Michael Sata, president of Zambia, Africa’s biggest copper producer, ordered that all exports need to be cleared by the central bank and called for investigations into the sales of Finance Bank Zambia and the state-owned phone company.
The government, formed this week after Sata’s Sept. 20 election win, is seeking more information on what is being shipped out of the southern African nation to boost transparency and reduce corruption, Sata told reporters in Lusaka, the capital, today after swearing in his new cabinet.
Zambia’s total exports climbed to 3.85 trillion kwacha ($799 million) in August, the statistics office said today. Copper shipments will probably jump to $8.4 billion this year, according to the central bank.
“Our country has lots of mineral wealth and yet our people remain poor,” Sata said. “We want to know exactly how much we earn from our exports.”
Known as “King Cobra” by his supporters because of his aggressive political style, the 73-year-old Sata won last week’s election on a pledge to spread more of the country’s copper wealth, create jobs and fight corruption. Companies including Vedanta Resources Plc (VED), First Quantum Minerals Ltd. (FM) and Glencore International Plc operate in Zambia.
Sata also ordered deals done during his predecessor Rupiah Banda’s presidency be investigated, such as the sale of Finance Bank Zambia to First National Bank, a unit of FirstRand Ltd. (FSR), South Africa’s second-biggest banking group, this month and LAP Green Networks of Libya’s purchase of a 75 percent stake in Zambia Telecommunications Corp.
This was to ensure transparency in the deals, he said.
Danny Zandamela, chief executive officer of FNB Africa, said the bank hasn’t received a formal request to review the transaction.
The process the central bank went through to rescue Finance Bank was “conducted within the regulator’s mandate and in a very transparent fashion,” Zandamela said in an e-mailed response to questions. “FNB hopes that the outcome of the election will not affect the transaction.”
Zambia’s central bank seized Finance Bank in December for breaching financial laws and agreed to sell it to FirstRand for about $5.6 million after the South African lender had managed it for eight months. LAP Green Networks bought the controlling stake in Zamtel, the state-owned mobile-phone and fixed-line operator, for $257 million in June.
Rates Too High
The energy regulator is disbanded and fuel tenders it entered into should be probed, while the Zambia Revenue Authority must also be investigated, Sata said.
Sata fired Caleb Fundanga, the central bank Governor, yesterday and appointed Alexander Chikwanda to replace Situmbeko Musokotwane as finance minister. Sata beat Banda in the presidential election and his Patriotic Front won the most seats in parliament, ending two decades of rule by the Movement for Multiparty Democracy.
The decision to replace Fundanga may be a signal the government wants to lower interest rates and weaken the currency, according to Leon Myburgh, sub-Saharan Africa strategist for Citigroup Inc. in Johannesburg.
The Finance Ministry has been tasked with reducing commercial bank’s lending rates in the country, Information Minister Given Lubinda said by phone today.
“Our country’s interest rates are too high and the government will act to cut them in order to stimulate economic growth as soon as possible,” he said.
Zambia’s kwacha strengthened 0.9 percent to 4,822 against the dollar by 5:55 p.m. in Lusaka, paring yesterday’s 2 percent decline.
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