� Business Monitor International Ltd Page -- cut royalty rates down to - shows the influence of mining companies and how important the industry is for the wider economy. However, the move will rattle voters in a country where resource nationalism is a growing trend, as it will increase the need for greater public spending cuts to balance the revenue shortfall. ...The elections were closely contested with Lungu of the Patriotic Front (PF) winning with --.-- of the vote compared to --.-- for the United Party for National Development s (UPND) Hakainde Hichilema. After a divisive electoral campaign, marred by incidence of violence, we anticipate further clashes between UPND and PD supports in the coming weeks, in the wake of Hichilema s move to challenge the election results in Zambia s constitutional court. Over a multi-quarter time horizon, we expect the political environment and investor sentiment toward Zambia will improve, albeit gradually. ...In recent years the deficit widened considerably, driven by subdued revenue growth and persistently high expenditures as the government boosted social spending in the run up to the August -- elections in an effort to garner support from the public. While the government s sharp uptick in borrowing in recent years has exposed it to increased foreign currency and rollover risk, fiscal consolidation and a forthcoming IMF package will help to temper pressure on debt sustainability and support sovereign credentials.
...We maintain our forecast for slower growth in ----, mainly due to cuts in investment in the mining sector, with the construction industry poised to expand -.- in real terms, down from an estimated --.- in ----. In September ---- Glencore said it will halt production at its Mopani mine, which accounted for -- of all copper produced in Zambia in ----, for -- months. Social unrest will remain elevated in Zambia in the coming weeks, after Edgar Lungu s narrow win over opponent Hakainde Hichilema in the August -- presidential elections. While the government will maintain a more investor friendly policy toward the mining sector, we expect that sentiment will only slowly improve in the wake of sclerotic mining sector policy during Lungu s prior term. Additionally, we expect the Zambian government to rein in spending in attempt to narrow t the country s fiscal deficit over the coming years. ...Additionally, we expect the Zambian government to rein in spending in attempt to narrow t the country s fiscal deficit over the coming years. The recent awarding of the first public-private partnership (PPP) project in Zambia offers upside potential for construction industry growth, but doubts remain surrounding the feasibility of the project.
...The economy remains focused on the export of copper and fared well when prices were rising - the construction industry being driven by the construction of new mines and related infrastructure. However, a fall in global copper prices, which declined by -.- in ---- and by a further -.- in ----, has made the country s finances vulnerable. ...