Local businesses and traders are consistently indicating that there is lack of liquidity in the Zambian economy despite macro economic indicators that have been showing a positive trajectory. One reason behind this scenario is the fact that most business transactions are done between multinational with limited to no involvement of local citizen owned companies.
One such sector is the lucrative fuel sub-sector, which is majority dominated and owned by foreign players. These players seem not to appreciate that to make their businesses sustainable, they need to involve local businesses so that the local economy also retains some of the profits that are made. This sector is supported by the less profitable petroleum transportation sector, a sector that is also flagging that local companies are also getting a raw deal.
As a result, the Petroleum Transporters Association of Zambia (PTAZ) had accused Oil Marketing Companies (OMCs) and bulk fuel importers of fuel which are majority foreign owned of failure to adhere to the rule of law as they have continued to ignore the law that states that local Zambian transporters must transport 50% of the imported fuel.
According to Statutory Instrument – SI No.35 of 2021 – Citizens’ Economic Empowerment (Transportation of Heavy and Bulk Commodities by Road) which is in place, Zambian citizens or citizen controlled companies must transport atleast 50% volume of all the imported fuel.
Association General Secretary Benson Tembo said local transporters are only transporting about 8% of all fuel imports despite the SI clearly stating that they should transport 50%, adding that it is unfortunate that there is no one to enforce the law despite citizen owned companies being protected by the law.
Speaking in an interview with the Zambian Business Times – ZBT, Tembo said government did its part as it clearly prescribed in the import waiver letters given to all Oil Marketing Companies and suppliers of fuel the condition that Zambian citizen owned companies transport 50% of the volume allocated to OMCs or suppliers.
“Most of the people in government don’t understand the SI because for them if they load a Zambian registered truck, they think they have complied with the law when in fact not. Most of the trucks registered in Zambian numbers are not owned by the prescribed Zambian citizens in the law, they are owned by foreigners registered in Zambia but those don’t qualify under that SI”, he said.
Tembo said the association is looking forward to engaging President Hakainde Hichilema because policy makers and technocrats have failed to address the matter adding that it is unfortunate that the association has to involve the Head of State in such matters when the law is clear.
“When you speak too much, people start thinking you are becoming political, there is nothing political about asking for what belongs to citizens. All those technocrats cannot pretend that they do not know this law, in the fuel transport subsector there is too much money, so people are blindfolded by money hence they even forget the citizens who were queuing up to vote, they have already forgotten”, he said.
He noted that once enforced, transporters and the local economy would generate more money, citizen owned transport companies will grow their capacity and create more local job opportunities. But all this is simply not being enforced.
Citizen owned companies in the petroleum sector continue to face serious challenges to scale due to failure by successive governments in Zambia to enforce already existing laws as well as facilitate for affordable financing. As a result, the majority of talented Zambians in the sector remain as employees, with some locals who venture into this sector contending with fighting for minority share in the lower margin fuel transport sector.
