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Agribusiness

Ministry of Livestock and Fisheries Permanent Secretary Benson Mwenya has confirmed that the availability of day old chicks in the country has improved on the local market and prices have slightly gone down due to the suspension of the issuance of export permits for the birds.

Mwenya said day old chicks are now readily available and the country would soon start seeing massive reduction in prices due to the temporal ban on the issuance of export permits for day old chicks.

Speaking in an exclusive interview with the Zambian Business Times-ZBT, Mwenya said the country would soon see a massive price reduction because the kwacha has started appreciating which will positively affect the prices of day old chicks.

A check by ZBT with day old chick suppliers showed that availability has stabilized but despite the suspension of the issuance of export permits for day old chicks in an effort to reduce prices, suppliers of day old chicks have maintained prices a month after the ban.

Ross Breeders is still selling their day old chicks at K16, with Novatek,Zamchick also still selling their birds at K15.50 and K16 for Quantum Foods day old chicks. This is despite the day old chicks producers having stated that their cost of production had a significant dollar component.

Last month the Ministry of Livestock and Fisheries suspended the issuance of export permits for day old chicks in order to address the escalating demand within the country that led to shortages on the local market. Some local broiler farmers were being turned away or given three months delivery timelines after payment for new orders.

The ministry disclosed that the demand for day old chicks had continued to increase with close to 2 million chicks needed every week adding that there was need to appreciate that companies needed to satisfy the local market first before resorting to exporting the excess.

Demand for day old chicks (both local and export) had outstripped the supply, which led to people waiting longer periods for their day old chicks once they placed orders with the various suppliers on the market, a situation that also led to increased prices on the local market.

Suppliers of day old chicks were also exporting fertilized eggs which were hatching in the countries they were being exported to which contributed to the shortage on the local market. Moreover, most breeders opted to export due to better prices.

The Kwacha has since been on an aggressive appreciation run for over three weeks now from the highs of K23 to a dollar to now about K15.5 to a dollar, an appreciation of about 33%. This has led to consumers calling for prices of imported to come down as well as prices for products that are said to have a higher dollar based cost components.

 

 

 

 

 

 

 

 

 

 

 

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Ministry of Livestock and Fisheries Permanent Secretary

Companies

The Tanzania Zambia Railway Authority (TAZARA) procurement processes has come under scrutiny following the company losing funds in advance payments that has left the company taking legal action to recover the said funds.

TAZARA has dragged Embrace Zambia Limited to the High Court for failing to adhere to contractual obligations and is demanding a total amount of K252,400.

Facts of the matter is that in 2012, the Authority made an invitation for sealed bids from eligible potential suppliers for the supply and installation of one set of locomotive load box.

Embrace Zambia Ltd won the tender and the parties entered into a contract for the supply and installation of a locomotive load box on 7th February 2013 valued at K950,000.

TAZARA made an advance payment of 40% of the contract price amounting to the sum of K380,000 with a view that the Embrace Zambia Ltd take site possession and perform its part of the contract.

The contract stated that the company would complete works within 30 days from the date of commencement of works,however,Embrace Zambia Ltd did not take site possession nor did it supply or install the locomotive load box but advised TAZARA that the equipment was ready for shipment and requested that the authority make a further advance payment of another 40% of the contract price.

TAZARA advised Embrace Zambia Ltd that in order for another advance payment to be made,the company raise the insurance bond provided to the the authority from 10% to 80% to fully cover both the first advance payment and the second advance payment demanded by Embrace Zambia Ltd.

The authority also requested that the project manager take steps to confirm that money had moved from the company to the manufacturers of the locomotive load box and it was discovered that no money was ever transmitted to the manufacturers by the company.

As of 19 August 2021,the contract has gone unperformed by Embrace Zambia Ltd.

On 8 December 2017,TAZARA reported the matter to Zambia Police and through it’s Managing Director, Embrace Zambia Ltd agreed to refund the authority the 40% advance on the contract price.

Consequently,the parties entered into a deed of settlement on 20th February 2018 in which Embrace Zambia Ltd consented to repay the payment advanced by TAZARA on or before 30th June 2018 together with a penalty fee of K80,500.

The deed of settlement expired on 30th June 2018 and Embrace Zambia Ltd only refunded K195,100 leaving a balance of K265,400. The parties entered another deed of settlement on or about 1st May 2020 under which the company was to make minimum monthly installments of at least K7,000.

The deed of settlement expired on 31st December 2020 and Embrace Zambia Ltd only made three monthly payments under it.

On or about 28 December, 2020, Embrace Zambia Ltd requested time relief on the debt due to Covid-19 and requested to be permitted to resume payments in April 2021.

On or about 16th March 2021,TAZARA informed Embrace Zambia Ltd that it would grant a time relief only after arrears due under the expired deed of settlement were paid in full.

TAZARA has since not heard back from Embrace Zambia Ltd and because of the actions of the company,the authority has suffered loss and damage.

Tanzania Zambia Railway Authority is demanding an order that Embrace Zambia Limited immediately pays the authority K252,400 being the balance of the 40% of the contract price advanced to Embrace Zambia Ltd by TAZARA.

TAZARA is also demanding damages for breach of contract, interest on any and all sums found due, any other relief the court may deem fit and costs.

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The Tanzania Zambia Railway Authority (TAZARA) procurement

Mining

The Zambia Chamber of Mines (ZCM) has disclosed that mining companies are ready to invest in expansion projects worth more than US$2.5 billion next year in Zambia once the industry agrees on mineral royalties with the new Government.

ZCM President Dr. Godwin Beene said First Quantum Minerals Limited (FQM) was ready to invest about US$1.5 billion into new expansion projects next year while Lubambe Copper Mine is also ready to invest about US$1.0 billion in expansion projects in the country.

He said in an interview with the Zambian Business Times – ZBT that the mining companies want the new Government to allow them to deduct mineral royalties from the tax they pay on profits and want a sliding scale tax that is levied on a pay as you earn basis.

“FQM and Lubambe are ready to invest in expansion projects in Zambia next year worth over US$2.5 billion if the industry can agree on royalties with the new Government.

“FQM will invest US$1.5 billion while Lubambe is ready to invest about US$1.0 billion in its expansion projects, this totaling more than $2.5 billion,” Dr. Beene told ZBT.

He said other companies were ready to spend hundreds of millions of dollars in capital projects that they had held back since 2019 due to tax changes. Dr Beene said President Hakainde Hichilema had reset the tone to one of rebuilding confidence and spurring growth.

“The industry is very positive and optimistic that with this common-goal approach to the way forward, there will be more of a partnership with government than we had ever seen before,” he said.

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The Zambia Chamber of Mines (ZCM) has

Companies

The Energy Ministry has exclusively disclosed to the Zambian Business Times – ZBT that the feasibility studies for the establishment of the Angola-Zambia Oil Pipeline (AZOP) that will be used to transport refined multi product petroleum and natural gas from Angola to Zambia is scheduled to commence in September 2021.

Zambia and Angola on April 29 2021 signed the Inter-Governmental Memorandum of Understanding through the Ministries responsible for energy to facilitate the commencement of the establishment of AZOP.

The Angola -Zambia pipeline project which is expected to cost approximately  US$5 billion is projected to supply 100, 000 to 120, 000 barrels per day of refined petroleum products along hubs from Lobito in Angola to Lusaka in Zambia when actualized.

The project is planned to be completed by January 31 2028, while the feasibility studies are expected to be concluded in two years due to the complexity and size of the project. Analysts have however appealed to the new government to review the timelines and see how this project can be delivered by 2026.

Ministry of Energy Permanent Secretary Veronica Mwiche told ZBT that the project proponents Basali Baliseli, a Zambian company is  scheduled to commence the feasibility studies next month for a period of two years.

Responding to a press query by ZBT, Mwiche said project implementation would only commence after the feasibility study is completed and the outcome indicates viability. “When actualized, the pipeline is projected to supply 100, 000 to 120, 000 barrels per day of refined petroleum products along hubs from Lobito in Angola to Lusaka in Zambia.

“The pipeline is also envisaged to supply to other countries in the Southern African Development Community (SADC) region,” she told ZBT.

Mwiche said the project would be financed through a Public Private Partnership (PPP) model with equity agreements involving Basali Baliseli (private sector project proponents) and state financiers, Sonangol EP of Angola and Industrial Development Corporation (IDC) of Zambia respectively.

She said the AZOP pipeline is expected to supply natural gas to combined cycle Gas turbine plants for the production of electricity of combined minimum capacity of 2, 000 megawatts (MW) for the Angola and Zambia electricity markets as well as electricity markets in other countries within the region through the Southern African Power Pool.

Zambia has been procuring it’s Petroleum from the gulf region in the Middle East when is Western located Neighbour Angola has huge reserves. The country stands to benefit by lowering the cost of landed petroleum products by cutting off shipping and other middle men costs when the oil is imported from Angola.

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The Energy Ministry has exclusively disclosed to

Markets

President Hakainde Hichilema – HH has opted for experienced hands and appointed 65 years old former Finance Minister Dr. Situmbeko Musokotwane as new Minister of Finance.

Dr. Musokotwane returns as Finance Minister after serving in the same portfolio in the Movement for Multi-Party Democracy (MMD) Government between 2008 and 2011.

In his first speech as Minister of Finance, Dr Musokotwane stated that this was his forth time returning to the ministry of Finance. He is no novice at the ministry and is perhaps the best suited to assist President Hichilema who has mostly spent his time outside government in the private sector. Dr. Musokotwane is seen as key to help the new government maneuver the complex and difficult to drive civil service.

In sharing some of his key objectives as he returns to the Ministry of Finance, Dr. Musokotwane pledged to focus on stabilizing the exchange rate, cut down the escalated cost of living and work at aggressively creating jobs for the youths.

He also said the UPND government would focus on making sure the mining sector expands by creating a good environment for more new investments to create more jobs in the country. He pledged to expand mining production from the current 850k tons per annum to 2 million tons per annum in five years and 3 million tons in ten years.

Dr. Musokotwane also said the government would make sure that there is value addition by persuading credible investors to invest in the Multi Facility Economic Zones to start producing value added copper products such copper cables and other copper products.

He said Government would engage the creditors to see if the country can restructure its debt by say paying at a slow pace over a stretched period or tenor to ensure that the country has space to do other tangible economic investments with the national budget.

Dr Musokotwane has pledged to timely engage with the IMF stressing that they are needed for the country to stand a chance of restructuring its debt and improving investor and creditor confidence.

Dr. Musokotwane is a qualified economist with a PhD in Monetary Economics, MA in Monetary Economics, and a BA Economics. He is an Alumni of the University of Zambia and Hillcrest National School of Livingstone. He has vast work experience both in Zambia and with multilateral international organizations.

 

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President Hakainde Hichilema - HH has opted

Companies

Nakoda Investment Limited has sued Mount Meru Petroleum Zambia Limited for failing to pay US$ 268,000 due on 5th December 2020 for a piece of land that the petroleum company acquired. The land in question which Mount Meru Petroleum Ltd defaulted on payment is around 1,413 square and is situated in Lusaka.

According to court documents seen by the Zambian Business Times-ZBT,  “On the 4th of August 2020,the plaintiff and the defendant entered into a written contract of sale of the said stand No.S/LUSAK/3195483 whereby the plaintiff (Nakonda Investments) was the vendor and the defendant (Mount Meru) was the purchaser”.

Mount Meru Petroleum Ltd paid USD 33,500, which is 10% of the price of the land upon receiving a certified copy of the certificate of title from Nakoda Investment Ltd as proof of ownership thereof as stated by the contract.

It was agreed between the two parties that Mount Meru Petroleum Ltd would pay 80% of the purchase price translating to USD 268, 000 on or before 5th December 2020.

Nakonda complained that “Despite numerous requests and reminders, Mount Meru Petroleum Ltd failed, refused, neglected and ignored to settle the said USD 268,000 which led to Nakoda Investment Ltd, through its lawyers,writing a formal demand letter requesting payment of the said amount on the 19th of April 2021”.

On 22nd April 2021,Mount Meru Petroleum Ltd responded to Nakoda Investment Ltd by raising extraneous issues concerning ZESCO, Lusaka City Council and the neighbouring plot which issues are extrinsic to the contract and which Mount Meru Petroleum Ltd was fully aware of or ought to have been fully aware of at the time of executing the contract.

On the 27th April 2021,Nakoda Investment Ltd through its lawyers wrote to Mount Meru Petroleum Ltd to the effect that the land in question was properly described in the contract of sale and Mount Meru had clear knowledge of the land and its adjoining lands .

On 3rd May 2021, Mount Meru’s advocates responded to Nakoda Investment Ltd outlining further excuses for non payment which excuses are extrinsic to the contract and purported that Mount Meru had opted to rescind the contract and made a demand for a refund of the deposit of USD 33,500 which was paid.

Nakonda argued that “The purported rescission is null and void ab initio and of no legal effect whatsoever on the following grounds: There has been no breach of any term of the contract in question by the Nakoda Investment Ltd to warrant any rescission”.

Nakoda Investment Ltd is also demanding for nullification of the purported rescission of the contract by Mount Meru Petroleum Ltd for being void ab initio and being of no legal effect based on the fact that the legal requirements for rescission have not been satisfied by Mount Meru Petroleum Ltd. The matter is still at the high court and awaiting trial.

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Nakoda Investment Limited has sued Mount Meru

Agribusiness

Nitrogen Chemicals of Zambia (NCZ) says the United Party for National Development (UPND) government is yet to communicate how it will ensure the reduction of fertilizer prices from K700 per 50kg bag to K250.

The farming season for many local farmers who depend on rains is fast approaching, with expectant farmers wondering if the reduction will be effected from this farming season. Meanwhile, NCZ Sales and Marketing Manager Cleopatra Chanda said the company is not yet aware of the policies that the new government will put in place in order to reduce the cost of fertilizer.

Chanda said the price of fertilizer had gone up due to the depreciation of the Kwacha, so the company awaits to hear the policies that the new UPND government will put in place to ensure that prices of fertilizer go down.

Speaking in an interview with the Zambian Business Times – ZBT, Chanda said the company imports some of the raw materials which are used in the manufacturing of fertilizer and the imports are made using US dollars and not the kwacha therefore leading to high prices.

She mentioned that a 50kg bag of D Compound is currently selling at K660 wholesale price and K665 retail price. She said the company is still waiting for communication on the current price of Urea but a 50kg bag was previously selling at a wholesale price of K730 and retail price of K735.

She added that the wholesale price only applies when one is buying atleast 50 bags of fertilizer. Chanda noted that production is going on smoothly since the injection of K684 million into the Nitrogen Chemicals of Zambia by the Industrial Development Corporation-IDC to boost its production and overall company performance.

During campaigns leading up to the 12 August 2021 elections, in a message to his supporters, then main opposition candidate and now republican President Hakainde Hichilema pledged that when his party forms government in August this year, which it did, it would lower the price of a 50kg bag of fertilizer, which was costing them between K700 and K800 to K250.

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Nitrogen Chemicals of Zambia (NCZ) says the

Markets

Zambia’s foreign exchange position has further been boosted by yet another trade surplus for the month of July 2021. The country recorded a trade surplus of K3.6 billion (about US$218 million) in July 2021 compared to a surplus of K5.7 billion in June 2021 indicating a 36.1% decrease.

Zambia Statistics Agency (ZamStats), interim statistician General Mulenga Musepa said exports mainly comprising domestically produced goods, declined by 5.1% to K18.5 billion in July 2021 from K19.5 billion in June 2021.

Mupesa said during the ZamStats monthly bulletin attended by the Zambian Business Times – ZBT that this was on account of decreases in export earnings of Raw materials, Consumer goods, Capital goods and Intermediate goods by 17.8 , 14.7, 3.4 and 2.7%, respectively.

He said the imports increased by 7.6 % to K14.9 billion in July 2021 from K13.8 billion in June 2021 as a result of a 20.1 and 16.9 % increase in import bills of Consumer goods and Capital goods respectively

“Traditional Exports (TE’s) which are Copper related export earnings increased by 3.7% to K13.4 billion in July 2021, up from K12.9 billion in June 2021.

“In terms of share in total exports, TEs accounted for 72.5 % of export earnings in July 2021,” Mupesa said. He said Non Traditional Exports (NTE) earnings decreased by 22.5% to K5.1 billion in July 2021 from K6.6 billion in June 2021.

Mupesa said in terms of share in total exports, NTEs accounted for 27.5% of total export earnings in July 2021. He said export earnings from refined copper in July 2021 increased by 3.9 % to K13.4 billion from K12.9 billion in June 2021.

Mupesa said the increase is attributed to the 4.5% increase in export volumes from 60.2 thousand tonnes in June 2021 to 62.9 thousand tonnes in July 2021.

“Copper prices on LME market for the corresponding months decreased by 1.9 percent to US$9,433.6 per tonnes in July 2021 from US$9,612.4 per tonne in June 2021

“The volume of refined copper exported for the period January to July 2021 was 510.0 thousand tonnes while that of 2020 for the same period was 501.8 thousand tons representing a 1.6% increase,” he said.

The cumulative total trade for the period January to July 2021 was K214.7 billion while that of 2020 for the same period was K117.1 billion, representing 83.3% increase.

Mupesa also said agricultural products accounted for a share of 37.2 % of Zambia’s NTEs in July 2021 compared to 30.2% in June 2021.

He said export earnings from agricultural products decreased by 4.8 %to K1.9 billion in July 2021 from K2.0 billion in June 2021.

The major export commodities were Oil-cake of soyabean accounting for 14.1 percent, Tobacco, not stemmed/stripped (12.1%) and other raw cane sugar (11.4%).

Mupesa said the Non-agricultural products accounted for a share of 62.8 % of Zambia’s NTEs in July 2021 compared to 69.8% in June 2021.

“Export earnings from non-agricultural products recorded a decrease of 30.2% to K3.2 billion in July 2021 from K4.6 billion in June 2021.

“The major export commodities were Sulphur of all kinds accounting for 7.9 percent, Rubies, sapphires and emeralds (7.3%) and Ferrosilico-manganese (7.0 %),” he said.

Zambia’s major export products in July 2021 were from the intermediate goods category mainly comprising copper anodes for electrolytic refining and Copper blister accounting for 81.1%.

Exports from the consumer goods, raw materials and capital goods categories, collectively accounted for 18.9% of total exports in July, 2021.

The major export destination in July 2021 was Switzerland, which accounted for 37.9% of the total export earnings with the main export product being copper anodes, accounting for 53.7% of total export earnings from that country.

Singapore was the second main destination of Zambia’s exports accounting for 18.8% of the total export earnings with the major export product being copper anodes, accounting for 70.9% of total export earnings from that country.

China was the third main export destination accounting for 14.4% of the total export earnings and the major export product was copper anodes, accounting for 46.3% of total export earnings from that country.

Congo DR was the fourth main export destination accounting for 10.1% of the total export earnings and the major export products were, Sulphur of all kinds accounting for 13.6% of total export earnings from that country.

South Africa was the fifth main export destination accounting for 2.7 % of the total export earnings with the major export product being Bullion semi-manufactured forms (gold) accounting for 21.0% of total export earnings from that country.

These five countries collectively accounted for 83.9 percent of Zambia’s total export earnings in July, 2021.

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Zambia’s foreign exchange position has further been

Lifestyle

Human Rights Defender and Alliance for Community Action Executive Director Laura Miti has refused to comment on assertions that she is speaking out on perceived ills in the United Party for National Development – UPND government because she has been left out of the soon to be announced cabinet by President Hakainde Hichilema.

Mitti responded that “ I have no comment and I never comment on such matters”. This was in response to a question that some ruling UPND supporters have accused her of speaking out because of being bitter after realizing that she has been left out of the soon to be announced cabinet.

Miti emphasized that only holders of office that have been officially appointed must be the ones who give information about the affairs of the head of state and not party functionaries.

Speaking in an interview with the Zambian Business Times – ZBT, Miti stated that this stance can be checked if there are some legal backing with qualified lawyers. She however refused to comment on assertions that she was bitter because she has been left out of HH’s cabinet which is expected to be announced soon.

Miti caused a social media stir when she questioned why the ruling UPND Secretary General Batuke Imenda (a Political Party official) was the one to issue a statement that newly inaugurated President Hichilema would not relocate from his private mansion in New Kasama area of Lusaka to Nkwazi house at State House when his is not a government official.

Nkwazi house is and had been the official residence designated for the serving Zambia head of state and President. President Hichilema was also reported to have opted to use a private vehicle after being sworn in, an action that has been reported to have destabilized state security operatives.

She question that “Why would the UPND Secretary General inform the nation where the President will live? Not his role! If the substantive spokespersons are not in place, then let the administration keep quiet about certain matters. There should be a clear separation between party and state. No more anarchy please”.

Imenda has since retracted his statement and clarified that the statement was his own opinion. A scenario that has added for the need and calls for President Hichilema to timely appoint substantive officials to put an end to this “anarchy”.

Miti later on posted on her social media page that “I hope that, one day, our economy will improve so that we don’t have half the country wanting to be Ministers, Ambassadors and Spokespersons in a new government. The stampede for jobs being reported right now is the direct result of government being the main employer and source of business. Gosh, political jobs are even, disturbingly, seen as a source of wealth”.

She further stated that “Anyhow, my hope is that President Hichilema will announce a lean Cabinet – we actually do not need that many Ministers. The reward culture is what kills administrations. It means people who may have contributed long, hard or recognisably to get a President elected, get jobs ahead of people who would better execute the demands of office. That’s not good for the country.

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Human Rights Defender and Alliance for Community

Markets

Zambia has enough resources and local but internationally renowned expertise that can solve the external debt challenge without the need of getting on an International Monetary Fund – IMF extended credit facility. This follows indications that the new UPND government is set to sign up and get the country on an IMF bail out package.

Patriots for Economic Progress – PeP President Sean Tembo who is also a financial expert has indicated that if the tax leakages were sealed, the country would not need to go for an International Monetary Fund (IMF) programme as it will be able to meet its debt obligations with the available resources. He said PEP was not in support of the country being put on an IMF programme because of its implications on the general economic management.

Tembo explained that when a country subscribes to an IMF programme, it commits itself to run the economy in accordance with the IMF conditions of which some of them were retrogressive. “When you subscribe to an IMF programme you are basically committing yourselves to run your economy in accordance with the IMF conditionalities.

An IMF programme can run anywhere from 12 to 60 months and what you are essentially saying is that during the period of the IMF programme, you are going to handover the running of the economy to the IMF,” he said.

Tembo said, “When you look at the conditions for an IMF programme, you will realise that some are very retrogressive to the proper administration of an economy especially a developing economy.

He said the IMF believes in running the economy as if you are running a private profit seeking company, but you cannot run a nation like that because there are other social considerations that you need to put onboard.

He said for example, if the country goes on an IMF programme, it would mean that some Government programmes such as the social cash transfer and the farmer input support programme (FISP) would have to be discontinued as a requirement of the IMF.

Tembo said some of the conditions might be that you fully or partially privatize parastatal entities that are loss making among others.

“So if you look at those conditions and were we are, it would not be a good idea measure to implement because when you look at things like social cash transfer. And when you look at how the IMF disburses funds, you realise that they do not disburse the money as a lamp some, they disburse in small instalments based on your meeting their conditions,” he said.

Tembo indicated that, “When you look at money that comes in installments, as a nation there is very little you can do with it, you cannot even refinance your external debt such as the Eurobond. So government may end up spending that money on other things like recurrent expenditure and you find that you remain with the huge IMF loan, which needs to be repaid back because it is a loan and yet you fail to point at what you used that money for.

“If you look at our country’s challenge, you realise that there is largely over borrowing and so if our biggest problem is over-borrowing, then how can the solution to that borrowing be additional borrowing even if that additional borrowing is from IMF, it simply does not make sense.

“We are hopeful that the new government will not go the IMF way because such a root is retrogressive,” he added.

Concerns are now being resounded on the pros and cons of getting on an IMF program. Zambia has had a difficult historical relationship with the fund following the hard experiences during the Structural Adjustment Program – SAP implemented in the late 1980’s which eventually resulted in social and harsh economic challenges for ordinary Zambians.

Indications are that the IMF has since reformed from the proscription based SAP era but it still remains to be seen if their programs actually benefit the ordinary citizens of the countries that get on their programs. Other experts have called on the country to put together a well trained and experienced negotiations team from Zambia to ensure that the program if gotten, is fit for purpose.

 

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Zambia has enough resources and local but