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Companies

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.

 

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ZESCO Limited has clarified that the exercise

Markets

The Democratic Republic of Congo (DRC) has remained Zambia’s largest export market in Africa with exports from Zambia to DRC standing at over K10.7 billion for the six months ended June 2021.

However, successive Zambian authorities have rather concentrated on fostering diplomatic relations with western countries, some of which have little to no beneficial economic relations to the local business and people of Zambia. This is one area where we should watch closely to see a difference in the Hakainde Hichilema Presidency.

According to export data for the top ten export destinations from Zambia by volume and value in Africa obtained from the Zambia Statistical Agency (ZamStats) by the Zambian Business Times-ZBT  between January 2021 to June 2021, Zambia’s exports to DRC were the highest in Africa were recorded at K10.7 billion (about US$700 million).

This re-affirms that DRC is the largest export destination for Zambia among the top ten African export destination countries. The other advantage of exports to African countries is that local businesses benefit when compared to exports to outside Africa destinations which mostly benefit foreign owned multinational companies.

The top five products exported to DRC during the first half of 2021 which is the period under review included non-alcoholic beverages, Sulphur products, Portland cement and Detergents used for washing clothes, dishes and kitchen utensils.

Of the top five products exported to Congo DR,  non-alcoholic beverages (drinks) accounted for about K1 billion, Sulphur products accounted for K976 million and Portland cement K730 million while detergents used for washing clothes, dishes and kitchen utensils accounted for K630 million and other products accounted for K6. 6 billion

South Africa, which enjoys a large trade advantage over Zambia was the second in the top 10-export destination for Zambian products accounting for over K3 billion during the first half of 2021. The Hichilema administration has a big task of negotiating aggressively with South Africa which has always found ways to use non-tariff barriers to block Zambian goods.

President Hichilema is yet to announce his trade Minister, a role that is responsible to turn around this sorry state of Zambia’s trade relations with the world. Local businesses and individuals expect that the new government will appoint a team and ministers at both ministries of trade and foreign affairs that would be able to handle this complex but attainable goal of re-setting Zambia’s bilateral and multilateral trade and economic relations.

 

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The Democratic Republic of Congo (DRC) has

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