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Association of Microfinance Institutions of Zambia (AMIZ) has urged the President Hakainde Hichilema and his government to look at ways and initiatives of supporting Micro, Small and Medium Enterprises (MSMEs) in accessing credit from both banks and non-bank financial institutions to unlock the huge potential of the sector.

Speaking in an interview with the Zambian Business Times – ZBT, AMIZ  President Webster Mate noted that Zambia’s private sector credit to Gross Domestic Product (GDP) ratio is amongst the lowest in Sub-Saharan Africa.

According to the World Bank data, private sector credit to GDP for Zambia stood at 15.6% in 2019. Mate said this situation affects the creation of jobs in the country considering the fact that MSMEs employee the majority of Zambians.

He said in this regard, the association would like to see more being done in area of supporting initiatives that can facilitate access to credit for MSMEs and individuals in the informal sector.

“In medium to long term, this economy needs revamping, its good that the new President is already talking about more investments in the mining sector, investment in agriculture, and hopefully we begin to see more in the SME sector because as you might know, private sector credit to GDP in Zambia is amongst the lowest in sub-Saharan Africa.

“So if credit is not going in the productive sector particularly the MSMEs, then how do you create jobs. From a micro finance perspective, we would like to see more being done in the area of supporting initiatives that can facilitate access to credit for the small local businesses,” Mate said.

He said the government should work on stabilizing the economy, which, has been depressed for a sometime. Mate said the depression in the economy has led to the high cost of borrowing in turn resulting in suppressed lending to MSMEs.

He said, “In that regard, we would love to see more being done in the area of high cost of business operations. As you may know Zambia is the high cost economy and our interest rates are what they are because those that provide finances are bearing a lot of risks and at the same time their own costs of operation are quite high that it then reflects on the interest rates.

“I think time has come for us to begin to see what is causing this, so that we try and unbundle it so that it can come to a level where our costs become reasonable. Because if someone is going to borrow at 60-80% in an environment where the economy is not even growing, it becomes difficulty to see how he or she will be able to service that kind of debt.

That is why you see that there is more consumer lending than lending to productive activities because consumer lending is premised on the lender having preferential access to individuals or to the borrower’s salary,” Mate said.

He said the association believed that for this situation to turn around, there was need for macro economic stability in the country. Mate lamented that even if private sector credit to GDP is still low, micro finance institutions do not inject capital in their operations in order for them to increase lending and develop their capacities to lend.

“We think micro finance institutions in this country need to begin doing that but to do that, they also need some assistance and this is where Government in partnership with its cooperating partners can come to the aid of micro finance institutions to provide capacity building.

“You know training is costly and because it is not their core business, it will be good if public finances can help them build that capacity because once they are capacitated they will begin to grow their outreach and be able to reach more people with financial services,” he added.

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Association of Microfinance Institutions of Zambia (AMIZ)

Markets

The Association of Bureaux De Change of Zambia (ABCZ) has called on President Hakainde Hichilema and his newly constituted government to work on reducing the number and cost of licenses needed for a business to run in order to reduce the cost of doing business.

And the Association has disclosed that high licensing fees by the Bank of Zambia (BoZ) has deterred many bureaus and local businesses from starting and expanding their branch networks in the country, which has slowed down the spread of financial services and inclusion.

In an interview with the Zambian Business Times – ZBT, ABCZ President Paul Kalumba noted that there were too many licenses in the country for a business, which make businesses inefficient and expensive to run.

He disclosed that bureaus pay more than K79, 000 to the central bank for software license whenever they want to open a new branch a situation that has deterred many bureaus from expanding their branch networks. Imagine how many more branches can open if this fee is scrapped off.

“Bureaus pay more than almost K79, 000 to BoZ for software license whenever they open a new branch. This high license fee has deterred bureaus from expanding their branch networks.

“Actually we are not supposed to pay anything because this system belongs to BoZ, who uses it to monitor the bureau activities in realtime. This system is like the Zambia Revenue Authority’s online system, the public do not pay to use it, same with the NAPSA system or any other system of public interest. ,” Kalumba said.

He stated that currently, bureaus pay the cost of BoZ to monitor bureaus adding that this is a matter of public interest and should therefore, be funded by public funds just like the ZRA or any regulatory online system.

Kalumba explained that this money is supposed to be paid by BoZ as a software charge by their provider  but the Central Bank passes the charge to the bureaus. “Its a software license charge. BoZ is charged by the provider of the system and they pass that charge to bureaus. Ideally, it should be their charge because the system is for BoZ to monitor Bureaus,” he said.

Kalumba said, “We have too many licenses in Zambia for a business, even for a business like ours, (Golden Coin Bureau De Change) that does not sell food, it has to pay fire permits, health permits, we have to pay for trading license, at times we have as many as 15 licenses in a business.

He said there is need for the new government to come up with a policy that will allow a business to only apply one license and be able to operate freely. “We expect that the new government will have a policy where you pay one license and your business is free to do business. Its policies like that make businesses efficient and cheaper,” Kalumba said.

He said looking at the fact that the President is a businessperson himself, it is expected that Zambia will see policies that are pro-business and those that will help the businesses to flourish. Kalumba said for the bureau sector, which largely depends on other sectors, the effects of Covid-19 than policy currently affects it.

Kalumba said that the new government should focus on solving this problem by putting in place measures such as having more people vaccinated and ensuring that borders are open to trade.

“The bureau sector’s primary purpose is to serve the travelling public, cross border traders, and the current environment is impacted more by covid-19 than policy. Therefore, it is solving these other problems like getting more people vaccinated and opening borders for our people going to trade, that answers the success or failure of the bureau sector. Our sector heavily depends on other sectors being operational,” Kalumba said.

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The Association of Bureaux De Change of

Agribusiness

Wonderful Group of Companies has exclusively revealed to the Zambian Business Times – ZBT that they have reached an advanced stage  in setting up a US$300 million local fertilizer manufacturing plant in Zambia to be called United Capital Fertilizer Zambia Company Limited.

The group intends to build a large fertilizer plant that will cut the importation of fertilizer for Zambia by about 60% and reduce the cost of fertilizer by about 40% due to use of local raw materials and economies of scale.

Company Board Chairman Roy Mwamba told ZBT that said once the plant is operational, the company would be able to supply 80% of the total percentage of urea demand and 60% of the total percentage of D compound required for the country.

Mwamba said all the raw materials, which include coal and phosphate, would be acquired locally in Southern Province and once operational, the plant will create about 1,100 direct jobs.

Mwamba further stated that 60% of the investment funds are being sourced from financial institutions outside Zambia with 40% being sourced locally, adding that US$ 20 million from the US$ 300 million is working capital for the first two years as per draft cash flows.

Speaking in an exclusive interview with ZBT, Mwamba said the fertilizer manufacturing company would have a production capacity of 135, 000 metric tonnes per annum for fertilizer and 80,000 metric tonnes per annum for ammonia bicarbonate.

He said the company would have a robust and state of the art integrated cross-circuit production process such that there will be no emission of either smoke or gasses adding that the smoke will be converted into a gas by-product, for which the company already has a captive market.

He noted that the gas produced in the production process and other by-products that come out of the production of ammonia bicarbonate can be used in the production of fire extinguishers and baking powder.

He mentioned that the treasury spends about K4 billion on the importation of fertiliser for the Farmer Input Support Programme (FISP) annually, which is drain on forex, therefore the urgent need for a fertilizer manufacturing plant to be set up in the country in order to substitute for the imports and avoid price escalations.

Mwamba stated that apart from reducing the prices of fertilizer, the manufacturing plant would also enhance agriculture activities, which is what the country currently needs noting that the company would be producing ammonia that would be supplied to Nitrogen Chemicals of Zambia (NCZ), and these raw materials are currently imported.

He further said that currently, every fertilizer manufacturing company in Zambia imports raw materials, mostly from South Africa. The new plant would be producing ammonia as a by-product, therefore there will be no need to continue importing from South Africa, thus boosting the production for local companies such as NCZ.

Zambia has been importing its bulk fertilizer to meet its growing land under cultivation. However, prices of the essential commodity had escalated following the depreciation of the local currency – the Kwacha, contributing to making food prices unaffordable for a good section of citizens.

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Wonderful Group of Companies has exclusively revealed

Agribusiness

The delay in appointing a new Agriculture Minister by President Hakainde Hichilema risks forex inflows and halting mealie meal exports for at least two months after the previous deal hatched with government expired at end of August 2021.

The Millers Association of Zambia (MAZ) has confirmed that it members exported close to 80, 000 metric tonnes of mealie meal as opposed to the 100, 000 metric tonnes that it anticipated to export in the exportation programme that ended on 31 August 2021.

Association President Andrew Chintala said the association estimated to export 100, 000 metric tonnes but the market experienced a downtrend in terms of pricing at the border in mid-august due to the appreciation of kwacha, therefore the failure to meet the 100, 000 metric tonnes exportation target that was approved.

Chintala confirmed that exports have currently stopped as the association signed the Memorandum of Understanding (MOU) which was running up to the month end of August 2021 with the Ministry of Agriculture under the then Patriotic Front (PF) government.

Chintala said the association would again begin talks with the new government concerning the continuance of the exportation of mealie meal as soon as the Minister of Agriculture is appointed.

Speaking in an interview with the Zambian Business Times – ZBT, Chintala said the only condition millers needed to meet to be able to export mealie meal was leaving 80% of their production on the domestic market and sell 20% at the recommended price according to the MOU signed.

He said it was an open programme and millers were allowed to export 20% and sell 80% of their production to the local market in order to stabilize the prices adding that millers on the export programme tried to maximize on the exports and in return offer an affordable price for the local consumers.

He noted that over 33 companies were participating in the export programme and different companies came on board every month. Government allowed millers with their own maize to export 20% of their mealie meal and the decision was in line with the policy directive that government would only deal with millers who buy their own maize from farmers.

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The delay in appointing a new Agriculture

Markets

The Bank of Zambia (BOZ) says it cannot state at which exchange rate the Kwacha will stabilize and settle at against the US dollar. This follows a period of rapid appreciation of about 30% within four weeks that has caused mayhem for both importers and exporters as far as planning is concerned.

When asked to at least share a projected range were the Kwacha to US dollar exchange rate pair would settle by the Zambian Business Times – ZBT, BOZ Governor Christopher Mvunga said the market dynamics will dictate where the rate will eventually sit as the country has a free floating exchange rate system.

Mvunga said the central bank does not hold or dictate the exchange rate but it may intervene to ensure price stability.

Speaking during the Monetary Policy Committee Announcement and Press Briefing, Mvunga said the bank of Zambia sells US dollars when there is a shortage on the market and buys the dollars when there is excess supply.

He explained that the country has a Liberal exchange rate regime and a Liberal market therefore only the market can dictate where the kwacha will sit depending on economic dynamics.

“I can’t tell you whether it will be at K5, whether it will be K17, whether it will be K20, I can’t tell you because we have to monitor the market and the market will dictate”, he said.

Analysts have questioned this policy were the Zambian Central bank has adopted to go with the utopian free floating regime which some have described as academic proposition rather than a practical method.

Without a target range, there is no way of holding anyone responsible for whatever rate the Kwacha trades with the dollar. There is need in Zambia to come up with a mechanism were a target range is set and announced so that there is some level of responsibility around the currency expectations.

The newly inaugurated UPND government is on record to have pledged to deliver an exchange rate of at least K10 per US dollar. From the the four weeks appreciation run so far, it looks more viable that Zambia may get back to a single digit trading exchange pair between the Kwacha and the US dollar.

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The Bank of Zambia (BOZ) says it

Lifestyle

Pardoned photographer Cornelius Mulenga popularly known as Chellah Tukuta qualifies to be appointed as Statehouse official Photographer.

This follows indications that Chellah Tukuta has been left out as does not qualify for appointment into the civil service or government as official statehouse photographer following his earlier conviction in a case of criminal libel and defamation  by Lusaka High Court Judge Lameck Mwale, sitting as Chief Resident Magistrate.

However, the Prisons Care and Counselling Association (PRISCCA) Executive Director Dr. Godfrey Malembeka has confirmed that ex-convicts pardoned by the President have no criminal record and are completely clean but ex-convicts who complete their sentence cannot work for the civil service, which is biased.

Malembeka further stated that there is need for the Public Service Commission Act to look at each case individually and see what an ex-convict was imprisoned for and if what an individual was sentenced for is completely different from the role they were playing at their work place, they should be reinstated.

Speaking in an interview with the Zambian Business Times – ZBT, Malembeka said according to the Police Act, once the police pick an individual’s fingerprints, they cannot easily be reinstated into public service and some countries have immigration laws that do not allow ex-convicts into the country.

“Even contesting for member of parliament is difficult but some members of parliament have been convicted before but once they are pardoned by the president, they go back to parliament, so that is why we are saying, what is the difference between a member of parliament and another Zambian”, he said.

“Security wings such as the Zambia Army cannot employ an ex-convict. If you want to own a gun for personal security, you cannot because you are an ex-convict. For example you are a journalist and you hit someone as you were driving, why shouldn’t you be reinstated”, he said.

He said when a civil servant is convicted, they can’t easily be reinstated by government after completing their sentence especially by government including the private sector which is a bit flexible but also discriminatory.

Malembeka explained that these issues need to be revisited and the association has been advocating for their reforms for the past twenty years adding that Civil Society Organisations (CSOs) and everyone working in the criminal justice system should team up and lobby for the review of such laws in order to eliminate stigma and discrimination.

He said there is need to make sure educated people leaving correctional facilities as professionals with academic qualifications such as degrees are employed by the private sector and also by the major employer, which is government.

He noted that the Zambia Correctional Service (ZCS) produces not less than 20 graduates per year from the University of Zambia (UNZA) and other private universities adding that major correctional facilities are all examination centres.

“People are saying we are going back to school and getting degrees but the biggest employer government does not employ us”, he said.

“These are professionals, Ministry of Education is conducting examinations inside, they have declared major correctional centres as examination centers, so that contradicts one arm of the government which is emphasizing the correctional model and then the security arm is saying no, we cannot still embrace you and yet we are under the new paradigm shift”, he said.

He mentioned that the association has been calling on government to consider revising the laws and is hopeful that the new government will consider, as that will empower ex-convicts who are leaving correctional facilities with skills and academic qualifications.

Chellah Tukuta was among the sixty (60) people that were pardoned by former President Edgar Lungu as he was exiting office, in what was seen as a deal cut between the outgoing and incoming president as the list had people seen to have been aligned to both the incoming [UPND] and outgoing [PF] political parties.

 

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Pardoned photographer Cornelius Mulenga popularly known as

Markets

The International Monetary Fund – IMF should not just look at lumping more debt on Zambia’s existing debt burden but instead help the country on how best it can retain forex back into the country from its boosted copper exports.

With improved International prices, Zambia is currently exporting more than US$30 million worth of copper a day, our total copper export earnings could be around K35 to 40 million per day. So if we are saying K40 million per day, in 10 days its K400 million and 30 days its K1.2 billion, so why do we still need to borrow and be put on an IMF bail out package when we could alternatively look at how a significant volume of our current exports could be banked locally?

The Private Sector Development Association (PSDA) has stated that it is important for Government [through the ministry of finance] to publish what criteria the International Monetary Fund – IMF bailout package is based on and how it is going to help the Zambian economy.

PSDA chairperson Yusuf Dodia said at the moment the IMF program is shrouded into too much secrecy and haste to the extent that people are becoming suspicious about the true intentions of the getting on an IMF bailout program.

Speaking in an exclusive interview with Zambian Business Times – ZBT, Dodia said it was important for the country to understand what conditions the IMF bailout packages comes with and also to appreciate why the IMF are interested in giving Zambia money.

He said, “furthermore, we are exporting more than US$30 million a day in copper exports, our total copper export earnings could be around K35 to 40 million per day. So if we are saying K40 million per day, in 10 days its K400 million and 30 days its K1.2 billion, so why do we still need the package?

“So the amount of money we are intending to get from the IMF is equivalent to one month of exports of Zambian products, so do we need to go the IMF way or could we use our export earnings as something to re-capitalize the economy?”.

“So the question is what are the strings or conditions that are attached to the IMF?, we need to be clear about that. We also need to appreciate why the IMF are interested in giving us money instead of helping us to retain the resources which we have from exports,” Dodia said.

He said these were very tricky issues that needed to be discussed and understood before going for the programme.

Dodia explained that, “We need to get a better eye view to say if we get this package how is it going to help because usually the conditionalities coming from the IMF will be to protect the foreign investors and yet it’s the foreign investors who are actually making the country poor.

He said looking at how much copper is leaving Zambia every day and yet Zambia does not get much [forex] out of it in terms of resources coming back into Zambia, there is need to ask ourselves these questions.

“We need to ask ourselves, is it worth it to allow all this copper to go like that? Why is the IMF not seeing it as problem that needs to be addressed? So at the end of the day, people have become suspicious of the role of the IMF, is it going to help Zambia or to keep Zambia in debt or to put Zambia into further debt.

So I think it is important for us to really reflect on what is going on, on the ground on this programme,” Dodia added.

Newly appointed Finance Minister Dr. Situmbeko Musokotwane who has returned to this role for the second time after having served in the MMD government has come under public scrutiny for his open haste to conclude the IMF extended credit facility which he un-solicitedly announced that he will conclude before the end of this year 2021.

Dr. Musokotwane has not been able to clearly explain or give credible examples of which African country has ever gotten better off after getting on an IMF program, has not been able to publish the conditionality’s under discussion as well as other key contentious issues of his impending deal.

The new finance minister has been challenged to be more transparent and move cautiously to ensure that collective Zambian interests are taken into consideration before this deal is closed. Zambia’s history with the fund is not rosy and the calls to act with caution when it comes to IMF is not unfounded.

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The International Monetary Fund - IMF should

Tech

The Zambia Medicines Regulatory Authority (ZAMRA) says it will advise in due course, on whether it will prosecute Chrismar Earthmoving Equipment and its directors for imported and unauthorized 10, 000 doses of suspected Covid-19 vaccines into the country.

ZAMRA on Tuesday announced that it had intercepted and destroyed a consignment of 10,000 doses worth US$150, 000 of a suspected covid-19 vaccine imported into the country without authorization by an importer named Chrismar Earthmoving Equipment.

Speaking in an interview with the Zambian Business Times – ZBT ZAMRA senior public relations officer Christabel Iliamupu said the authority would advise whether the proprietors of Chrismar Earthmoving Equipment would be prosecuted for this act. Valden Findlay is the prominent businessman behind Chrismar Earth Moving Equipment.

According to the Medicines and Allied Substances Act No 3 of 2013, “(1) a person shall not import any medicine or allied substance without an import permit. This section does not apply to any medicine or allied substance imported by a traveller entering Zambia for the traveller’s use as may be prescribed.

The Act provides that a person who contravenes subsection (1) commits an offence and is liable, upon conviction, to a fine not exceeding one million penalty units or to imprisonment for a period not exceeding three years, or to both.

The authority seized a vaccine named Hayat-Vax (SARS-COV-2 Vaccine (Vero Cell), inactivated valued at US$150, 000. The seizure was necessitated as the vaccine was not registered or authorized by ZAMRA for use on the Zambian market and was also not listed under the World Health Organisation emergency use listing procedure.

The importer did not have a pharmaceutical license to sell, store, distribute, or supply and the importer did not have an import permit to authorize importation. The suspected vaccine where imported by Chrismar Earthmoving Equipment and are purported to have been manufactured by Gulf Pharmaceutical Industries in United Arab Emirates (Middle East.

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The Zambia Medicines Regulatory Authority (ZAMRA) says

Lifestyle

The Anti-Corruption Commission (ACC) has advised that members of the public can anonymously report suspected cases of corruption to the commission on toll free numbers with assurance that their identity will be safeguarded.

Commission Spokesperson Queen Chibwe said the public could make use of the commission’s presence in provincial centres or contact the commission using the Toll free line, which is 5980 and is available on Airtel, MTN and Zamtel.

Chibwe said the public could also report individuals suspected to be [or to have been] involved in corrupt practices using the social media platforms, which are Facebook and Twitter. She said it is the commission’s desire to see members of the public participating in the fight against corruption by among others things, reporting suspected cases of corruption to the commission.

According to information made available to the Zambian Business Times – ZBT, Chibwe said the commission is a professional body that values and upholds confidentiality therefore anonymous whistleblowers of corruption will be respected and their identity protected.

She noted that the Anti-Corruption Commission is mandated by the Anti-Corruption Act number 3 of 2012 to investigate any person involved in corrupt practices adding that the commission carries this mandate impartially whether the person involved is in government or not.

Following the change of government, there are heightened reports of former government officials as well as their contacts who are suspected to have been involved in corrupt practices. These individuals or companies can now be reported anonymously using toll free number across Zambia.

 

 

 

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The Anti-Corruption Commission (ACC) has advised that

Markets

Conflicting information on the state of Zambia’s finances continues to emerge and new finance minister – Situmbeko Musokotwane should rise to the challenge and clear the air on what the actual and detailed status of Zambia’s treasury is. Is it a cash flow problem or an revenue problem?

Newly inaugurated President Hakainde Hichilema told the nation and international media via BBC that he has inherited an empty treasury. Within the same space of time, government main revenue generator – the  Zambia Revenue Authority (ZRA) stated in their scheduled update that they have exceeded their revenue collection target after having collected K59.450 billion against the annual target of K59.369 billion for 2021.

ZRA went on further to state that the Authority has exceeded the revenue collection target with four months to spare before the end of the year And that the Authority has refunded K7.846 billion mainly to the mining sector.

During the Monetary Policy Committee update, the Central Bank Governor Christopher Mvunga stated that the country’s reserves have crossed five months import cover and reached US$2.9 billion. A check also with government biggest expenditure line shows that the payroll was made on time and all civil servants are being paid on time.

A check on the market has also confirmed that there is a Kwacha liquidity challenge which if not arrested on time, will spiral out of control. The Kwacha is just from recording a 30% appreciation within a period of about four weeks.

This scenario then saw opposition Patriots for Economic Progress – PEP leader Sean Tembo accuse President Hichilema of putting out a statement that the treasury is empty “as political” to avoid being held accountable for campaign promises such as provision of free education from primary to university.

So, which is which? Which coffers are empty? Is it control 99? What is it? There is need for a more comprehensive report on Zambia’s financial position and the Finance Minister should come through and clear the air. There is need to have a clear view so that both local and foreign investors can have a sound basis for taking financial decisions.

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Conflicting information on the state of Zambia’s