Zambia, which is rich in copper, reported an increase in electricity exports in March 2022. However, it’s unclear whether ZESCO, the world’s largest power company, has forecasted a surplus that would prevent local load shedding as water levels fall.
According to Zamstats data, power exports, which were not among the top ten exports in February 2022, suddenly increased and were listed as Zambia’s greatest non-agro export in March 2022, with exports of K300 million (about $18 million).
After the completion of the $2.2 billion Kafue Gorge Lower power plant with a production capacity of 750 megawatts, power company ZESCO said in 2021 that it intends to become a net exporter of electricity, an input that would result in Zambia having surplus power at the national level.
However, cracks in that plan emerged earlier in 2022 when the new ZESCO board chairman revealed that the Chinese EXIM Bank had halted funding to complete the installation of the five turbines, with each expected to produce 150 megawatts.
A fact-finding mission to the plant by the farmers union (ZNFU) revealed that only two of the five turbines had been fully installed while the other three awaited negotiations and finalization from the ZESCO management.
ZESCO stated that they would use internal or alternative resources to complete and fire up the other three turbines to bring the new plant to full production. Zambia’s copper exports remain the highest, but limited export dollars are remitted back into the country.
With ZESCO, a state-owned entity having exports being shored up, there is a high possibility of export earnings flowing back into the Zambian economy that could help improve US dollar supply, in the process aiding the stability of the Kwacha.
Zambia’s Copper exports revenues remain the highest and are expected to be over $8 billion for Zambia in 2022 if the prices remain above $10,000 per ton and production holds at least to 800,000 tons, but successive governments have not been able to successfully negotiate and retain a fair share of the export dollars to help stabilize the Kwacha in the medium to long term.
ZCCM IH – a state-owned investment company holds a minority interest or shareholding in the top copper mining companies in Zambia following the privatization exercise post-1991 change of regime. This continues to diminish the negotiating power and retention of export dollars back into the Zambian economy.