The legal challenge of relieving Zambia from Onerous terms in Development agreements

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Chileshe, Mulenga Stella
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This study acknowledges the contribution of development agreements to the inflow of foreign capital and technology which are necessary for economic development, especially in the mining sector. It is also acknowledged that development agreements play an important role in investment. However, when a country is desperate for capital and investment (as Zambia was at the time of entering into the development agreements) and when a country is afflicted with a number of other shortcomings, including the corrupt practices of its leaders, it may well sign up to contracts which, in due course, may be detrimental in operation. Should a state that finds itself saddled with oppressive investment contract despair, or should it take steps to withdraw from the contract? Better still, should such a state repudiate the contract and risk earning a reputation as a rogue state having no respect for the sanctity of contract .This study explores these questions and suggests that what is needed is a greater awareness among underdeveloped countries of the pitfalls of contract negotiation in the alienation of commercial interests in strategic industries, so that they can reject the worst deals and extract much better terms in future. In this vein this study looks at the legal challenge of relieving Zambia from such onerous terms in development agreements. A significant step in this direction has come with the recent enactment of the Mines and Minerals Development Act (no.7 of 2008) as well as the amendment of the Income Tax Act (No .l of 2008).
Development Agreements-Zambia