Lungu Reorganizes Ministries in Bid to Spur Zambian Growth

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  • Government to create a total of five new ministries under plan
  • Zambia to become electricity exporter within 13 months

Zambia will separate its mines and energy ministry and move national planning out of finance as part of efforts to improve economic growth, President Edgar Lungu told lawmakers in his state of the nation speech.

The government will also split the Ministry of Transport, Works, Supply and Communication as well as the Ministry of Agriculture and Livestock, he said Friday in Lusaka, the capital. Zambia will have five new ministries, according to Lungu, who didn’t say when they will be formed or who would head them.

“The starting point in promoting dynamic and strategically focused diversification and rapid growth is realignment of our institutions to promote synergies in the planning, implementation, monitoring, evaluation and coordination of national programs,” the president told lawmakers.

Zambia is facing its worst power shortage on record and a plunge in metal prices has prompted mines to announce suspensions and thousands of retrenchments, threatening revenue and growth. The government is working “rapidly” to address the power crisis and the country will be an electricity exporter within 13 months after new generation projects start, Lungu said.

Map: Zambia, showing mines

Describing the energy deficit as a “national emergency,” Lungu said he was frustrated that some power project proposals had been held up at the Ministry of Mines and Energy.

National Importance

“We must abandon the business-as-usual approach to matters of great national importance,” he said. “All those who are afraid to venture into new ways of doing things must not hold the system hostage by their fear.”

Zambia’s power shortage is largely the result of low water levels at Lake Kariba, which have prompted production cuts at the hydropower station that the country relies on for nearly half of supplies. The government has a program to add 600 megawatts of solar power, increasing total generation capacity from about 2,300 megawatts of mostly hydropower.

By January, the Maamba coal-fired plant and the Itezhi Tezhi hydropower dam will add 420 megawatts, easing the shortage, said Lungu.

Africa’s second-biggest copper producer will increase power tariffs to $0.1035 per kilowatt hour from an average retail price of $0.0564 now to help attract investment in generation, he said.

The government also plans to start operating a national airline in 2016 as it spends $1.7 billion upgrading airports, he said.

A private company Lungu didn’t identify plans to build a $2.5 billion pipeline to transport refined petroleum products from Lobito in Angola to Lusaka, he said. The project will start in 2017 and will also provide gas to power plants that could generate as much as 1,000 megawatts, he said.