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Nyimba Investments Limited has denied allegations that the company overpriced fertilizer supplied to government in the 2020/2021 farming season under the farmer Input Support Program – FISP.

Large Fertilizer trading companies have been accused of extortion and possible involvement in corrupt practices after it was revealed that the companies were charging the ministry of Agriculture – FISP program US$1,200 per ton when prices were as low as US$400 per ton.

Nyimba Investments is among the top three large scale suppliers of fertilizer to government under FISP that include Neria Investments and Export Trading Group – ETG whose dealings with government have come under scrutiny following the change of government from the Patriotic Front – PF to the United Party for National Development – UPND.

President Hakainde Hichilema during a briefing revealed that his predecessor government were buying fertilizer at US$ 1,200 per ton from its contracted suppliers at the time when the commodity was selling between USD400- USD450 on the international market.

“When the fertilizer world prices were USD 400-USD450 per tonne, our colleagues deliberately, consciously were buying fertilizer using taxpayer’s money at USD1,200 per ton, you multiply that by 300,000 metric tonnes”, President Hichilema said.

One of the companies that supplied huge volumes of fertilizer to government under FISP, Nyimba Investments Limited has refuted the allegations saying the company supplied fertilizer at a price below USD 1,200 per ton.

Company Head of Sales and Marketing Willings Mulendema noted that Nyimba Investments Ltd supplied about 103,000 metric tonnes of fertilizer in the 2020/2021 farming season and that the price was below the US$1,200.

Mulendema further questioned as to when or at no point was fertilizer selling at US$400 per ton on the international market. He indicated that some prices are quoted at Free on Board – FOB and one has to look at what the landing cost is which includes Insurance, freight and shipping and other cost components.

He added that there are various international suppliers of fertilizer and prices change all the time just like crude oil or any other commodities. So prices and volumes are agreed at particular times.

Nyimba Investments Limited has denied allegations that

First Quantum Minerals – FQM, Zambia’s largest copper miner with large scale copper mines at Kansanshi in Solwezi and Trident at Kalumbila  has today 15 November 2021 announced that the Board of Directors will appoint Tristan Pascall, currently the Company’s Chief Operating Officer (COO), to the role of Chief Executive Officer (CEO).

Tristan will take over from his father Philip Pascall co-founded First Quantum Minerals in 1996 and has served as its CEO and Chairman ever since. He retires as one of the longest-serving CEOs among the world’s major mining companies.

The appointment will take effect at the Annual General Meeting (AGM) to be held in early May 2022, at which time Philip Pascall, the Company’s current Chairman and CEO, will retire from the CEO role and will continue to serve as Chairman of the Board. The Company will nominate Tristan Pascall for election as a director at the AGM.

According to a statement made available to the Zambian Business Times – ZBT, FQM stated that “After a thorough search process, we are very pleased to appoint Tristan Pascall as First Quantum’s next Chief Executive Officer. Tristan has demonstrated impressive leadership in his current role as COO as he navigated the successful ramp-up of our largest asset through the challenging environment presented by the global pandemic”.

The statement further stated that “Tristan’s previous hands-on leadership experience of eight years in Zambia and four years in Panama has given him a deep knowledge of our assets, operating teams and local partners. His practical, on-the-ground experience with our people and projects, combined with lessons learned from the countries where we operate, embodies the Company’s culture and makes Tristan the right leader for First Quantum,” said Robert Harding, Chair of the Nominating and Governance Committee and Lead Independent Director.

Tristan Pascall joined First Quantum in 2007 and held progressively senior operational roles in Africa and Latin America until 2020 when he served as Director of Strategy and later became Chief Operating Officer in January 2021. Prior to assuming his executive leadership roles, Tristan was a key member of the teams that delivered on several major greenfield and expansion mining projects which now collectively represent most of the Company’s net asset value. His responsibilities from 2009 to 2015 included the initial development, construction and operating the Sentinel [Kalumbila] mine in Zambia.

Tristan graduated from the University of Western Australia with a Bachelor of Engineering (Honors) and Bachelor of Commerce and completed an MBA at INSEAD.

“I am very excited to continue to build upon the momentum we have established at First Quantum. It is deeply humbling to be selected to lead such a highly talented team, all of whom have contributed to establishing a unique entrepreneurial culture,” said Tristan Pascall. “As we enter our next stage of growth, I look forward to building on First Quantum’s accomplishments of the past two decades.”

Over the course of Philip Pascall stewardship, the Company has grown from the construction of the Bwana Mkubwa project in Zambia designed for 10,000 tonnes a year of copper production, to become the world’s sixth largest copper producer. FQM which is listed in Canada has over 70% of its copper production and revenues generated from Zambia.

The FQM group business has now grown into a global mining giant and has continued to diversify geographically with its Zambian units contribution to both revenue and production being reduced in proportion on a year on year basis.

First Quantum Minerals - FQM, Zambia’s largest

A source has disclosed to the Zambian Business Times – ZBT that the police has arrested about six (6) civil servants that are suspected to be behind the criminal matter where some teachers were allegedly recruited and given ‘fake’ appointment letters.

Some teachers deployed to various public schools across the country but not placed on the government payroll for over a year staged a protest on Monday 8 November 2021 at the Ministry of Education demanding to be addressed and put on payroll.

This protest led to the revelation that about 1,500 teachers have been issued with appointment letters, posted to various provinces but had not been put on the government payroll. Others accused the government officials at the ministry of education of having removed them from the original list and put their own preferred applicants in suspected corruption and nepotism grounds.

Speaking in an exclusive interview with ZBT, the source who is not authorized to publicly speak to the media stated that some of the teachers who were protesting acquired the appointment letters dubiously as they were fake therefore the teachers were not recruited by government.

The source who asked to remain anonymous said investigations are still on going and the police will be able to give more information in due course. Another source stated that the problem is that some officials started selling appointment letters for as high as K10,000 to K15,000. This is what led to the confusion as some genuinely recruited teachers were  being removed and replaced with the ones that paid the bribes. This issue is deep and very complicated, the source stated.

The source further revealed that some of the teachers that were protesting were “sponsored” in order to paint a certain picture of the Teaching Service Commission and ministry of education so as to find excuses to get rid of some officers ‘that they did not like’.

“How do you explain some of the protestors coming from as far as Mansa when you say they have not been paid for over a year and don’t have money”, the source said. Look at that video, some of them were even wearing new clothes bought after being paid and were simply sponsored.

The source told ZBT that this issue is more complicated as some of those letters are suspected to be forged, so even some of those protesting teachers should also be investigated as some of them engaged in corruption as they are suspected to have bribed some officers to issue them with appointment letters. Some simply forged their letters to get it. There has to be thorough investigations.

The fight against corruption in Zambia is a complex matter as they are always tainted with insinuations of political interference or counter accusations of tribalism or favoritism. Moreover, the law enforcement agencies delay in executing investigations and subsequent arrests and only acting after media exposures or political instructions.

A source has disclosed to the Zambian

OP-Ed by Stuart Lisulo

GOVERNMENT proposes to spend an unprecedented K173 billion national budget expected to be passed and implemented from January next year.

Among the key measures proposed by the UPND administration will include new expenditure of a staggering K350 million for Small to Medium Enterprises (SMEs) as empowerment funds; a monumental increment of the Constituency Development Fund (CDF) from K1.6 million to K25.7 million, signalling an acceleration of the decentralisation programme and increased expenditure in both the health and education sectors.

Government will also recruit 30,000 teachers and around 11,000 healthcare personnel next year, partly financed by the International Monetary Fund (IMF) US $1.3 billion Special Drawing Rights (SDR) made available in August, this year.

However, government’s proposed expenditure on servicing external and domestic debt repayments alone is a staggering K78,680,141,674, or around US $4.5 billion, almost half of the entire budgetary expenditure.

According to next year’s available resource envelope, government proposes to raise a cumulative total of around K74.4 billion as both domestic and foreign debt to finance year’s budget, representing around 29 per cent of the total budget.

Reliance on debt to finance next year’s budget has, therefore, increased to K74.4 billion from K53.6 billion contracted in this year’s budget.

While the UPND ‘New Dawn’ government can boast of already having access to the SDR made available by the Fund, with another similar amount for Balance of Payments (BoP) support expected to go into reserves by early next year, implementing this debt-financed budget will be the toughest test for this new government.

Speaking during a ZiCA 2022 post-budget analysis dinner at Mulungushi International Conference Centre (MICC) recently, Finance Minister, Dr. Situmbeko Musokotwane, told stakeholders thatZambia’s economic recovery needed “dramatic” measures to kick-start the ailing economy, even amid high debt servicing.

“…But at the same time, you want to do something dramatic on economic growth that will generate more revenues because in a sense, this debt problem that we have of US $13 billion, if the economy is big, US $13 billion is nothing. So, therefore, as you push debt down, you must also do something to raise the level of the economy so that it can be able to handle the level of debt that you have,” the Minister said in response to questions from participants on how government will stop accumulating debt.

Assuming the available credit does materialise next year, there is the danger of crowding out the private sector, which presents serious problems for credit availability for small businesses. For instance, a quick glance at the 2022 budget speech reveals that while government is committing to dismantling domestic arrears of around K3.145 billion, on the other hand, it will pull out around K24.5 billion from the domestic market in local borrowing.

And sceptics argue that foreign credit facilities budgeted for to finance next year’s budget will not be made available annually so how will the budget deficits be covered from January 1, 2023? Assuming projected GDP growth rate of 3.5 per cent next year is realised, will this be sufficient to support Zambia’s heavy debt repayments, especially in view of the looming US $750 million debt repayment, which still needs to be serviced as single, bullet point payment?

Most critics of next year’s Yellow Book are roundly agreed that while it is a progressive budget, implementation will prove to be much harder and will be the first, real tough test that awaits the ‘New Dawn’ administration.

OP-Ed by Stuart Lisulo GOVERNMENT proposes to spend an

ZAMBIA has moved up two places in the Absa Africa Financial Markets Index, signalling an improvement in the country’s attractiveness to foreign investment and improvements in its financial markets.

According to a statement availed to the Zambian Business Times – ZBT,  Zambia’s ranking jumped to seventh position from nine out of 23 countries ranked, indicating an overall improvement in the country’s attractiveness to foreign investment based on six pillars that include access to foreign exchange and market transparency, among others.

The latest Index is the fifth edition having been officially launched back in 2017, whose aim is to show how economies can improve the market framework to bolster investor access and sustainable growth, and act as a benchmark for investors and policymakers.

The Index, produced by the Official Monetary and Financial Institutions Forum (OMFIF), an independent forum for central banking, economic policy, and public investment, and sponsored by Absa Group Limited, records the openness and attractiveness of 23 countries across the continent to foreign investment based on six fundamental pillars, which include market depth; access to foreign exchange; market transparency; tax and regulatory environment, among others.

Since its launch in 2017, the Absa Africa Financial Markets Index has shone a crucial light on the opportunities for investment in the region. Commenting on the latest findings in Lusaka recently, Absa Bank Zambia Plc Director, Head of Global Markets, Stanley Tamele said he had high hopes of seeing Zambia’s ranking improve even further.

“Over the last few years, we have seen the Index grow from strength to strength, with the market insights getting more expansive. What provides reassurance in the Index to stakeholders is OMFIF’s independence and the depth of their market insights, and we have high hopes that we can see Zambia’s rankings improve in the coming years, said Tamele in a statement.

And Absa Group Limited Chief Executive of Corporate and Investment Banking Charles Russon observed that some markets had not recovered from COVID-19 as originally anticipated.

While some might find it disheartening to see the average score across the board drop, Africa is navigating an extremely tricky economic atmosphere. Recovery from the COVID-19 pandemic has not been as straightforward as we would have hoped last year, and this has had a large impact on the twin challenges the continent faces in reinvigorating financial markets post-pandemic, while strengthening market infrastructure, said Russon.

OMFIF chairman, David Marsh, said that innovations in sustainable finance and market infrastructure would be critical to ensuring that African markets remained competitive.

A glance at the country snapshot shows that from the six pillars, Zambia achieved its highest score in Legality and Enforceability of Standard Financial Markets Master Agreements, scoring 85 out of 100.

The country is currently in the process of reviewing the Companies and Insolvency Act to create a more robust regulatory framework for insolvency protection and practice.

ZAMBIA has moved up two places in

The Bank of Zambia – BOZ has been blamed for the current Kwacha slide that has continued to eat away value for Zambian citizens due to the central bank’s lack of intervention in the past few weeks.

According to an Access Bank Zambia Limited note, the Bank has pointed out that the lack of central bank – BOZ intervention to support the kwacha contributed to the local unit coming under pressure.

“The local unit posted another weekly loss. The USD/ZMW currency pair closed the Friday trading session at K17.36/K17.41 compared to the K17.24/K17.29 quoted as at close of the previous Friday. The kwacha continued trading under pressure stemming from the lack of foreign currency on the market. Absence of central bank intervention exacerbated the pressure on the kwacha,” stated Access Bank Zambia in its Treasury Market Update issued recently.

The Kwacha has unexpectedly continued depreciating against major currency convertibles despite the strong international copper prices, news of the removal of Mineral Royalty Tax (MRT) non-deductibility, widely hailed as favorable for mining companies and a looming International Monetary Fund (IMF) economic bailout programme.

 Moreover, Zambia received the US$1.3 billion Special Drawing Rights injection from the International Monetary Fund – IMF that boosted foreign exchange reserves to over five months import cover. 

BOZ Governor Denny Kalyalya during his first stint as Governor used to blame the perpetual Kwacha depreciation on the fiscal side or uncontrolled government spending. Now that we have a new Minister of Finance [Situmbeko Musokotwane] and some changes in leadership at the ministry of finance, it will be interesting to hear what the current depreciation will be blamed on.

 Since the August 12 polls, the kwacha surged against major currency convertibles to peak at K15.94 per dollar by end-August, 2021, mainly driven by positive sentiment of the election outcome which was won by the United Party for National Development – UPND.

A check today by the Zambian Business Times – ZBT revealed that the the local unit has continued to depreciate and trading at about K17.65 per US dollar. This is eroding value from a majority of Zambian citizens whose earnings are pegged in Kwacha.

The UPND government had among other campaign promises pledged to fix the monetary and fiscal regime and deliver a below K10 per US dollar rate for Zambia. With all the key supporting fundamentals such as buoyant copper prices, reserves of over five months import cover and a new fiscal team in place, the continued slide of the Kwacha continues to raise more questions than answers. Efforts to get a comment from BOZ were underway by time of publishing.

The Bank of Zambia - BOZ has

Locally owned and upcoming Oil Marketing Companies – OMCs have expressed concern at still being sidelined by the new dawn UPND government when it comes to awarding of oil supply deals.

“What we’ve witnessed is that when government accumulates debt, only then do they resort to the smaller and mostly locally owned OMCs; we feel used because at some point will come and say, ‘let’s give you waivers’ because, now, they are unable to service the debt”, stated the Association of Oil Marketing Companies President Dr. Kafula Mubanga.

So, where do they run to? the local OMC’s. So, we really appeal to government [and the new minister of energy Chibwe Kapala] to make a serious decision in rescinding that contractual obligation by creating policies around the tendering process to ensure that the local OMCs are also part of the stakeholders that supply (the commodity)…” he added.

“I always say, ‘let the waivers be a preserve of indigenous Zambians’ so that they are able to build capacity by importing so that it’s not a contractual obligation; they source product, then they bring the product on the market and be able to create competition on the market between the majors (mostly foreign owned OMCs) and minors (mostly locally owned OMCs). In fact, government was supposed to award those contracts to Zambians or to come up with a structure were the majors subcontract the indigenous owned companies.”

But when asked whether government’s proposal to restructure the fuel supply chain next year to achieve least cost pricing while ensuring stable supply of petroleum products would be able to cut out middlemen?, Dr. Mubanga observed that it may be difficult to implement restructuring in practice as the dominance of foreign OMCs rules out the prospect of cutting out middlemen in the fuel procurement process.

“The commitment might be there, but the technically, It’s very clear from the contracts that were awarded that it does not provide that solution in detail because there is no way you are going to avert agents or middlemen with only the majors or large OMCs on the market playing the game.

That is not true. That is not the correct position. The correct position to us achieving that is that there should be indigenous participation in the supply chain, and that in itself shows the commitment of the ‘New Dawn’ government. The good will is there, but the technicality is the issue we’re talking about,” replied Dr. Mubanga.

The most recent fuel pump price hike occurred on December 27, 2019, where the Energy Regulation Board (ERB) approved fuel price increases for petrol, diesel, kerosene, Low Sulphur Gas (LSG), among others, to K17.62; K15.59, K15.39 and K17.88 per litre, respectively.

At that time, the kwacha breached the K15 per US dollar threshold for the first time in Zambia’s history, as oil prices on the international market soared to hit nearly US $70 per barrel of Brent Crude oil.

The Kwacha is now trading at about K17.5 per US dollar and crude oil price at the international market have skyrocketed to over US $83 per barrel, a three-year high, according to prices tracked by oil-price.net, the commodity pricing monitor. It’s clear that both the price per barrel and the current US dollar to Kwacha exchange rate have adversely moved to force an upward price adjustment.

Moreover, Government’s fuel arrears have significantly risen due to the price differential between the landed cost of petroleum products and the obtaining pump price at gas stations resulting in government subsidizing the commodity. The stock of fuel arrears as at end-August, 2021, stood at about US $480 million.

Successive Zambian governments have struggled to find a workable formula to enable the growth of locally owned OMCs as the market is heavily dominated by foreign owned OMCs. It also remains one of the major drainers of forex from the Zambian economy, putting pressure on the perpetually depreciating Kwacha.

Having a healthy mix of players and market share in the oil supply chain between local and foreign owned is considered strategically important due to the economic and political sensitivity of fuel pump prices. Over reliance on a foreign owned and dominated industry continues to risk and compromise the economic sovereignty of Zambia.

Locally owned and upcoming Oil Marketing Companies

FUEL pump prices are likely to be hiked in view of increased oil prices on the international market, compounded by the unbalanced oil subsector obtaining in Zambia where foreign players continue dominating, says Oil Marketing Companies (OMCs) Association president Dr. Kafula Mubanga.

And Dr. Mubanga has observed that government’s intention to restructure the fuel supply chain to achieve least cost pricing, while ensuring stable supply of petroleum products, is a welcome move but may be difficult to implement in practice due to limited local OMCs’ participation.

Brent Crude oil prices on the international market have skyrocketed to over US $83 per barrel, a three-year high, according to prices tracked by oil-price.net, the commodity pricing monitor. And a review by the Zambian Business Times – ZBT shows that crude oil prices are at a three-year high, the kwacha has equally continued to depreciate steadily to around K17.50 per dollar by early November.

The commodity’s pricing is influenced by the two key factors being the kwacha and prevailing oil price on the international market as oil is imported into Zambia at spot prices, usually via Dar Es Salaam, either as comingled stock through the Tazama pipeline onto Indeni Petroleum Refinery in Ndola or as finished products via OMCs.

Commenting on the development, Dr. Mubanga warned that local fuel pump prices, which were last hiked to K17.62 per litre of petrol in December, 2019, would inevitably be increased owing to the deteriorating macroeconomic fundamentals, compounded by the uneven structure of the oil subsector on the local market that has continued to favour foreign OMCs over local businesses.

“Government has not committed itself to empowering the local OMCs by putting up an S.I. (Statutory Instrument) that will compel the large and mostly foreign owned OMCs to engage the local and upcoming OMCs  in terms of market share; they have deliberately ignored that. Now, with that in mind, these majors (OMCs) are here to make profit, so they will not entertain the local OMCs  because it provides competition for them.

So, we are still vulnerable because government has not provided that platform, which has a legal framework that compels the large and foreign owned OMCs to engage the locally owned OMCs in terms of market share. So, I can guarantee that, there will definitely be a steep rise in terms of the pump price because the business environment has not been levelled in terms of participation by government by ensuring the locally owned OMCs also participate,” Dr. Mubanga said in an interview.

“Yes, definitely, it may not be today, but definitely, there will be these effects passed on to the end user. Remember, we just import, we do not have a functional refinery, currently, so we are getting imported products into Tazama; we are basically depending on the imports. So, we are likely going to see an increase in the pump price. It might not be now, it might be soon or even next year.

FUEL pump prices are likely to be

The Crushers and Edible Oil Refiners Association (CEDORA) has disclosed that the statutory instrument – SI that temporarily suspended import duty on edible oils expired at end of October 2021 and may be the reason behind market price instability of the commodity.

CEDORA however refuted reports that there is a steep increase in cooking oil prices on the market. Association Director Aubrey Chibumba said he was not aware of cooking oil prices steeply going up as most of the supermarkets have maintained old prices.

Chibumba said CEDORA members has held their prices the same and if prices have gone up, it is by a small margin of between K3-K5, which may be a reflection of crude oil prices on the international market, which have gone up by USD 200 per tonne.

Speaking in an exclusive interview with the Zambian Business Times – ZBT, Chibumba said the Statutory Instrument (SI) number 63 of 2021 to suspend customs and exercise duty on importation of edible oils, meant to help cushion the prices of cooking oil, expired on 31 October 2021.

He said there has been no new SI issued therefore some traders and retail outlets might be increasing prices because they are adding Value Added Tax (VAT) and that may be the reason for the variations in cooking oil prices on the market.

He noted that the industry is waiting for guidance from government on the SI that expired and part of what is currently happening is because the market is disorderly due to not knowing the way forward. The Association however noted that there has been signals that the SI has been extended but there has been no official communication.

Chibumba mentioned that most brands have maintained prices for the past few months but a lot of sunflower oil has come onto the market, which is usually more expensive than other products so it may be selling for a higher price, but it was not on the market previously.

“So if you are trying to compare the price of sunflower oil and Soya oil, you are not comparing the same things, so you can’t say that the price has gone up, the correct thing to say is that there is a new product, more expensive product on the market”, he said.

The Crushers and Edible Oil Refiners Association

A consortium of influential non-governmental organizations – NGOs that includes Caritus Zambia, JCTR, Diakonia and Women for change have challenged the finance minister Situmbeko Musokotwane to provide clarity on the utilization of the increased funding through the Constituency Development Fund CDF.

The NGO consortium in a statement made available to the Zambian Business Times – ZBT stated that the Minister of Finance needs to provide more guidance on what CDF will be used on and what it will not be used on. In his budget speech, Dr. Musokotwane mentioned that some costs will not be met from the CDF. It is important for the public to know what the allowable and non-allowable costs under the K25.7 million for the public to be able to effectively monitor utilization of these funds?

The NGOs have also cautioned that government need to put in place control measures that will prevent the undue influence of local authority officials and members of Parliament in the management and administration of CDF. In the past, communities’ priorities were sidelined over local authorities’ priorities.

Among other concerns raised, the NGOs further expressed the concern on the late, inadequate and inconsistent release of the CDF allocation by Central Government to Constituencies in the past which negatively affected the implementation of new projects or the completion of already existing incomplete projects. The government should advise how these pitfall will be avoided.

The NGO consortium has propose the following as the way of making CDF a success in Zambia:

1. The CDF Guidelines should be strengthened so as to mitigate against the risk of individuals or elected representatives’ prioritization of projects using their positions of influence.

2. There is an urgent need to establish and strengthen local and sub-governance structures such as the WDCs and CDF management committees. Local authorities also need to prioritize the formation and full orientation of the WDCs as provided for in the 2021 WDC guidelines as they are key in the submission of ward development plans and priorities.

3. There is need to harmonize and align various policies, regulations and procedures as CDF will be an integral component of the country’s development agenda.

4. There is need to review the local Government expenditure and procurement rules and regulations as a means of enhancing transparency and accountability in the expenditure and procurement of the CDF.

5. It should be emphasised that CDF should be prioritized within the local communities needs and aligned to the Integrated Development Plans (IDPS). The CDF amounts should be adequate in consideration of the size of the wards, constituency and population among others.

6. Ministry of Local Government needs to prioritise awareness raising on CDF targeting both Right Holders and Duty Bearers.

7. Ensure timely and non-discriminative (all constituencies) disbursement of the CDF allocation.

8. Enhanced transparency and accountability measures in CDF utilisation and corrective and punitive action for anyone found wanting.

Decentralization as a policy is one of the best methods of ensuring equitable distribution of development and cash but has its own complications and drawbacks. The new dawn UPND government will therefore need to ensure that they work extra hard and smart especially in this first year of implementation to give the policy a head start for successful implementation.

A consortium of influential non-governmental organizations -