IMF warns Zambia on Chinese investment

Category: World News

Date Added: 12 March 2010

FOREIGN STAFF

Lusaka

Strauss-Kahn, who arrived in Zambia on Wednesday from SA, made the comments during brief talks with Finance Minister Situmbeko Musokotwane in the capital, Lusaka. He later met President Rupiah Banda.

Chinese investment in Africa’s largest copper producer to date stands at about $1bn, making it by far the biggest investor.

The Asian powerhouse owns several mines and manufacturing facilities in the impoverished country.

Last week, Banda paid a week long visit to China, where he signed a number of agreements on further inward investment in the mining, energy, agriculture and manufacturing sectors.

Zambia’s political opposition has been critical of Chinese investors, accusing them of failing to meet basic labour standards.

Strauss-Kahn said he did not “in principle see any kind of problem in receiving investment from China … but these kind of deals should be beneficial (to Zambia),” he warned.

The IMF chief, who also visited Kenya on his three-country tour in Africa, said he was “optimistic” about Africa’s chances for a quick recovery from the global recession.

The continent initially appeared to have escaped the worst of the crisis, but was hard hit by the aftershocks in terms of reduced trade, investment and aid with and from the west.

The IMF has increased its growth forecast for sub-Saharan Africa for this year to 4,5% from 4,3% in January.

Musokotwane appealed to the IMF to help Zambia to reduce the economy’s reliance on mining.

Thousands of mining jobs were lost in Zambia in 2008 and early last year when copper prices fell and several foreign mining firms shut production. Sapa-DPA

Source: Business Day