. It was published in December 2016. 

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Validation of Zambia 2017 - reports

Published Date: 
October, 2017

Zambia's Validation commenced on 1 January 2017. On 25 October 2017, the EITI Board found that Zambia has made meaningful progress in implementing the 2016 EITI Standard. 

The following documentation laid the basis for the Board's decision, attached below:

Initial data collection by the International Secretariat (English)Draft Validation Report by the independent Validator ASI (English)Final Validation Report (

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2014 Zambia EITI Report

Published Date: 
December, 2015
Publisher: 
Zambia EITI

This EITI Report covers Zambia's extractive sector in 2014. It was published in December 2015. 

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View all documents related to Zambia in our publications library

Contacts

National Coordinator

S.S. Banda

Siforiano BANDA

National Coordinator EITI Zambia
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International Secretariat

Ines Schjolberg Marques

Inês Schjølberg Marques

ines.schjolberg.marques
Directora de Políticas
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