Zambia

October 2006 | Ratings Update

The outcome of the recent elections is a boost to our short-term political outlook. Mwanawasa has acknowledged the dissatisfaction - particularly concentrated among miners in the country's copper belt - seized upon by his main challenger Michael Sata. Among other things he will propose a law to enable Zambians to acquire shares in foreign owned copper firms, and lift mineral royalties from their presently low level of 0.6% to 2.5%. Moreover he has promised an accelerated fight against poverty, with spending plans of some US$16.5bn over then next five years. These drives should, at least in part, help allay any brewing discontent.

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