ROUNDUP: AFRICA
By Antonio Guerrero
Government incentives are paying off for Zambia's copper sector, with output expected to surpass 740,000 tons this year for the first time, pushing it above the record highs of the early 1970s.
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Payback: Incentives have boosted Zambia's copper output |
Incentives, including tax breaks and the permission for foreign investors to forgo the need for local partners, have increased outlays and spawned new projects in Africa's largest copper producer. Output declined to a historical low of 250,000 tons in 1999, after which it began to grow gradually. Production in 2010 was estimated at 720,000 tons. Copper accounts for some 70% of Zambia's foreign currency revenues. With copper production booming, the Zambian government is now pursuing new investments in the country's gold, diamond, silver and manganese mining sectors. The nation's economy grew by 7.1% in 2010 and is expected to grow by 6.4% this year, driven mainly by increased mining output and investments.
The Nigerian government is seeking ways to curb spending this year in order to focus on funding capital projects that will improve the country's infrastructure. President Goodluck Jonathan submitted a $27.5 billion budget for 2011, which is 19% lower than the 2010 budget. Even so, the country expects to post a 20% budget deficit this year. The 2011 budget is based on 7% GDP growth, crude oil production of 2.3 million barrels a day, and an average oil price of $65 a barrel. The government aims to slash recurrent spending by 29% this year.
The International Finance Corporation (IFC), a member of the World Bank group, says its African local-currency loans initiative is expanding rapidly—and that it has issued more than $800 million in local currency loans throughout the continent over the past decade. The institution says local-currency loans, granted in 24 African countries, have helped recipients mitigate foreign exchange risk and currency market fluctuations. The IFC initially made loans in Africa in South African rand but has since expanded into a variety of African currencies, including Ghanaian cedi, Moroccan dirham, Nigerian naira, Rwandan franc, Tunisian dinar and Zambian kwacha.
