Zambia is to issue a statutory instrument (SI) that will require exporters to sell goods on letter of credit (L/C) terms.

Known as SI34, the legislation aims to make sure that export earnings are accurately recorded, properly taxed and captured for the Zambian economy.

Government concerns

The Zambian government has been concerned for some time that export earnings - particularly those of mining companies - are not sufficiently benefiting the country's economy.

Officials say that some of the earnings of foreign investors in Zambia are paid into accounts outside the country.

Economic benefits

The government hopes that by insisting exporters sell on L/C terms, more overseas earnings will reach the economy.

Export L/Cs will have to be authorised by the Zambian government and the proceeds paid into local financial institutions.

This article represents the views of the author and not necessarily those of the ICC or any of the other partners in DC-PRO.