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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.”

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FUEL pump prices are likely to be

Agribusiness

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.

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The Crushers and Edible Oil Refiners Association

Lifestyle

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.

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A consortium of influential non-governmental organizations -

Companies

FNB has launched the Helping Everywoman Rise-H.E.R initiative, which will help address some of the challenges that women face in accessing financial products.

Speaking during the launch of the H.E.R initiative which was held at Sarovar Hotel, FNB Chief Executive Officer Bydon Longwe said the need to launch this initiative was also motivated by the central bank’s statistics a few years ago, which showed that it was difficult for women to access banking services.

Longwe has encouraged customers to go cashless and transact on the digital platform and encouraged women that will uptake the new product to take advantage of the FNB application, which provides the necessary information.

And Labour Minister Brenda Tambatamba who represented government said the launch of the initiative acknowledges that women can contribute to growth not only by building businesses but also by better managing their financial resources.

Tambatamba said financial inclusion is more than just reducing the gender gap but it is about empowering women to increase their financial autonomy, bargaining power and self-esteem while reducing their exposure to risks.

 

 

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FNB has launched the Helping Everywoman Rise-H.E.R

Markets

One of Zambia’s leading economists Yusuf Dodia has disclosed that the 2022 budget will lead to a huge increase in net foreign debt position for Zambia.

Dodia told the Zambian Business Times – ZBT that 29% of the 2022 national budget is being funded through foreign financing, so the country’s debt will increase on a net basis based on the financial model which has been adopted.

Dodia stated that “I’m concerned that we are looking for answers to our challenges from outside when we have this huge amount of copper earnings which we are not touching in our 2022 budget”, he said. Copper prices are expected and projected to remain buoyant throughout 2022.

He questioned that “where is the money going to come from because we are looking at a budget which has risen from K119 billion to K173 billion which is an increase of K50 billion. So where is the money going to come from to finance this and this is where the big challenge is, if we had not done that well in 2020, how can we expect to do better in 2022”, he said.

Dodia further revealed that revenue collections are expected to go up by between 35% and 90% and questioned company tax collections going up by 70% adding that the mechanism put in place to facilitate the collection of higher taxes in the 2022 budget is not clear.

He said many initiatives government has put in the budget are for medium to long-term development and the 2022 national budget is 12 months, so within 12 months the plan is to raise an extra K50 billion?.

Dodia additionally stated that it is not clear yet which criteria the Ministry of Small and Medium Enterprises will be using for the services that they will offer the local businesses in Zambia.

He however added that going by the President’s [Hichilma’s] pronouncements, businesses that are officially registered would be able to apply for technical support and receive support in terms of being connected to financial institutions that can provide them with loans and capital and connections between businesses themselves.

But these would be in the same line with the Citizen’s Economic Empowerment Commission (CEEC), which more or less provided a similar service. So, will CEEC continue or these will be done under the new ministry?

The economist advised that the ministry of SME should rather focus more on how they can create linkages for small businesses to government and other institutions such as purchasing units of various multi-national institutions adding that government should commit itself to buying from the small and medium enterprises as part of its support programme for developing the sector.

“I can advise business houses to formalize. Make sure that you are a registered company and at the end of the day, when you make your applications you are making your applications as a company which is officially registered in Zambia as a small and medium enterprise”, he said.

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One of Zambia’s leading economists Yusuf Dodia

Markets

Leading Zambian Economist Yusuf Dodia has disclosed that the 2022 national budget has placed a lot of emphasis on borrowing from the domestic economy which will crowd out or constrain access to credit for the private sector, a situation that should be avoided so that the private sector can have access to reasonably priced money.

Dodia said that priority should be given to the private sector to access to money from the banks and not the banks simply putting all their money into government treasury bills and bonds, but the 2022 budget drives in the direction of a lot of money going into government borrowing from the domestic economy.

Speaking in an exclusive interview with the Zambian Business Times-ZBT, Dodia said the 2022 national budget is very ambitious as new government is trying to deliver to the people of Zambia on the promises they made.

He said a lot of money would go into the Ministry of Education, Health and Small and Medium Enterprises development adding that various promises were made to different sectors of the economy and that this budget addressed some of these promises.

Analysts have however warned that reducing the cost of borrowing in an environment were government borrowing is rife is a difficult as banks will simply tie up their funds with government through treasury bills and bonds at elevated interest rates, considered as risk free.

Lending to the private sector attracts a further risk-reward premium over and above the government treasury bills and bond rates consider as risk free assets.

A check by the Zambian Business Times – ZBT on the latest treasury bills auction results by Bank of Zambia – BOZ dated 4 November 2021 shows that the government is borrowing from Banks for the 364 days treasury bills  cut off yield rates have drastically come down to about 12% from the highs of about 25% on August 11, prior to the change of government.

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Leading Zambian Economist Yusuf Dodia has disclosed

Lifestyle

Royal Zambian Airline has unveiled musician Cleo Ice Queen as the new brand ambassador for the company.

Speaking at the launch, Sales and Marketing Manager Chileya Kasuba said Cleo will take the message of Royal Zambian Airlines to further heights than it’s been before and the airline is confident that Cleo has the character and energy to represent the company’s brand effectively and in the best possible way.

Kasuba said the company offers competitive rates and sees itself as a viable alternative to other carriers servicing the Lusaka-Johannesburg route noting that the airline is proud to contribute to the growth of the Zambian aviation sector.

She said the company is hopeful that the service that it offers to its clientele will continue to bring new clients on board and help to retain old clientele.

“We are very excited to embark on this adventure with Cleo and her loyal fan base both locally and internationally”, she said.

Kasuba mentioned that December 2021 will mark exactly one year since Royal Zambian Airlines took to the skies to offer a luxury air travel experience between Lusaka and Johannesburg and as a proudly Zambian airline, it has made it easier for business and leisure travelers to travel between Lusaka and Johannesburg safely, swiftly and stylishly.

She said the company offers excellent customer service and has highly skilled professional and friendly stuff, serves delicious food, has amazing fares and has great partnerships one of which is with Legacy hotel in Johannesburg.

Speaking at the same event, Cleo Ice Queen said it was an honour to be appointed brand ambassador for the airline and she looks forward to a long-term relationship with the company.

She added that Zambians should be proud of having something that they can call their own and wished the Royal Zambian Airlines massive success and encouraged everyone to support Zambian Royal Airlines and everything that is local.

 

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Royal Zambian Airline has unveiled musician Cleo

Tech

The new dawn UPND government risks spending a minimum of US$252 million ( US$21m by 12 months) if the Energy Regulation Board – ERB Board of directors is not timely appointed [following the dissolution of the erstwhile board] and does not immediately increase the fuel pump prices across the country.

Surging global crude oil prices threaten to spike another wave of food price increases in Zambia and across the world as energy prices are are key determinant of the cost of landing agro produce to various markets as well as influence the general cost of living through increased transport costs.

The continued increase in global crude oil prices has forced Zambia’s finance minister Situmbeko Musokotwane to disclose that the government is spending about US$21 million per month on fuel subsidies alone, an unsustainable undertaking that threatens to continue with a long culture of pumping money towards areas not budgeted for thereby threatening the entire budget credibility .

The new dawn government is facing up to the realities of running a African economy like Zambia as this figure alone ($250 million) on fuel subsidies, does not even take into consideration the further global fuel price hikes projected for 2022. The subsidies, if not checked would grow to even half a billion dollars going by the further projected further crude price increases.

And the impending fuel price hike threatens to reverse the inflation gains that Zambia has posted in the last few months. With the annual rate of inflation having reduced to 21.1 per cent in October from 22.1 per cent recorded in September, mainly driven by easing food and non-food inflation, the fuel price hike are expected to wipe off these gains.

Last month, Zambia’s annual rate of inflation for the month of October, Zambia Statistics Agency (ZSA) Interim Statistician General Mulenga Musepa disclosed that inflation this month significantly dropped to 21.1 per cent, the lowest since December, last year, largely driven by easing food and non-food prices across a variety of items.

“The annual inflation rate for October, 2021, decreased to 21.1 per cent from 22.1 per cent recorded in September, 2021. This means that on average, prices of goods and services increased by 21.1 per cent between October, 2020, and October, 2021. The decrease in the annual rate of inflation was mainly attributed to price movements in both food and non-food items,” Musepa told journalists via video conference in Lusaka.

This month’s annual food inflation rate for October, 2021, dropped to 28.1 per cent compared to 29.6 per cent recorded in September, 2021, a decrease of 1.5 percentage points, driven by declining prices of food items such as cereals

“…This was mainly attributed to price movements of food items such as cereals such as (Breakfast and Roller Mealie Meal; Mealie Meal and grain; imported rice; eggs; cooking oil and meats…” explained Musepa.

The country’s non-food inflation on the other hand marginally reduced to 13.2 per cent from 13.6 per cent recorded last month.

Of the total 21.1 per cent annual inflation rate recorded this month, the food and non-alcoholic beverages group accounted for 14.9 percentage points, while non-food items accounted for 6.2 percentage points, with housing, water and electricity having contributed the highest at 2.2 percentage points.

ZSA data shows that Zambia’s annual rate of inflation of 21.1 per cent recorded this month is the country lowest since December, last year, when inflation was at 19.2 per cent.

While the national average mealie meal prices have broadly remained static this year, prices of cooking oil and eggs have noticeably dropped over the period under review.

A three litre bottle of cooking oil has steadily declined to K114.05 this month compared to a peak of K124.57 for the same quantity recorded in June, this year, while a tray of eggs skyrocketed to a national of average of K66.66 in August, now down to around K58.04, the lowest since May, this year.

However, all the above gains are now threatened by the global fuel price hikes which ERB has so far resisted to update resulting in the government picking up the tab and resorting to the historically political but inefficient way – subsidies.

Analysts have challenged successive governments in Zambia including the new dawn government to take a long term view on fuel supply and economics by diversifying supply to include the alternative of sourcing from neighboring Angola which can massively cut transport costs as well as the use of bio-fuels as a substitute that can be grown locally using Zambia’s massive arable land and water resources.

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The new dawn UPND government risks spending

Mining

Associate Professor in the School of Mines at the Copperbelt University – CBU Peter Chileshe has advised Government to first look at Vedanta Resources Limited’s records in all the countries it has operated in or is operating in as it moves to make a decision on the way forward for Konkola Copper Mines Plc (KCM).

Prof. Chileshe said currently Vedanta does not have a social license to operate at KCM, which means that the citizens around the mine area were totally against the company.

He said this calls for Government to balance the realities on the ground in Chililabombwe and Chingola and then the capacity for Vedanta to pledge and actually act on the pledge because they were there for about 15 years.

“First of all, the new Government should look at everything in a new way, we expect them to look at Vedanta’s records at KCM, in India, South Africa and other places and judge for themselves. The fact that the social license for Vedanta to operate was not there means that the citizens in Chingola and Chililabombwe were totally against Vedanta at the end of 15 years that tells us something.

“So obviously, the new Government has to balance the realities on the ground in Chingola and Chililabombwe and the capacity of Vedanta to pledge and actually act because they were there for 15 years, so they have a record and they should be judged based on their records,” Prof. Chileshe said.

He said the new Minister of Mines and Minerals should look at ways of encouraging increased production in the mining sector.

Prof. Chileshe noted that copper production has been stuck at about 850, 000 tonnes per annum for a long time due to a number of reasons of which some were from the Government while others were from the investors themselves.

“The Government should look at the mining industry, it has been stuck in terms of copper production at somewhere around 850 000 tonnes per annum for many years. A lot of reasons contributed to this, some being from the investors and some were from the government itself.

“The government was always being accused of tinkering the taxes all the time each year, then on the side of the investor, some of the investors have not brought in their pledged investments, peace and production or profits due to their actions,” he said.

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Associate Professor in the School of Mines

Lifestyle

MultiChoice Zambia has launched GOtv SUPA-a new package that is being added to the GOtv suite of packages, which will provide GOtv customers more options for quality content.

Some of the channels included in the new GOtv SUPA package for only K260 per month are Honey, Africa Magic Urban, Pearl Magic Prime, National Geographic, WWE, TL Novelas, Novela Magic, Rok, Kix Channel and Boomerang, among others and the package will appeal to audiences all over Africa.

GOtv Board Chair Nalumino Chiapeni said the launch of the new package is an initiative by MultiChoice aimed at adding more value to its customers by providing them with more choice thereby making entertainment more accessible to Zambians.

In a speech read on his behalf by Board Member Simon Bota, during the launch of the GOtv SUPA package, Chiapeni said MultiChoice has played a significant role in developing the local content industry through local channels such as Zambezi Magic, One-Zed and SuperSport as well as infrastructure investments in local production infrastructure such as studios and production equipment.

He said the heavy investment in the local content industry by MultiChoice has resulted in the relative growth of the film industry in Zambia and the investment is a true reflection of how MultiChoice is adding value to customers and putting their interests first.

The board chair noted that MultiChoice not only provides Zambians with world-class entertainment using the very latest satellite TV and digital technology but also contributes to the sustainable economic growth of the country through tax contributions and significant job creation.

He added that as a proud supporter of the local film and television industry, MultiChoice continues to use its influence to play a positive role in helping to grow the local creative industries into vibrant economic powerhouses.

Chiapeni noted that with the launch of GOtv SUPA, customers will be treated to exciting home-grown Zambian content which will include Mpali, Zuba and Shimumbi as well as international favourites such as WWE wrestling, telenovelas and boomerang for kids among others.

He mentioned that some of the Multichoice Talent Factory (MTF) alumni are part of the production crew and cast on some of the shows that will be airing on GOtv SUPA channels such as Zambezi Magic and MTF will continue to provide a pool of talented young film makers who help to tell the stories that will change filmmaking in Africa.

Chiapeni added that MultiChoice will continue to provide customers with content that resonates with them while ensuring that they have an array of options when it comes to package selection because it is committed to putting customers at the heart of every decision it makes.

Speaking at the same event, Minister of Information and Media Chushi Kasanda said government appreciates the significant contribution that MultiChoice is making in improving people’s lives as the company continues to create employment opportunities for local people by promoting the development of local content for television.

Kasanda said channels such as Zambezi Magic and One-Zed that showcase Zambian talent in the film industry are good examples of the huge contribution that MultiChoice is making to job and wealth creation in the country.

She commended MultiChoice for the initiative as the GOtv SUPA package which has 68 channels will provide customers with more local and international entertaining content and package options that suit family budgets and their viewing needs adding that the initiative is in line with government’s agenda of a well-informed populace.

The media minister said the Ministry works with industry partners like MultiChoice to build the creative industry in Zambia and the launch of GOtv SUPA is a testament to the flourishing partnership.

She expressed happiness over how proactive MultiChoice has been in terms of taking up their place by introducing initiatives on their platforms that help to inform, educate and entertain people.

Kasanda noted that key to unlocking Zambia’s immense potential lies in education and skills development therefore it is gratifying to note that MultiChoice Zambia is supporting this through its corporate social investment initiative-the MultiChoice Talent Factory.

She said the academy is key to developing the country’s creative industry and government believes that through this initiative, a new and skilled generation of filmmakers and television professionals is rising to take Zambia’s film industry to greater heights.

Chushi mentioned that MultiChoice has enriched lives in Zambia by creating employment for local people, developing the local content industry through local channels, which has in turn contributed to economic development through the contribution of tax to the government.

She encouraged all Zambian filmmakers to take keen interest in the initiatives MultiChoice is implementing which are aimed at building the Zambian film industry adding that through working as a team , Zambia can be put on the map and tell Zambian stories to the rest of the world.

The media minister noted that government will continue to support such initiatives by providing an enabling environment that ensures the viability and growth of companies like MultiChoice and the media industry adding that it will invest time and resources in such initiatives.

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MultiChoice Zambia has launched GOtv SUPA-a new