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The Zambia Chamber of Mines has disclosed

Used car prices go up!

The domino effect of increasing fuel prices is having a telling effect on the economy as the cost of almost all items, consumer and capital goods have gone up due to reliance on transport and logistics whose main cost driver is the price of fuel. Calls for an urgent solution from government to cushion its citizens are getting lauder.

The Car Dealers Association of Zambia has disclosed that the high fuel prices which are obtaining following two major increments in the last six to eight months have pushed the prices of used motor vehicles up because an increase in fuel price results in high landing costs for the vehicles.

Association Spokesperson Kelvin Kameta said fuel price increase impacts the business the same way a high exchange rate affects the car business, therefore they need to make price adjustments which are passed on to the buyers in order to realise a profit from the business

Speaking in an interview with the Zambian Business Times – ZBT, Kameta said lower fuel prices and a stable exchange rate help to keep the used car business stable adding that vehicles with bigger engine capacities have become even more difficult to sell when fuel prices are increased.

Kameta noted that when fuel prices go up and the price of landing a vehicle increases, consumers have to bare the cost because car dealers need to continue making a return or profit. There is shipping and landing costs from the port to the selling points, all these costs are affected by fuel prices.

He told ZBT that it is currently difficult to sell vehicles which run on petrol as most people are being discouraged by the high price of petrol adding that lately a lot of people are buying 1.5 litre engine cars such as the Toyota Allion with a few buying the Alphard and Hilux.

“We bring the vehicles from overseas, so what happens is that as fuel prices go up,the cost of landing a vehicle also goes up. If for example I am supposed to spend a K2,000 on fuel, then I will end up spending a K3,000 due to increased fuel prices, so I also have to recover that money and in the end, it is the end user or buyer who is affected”, he said.

“We used to sell a vehicle within a month but these days some cars which were brought into the country in December and January are still on the market. Some dealers have capital for one or two units, so when you have capital for one unit and it stays for three months it’s a loss because you will incurr other unforeseen expenses”,he said.

April 14, 2022

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The domino effect of increasing fuel prices

Agribusiness

Apollo farm to increase diary herd by 15%

One of Zambia’s leading diary farms – Apollo Agricultural Holdings Ltd says it has plans of increasing the number of dairy animals in 2022 in order to increase milk production adding that Apollo has a successful breeding programme, with over 90% pregnancies in heifers, 80% in lactating animals, and mortalities of less than 1% in heifer calves.

Company Director Johannes Steyn said that these are all very positive indicators for Apollo’s herd growth, which is projected to be 15% per annum, noting that the company’s strategy to reduce the cost of production of every litre of high-quality milk is supported by its pasture-based model.

In an exclusive interview with the Zambian Business Times – ZBT, Steyn said Apollo has adopted a pasture-based dairying model, which is in harmony with maximizing the benefits of the environmental and developmental characteristics of Chingola

Steyn explained that being in a reliable rainfall area, having availability of titled land, access to undulating land that permits (even invites) the building of conservation dams to save rainwater to be used for irrigation during the dry season.

He added that importantly, having access to strong existing infrastructure originally provided by the mines, dairy farming can make a contribution to sustaining some of the extensive assets that may otherwise go to waste as copper resources in Chingola dwindle.

“Our AI breeding policy prioritises use of imported semen from bulls with a proven track-record of producing offspring with enhanced fertility, longevity, and butterfat characteristics. Another consideration which is important for us is the hybrid vigour of cross-bred dairy animals”, he said.

“Apollo is currently formulating applications for approval of long-term development programmes with the object of continuing to grow its pasture-based dairying operations. Hopefully, others will see the advantages of pasture-based dairying on the Copperbelt and emulate what we are doing”.

“If Copperbelt dairy farming can collectively develop to the stage where a milk processing business can be justified and established locally, they will be able to serve the Copperbelt, and ultimately the DR Congo, whose market presents a golden opportunity for surplus production”, he said.

Steyn noted that Apollo’s budget is to produce in excess of 24,000 litres of milk daily at peak this year adding that Apollo’s maximum production is achieved in the dry season when irrigating and this peak production coincides with the slump of dairy farmers production who do not irrigate and are feed challenged by lack of suitable grazing. In this way a contribution is made to balancing the supply of milk into the market.

He however said the dairy industry as a whole would benefit from a reduction in the costly burden imposed on it by bureaucracy noting that eliminating, streamlining, simplifying and expediting approval of essential inputs would enhance the growth and reduce the cost of production in the industry.

Steyn added that further levelling of the playing field by increasing protection of the local dairy industry from unfair competition by international competitors, who are not burdened by the same restrictions, would be beneficial. He said some of the challenges the sector is facing include the escalating cost and availability of essential inputs.

“We greatly fear that the net overall impact of the ongoing covid pandemic and recent geopolitical upheavals will force an escalation in the price and availability of energy and agricultural products / inputs which in turn will impact on inflation throughout our economy. All cost aspects in the production of essential commodities (milk, medicaments, and fertiliser included) will be adversely affected. Farmers will be economically challenged to produce food and milk at affordable prices and in the quantities normally attained”, he said.

Steyn said the indications are that the dairy sector is emerging from an environment that has been conducive to growth and sustainability but the recent geopolitical changes are causing significant challenges on various fronts that if not managed will lead to a reversal of the gains made.

He said government has the enormous task of balancing various interests as they strive to improve the conditions for Zambians as a whole noting that interests of some parties will inevitably conflict with those in the dairy industry.

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One of Zambia’s leading diary farms -

Tech

ZESCO pledges to make CEC deal public

ZESCO has disclosed that the new Bulk Supply Agreement (BSA) that the company initialed with the Copperbelt Energy Corporation (CEC) will be made public once it is approved and signed off.

ZESCO Corporate Affairs Manager Dr. John Kunda said the agreement is currently being reviewed by the Attorney General and will need to be approved by the Energy Regulation Board (ERB) before it is signed and made public.

Speaking in an exclusive interview with the Zambian Business Times – ZBT, Dr. Kunda said he could not state when the agreement would be approved as that is also dependent on the Attorney General’s office and the regulator ERB.

“That agreement goes to the Attorney General – AG for review and ERB for approval, that’s when we will have access, initialing is basically indicating that we are on a path to agreeing, as the two companies we agree but then it has to go through the necessary reviews and approvals. It is in the hands of the regulator and AG’s office”, he said.

But there are concerns that have been raised that ZESCO may be forced to sign off an agreement that is in the favor of CEC after revelations that the previous agreement which expired had disadvantaged the power utility. The concerns are that the current ERB Board of Directors new Chairman, Reynolds Bowa may have interest in CEC as he previously served as CEC board board member and vice Chairman.

ZESCO confirmed that they have successfully completed negotiations for a new BSA with CEC. The new BSA underpins arrangements for power supply and provision of transmission services between the two companies.

The new BSA will replace the old BSA that expired on 31 March 2020 and was not renewed after the previous management and board which have now been replaced following the change of government accused CEC of having enjoyed undue advantage.

CEC has committed to opening a new chapter of a new mutually beneficial relationship with ZESCO. The two companies are confident that the strong interconnection that exists between their power networks, coupled with the need to closely coordinate operationally will continue to be the cornerstone of their ongoing efforts to foster a cordial, transparent and commercially sound business relationship going forward.

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ZESCO has disclosed that the new Bulk

Companies

ZAM questions ZESCO decision to overlook local manufacturers

The Zambia Association of Manufactures – ZAM has questioned the wisdom in ZESCO’s decision to shortlist ten (10) Zimbabwean and South African companies who have since been invited to submit sealed bids at the expense of local companies

In a statement made available to Zambian Business Times – ZBT, ZAM Chief Executive Officer Florence Muleya stated that the decision by ZESCO management to only engage foreign firms for the supply of wooden poles on the basis that Zambian companies do not have adequate capacity to meet the procurement demand is not supported by facts on the ground.

She said following extensive consultation with their members, ZAM has noted that the decision indeed overlooked local suppliers of wooden poles. Primarily, the opportunity was not locally advertised before it was extended to foreign companies, to substantiate that no local capacity existed.

Muleya further stated that this stood to disadvantage local companies with the capacity to meet the procurement demand. “Moreover, one of our members, a major supplier of treated wooden electrical poles to ZESCO for many years, boasts of a total installed plant capacity of 60,000 poles”.

She further added that in 2022, the said company has planned to produce a total of 30,000 wooden poles validating the capacity possessed by local manufacturers who were unfortunately left out of the bid process.

ZAM has since urged all key stakeholders and consumers of goods and services to always think local first and the Association has re-echoed the commitment to supporting and promoting the production and consumption of Zambian products and services to revive the Zambian economy.

“We look forward to the re-consideration by ZESCO to engage our local manufacturers in the sealed bids”, the ZAM CEO stated.

On 31^st of march, 2022, the Zambian Business Times – ZBT published an exclusive article that revealed that the Copperbelt Forestry Company (CFC), a Zambian wholly-owned company which was incorporated in 2000 as a management buy out company after the privatization of ZAFFICO has disclosed that it has the capacity to supply ZESCO with the required poles.

CFC has confirmed to ZBT that ZESCO has since engaged them (Copperbelt Forestry Company – CFC) through a meeting that was held mid-mornings of 31 March 2022 on concerns that they had been sidelined. ZESCO stated that they thought the company was not yet in operation after the fire situation it had in the late months of 2020.

When asked why CFC was not initially considered, the company told ZBT that they are not sure if ZESCO will shortlist them or call them back, but confirmed that they have been advised to write back to the managing director and the head of procurement, stating that the previous applications to supply ZESCO with wooden poles might not have reached the Head of Procurement and the Managing Director, CFC stated.

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The Zambia Association of Manufactures - ZAM

Lifestyle

Reasons behind Inonge Wina omission on Lozi awards explained

The omission of Zambia’s first female Vice President Inonge Wina from the inaugural King Lewanika Royal Meritocracy awards following the successful hosting of the Kuomboka ceremony of the Lozi people has been attributed to the high number of eminent personalities and that she will be considered in the subsequent and future annual awards.

The Litunga Lubosi Imwiko II, recognized 13 distinguished women in what was inaugural royal meritocracy awards during the Kuomboka ceremony held in western province. The awards have however raised questions on the criteria used as Zambia’s first woman former Veep Inonge Wina was conspicuously missing from the inaugural list. Debate has raged on social media that the omission of Wina has politicized the awards list.

The 13 women that were recognized and awarded include; Dr Inonge Mbikusita – Lewanika, Mutumba Mainga Bull, Stella Mwaka Libongani, Ndiyoyi Muliwana Mutiti, Nelly Kashumba Mutti, Mukwandi Walusiku Chibesakunda, Princess Nakatindi Yeta Nganga (Posthumously), Frances Mwangala Zaloumis, Ireen Mukombe Muyenga, Kapelwa Sikota, Janet Mwananyanda Yeta, Rebecca Lisulo Katowa and Sister Namunji Mutelo.

In an exclusive interview with the Zambian Business Times – ZBT Joseph Maopu, Investment Development Consultant to the Barotse Royal Establishment – BRE stated that there are more than fifty hundred (5,000) woman of eminence from Barotseland who could all have been on the award list.

Maopu stated that “these are annual awards from now on, thus every year men and women from Baroste will be awarded by his majesty the king, he added that the men and women that did not find themselves on the list of those that were awarded are likely to be awarded in the years to come”.

The BRE consultant who previously served as Luapula Investments Cordinator added that “the responsibility of choosing and the honour to confer, rests on his majesty the Litungu through the royal establishment “KUTA”, there is a committee that deliberates and makes the final nomination”.

And when asked by ZBT if the awards were being made to those that made contribution to Barotseland specifically and not Zambia as a nation as indicated by some media reports, Maopu disputed those assertions and re-stated that the awards were based on contributions, achievements and service to the world, to Africa, to Zambia and to Barotseland.

He further added that the meritocracy awards were not politically inclined as one of the recipient for instance a sister in the missionary work, the oldest and longest serving holy cross sister in Zambia, Sister Mirrian Namunji Mutelo.

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The omission of Zambia’s first female Vice

China mute on accusations of slowing down IMF loan

The Chinese embassy in Zambia has refused to confirm or deny assertions that they are responsible for the delay in the finalization of a $1.4 billion credit facility (loan) that the Zambian government is pursuing with the International Monetary Fund – IMF.

The IMF loan which was initially planned for disbursements in the first quarter (January to March) of 2022 was rescheduled with Zambia’s finance Minister Situmbeko Musokotwane announcing a revised target of conclusion to mid year – June 2022, a date that is now looking to be too ambitious due to the confirmation that a credit committee to deliberate on Zambia’s debt restructuring request has not yet been formed.

IMF mission chief to Zambia Allison Holland told the Zambian Business Times – ZBT in an exclusive engagement that the timing as to when the Credit facility would be concluded depends on the Zambia governments getting the refinancing assurances from its creditors (the G20 credit committee)

Holland stated that “the precise timing will depend on when the [Zambian] authorities can secure the necessary financing assurances from creditors. This is why we encourage official creditors to come together as quickly as possible to form the official G20 creditor committee under the Common Framework”.

In an exclusive interview with Zambia Business Times – ZBT, a source at the Chinese embassy who asked not to be named stated that they are aware of the accusations but have no comment at the moment. The source however stated that they would revert after going through their internal processes needed to issue an official response.

Chinese funding to Zambia is quite visible with projects such as the Kenneth Kaunda International Airport in Lusaka, Simon Mwansa Kapwepwe International Airport on the Copperbelt, the Kafue Gorge Lower Power project etc

The complexity now is that there is a requirement that Zambia engages all its key creditors (China inclusive) under a common debt treatment framework to achieve debt restructuring. Zambia’s debt obligations to China is well over $3 billion and any deal to restructure Zambia’s overall debt will have to have input from China.

Unless Western lender’s agree to a 100% refinance to take over and then pay off Zambia’s debt to China, it remains to be seen how debt owed to both Western creditors and from the Chinese would eventually achieve common treatment, without the usual shadow boxing or tag of war between the two global power blocks which may be beyond Zambia’s finance ministers sphere of influence.

April 8, 2022

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The Chinese embassy in Zambia has refused

Lifestyle

Whistleblower Doc on drugs shortage forced to resign from Govt

Resident Doctors Association of Zambia (RDAZ) President Dr. Brian Sampa, who was also serving as a practicing medical doctor in government who is credited to have confirmed the now accepted countrywide drugs and medicine shortage in government health facilities has been forced to resign.

Dr. Sampa who went further to reveal acute shortages of essential drugs as well as stationary has disclosed that recommendations were made to have him fired from government where he was serving as a medical practitioner due to his advocacy work and that some people did not approve of his advocacy works.

Dr. Sampa has resigned from government effective today (7 April 2022) stating that his work as a medical practitioner in government was conflicting with his activism which he uses to advocate for quality health services.

Speaking in an interview with the Zambian Business Times-ZBT, Dr. Sampa said he realised that he had to resign from his job if he was going to continue advocating for better health services for the Zambian people because his job was always going to be used against him.

“I thought about the importance of people’s lives rather than my job because what will it profit me to have that job meanwhile am seeing wrong things being done and I can’t speak out. I had no option but to let go of the job and focus on advocating for quality health services and for the betterment of our health sector”, he said.

He explained that some individuals at the Ministry of Health did not approve of his advocacy work therefore his job was on the line, which made it difficult for him to execute his duties diligently as a medical doctor as well as an advocate.

“My job became a liability, I advocate for quality health services, I also stand for the Zambian people when it comes to health and all matters which affect their health, aside from that I am the president of the Resident Doctors in Zambia. All these things require advocacy and each time I was advocating, my job was on the line, there were threats over my job”, he said.

Dr. Sampa mentioned that everything had been okay from 2021 until recently when things started going wrong in the health sector adding that when he became more pronounced about drug shortages and other things happening at the Ministry of Health, things started going wrong for him, making it difficult for him to advocate for better services while serving in government.

“I was going to fail because to be a doctor I needed to concentrate but how do you concentrate at a job that is always on the line and how do you concentrate as an advocate when you are thinking about what will happen to your job when you advocate. I realised this is the right decision to make after consultation and deep meditation, I realised the best way to serve the Zambian people is when I am not tied”, he said.

He noted that he would continue to serve as the President of the Resident Doctors Association of Zambia adding that he is still a practicing medical doctor who will still serve the Zambian people whenever needed and will continue advocating for quality health services without fear or favor.

April 7, 2022

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Resident Doctors Association of Zambia (RDAZ) President

Zambian govt aligned to agreed staff level commitments – IMF

The International Monetary Fund – IMF has re-affirmed that the Zambian government has stayed the course and is broadly aligned with the commitments agreed under the staff level agreement, setting a good base to get the IMF facility.

Responding to a question from Zambian Business Times – ZBT, Allison Holland, IMF Mission Chief for Zambia stated that “the [Zambian] authorities have shared key parameters of their economic reform program, which are broadly aligned with the commitments agreed under the staff-level agreement, and that are aimed at the overarching goal of restoring growth and fiscal sustainability.

Holland further stated that the Zambian “authorities have already begun implementing important reforms, such as increasing transparency in the procurement processes, enhancing control of budget spending and indebtedness, and moving towards cost-reflective tariffs in fuel products.

She stated that these reforms will support the IMF program once it is approved. When asked as to what the conditionality’s for the $1.4billion facility would be, Holland stated that full details would be availed after the program is approved.

“Once the program is approved by the IMF Board the full details of the program will be published – including all the reform targets and goals that will be monitored under the 3-year program”, the IMF mission chief to Zambia stated.

When asked when the IMF program would be availed to Zambia with concerns that the June timeline is fast approaching and this is affecting the national budget credibility? Holland restated that Zambia is in debt distress and needs a comprehensive debt treatment, together with fiscal reforms to restore debt sustainability over the medium term.

“We aim to bring the Zambia program to the IMF Board as soon as possible. However, the precise timing will depend on when the [Zambian] authorities can secure the necessary financing assurances from creditors. This is why we encourage official creditors to come together as quickly as possible to form the official G20 creditor committee under the Common Framework” Holland stated.

Zambia’s Minister of Finance Situmbeko Musokotwane and the hired debt advisors (Lazard) now have the task of ensuring that the credit committee is formed and that Zambia can get refinancing support from the G20 credit committee and the Paris Club in good time before they miss the timeline of getting an IMF deal by June 2022.

It it however not clear how the common debt treatment required to achieve debt restructuring from the key creditors will be achieved as a significant amount of Zambia’s debt is to China and its various financial institutions. It remains to be seen how debt owed to western creditors and that from the Chinese would eventually be treated, without the usual shadow boxing or tag of war between the two.

April 5, 2022

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The International Monetary Fund - IMF has

Govt still subsidizing fuel

Energy Expert Johnston Chikwanda has disclosed that government is still subsidising fuel in form of forgone or waived 16% Value Added Tax (VAT), 25% customs duty and excise duty which translates to over 41% when these taxes are added.

Chikwanda said these taxes were suspended by the previous Patriotic Front (PF) government in order to suppress the pump prices upto 31st December, 2021. Therefore, on 1st January, 2022 the fuel pump prices were supposed to increase by more than 41% but the UPND government decided to extend the tax waiver policy to mid this year which ends on 30th June, 2022.

According to information obtained by the Zambian Business Times-ZBT, Chikwanda who is one of Zambia’s leading energy experts said that “There has been alot of conflicting statements from different stakeholders that there are no fuel subsidies in Zambia at the moment while others are saying there are still fuel subsidies.The correct position is that government is still subsidizing fuel”, he said.

A subsidy can be direct or indirect. A subsidy is simply a sum of money granted by government to help an industry or business keep the price of a commodity or service low, so when a government decides to suspend taxes and duties which they actually need to finance other sectors, they are actually subsidizing that product.

The continuing of the UPND led government to copy and extend the waiver on VAT, Customs and excise duties on petroleum products which was initially done by their predecessor the PF, simply confirms that the subsidy on fuel has continued.

See earlier ZBT article https://zambianbusinesstimes.com/govt-abandons-tax-revenue-from-imported-fuel-extends-waiver/ to appreciate the continued tax waivers and in-fact subsidizing of fuel in Zambia.

April 3, 2022