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Infratel says it appreciates the fundamental role

Companies

Decision to shut down Indeni needs independent review – Energy expert

Energy expert and former Rural Electrification Authority – RIA Chairman Johnstone Chikwanda has advised government to consider setting up an independent technical task force to independently advise on the best course of action on Indeni.

Chikwanda told the Zambian Business Times – ZBT that the closure (care & maintenance) of the refinery may not necessarily bring down the fuel pump prices but may achieve other better outcomes. He noted that there are dozens of African and SADC countries with no refineries yet their fuel pump prices are much higher than ours despite us having a refinery.

An independent task force should be one with broad based representation from key stake holders such as Petroleum Transporters Association of Zambia (PTAZ), TAZARA, Consumers Representative and energy experts in order to help identify the best course of action concerning government’s decision to place Indeni Petroleum Refinery on care and maintenance as well as TAZAMA pipeline change of use, stated Chikwanda.

A ZBT investigation has so far only found a 2017 world bank report to have been the only available basis used by Energy Minister Peter Kapala to shut down Indeni. A search for a more recent and independent report has so far drawn a blank with sources saying the decision was based on an outdated world bank report which may have not taken into consideration the supply security and sensitivities of fuel supply which are in the long term interests of the majority of Zambian citizens.

Chikwanda said the task force needs to assess whether the closure of the 40-year-old Indeni Petroleum Refinery will lead to reduced fuel pump prices and if so, to what extent. He said the task force should also assess the impact of these reforms on stakeholders especially the Petroleum Transporters who may lose combined business up to 50% and some of them have active loans with different financial institutions.

The former RIA Chairman told ZBT that task force should also assess and recommend Zambia’s long-term strategy with regard to strategic fuel reserves. He added that if the outcome is favorable, the task force must recommend exit plans and Management of Change (MoC) to manage the transition.

Chikwanda noted that the overall government intention of trying to reduce the inefficiencies in the petroleum subsector through reforms is a welcome development. He said there is also need to assess the viability of reverting the 53 years old 1,710 km Tazama pipeline from transporting crude oil to transporting refined fuel if this has not yet been done in the recent past.

He said there are a lot of technical and commercial questions which need to be answered including assuring the security detail and cost which will be required over the stretch of this infrastructure and the remaining useful life of the 53 year old pipeline. Other consideration is that there is need to also assess if the current transportation tariff of $55 per ton being charged by Tazama is cost reflective

Chikwanda said the task force can conclude its work in less than 3 months and it must also review other studies which have been done in the past and update the findings as well as look at the Petroleum Management Bill which has not yet gone to Parliament. He said government must consider disengaging from participating in fuel procurement as this is where costly inefficiencies come from as well and this has been presented to Parliament many times.

The new government has been advised to take well calculated and informed decisions on strategic assets of Zambia such as fuel supply and logistics. Fuel is at the core of everyday life and business with lessons on why Indeni was set up in the first place readily available for the current generation of leaders.

December 6, 2021

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Energy expert and former Rural Electrification Authority

Markets

DBZ board oversight role questioned as ACC nabs its MD

The oversight role of the board of director of the Development bank of Zambia – DBZ has come under question after the Anti-Corruption Commission – ACC arrested the banks Managing Director Samuel Bwalya.

A check at the website of DBZ reveals that the board has a distinguished persons as directors who were expected to supervise and have oversight over the development bank activities and its managing director.

The board has distinguished individuals serving as directors that include Prof Pinalo Chifwanakeni as Chairman, Mpho Kubelo, Sanjay Chaudury, Linda Mazokera and Kafula Mwila. These directors on the DBZ board have the requisite experience, qualification and international experience to have prevented the reputational damage that the bank has taken.

The questions that are arising is how the MD managed to pay out all these amounts acting alone as this should have involved other senior staff such as the Finance Director and accounts department staff to facilitate initiating and approving payments without support documentation.

It also raises further questions on the Board of directors risk responsibility to implement financial controls as the Finance Department seems to have continued to process these payments over time when there seems to have no contract or terms of conditions of Servince to warrant such payments which are reported to have been made over a period of time.

The anti-corruption investigative agency – ACC arrested the Development Bank of Zambia (DBZ) Managing Director Samuel Bwalya for Abuse of Authority of Office involving K780,000 relating to suspected amounts paid or drawn from the development bank as education and school fees allowances.

Bwalya aged 51, of New Avondale, Lusaka, has been charged with 12 Counts of Abuse of Authority of Office contrary to the Anti-Corruption Act.

ACC Spokesperson Queen Chibwe said details of the offence are that on multiple occasions between 1st May 2020 and 30th July 2021, Bwalya whilst working as a public officer in his capacity as Managing Director for the named bank arbitrarily directed the payments of school fees for his children abroad using public funds.

“Bwalya, using public funds, made 12 separate payments of £15, 980, equivalent to K417, 900.97; R106, 324, equivalent to K132, 435.09; and R90, 205, equivalent to K130, 709.94,” Chibwe disclosed.

“Other payments were R35, 160.61 equivalent to K39, 028.28; K10, 540, K9, 000; K8, 111.50; K8, 420; K6, 980; K6, 840; K6, 560; and K4, 670.” She said the funds were paid to different schools in the United Kingdom, South Africa, and Zambia.

The DBZ MD Bwalya has since been released on bond and will appear in Court soon. ACC has not confirmed whether Bwalya acted alone, forged his contract as no other officer or director at DBZ has been jointly charged with him.

December 4, 2021

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The oversight role of the board of

Agribusiness

FRA to raise K1.8bn from maize sales – Enough to clear all farmers

The answer to clear the entire outstanding bill of K1.6 billion owed to mostly local farmers who have supplied maize to the Food Reserve Agency – FRA seem to have been found by the new dawn government.

FRA has put out a maize sales program that will see the agency sell off 450,000 tons of its reserves. The agency had decided to increase the amount of maize to be purchased from local farmers by an extra 500,000 tons after the country posted a notable bumper harvest in the 2020/2021 Agro season.

According to the Maize sales program made available to the Zambian Business Times – ZBT, the sales will be handled by a maize sales committee who have been tasked to offload 450,000 tons.

The special purposes FRA maize sales committee is selling the maize at a warehouse price of K4,000 per ton (about US$222 per ton) and has invited both local suppliers and exporters to put in applications that will then be allocated at the discretion of the committee.

When successful, FRA would be able to raise K1.8 billion that would clear the entire K1.6 billion outstanding bill with an extra K200 million available that could be used to mop up the remaining maize stocks at various FRA depots dotted across the country.

The Committee in the announced sales program has stated that the price of K4,000 per ton is subject to revision from time to time in line with market dynamics on both the local and regional level.

Veep W. K. Nalumango announced during a National Assembly session that the government through FRA owes farmers K1.6 billion which had not been budgeted for in the 2021 national budget.

Maize production which is 90% driven by local farmers in Zambia has been on the increase with the last successive farming seasons. Agronomists have listed Maize as one of the crops that Zambia can drive up and start earning billions of dollars annually if taken with the seriousness it deserves.

The knowledge for maize cultivation is also widespread and this provides a value chain that can deliver the much needed economic activity and productivity to a vast majority of Zambians. Even from the FISP program, one million locals have registered as farmers, giving a viable base to start from.

In as much as this may be good news to the farmers who will receive payments, FRA has not released the full details on how the 450,000 tons figure that is to be sold off has been arrived at. According to statistics shared in 2020, Zambia’s annual demand plus required emergency reserves storage for maize for a population of 17 million was projected to about 3.2 million tons and only the surplus should be exported – see See ZBT article on maize reserve requirements

December 4, 2021

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The answer to clear the entire outstanding

Zambia’s annual copper production drops

ZAMBIA’s total annual copper production volume could fall far short of meeting last year’s amount of around 882,000 metric tonnes, as data shows the country’s 10 large-scale mines only managed to produce around 735,200 tonnes between January and October, this year.

According to the latest Zambia Statistics Agency’s (ZamStats) monthly statistical bulletin, Zambia’s 10 large-scale mining companies produced 735,200 tonnes in the 10-month period ending October 31, 2021. This is adverse when compared with copper produced from January to October, 2020, which stood at 771,600 tons.

The Copper rich country managed to produce an extra 110,461 tons to end last year 2020 with 882,061 tons. ZamStats data analyzed by the Zambian Business Times – ZBT showed that copper production remained significantly short this year compared to last year over the three month period – August to October.

And an analysis from the latest copper production data update showed that the cumulative volume of refined copper exported from January to October, this year, reduced by 4.7 per cent during the period under review. However, a surge of international copper prices has been handy in boost earnings and negating the effect of a drop in production.

This also confirms fears that Zambia may not surpass the 882,061 tons produced last year unless the country’s mining companies ramp up production to exceed over 147,000MT in the remaining one month of the this year, a tough call now that the country is entering the rainy season that makes open cast mining much more challenging.

Zambia recorded a huge increase in its copper production for 2020 to over 882,000 metric tonnes from 796,432 tonnes recorded in 2019, mainly triggered by triggered by record-breaking output from First Quantum Minerals’ (FQM) subsidiary companies, which collectively posted the highest last year.

However, Zambia Chamber of Mines data revealed that last year’s copper output still lags behind the Democratic Republic of Congo’s (DRC) impressive 1.55 million tonnes that country’s mines produced last year.

The total copper production included all of the country’s 10 large-scale mining operations as well as small-scale mining operations, which accounted for at least 13,391 metric tonnes from the total tonnage.

Kansanshi Mining Plc maintained its status as Africa’s top copper producing company having produced 253,154 tonnes, narrowly beating its Kalumbila-based counterpart, the Sentinel, also operated by First Quantum Minerals – FQM, which posted 251,175 tonnes last year compared to around 220,000 tonnes in 2019.

According to Finance Minister, Situmbeko Musokotwane, the New Dawn Administration plans tof acilitate the increase in copper output from the current average of about 850,000 to over three million metric tonnes in a decade. Musokotwane has however not given a breakdown per annual on how this will be achieved.

This however entails that existing mines must up their production levels significantly while new copper Mines must be opened. This further raises questions on timelines as large scale copper mine investment take time from exploration and set up to commercial production.

The new government also needs to timely take a decision on the way forward regarding two large Mines – Mopani Copper Mines and Konkola Copper Mines which between them are anchors companies for about four major Cities or towns in Zambia.

The new Government led by Hakainde Hichilema, who before ascending to precedence was one of the top businesspersons in Zambia has re-introduced the deductibility of Mineral Royalty Tax – MRT for corporate income tax assessment purposes from January 1, 2022, widely proclaimed as the “game changer” and expected to attract massive Foreign Direct Investment (FDI) in the mining sector.

December 3, 2021

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ZAMBIA’s total annual copper production volume could

Kansanshi Mine to turn away unvaccinated employees from new year

Talk about a new year present – Kansanshi Mine has announced that they have stepped up efforts to compel all its employees to get fully vaccinated against COVID-19, failure to which their access to the company’s premises will be restricted from New Year’s Day.

In a memorandum seen by the Zambian Business Times, – ZBT issued to all of Kansanshi’s employees recently, Kansanshi general manager, Anthony Mukutuma, called on workers to get fully vaccinated or at least be in receipt of one jab to prevent the spread of the deadly COVID-19.

In recent days, a more dangerous strain of the virus, dubbed the Omicron, was announced in South Africa, triggering an immediate global response to ban travel of all passengers who passed through that country, among five other countries in the SADC region.

The United Kingdom is among the leading economies to have quickly announced mandatory measures to restrict arrivals from the SADC region, including Zambia, which has just been placed on the ‘Red List’ of countries.

This means that passengers arriving in the UK from the SADC region will have to compulsorily quarantine for between 10 and 14 days at a facility in the UK before being admitted to that country, and at their own cost.

“You will all be aware that Kansanshi Mine is currently enjoying a respite from the effects of the COVID-19 virus. However, evidence suggests that this will not continue indefinitely and that a fourth wave of infections could reasonably be expected to evolve in the coming weeks and months. I intend to prepare for this eventuality. Research shows that the COVID-19 vaccine is the best means of doing this, the efficacy of which is now irrefutable,” wrote Mukutuma.

“From January 1, 2022, the following changes will come into effect: Any employee who is unvaccinated (not received at least one jab) and is away from work for more than 72 hours will be required to present a negative PCR test certificate before returning to work – at their own cost. Entry inside the Kansanshi Gold Club clubhouse, the KGE Gymnasium and Swimming Pool and site canteens (for sit–down meals), will be restricted to those individuals who have been vaccinated against COVID-19 (received at least one jab); working in shared spaces/offices will be restricted to employees that are vaccinated (received at least one jab).”

Health officials in Zambia have stepped up efforts to get more people vaccinated, with the arrival of more jabs, the most recent being the Pfizer COVID-19 vaccines delivered from the United States under the COVAX facility.

But uptake remains sluggish with a vaccination rate of only seven per cent so far, nationally, and various citizens ignoring mask mandates. Conspiracy theories and a deep seated mistrust of western driven drive is rife among most Africans and Zambia is no exception.

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Talk about a new year present -

Agribusiness

Govt lifts ban on export of day old chicks & stockfeed

Government has lifted the suspension of the issuance of export permits for day old chicks, stockfeed and its ingredients. This is after the exports were suspended after the country started experiencing shortages as well as price escalation.

Ministry of Fisheries and Livestock Permanent Secretary Benson Mwenya said the suspension of the issuance of export permits for the commodities is still in effect only on paper but in reality, exports are taking place. Mwenya said the issuance of export permits for day old chicks, stockfeed and its ingredients is currently going on and the borders have been relaxed.

Speaking in an exclusive interview with the Zambian Business Times – ZBT, Mwenya said government through the relevant ministry would soon issue an official statement on the matter. He said the decision to suspend the issuance of export permits was required in order to stabilize the availability and prices of day old chicks and stockfeed because companies were increasing prices almost every week.

He added that the availability of day old chicks and stockfeed was affected and the commodities became expensive because companies were opting to export everything therefore the decision to put in place systems that would enable companies to satisfy the local market before exporting.

“It really helped the industry, prices never went up again after the suspension of exports. Two companies that sent notices that they were going to increase the following week didn’t increase. After that, we said we needed to secure local supply. So it was a very serious move”, he said.

“Look at the maize availability now, you know maize is one of the ingredients for stock feed production but we have got too much maize around so we have opened up for export”, he said.

But analysts have cautioned that this opening up may lead to another wave of day old chicks and livestock shortages as well as price escalation. There is need for putting in place policies and measures that will not see what we experienced repeated.

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Government has lifted the suspension of the

Lafarge exits Zambia – Huaxin takes over & renames Company

LAFARGE Zambia Plc has changed its name and reverted back to ‘Chilanga Cement Plc’ following a Share Sale and Purchase Agreement signed and executed with Huaxin (Hainan) Investment Limited, the Chinese cement manufacturer, who now hold a controlling majority stake.

Lafarge had been heavily fined by the Zambian anti-trust watchdog – CCPC and had appealed the decision. CCPC is yet to confirm if the company that takes over will also inherit the fines or if Lafarge has indeed entered into any settlement agreement.

On June 11, 2021, Lafarge Zambia Plc announced that Huaxin (Hainan) Investment Co., Limited, had entered into a Share Sale and Purchase Agreement with Pan African Cement Limited and Financier Lafarge SAS, in respect of the sale and purchase of their 50.1 per cent and 24.9 per cent, respectively, of the issued share capital of Lafarge Zambia Plc.

And in a further cautionary announcement on November 10, 2021, shareholders were advised that all the relevant approvals had been obtained and the conclusion of the transaction was now underway in line with regulatory requirements.

According to an updated circular seen by the Zambian Business Times– ZBT, the share sale from Lafarge to Huaxin (Hainan) Investment Co., Limited is now completed, and that name change back to Chilanga Cement Plc confirmed.

“Following approval of the Sale by the regulatory authorities and satisfaction of all conditions precedent, shareholders were advised via an announcement on November 10, 2021, that the conclusion of the transaction is now underway in line with regulatory requirements. Following the completion of the signing of the sale and purchase agreement and obtaining all relevant approvals, Lafarge Zambia Plc now proposes to change the name of the company from Lafarge Zambia Plc to Chilanga Cement Plc, in line with impending majority control in the company and consistent with the complete exit of Financière Lafarge SAS and Pan African Cement Limited representing the Lafarge Holcim Group, the majority shareholders in the company,” read the circular.

Huaxin is a wholly-owned subsidiary of Huaxin Cement Co. Limited, an entity listed on the Shanghai Stock Exchange in China. As of December 31, 2020, Huaxin Cement is present in 13 provinces of China and six countries abroad with almost 250 subsidiaries and branches.

The total asset value of Huaxin Cement amounts to approximately US $6.6 billion, with sales of approximately US $4.4 billion and around 16,860 employees globally. The Cement company is a leading player in the manufacturing and marketing of cement products in China.

Founded in 1907, Huaxin Cement today has a cement production capacity of 115 million tonnes per year, aggregate production capacity of 55 million tonnes per year and a ready-mix concrete capacity of up to 27 million cubic meters/year.

Huaxin Cement is ranked in China’s top 500 manufacturing companies and is also listed as a Fortune China 500 company.

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LAFARGE Zambia Plc has changed its name

Agribusiness

Caritas Czech & Big Terra launch app to aid farmers in Zambia

Caritas Czech Republic and Big Terra have introduced a new and simple mobile app to help Zambian farmers better resist climate change through the timely provision of data concerning the weather and their crops.

Introduced at an online workshop attended by farmers and representatives of municipalities and ministries from both Zambia and the Czech Republic, the Terra Crop Zambia app provides weather information and other data valuable to both small scale farmers and larger local agricultural cooperatives.

The app was created in cooperation with the Czech European Space Agency incubated start-up Big Terra within the AgriBusiness for LIFE (Livelihoods, Innovation,Food and Empowerment) project funded by the Czech Development Agency.

Project Coordinator Mutinta Shandele said the project which was funded by the Czech Development Agency was implemented between July 2018 and was scheduled to end in July 2021 but came to an end in August 2021. She said Caritas Czech Republic in partnership with Lima Links, Czech University of Life Sciences in Prague, Big Terra and government line ministries implemented the project.

Speaking during a Climate Data Workshop, Shandele said the overall objective of the project was to increase agricultural productivity and incomes of small & medium scale farmers and cooperatives, and the project was operating in Mongu, Limulunga, Kaoma, Nkeyema and Mumbwa districts with a target of 22 cooperatives (more than 400 members) and 125 small to medium scale farmers in the 5 pilot districts.

“Local farmers are interested in understanding the weather conditions so that they know what crops to grow and when. So far, 20 farmers have tried the application during the pilot phase, and according to them, the application is user-friendly and they are very satisfied with it,” stated Shandele.

And Big Terra Founder Pavel Jurus said better future planning of farmer resilience to the impacts of climate change can improve lives. “We want to support sustainable farming around the world by providing customized information to farmers in various locations,” stated Jurus about the motivation to develop an application for Zambian farmers. “The information is based on satellite data, weather and climate models, crop modelling and local data. The result is a service tailored to local needs, contributing to the resilience of local farmers to climate change.”

In Zambia, agriculture plays an important role and the livelihood of a large part of the population depends on it. However, climate change is bringing even more uncertainty to this already unpredictable sector. This Terra Crop Zambia app aims to contribute to more efficient agriculture and better resilience of Zambian farmers to the effects of climate change.

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Caritas Czech Republic and Big Terra have