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The Bank of Zambia (BOZ) says it

FNB Zambia cuts ATM cash withdrawal fees

FNB Zambia has cut Automated Teller Machine (ATM) withdrawal fee for its customers using other Bank ATMs from the current K20 to K11 per transaction with effect from Friday 3 September 2021.

This has been necessitated by the cash challenges being experienced at some of the FNB’S ATMs in the country. A check by the Zambian Business Times – ZBT has however revealed that almost all banks are experiencing cash shortages.

FNB Zambia Head of Strategic Marketing and Communications Kasali Mwaba Kaingu told the Zambian Buisness Times – ZBT that this would be for a two-week period only. Kaingu said the bank would waive the withdrawal fee entirely for customers with a bundled account.

She said the Bank was aware of the cash challenges being experienced at some selected FNB ATMs and was working with the regulators and other stakeholders to ensure that this is resolved as soon as possible to avoid inconveniencing its customers.

“While we do our best to resolve this industry-wide challenge, we encourage our customers and stakeholders to make use of our digital banking channels that include Mobile and Online banking services, CashPlus agencies across the country, the FNB App and FNB Debit Card to transact and make purchases.

These alternative options are convenient and safe, and they help avoid the risks that come with cash handling,” Kaingu said. She said customers that they could also instantly increase daily limits to manage online transactions using the FNB App or from an FNB branch in their vicinity.

Kaingu said the Bank would continue to monitor the cash situation with a possibility of extending should the cash challenge persist.

A random check by ZBT in Lusaka and Kitwe , Zambia’s two largest cities by population has revealed growing frustration among ATM users for various banks which has seen some banks resorting to switching off their ATM networks as they can no longer sustain the cash needs due to shortages of the Kwacha on the market.

ZBT had asked the central bank – BOZ during the Monetary Policy Committee media engagement on why this situation has emerged, the BOZ team stated that they are aware of the situation and that the shortage would normalize by Friday 3 September 2021.

September 2, 2021

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FNB Zambia has cut Automated Teller Machine

Zambia’s reserves cross 5 months import cover

ZAMBIA’s international gross reserves have increased to US $2.9 billion by the end of August, 2021,representing 5.4 months of import cover, from US $1.2 billion three months prior, the highest level since 2015, BoZ data shows.

And the kwacha appreciated by nearly 30 per cent against major currency convertibles between July 1 and August 31, this year, mainly boosted by significant inflows from non-resident investors in government bonds and improved market sentiments.

Speaking during the Monetary Policy Rate (MPR) announcement in Lusaka, September 1 attended by the Zambian Business Times – ZBT, Bank of Zambia (BoZ) governor Christopher Mvunga announced that the rise in the country’s reserves was largely triggered by the International Monetary Fund (IMF) Special Drawing Rights (SDRs), which led to the injection of around US $1.3 billion.

SDRs are the IMF’s reserve asset, and are exchangeable for dollars, euros, sterling, yen and Chinese yuan or renminbi.

An allocation of SDRs requires approval by IMF members holding 85 per cent of the total votes, with the United States holding 16.5 per cent of the votes, meaning that Washington D.C.’s view is decisive.

IMF Managing Director, Kristalina Georgieva, stated in early August that the much-needed liquidity came at the right time for the global economy, which was reeling from the Coronavirus pandemic.

The IMF Board of Governors approved a general allocation of SDRs equivalent to US $650 billion or around SDR 456 billion on August 2, 2021, to boost global liquidity.

Zambia’s reserves have since benefited from the increased SDR allocation, which took effect, August 23, with the country’s reserves now sitting at nearly US $3 billion, representing around 5.4 months of import cover.

“Gross international reserves rose to US $1.4 billion (equivalent to 2.6 months of import cover) at end-June, 2021, from US $1.2 billion (2.1 months of import cover) at end-March, 2021. At end-August, 2021, international reserves rose further to about US $2.9 billion (5.4 months of import cover) following the receipt of the IMF SDR937.5 million allocation (US $1.33 billion) as well as market purchases. BoZ net purchases amounted to US $154.4 million in July and August,” said Mvunga during the quarterly brief.

According to BoZ data seen by ZBT, Zambia’s reserves had earlier dropped to US $1.2 billion by the end of last year, the lowest-ever on record.

The country’s reserves drastically dwindled since 2016, precisely in tandem with Zambia’s escalating external debt stock and correspondingly high debt servicing, which put tremendous pressure on the reserves.

The last time the country’s international gross reserves dropped to below US $2 billion before 2016 was in 2009 when BoZ data revealed that reserves held were at US $1.9 billion in December of that year. Zambia’s reserves, however, peaked at over US $3.9 billion in July, 2015.

International reserves are any kind of reserve funds, which central banks can pass among themselves, internationally, and they remain an acceptable form of payment among these banks. The Gold reserves balances however remains low and this may be attributed to apathy from the responsible officials at BOZ who are not aggressively growing this line.

And the kwacha rallied against major currency convertibles by almost 30 per cent between July 1 and August 31, this year, mainly boosted by significant inflows from non-resident investors in government bonds and improved market sentiments.

“…Recently, the kwacha has appreciated sharply mainly due to significant inflows from non-resident investors in government bonds and improved market sentiments. Between July 1 and August 31, 2021, the kwacha strengthened by 29.6 per cent to K15.94 per US dollar,” stated BoZ.

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ZAMBIA’s international gross reserves have increased to

Lending rates resists current positive sentiment, remain flat

By ZBT Staff reporter

The Bank of Zambia (BoZ) has again maintained the Monetary Policy Rate (MPR) which serves as a benchmark lending rate at 8.5 per cent. This is despite the current positive economic sentiment that Zambia is enjoying following the change of government and the peaceful transition of power.

Lending rates have resisted to follow the trend that have been seen in other economic indicators that has seen the Kwacha appreciate by about 30%, with Zambia’s Euro bonds yields having earlier been reported to have been the first to indicate the positive sentiment following the announcement of President Hakainde Hichilema’s win.

Speaking during a media briefing in Lusaka, Wednesday attended by the Zambian Business Times – ZBT, BoZ governor, Christopher Mvunga, announced that the central bank decided to maintain the MPR at 8.5 per cent for the third successive time since last February.

Mvunga explained that maintaining the MPR at 8.5 per cent was arrived at in view of the subdued economic activity and existing vulnerabilities in the financial system.

The MPR is the benchmark lending rate the central bank sets on commercial banks to either increase or decrease interest rates on credit facilities, while the Statutory Reserve Ratio (SRR) is the proportion of deposits a commercial bank, by law, must keep in cash or place with the central bank.

The SRR usually moves in tandem with the MPR.

“The Committee noted that, over the forecast horizon, inflation is projected to decelerate faster and edge closer to the target range than was envisaged in May, 2021, MPC meeting. Underlying the decline in inflation is mostly the favourable outlook for the exchange rate and improved prospects for the fiscal consolidation. In this regard, the MPC decided to maintain the MPR at 8.50 per cent. In arriving at this decision, the Committee remained mindful of the subdued economic activity and existing vulnerabilities in the financial system,” said Mvunga.

“Decisions on the Policy Rate will continue to be guided by inflation forecasts, outcomes and identified risks, including those associated with financial stability wand the COVID-19 pandemic.”

Commercial banks’ nominal average interest rates on loan facilities, which have generally remained elevated in recent years, have finally started slightly declining this year since the downward adjustment of the MPR last February.

BoZ data shows that banks’ nominal average lending rates have marginally dropped to 25.6 per cent by end-June, 2021, down from 26 per cent in March, this year. Interest rates on loan facilities linked to the MPR are directly impacted as this is the benchmark lending rate.

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By ZBT Staff reporter The Bank of Zambia

Agribusiness

Mununshi banana should ignite move away from importing concentrates

Agro experts have called for policies that will encourage local fruit production and processing as opposed to the current set up were large scale soft drinks producers in Zambia opt to import concentrates as opposed to investing in local fruit production and processing.

This follows the announcement by Mununshi Fruit Company Limited, wholly owned by the Industrial Development Corporation (IDC), that they have started to harvest their first banana fruits from the estate, and this is expected to help further cut banana imports which are estimated to be about US$430k per annum.

The company, which is located in Luapula’s Mwense district, expects to harvest 1,425 tonnes of bananas from 47,500 plants, grown on a 30 hectares plantation. Despite having all the requisite weather and soil conditions, Zambia still had a Banana production deficit that results in imports to cover the shortfall.

IDC in a statement made available to ZBT stated that they have so far invested K19.2 million (US$1 million at that time) in the banana plantation to procure suckers, irrigation equipment, land clearing and rehabilitation of infrastructure.

The greenfield project, which is in line with the IDC’s mandate to spur rural industrialisation with the aim of creating wealth and jobs, has employed 38 full time employees and 10 seasonal workers from the local community.

The project having completed a full circle, is expected to play a role in making Zambia self-sufficient in banana production, while slowly plugging the gap of importation of the fruit.

IDC notes that it is confident Mununshi Fruit Company will contribute to currency valuation through banana exports adding that the first fruit has been taken up by local off-takers who are supplying the local market as well as DR Congo.

Expansion of the estate will take a phased approach and this will include the production of commercially viable fruits like avocados and mangoes. The company is growing bananas in the current phase but will diversify to mangoes, avocadoes and vegetables in subsequent phases. See more on how Zambia spending US$432k on banana imports.

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Agro experts have called for policies that

Agribusiness

Stockfeed availability improves but prices can only fall after six months

Livestock farmers have confirmed that stockfeed availability across Zambia has improved following the export restrictions that had been put in place. Some parts of Zambia had even started recording shortages while some farmers complained of being forced to buy in bulk to secure feed.

Lon the issue of when the prices are expected to fall following the increased supply as well as appreciation of the Kwacha of about 30% in the last three to four weeks, a source at Novatek told the Zambian Business Times – ZBT that prices can only fall after six (6) months.

And Ministry of Livestock and Fisheries Permanent Secretary Benson Mwenya stated that the suspension of the issuance of export permits for stockfeed has stabilized the availability of stockfeed in the country. Mwenya said the availability of stockfeed would help address the high cost of feed that was being experienced on the local market.

Speaking in an interview with ZBT, Mwenya said the recent appreciation of the kwacha is expected to also contribute to the reduction in prices adding that most suppliers of stockfeed would reduce prices as soon as they get rid of the old stock.

A check by ZBT showed that stockfeed suppliers have maintained prices despite the ministry’s efforts to see reduction in prices by issuing a temporal ban on the issuance of export permits for stockfeed about a month ago. Some feed outlets spoken to could not confirm when their old stocks would be finished and when they project to reduce prices.

One of the stockfeed suppliers – Quantum Foods is selling their starter feed at K427, grower feed at K401 and finisher feed at K386 with no indication of when they expect to start reducing prices. Another, Novatek Animal Feeds is selling their starter feed at K532, feed grower at K508 and finisher feed at K490.

A Novatek Animal Feeds staff whose identify has been withheld told ZBT that their customers would only be able to see a price reduction of stockfeed after about six months as the company imports raw materials that last for about six months, which it uses in the manufacturing of stockfeed.

The company source explained that Novatek imports enough raw materials, which enables it to manufacture feed to be sold for six months, therefore the recent appreciation of the kwacha will only affect the prices of the stockfeed after six months.

A month ago, the Ministry of Livestock halted the issuance of export permits for stockfeed due to the steep increase in prices of stockfeed. The suspension of the issuance of stockfeed and its ingredients was meant to address the continued increase of stockfeed prices on the market despite the key ingredients being sourced locally.

The issuance of export permits for stockfeed was suspended with immediate effect on 25^th July, 2021 and Ministry of Livestock instituted an investigation and directed producers of stockfeed not to increase prices of their products until concerns of livestock farmers were reviewed and resolved.

However, firms with valid and already issued export permits were allowed to conclude their exports as some may have already committed to contracts of supply. The suspension of new export permits issuance followed concerns that government received from some livestock farmers on the pricing and availability of stockfeed.

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Livestock farmers have confirmed that stockfeed availability

Companies

Indian firm – Afcons sued for land encroachment

Afcons construction, a firm that is part of India’s large diversified Shapoorji Pallonji Group that was awarded the contract to undertake the Lusaka 500 kilometer Decongestion Road project dubbed L500 has been sued for land encroachment.

A Lusaka west resident Alice Tembo has sued Afcon Construction Limited together with the Lusaka City Council (LCC) and the Attorney General for land encroachment.

Tembo is claiming an order for payment as compensation from Afcons for the sum of K831,844 being the value of the uncompensated land occupied and acquired by LCC as part of the road in the Lusaka City decongestion Road project along Kasupe Road in Lusaka West.

The plaintiff is also claiming interest on the amount due to her from the defendants,further or any other relief the court may deem fit and legal costs.

As the property owner of Sub TI of farm 1938, Tembo was notified that her property was being acquired compulsorily by the state. However, LCC acquired an extra 6,652 sq metres of land contrary to the initial 2415 sq metres of land that was agreed to be taken and the total area covered by the construction works was 9,067 sq metres.

The extra 6,652 sq metres of land was acquired in order to put side roads on the subject road. The reason for the acquiring of the land was to pave way for the construction of a road under the Lusaka City Decongestion project (Road 3-off Kasupe Road) Lusaka West.

The land in question has been subject to encroachment by squatters and there is a court judgement wherein the court held that Tembo is the legitimate owner of the property.

However,the Ministry of Local Government proceeded to compensate the squatters for the extra land that was used and this is despite the fact that the initial payment was made to Tembo who is the bonafide owner of the property in question.

The Ministry did not even bother to contact the owner of the land and ascertain the position of the land. Despite requests from Tembo to receive compensation from the ministry,there has not been any payment received.

On 15th July 2020,Tembo received a letter of notification from Lusaka City Council (LCC) under the office of the town clerk with regard the valuation of properties that were affected by the construction and design of the Lusaka City decongestion project ( Road 3-off Kasupe Road) Lusaka West.

The said letter was a notification by LCC in conjunction with government valuation department for the purposes of compulsory acquiring of properties from owners in accordance with the provisions of the Land acquisition Act Cap 189 of the laws of Zambia in order to pave way for the construction of the road referred to above.

Tembo’s property, measuring approximately 2,415 Square meters, was among those affected and as such, it was valued by the government valuation department on 25th February,2020 at K302,000 and she received the said amount as per valuation report.

However, Afcon Construction Ltd proceeded to construct a side road on Tembo’s other unvalued property which was never part of the initial notification dated 15th July 2020 by LCC.

Tembo proceeded to have the said unvalued property valued as per a letter of demand to the permanent secretary at Ministry of Local Government dated 19th November,2020 and a sketch plan dated 27th October 2020 wherein the said unvalued property measured appropriately 6,652 sq metres.

According to a statement of claim obtained by the Zambian Business Times-ZBT,Tembo claims that Afcon Construction Ltd, Lusaka City Council and the attorney General still owe her K831,844 for the uncompensated area.

Despite the numerous reminders to pay her the amount owed,the three defendants have continued to refuse, or neglected and failed to compensate Tembo the said sum owed. Tembo is demanding compensation for the extra 6,652 sq metres of land which was compulsorily acquired by LCC and was not covered by the initial compensation.

More to follow as the matter develops…

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Afcons construction, a firm that is part

Mining

Implement 30% local content for a sustainable mining industry

The Association of Mine Suppliers and Contractors of Zambia – AMSCZ has called for a balanced approached were the needs of both local and foreign players in the mining industry is taken onboard to ensure that more investments and sustainable jobs are created in the country .

AMSCZ President Augustine Mubanga said in this regard, the new Government needs to craft and implement policies that will ensure a stable mining environment in the country, which is not only favorable for multinationals companies, but local Mine contractors and suppliers.

Mubanga said to achieve this, the new government needs to either revise the Mines and Minerals Development Act or issue a statutory instrument to accommodate the diversity of interests of both local and foreign investors.

He said in an interview with the Zambian Business Times – ZBT that Government should quickly implement or sign the Local Content Policy for the mining sector, which is anchored on prioritizing the consumption of locally manufactured goods in the mining sector and also the employment of Zambians with technical skills.

“The local content policy is an extrusion from the Mines and Minerals Development Act section 20. The policy will make sure that as the [foreign owned] mining companies are doing business, they need to give special prefer pence to locally manufactured goods and they need to give preference to qualified Zambians with technical skills in existing mining operations to ensure that benefits accrue to the country.

The mining companies also need to support the industry by giving those products that are manufactured locally quotas so that the industry begins to have a ready market,” Mubanga said. He further stated that the minimum percentage agreed upon initially was that 30% of locally manufactured goods and skills must be reserved for Zambians in the first year of implementation of the policy.

Mubanga said, “the initial percentages we had agreed on was 30% of locally manufactured goods and also the skills, that is a graduated approach, the first year of implementation is 30% and this will be attained through the establishment of a local content board which is going to accelerate the implementation of the legal requirements through a Statutory Instrument.

He said from there, the score sheets would be provided to all mines to fill in the levels of the implementation of the local content.

“Year one, we anticipate that 30% will be a starting point, other mines might be on 40%, but the minimum is 30% in year one, then in year two looking at the dynamism of in sector the graduation could graduate to 35 to 40% depending on how the sector is responding.

“The quick implementation or signing of the local content policy will empower local Zambians and create wealth among Zambians in the sector. That piece of legislation will be key to achieving that dream of a win-win mining sector ,” Mubanga said.

He further said a special regulator or Agency for the mining industry should be established to be able to regulate the technical, financial and taxation of the mining companies in the country. “The establishment of a regulator or Agency, which the industry agreed on, is important that the mining sector have a specific agency or regulator.

Among all the ministries in Zambia, isn’t it strange that only the Mines ministry do not have a special regulatory agency and yet mining is the biggest industry in Zambia?, we need to have an agency with top experts which is able to regulate the operations of the mines.

“So we are looking forward to working with the new government in crafting the policies that will help to drive the economy in the mining sector in a positive trajectory,” he said.

Mubanga also called on the fair implementation of the law to compel even Chinese owned companies to do business with locals. He lamented that Chinese owned mining companies give little or no businesses to local mine suppliers and contractors in the country, a situation which needs to change.

“We want to see that this behavior by the mining companies owned by Chinese, of excluding Zambians to fully participate in the areas of contracting and procurement should come to an end.

That can only come to an end when the law is crafted and implemented fairly and across the industry. So we see hope in the victory speech by the president and shows that in terms implementation of the law, and observance of the law, we not going to have segregation of implementation of the law,” Mubanga said.

He said , “So if we walk on that path, then we don’t see the Chinese walking on the same path that they have been on of excluding Zambian businesses totally from participating in the opportunities that are created or generated in their investments.

Mubanga said the association was of the view that this trend must be broken and sanity brought so that if opportunities are created in the Chinese owned mines or any other owned mines, those opportunities must first benefit Zambians because they are the owners of the mineral resources that are being exploited.

“So that should be respected and we would also want to see them participating in the knowledge and skills transfer and supplier contractor development, they need to come up with programmes that aim at developing local suppliers to a level where they begin to engage in higher volumes of activities.” He added.

Zambia can only be developed by Zambians and this notion needs to be taken into consideration when crafting policies. Zambia by now should be talking of Zambian opening new mines, but this all depends on policies adopted.

August 31, 2021

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The Association of Mine Suppliers and Contractors

Companies

Internal HR Audit is standard practice – ZESCO

ZESCO Limited has clarified that the exercise of conducting an internal human resource audit is procedural and is in line with best practice in human resource management.

The Company Public Relations Manager Hazel Zulu said the exercise is a standard practice in human resource management and one of the activities that the company carries out periodically.

Speaking in an interview with the Zambian Business Times – ZBT, Zulu said the corporation conducts internal audits of its assets and human resource to provide autonomous assurance that the company’s risk management, governance and internal control processes are operating effectively.

She noted that the company was not aware of who shared the internal memorandum to the public, which is currently circulating on social media. Most companies have internal memo’s and these are part of the internal communication process.

According to a ZESCO memorandum which has gone viral on social media and seen by the ZBT dated 27 August 2021, The Power utility company stated that there was an urgent need to carry out a physical employee verification exercise in all the stations countrywide.

The exercise will be carried out in an effort to ensure that the integrity of the company’s employee data in PHRIS and the data bases in respective divisions/directorate for all employees tally and align.

The Memo further stated that all employees will be followed in their respective stations to verify their physical presence/absence in the stated department according to the company’s records.

The employees should sign against their names to signify the confirmation, no employee will be allowed to sign for a colleague and some of the information required includes the Man No, Name, Station, Department and Signature of the employee. A consolidated confirmation report must be submitted by 13 September 2021 or earlier.

ZESCO recently commissioned the Kafue Gorge Lower Hydro power plant that has since ended load management in Zambia. The company has announced that it plans to become a net electricity exporter in the coming years.

August 31, 2021

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ZESCO Limited has clarified that the exercise