Zambia

EITI Status Meaningful progress
Joined EITI in 2009
Latest Data From 2018
Latest Validation 2019
Website EITI Zambia
Last updated 11 June 2020

Overview

Zambia, Africa’s second-largest producer of copper, is highly dependent on mining as its major productive industry. Mining contributes to 78.4% of total export value, and 31.4% 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. 

Extractive industries contribution to the economy

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

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. 

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 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 (2018), Zambia’s mining sector contributed 78.4% of total export value and registered an increase from USD 6,6 billion in 2017 to USD 7,1 billion in 2018 largely due to an increase in copper export earnings.

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

Mineral Production (Tonnes)

Initializing chart.

Revenue collection

According to the latest EITI reporting (2018), government revenues from the extractive sector increased from ZMW 12.4 billion in 2017 to ZMW 16.6 billion in 2018. Zambia’s extractor sector contributed 31.4% of government revenue in 2018 (up from 29.1% in 2017). The sector contributed 10.7% to the country's GDP.

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 (2018), the extractive sector accounts directly for 10.7% of GDP and 78.4% 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. Investment pledges in the extractive sector represented 5.87% of the total investment pledges of USD 4.8 billion. The mining sector directly employs  about 84,536 people representing 2.9% of total employed persons in Zambia. 

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. 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 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.

Zambia progress by requirement

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