ZAMBIA Trends and Developments Contributed by: Mweshi Banda-Mutuna, Musenge Leah Nkonde and Lumbanya Judah Mulenga, Mweshi Banda & Associates Legal Practitioners
These requirements compel employers to adopt a systematic approach to safety, supported by docu- mentation and demonstrable implementation. Employee duties A notable and significant shift is that employees have enforceable obligations to adhere to safety standards, report hazards and take reasonable care for their own safety, including the use of protective equipment, Directors and officers may face personal liability where offences occur with their knowledge or involvement – a significant shift from previous regimes. The combi- nation of organisational duties and personal account- ability of employees and directors creates stronger incentives for employers to invest in workplace safety culture and risk prevention. The seriousness of these obligations is underscored by the introduction of crim- inal sanctions, as non-compliance may attract sub- stantial fines or imprisonment, representing a marked escalation from the previous framework. Enhanced enforcement where necessary. Director liability Enforcement powers have been significantly enhanced. Authorised officers may enter workplaces without notice, inspect operations, suspend activities and, where there is imminent danger, order the closure of a workplace. Such closures may also be publicised, exposing employers to reputational damage alongside legal sanctions. Currency Controls Last but certainly not least, another important devel- opment in Zambia’s compliance landscape arises from the Bank of Zambia Currency Directives, 2025. These Directives reinforce the use of the Zambian kwacha in domestic transactions by providing a struc- tured framework. Mandatory use of kwacha for domestic transactions Under the Directives: • domestic transactions must be settled in kwacha; • even where contracts are priced in foreign cur- rency, payment must occur in kwacha, using the
market exchange rate agreed upon by the parties or, in default, the current Bank of Zambia mid-rate on the settlement date; • government contracts must not be quoted, paid or demand payment in foreign currency; and • exemptions apply only to specific cross-border and sector-specific transactions set out in the schedule of exemptions. This framework reinforces the kwacha as the legal tender for local payment obligations, as set out in the Bank of Zambia Act, No 5 of 2022. Impact on businesses and contracting practices Although the Directives do not restrict businesses from quoting their services or products in foreign cur- rency, it is prudent for businesses to revise their:
• contract templates; • pricing structures; • settlement procedures; and • treasury management policies.
Companies operating in sectors with high exposure to foreign currency (such as construction, mining ser- vices, retail or import-dependent industries) need to review compliance with the Directives to avoid penal- ties. Strengthening currency discipline By formalising currency controls, the Bank of Zambia seeks to: • reduce exchange rate risk within the domestic economy; • enhance transparency of foreign currency flows; and • support the country’s macroeconomic stability efforts. Compliance requires not only documentation but demonstrable alignment of internal financial pro- cesses with regulatory expectations. Failure to com- ply attracts penalties and criminal sanctions, with the risk of directors or management of a company being deemed to have committed a contravention of the Directives.
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