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Agribusiness

Zambians living in most of the key cities and towns have adopted an English breakfast that has bread and wheat products as the key components, but the country still continues to struggle to locally grow enough wheat resulting into imports to cover the deficit.

The demand for bread and other wheat products continued to expand as urbanization and the middle class expands. The country has had no option but to import over 100,000 metric tonnes of wheat annually to cover the deficit.

One challenge has been the fact that very few local farmers and indigenous Zambians have been able to successfully adopt and take up wheat cultivation. One exception and an excellent example is David Samutela, the Director of Rockshield farm of Mkushi.

He has been growing wheat since 2006 and his message is that Zambia has what it takes to first close the deficit and become a net exporter of wheat and wheat products. Samutela told the Zambian Business Times – ZBT that with concerted efforts, Zambia would be able grow enough wheat to meet the national demand and permanently close the deficit.

Samutela said some of the challenges involved with wheat production include high commodity prices such as high prices of fertilizer, chemicals and machinery as everything is imported adding that electricity which is relied upon to run the irrigation system is also very expensive.

He said growing wheat is capital intensive and that is why we find that only commercial farmers mostly grow wheat, as it is not easy to grow as a small-scale farmer because of the cost that is involved in buying equipment and other necessities.

He said a Centre pivot that can be set up for 60 hectares of land costs between US$200,000 and US$300,000, but the upside to this is that once irrigation is in place, farmers can grow many other cash crops, adding that farmers can grow two crops in a year [avoid mono-cropping]. This means that a farmer can have a summer crop and the winter crop, which is wheat.

He noted that expanding wheat production by farmers already growing wheat is also a challenge because banks in Zambia are not flexible in their financing conditions and the high interest rates on borrowing make it even more difficult for farmers to get loans.

Speaking in an interview with ZBT, Samutela said farmers in Zambia are capable of meeting the wheat demand if they can receive the necessary support or incentives from government [ministry of Agriculture] and other stakeholders.

He said it is possible that the country is able to meet the current wheat demand but traders have continued to take advantage of the situation and import wheat in order to make money. Why should the country continue to import wheat when it can be successfully grown locally?

“The wheat that some traders import is maybe 10 years old, which they have been keeping in other countries. When they are about to throw it, they bring it [dump] into Zambia and blend it with our wheat which is fresh for it to be of quality for consumption, otherwise it’s meant to be given to animals as livestock feed but it ends up in this country. This explains why some of these imports are cheaper”, he said.

He explained that with the right support from the government, many local farmers would go into wheat production in order to support the demand in the country, which should be the case because with the COVID-19 pandemic, many countries would ensure they have enough before giving to other countries.

He said government can help improve the wheat production in the country by subsidizing most of the equipment requirements and inputs, bring in special tailored soft loans, bring down the cost of electricity because once the cost of production reduces, production of wheat increases, as it would be easy for most farmers to grow wheat.

He noted that there is so much water in the country and most of it is being wasted adding that the Water Resources Management Authority (WARMA) is making matters worse for the farmers with the various restrictions on access to water.

“Instead of us holding the water in this country and using it for production, there are a lot of restrictions now being put on water. We have to pay for the water, even after you put up your own dam you still have to pay for so many things, it’s becoming too costly and these are new rules which have just come in”, he said.

He mentioned that we need to be careful with the systems that have been imported from other countries which may not be practical and viable in Zambia and these are making agriculture very difficult. Some farmers do not understand these rules and restrictions causing disharmony in the Agro space.

“They are telling us if you do this, we shall impose sanctions and everyone is now so scared and don’t know where to start from because they haven’t made us understand the newly introduced rules regarding water systems and applying for water permits is taking years”, he said.

Samutela said farming is not an easy business if government is not supporting farmers adding that countries where farmers are supported have been able to meet the demand for most commodities.

He said there is plenty market for wheat in the country and neighbouring countries such as DR Congo, Angola etc where most of the country’s flour is sold, adding that it is better to have a surplus, which can be used during years when production may go down because food is controlled by the weather which people have no control over.

Samutela said he uses the shungu and nduna wheat variety, which he buys from ZAMSEED and SEEDCO and expects a harvest of approximately 1800 metric tonnes of wheat this year from his planted area of 200 hectares.

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Zambians living in most of the key

Companies

The Southern Africa Development Community-SADC Cross Border Traders Association says Zambia is likely to experience the impact of the looting that was happening in South Africa – SA in the next two to three months

Association Executive Director Jacob Makambwe said the looting would disrupt the supply of goods in the country as Zambia mainly depends on South Africa and South African ports for import of various goods and most local cross border traders always get their goods from South Africa.

Makambwe said another impact of the looting would be an increase in the prices of goods coming from South Africa in the next few months, as the country would have to make sure they have enough before bringing it into the country.

Speaking in an interview with the Zambian Business Times – ZBT, Makambwe said the supply of goods to supermarkets and chain stores will be erratic because most large scale supermarkets in Zambia are South African owned and are normally supplied by goods from South Africa.

He however said this is an opportunity for the private sector and local manufacturers to fill up the shelves of these stores adding that this will help the country retain and internalize its foreign exchange.

He has advised the local manufacturers and producers to take advantage of the situation and look at what products they can supply, as it is an opportunity for the local industries and processors to supply the chain stores, which usually stock South African products.

“You know that the South African government is now deploying more soldiers meaning that whoever would have imported goods, at the moment, it will be extremely difficult to verify which factories the goods are coming from or whether criminals have organised and gotten the truck and just want to come and sell in Zambia. There will be a lot of suspicion around and in order for it to be cleared, it could be difficult”, he said.

He stated that most of the fruits and vegetables in the country (whether we acknowledge this or not) come from South Africa and this disruption may cause a shortage or price increase of these products on the market.

“We do not actually know to what extent the damage has been done, in terms of trying to resuscitate the industries and also to restock their own country, it may take some time because things were gutted and billions of rands were lost in that demonstration”, he said.

Makambwe said the most affected people are the ones in areas where the demonstrations took place because they may have the money but do not know where to buy things because there is no stock and shops are closed.

He further said hunger is looming within the areas affected by the riot because most of the shops were gutted and things may not get back to normal very soon adding that the looters may end up losing everything because of the soldiers that have been deployed.

He noted that some of the goods imported from South Africa and partly Botswana include clothes, electrical appliances, television sets, motor spare parts, hardware, shoes, blankets and baby clothes. All these supplies to Zambia will be affected.

He also noted that the closure of borders has already affected cross border business, as there is little movement from people coming from Zimbabwe, Botswana and South Africa to buy goods from Zambia so the looting will affect the delivery of goods.

He said the supply of goods has been erratic as traders experience delay in receiving their goods, which sometimes take weeks and over a month.

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The Southern Africa Development Community-SADC Cross Border

Mining

Mopani Copper Mines with large scale copper mines at Kitwe and Mufulira will soon be announcing the official decision to pay terminal benefits to qualifying employees following the mines change of ownership from Glencore to ZCCM IH.

Speaking during President Lungu’s visit to the company head office in Kitwe, Mine Workers Union of Zambia – MUZ President Joseph Chewe stated that the issue of payout of terminal benefits has been on the cards and needed to be dealt with following the change in control.

Chewe was Speaking after Mopani Chief Executive Officer briefed President Lungu that the Mine under local management is settling down and month on month production is steadily increasing.

President Lungu stated that in the spirit of industrial harmony and equity, Mopani Employees would also be paid their terminal benefits after the necessary internal procedures and board approvals are put in place.

The head of state challenged the union to seat and agree with new management of Mopani on how best this decision can be implemented and when the first installment and modes of payment would be effected.

KCM Workers have been paid the first installment of their terminal benefits after the exit of Vedanta, the next installment will be paid also, so why should Mopani employees not be treated equitably? President Lungu questioned. See more on Mopani ZCCM IH buy back of Mopani from Glencore

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Mopani Copper Mines with large scale copper

Opinion

We are now deep into the political season, with August 12 elections date fast approaching.

Realistic candidates and political parties taking part should by now make up their minds on either to cut their losses or increase their momentum. To endorse other candidates or parties and get off the crowded Zambian political field to give space to the real contenders.

Some candidates by now, from Presidential, Parliamentary and local government are feeling the pressure, are getting that inevitable deep seated feeling or sense that they are headed for a defeat.

Others are catching momentum, catching the wind in the sails and sprinting to the finishing line of August 12 general elections when the voters will merely be confirming them as winner.

Despite this gift to humanity for inner feelings and deep reasoning, some candidates despite sensing defeat, are rather scheming on how to cheat or manipulate electorates or the electoral system.

Others are convincing themselves that they are still going ahead with the polls for strategic purposes, gunning for the future 2026 general elections. Whether this is wise or downright naivety will only be known in the near future.

While for others, it’s a fight to the death, they are already too invested to back down even when the signal is clear that they are more likely to lose than to win. Their chances are below 50%. But this is the world we live in today, were common sense can completely escape from one’s mind.

Experienced political hands will tell you that endorsement of the eventual winner is more viable than political posturing. Than continuing to run when you very well know that you have lost the race.

Bottom line is, some candidates by now know that they really have no sizable support base and stand no realistic chance of wining. For these, our advice is that, it’s time to cut your loses. Weather at local government, National Assembly or presidential level, its time to for once act in an efficient manner.

Whatever the case, most of our ordinary citizens who are independent observers, voters and in some way sympathizers of specific candidates or political parties are also getting the drift. They know deep down in their hearts the direction that this election will go and which way they will vote.

As an experienced and initiated democracy, Zambia has navigated through the 1991, 1996, 2001, 2006, 2011 and 2016 general elections with two presidential bye elections in 2008 and 2015. There are clear discernible patterns that have been established.

From this experience, It’s suffice to say that some of the candidates or political parties are merely being stubborn to accept the inevitable verdict to come. Even their loyalist are remaining mostly because of personal ties while others for their financial survival or reasons.

This is perhaps why you will note that the more experienced political hands have rather backed off the race and endorsed one of the top two contenders.

Elections by their very nature are a very divisive process especially for our humble citizens most of whom are simply weeped or shepherded into supporting one or the other candidates or political parties.

Others have also been made to support candidate because of their habitat location, the region’s they call home. And this is what makes politics a dirty game. It’s never about meritocracy, but more of capturing minds, traditions and taking advantage of the human instinct that seeks belonging.

As we are now in the last 30 days, voting blocks and boundaries will start to clearly be drawn. Politicians will open up memories of historical wounds and mistrust between citizens, between cultures and regions.

Geographic, demographic, cultural, social and any other sphere of differences of our ordinary citizens will be elevated such that, in the end, historical voting patterns will emerge.

You see, politics is and has always been a dirty game. You and I may not agree with how it plays out but it’s very nature even in more developed western economies leaves much to be desired.

In these elections, due to Covid, the Electoral Commission of Zambia – ECZ has restricted road shows. Remember, if we were to rank which modes of campaign is more effective, rallies were historically the main form of political mobilization followed by road shows and then direct approach such as door to door.

In these elections, the two most utilized platforms for political mobilization which are rallies and road shows are out of the play book. The terrain has been fundamentally altered.

Of course, this is necessary when you look at the raging COVID pandemic. Only those living on isolated homesteads can dispute the need to ban super spreader events. On our part, we can confess that this third wave is more devastating and real as close relatives and friends have either tested positive or succumbed to this virus.

So, forget about the argument that there is no COVID or that it’s politics, it’s real and raging right now. The cold season has also not helped matters as hospitals and clinics are now overwhelmed.

Now, the real political question of today is who is more astute between the ruling Patriotic Front – PF and their main rival the opposition United Party for National Development – UPND, the two main official options available for campaigns i.e on door to door mobilization and digital/Facebook activation?

Is digital/Facebook activation more powerful than door to door engagement to get out the votes? Will voter turn out be the key deciding factor for these elections? Will voting patterns or voting blocks repeat themselves and tilt the balance of power due to the arrogance of numbers in this contest?

All we can say for now is the patterns are slowly but surely emerging…

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We are now deep into the political

Markets

The Ministry of Finance and the Bank of Zambia – BOZ have been advised to concentrate their efforts on securing a debt restructuring deal to prevent further slide or depreciation of the Kwacha.

The stability of current exchange rate position is largely driven by the country’s debt position, which is currently at unsustainable levels and the Government’s needs to return to a position were all its sovereign debt can be serviced.

Speaking in an interview with the Zambian Business Times – ZBT, Financial Analyst Trevor Hambayi explained that the Government’s push to service the country’s debt has continued to depreciate the Kwacha, which is also seen in the reduction of foreign reserves.

Hambayi said to address this situation, the technocrats needs to deal with the debt situation by securing a restructuring deal to sustainable levels. And one of the key conditions required to achieve this is to agree on the International Monetary Fund (IMF) package.

He said once this is done, all other conditionalities would fall in place, which will be speaking to the country’s fiscal discipline including how the country gets to spend or not to spend money, how much debt the country can contract or where and when the country can contract debt.

“Once we have managed this debt situation and restructured it to meet our capacity to repay, this is going to bring stability in the exchange rate. This stability will ensure that the inflation rate will start to be stable and that is what is going to speak to us having to be able to recover economically,” Hambayi said.

He said there needs to meet the conditions set by IMF which include transparency on the amount of debt the country has, fiscal discipline, tackling corruption, abuse of office and overpricing of infrastructure development projects.

Hambayi said, “Once we have put those things in place, the IMF is very willing to come on board to support us and then we can restructure our debt.

“The other thing around this is that there is no way the IMF would not agree on anything prior to the country going to general elections. This is because the tendency of African governments which we have seen even with our own is that they tend to spend money on basic political empowerment programs to appease the electorates.

“So the IMF was very weary of this and where not willing for us to be able to discuss this package until after elections,” he said.

Hambayi said what would have been positive is for Government to have negotiated with IMF to determine what it needed to do exactly prior to the election and agree that as soon as the country goes past the elections, the IMF will come on board.

“Generally, I think yes the IMF will support us but this support will have to come after the elections and what you will see is that at that time, government will have no political inclinations about this and very hard decisions will be taken.

Some of the projected decisions will include the increase in the price of fuel and the removal of subsidies on electricity and other things that have subsidies on as well as have wage freeze where government will be required either to trim down its workforce to reduce the wage bill,” he said.

He said following this, there would be need for a stimulus package into the economy for the economy to be able to grow. “Once the economy starts to grow, it will lead to the reduction of both the inflation rate and stabilization of the exchange rate.

“Once we start to have the economy recover, we want this recovery to be driven by local businesses and SMEs because this is what is going to ensure that the resources we are going to generate will remain in the country and the benefits will trickle down to the market,” Hambayi added.

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The Ministry of Finance and the Bank

Mining

The Competition and Consumer Protection Commission (CCPC) has confirmed that they have not yet approved the transaction between Huaxin Investment Company Limited and Lafarge Zambia Plc as the case is still under review. Lafarge Zambia still has a pending case with the Competition and Consumer Protection Tribunal – CCPT.

Lafarge Zambia together with Mpande Limestone (Sinoma Cement) and Dangote were ordered by the CCPC Board to slush down their retail prices and revert to pre-cartel prices following an investigation that found the three firms gilty of acting and forming a cartel.

The proposed transaction is such that, Huaxin is purchasing 50.10% and 24.90% shares in Lafarge from Pan African Cement Limited and Financière Lafarge SAS respectively. This will culminate in the acquisition by Huaxin of 75% shares in Lafarge Zambia.

CCPC public relations officer Rainford Mutabi confirmed in an interview with the Zambian Business Times-ZBT that the commission was still reviewing the proposed merger involving the two companies and would communicate if the approval is granted.

“The Commission has not yet made any approval to the transaction between Hauxin Investment Company Limited and Lafarge Zambia Plc. This is because the case is still under review and as such, further information will be communicated if approval of the transaction is granted,” Mutabi said.

The Commission is calling for stakeholder views on the proposed merger involving Huaxin (Hainan) Investment Company Limited (“Huaxin” or the “Acquirer”) and Lafarge Zambia Plc (“Lafarge” or the “Target”). Some stakeholders have expressed concerns that Lafarge May have sold out to escape the fines that were meted in the company by CCPC.

Huaxin is a limited liability company incorporated in the People’s Republic of China. Lafarge is a public limited company, incorporated under the laws of Zambia and listed on Lusaka Stock Exchange.

On the other hand, the Competition and Consumer Protection Tribunal (CCPT) is yet to make its ruling in the cartel case, which involved Lafarge Zambia Plc, Mpande Limestone Limited and Dangote Cement Zambia Limited.

The board of directors of CCPC in March this year fined Lafarge Zambia Plc and Mpande Limestone Limited 10% of their annual turnovers for the year 2019 and another 10% of their 2020 annual turnovers for price fixing and division of markets, while  Dangote Cement Zambia Limited was granted full leniency for having cooperated with the Commission during investigations.

However, Lafarge Zambia Plc appealed the decision by the Commission to the Competition and Consumer Protection Tribunal – CCPT. “You may wish to know that the CCPT is yet to make its ruling in the cartel case which involved Lafarge Zambia Plc, Mpande Limestone Limited and Dangote Cement Zambia Limited.

However, CCPC Board of Commissioners only granted full leniency to Dangote Cement Zambia Limited for having cooperated with the Commission during investigations,” Mutabi said.

The board of commissioners of CCPC ordered Lafarge Zambia Plc, Dangote Cement Zambia Limited and Mpande Limestone Limited to revert to the pre-cartel prices ranging between USD 4.50 – USD 5 for a period of one year from the date of receipt of the Board Decision pursuant to  Section 59 (3) (b) of the Act.

This was after an exhaustive investigation by the Commission initiated in January 2020, following the Commission’s observations of a sustained increment of cement prices from an average of K55 to K100 per 50Kg bag between July 2019 and January 2020.

The Board of Commissioners determined that the sharing or exchange of commercially sensitive information relating to future prices and rebates by Mpande Limestone Limited, Dangote Cement Zambia Limited and Lafarge Zambia Plc amounted to an agreement.

The Board of Commissioners further determined that this agreement was anti-competitive as it was used to fix the price of cement and share markets contrary to Section 9(1) (a) and (b) of the Act respectively.

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The Competition and Consumer Protection Commission (CCPC)

Agribusiness

When the Food Reserve Agency – FRA announced a 36% maize buying price increase, it was heralded as a good decision, especially for the farmers. FRA went on to increase buying prices for Soya and other key commodities. For the initiated, it was clear from that time that it was the consumers who would eventually pick up the tab and foot the bill.

It is important for us to understand and appreciate that what may be referred to as good prices for farmers, eventually lands back at the consumers or general public in form of price increases. The increase in buying prices by FRA in itself is not a bad thing, but what the country seems to struggle with is that these increases need to be managed, need to be gradual and minimal year on year for consumers to be able to adjust.

What is now happening is only a domino effect, commercial suppliers of day old chicks across the country have one by one come forward and announced increases in prices of day old chicks, with many citing the depreciation of the kwacha as the main reason for the price hikes.

Ross Breeders Zambia Limited is the latest commercial breeders to announce a price increase of day old chicks by about 14% from K14 to K16 per bird effective 19 July 2021. This increase effectively means that the retail prices of chicken will also follow suite and go up by a similar margin.

Ross Breeders Sales Coordinator Francis Mwila has explained that feed prices for the parent stock have continued to go up which means the production for the parent stock, which produces the eggs where the day old chicks come from, has also increased.

Mwila said the company does not have all the raw materials used to manufacture feed for the parent stock, therefore it imports the materials that are not available in the country from South Africa and other foreign countries.

Speaking in an interview with the Zambian Business Times – ZBT, Mwila said these materials are imported using foreign currency (in US dollars) and with the weakening of the Kwacha, manufacturing feed has become expensive due to the high prices of the imported raw materials and feed supplements.

He noted that feed prices for day old chicks have also gone up in a range of about 20-25% due to the kwacha losing its value against major convertibles. “The price of maize, soya beans and all the other locally available raw materials that are used in the manufacturing of chicken feed have gone up, so that’s why you are seeing the prices of feed going up”, he said.

A check by ZBT also revealed that even the Food Reserve Agency – FRA announced some notable increase in buying prices for Maize and Soya beans (key materials for stock feed) in 2021 which is now being felt after millers, stock feed manufacturers and traders price in the current prices. See article on Govt nods 36% maize price hike

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When the Food Reserve Agency - FRA

Companies

As an economy, local manufacturing may not always be a solution for some products as economics of comparative advantage eventually wins. There is need to engage in deep analysis and make informed decisions about which products can be efficiently manufactured locally and which ones the country should rather rely on imports.

One current case in point of the play of economics of comparative advantage coming to weigh in is the shutdown of Eagle Glass which was aimed at reviving the nostalgic Kapiri Glass Company. The set up of this company was aimed at cutting down Glass imports and making Zambia self sufficient in glass manufacturing using locally sourced raw materials.

But Eagle glass announced that it was shutting down its local production lines earlier this year due to heavy competition from cheap imported glass. When contacted to find out the current state of affairs, Central Province Permanent Secretary – PS Bernard Chomba stated that negotiations are still underway to see if Eagle Glass manufacturing company in Kapiri Mposhi can resume operations.

He also confirmed that the manufacturing company is currently not operational as it halted production of its glass products earlier this year. Chomba said the company stopped production because imported glass is cheaper than the glass that it was manufacturing and therefore realised that it was difficult for it to survive in business.

Speaking in an exclusive interview with the Zambian Business Times-ZBT, Chomba said investigations are ongoing to find out why the company would decide to down tools until a time when business is favourable for them after investing huge sums of money into the Kapiri Mposhi based factory.

He said the company has halted production, sold off everything it had produced and has switched off its machines and glass manufacturing plant, adding that it may be trying to convince government to increase the tariffs on imported glass, so that its glass can be cheaper.

The Central Province PS stated that one possible solution might be engaging power utility ZESCO Limited to see if reducing electricity tariffs for the company would assist it in any way, but no concrete solutions have currently been agreed.

He added that the company sources its major raw materials locally which is a plus to the local economy, adding that some raw materials such as chemicals, which are in form of powder, are imported and used in the manufacturing process.

“I don’t know if they just want to make their case and convince government to start hiking the tariffs on the imported glass, so that they can have a monopoly of their products on the market, we are still investigating”, he said.

Chomba further revealed that Eagle Glass manufacturing company is the first of its kind and the company had plans to open another factory, but the current situation does not make it clear on the fate of those plans.

When contacted for a comment, Eagle Glass Managing Director Zhi Zhao confirmed to ZBT that the company is no longer in active glass production and that the company would be able to provide more information on its operations at a later stage.

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As an economy, local manufacturing may not

Companies

Zambia’s energy giant – ZESCO Limited is working towards making Zambia a net exporter of electricity for the Southern African region by the year 2025. This will make the power utility to become a major contributor to forex earnings for the country which is key to stabilizing the Kwacha.

The power utility company is currently taking steps towards ensuring that this projection becomes a reality by investing in a number of power generation projects in the country. There are also some independent power producers – IPP projects that are expected to further increase the country’s energy output.

Speaking in an exclusive interview with the Zambian Business Time- ZBT, ZESCO Senior Manager, Corporate Affairs, Dr. John Kunda, said the company’s five-year projection was to become a trade hub for electricity for Southern Africa.

Dr. Kunda said that, to this effect, the company has been investing in power generation projects that will significantly contribute to the national grid, with the excess to be exported.

He cited some of the projects such as the 750 Megawatts Kafue Gorge Lower (KGL) hydroelectric power station, Lusiwasi hydro power project and the Luapula Hydroelectric project the Batoka Gorge Hydroelectric Power Station, among others.

“So the five-year projection for ZESCO is to become the net exporter of electricity in the region, this target is to be reach by the year 2025,” Dr Kunda said. When asked on the progress for the development of the Luapula Hydro project, he explained that the Luapula hydro project is currently at feasibility stage.

Dr Kunda explained that apart from having a rich energy mix with both solar and hydro power, ZESCO was looking to have a scenario where Zambia becomes self-sufficient as a country.

He noted that the current demand for electricity as a country is about 2,300 megawatts at peak and by 2025; the projected generation capacity will be at about 3,550 megawatts. This is expected to provide a surplus.

Dr Kunda said that, this means that ZESCO will have excess electricity to export to neighboring countries by 2025 thereby earning forex income for the country. Power exports are projected to become a major contributor to Zambia’s forex earnings.

“In terms of solar, we are currently injecting about 86MW into the national grid.  We are also working on the Lusaka Distribution and Transmission Rehabilitation Project which is being funded by the European Investment Bank and the World Bank at a total cost of about US$260 million.

“The purpose of this project is to upgrade the transmission and distribution network so that it is stable, that is, it provides reliable and consistent power.

We are also upgrading a number of substations such as the one at Leopards Hill in Lusaka, the Water Works one along Tokyo way and the one in Roma in Lusaka. This is to ensure efficiency and stability in power supply for Zambia’s capital,” he said.

He observed that some of the outages in electricity supply that are usually experienced in some parts of the country were as a result of a network that is old or unstable. This is however being upgraded.

Dr. Kunda said, “We are also working on a number of interconnectors that should be able to assist in the transmission of power in the region like taking power to Zimbabwe, Botswana, South Africa, Angola, Tanzania and Namibia. Power Trading is also projected to significantly increase.

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Zambia’s energy giant - ZESCO Limited is

Companies

Zambian businesses have been cautioned to be more vigilant following Financial fraud involving about K400,000 which has landed Global Seal Zambia Limited a two year suspension from participating in public procurement activities in Zambia.

The remitting bank – Ecobank and the Financial Intelligence Centre – FIC were both engaged to recover the funds by the local company but have all failed to successfully corroborate with the receiving bank to remit back the stolen funds due to email hacking.

The Zambia Public Procurement Authority (ZPPA) has with immediate effect suspended Global Seal Zambia Limited from participating in public procurement in Zambia, for failing to substantially perform contractual obligations.

Global Seals Zambia was awarded a contract by ZESCO Limited to undertake rehabilitation works on the ZESCO water flowing system at Kafue gorge in 2019 at the total cost of K1.6 million. However, the company could not successfully undertake to works.

Global Seals Zambia technical services manager John Mushi said the company failed to fulfil the contractual obligations at that time because it was swindled during the transaction to procure materials from the suppliers in Sweden.

Mushi explained that ZESCO had paid Global Seals about K400,000 as down payment to enable the company procure the raw materials needed to start the project.

“We lost some money through some cyber security breach, the money was paid to us by the client who was Zesco. So as we were trying to send the money to our supplier Ramson Multi Filter Systems of Sweden, we ended up sending to a wrong account because they had penetrated the email system.

“When we lost the K400,000, we failed to raise money to work on the project, so that is why the client (ZESCO) complained and we have been suspended,” he said.

Mushi said, “We received correspondence from our clients in Sweden that we should use the different account from what we usually use to send the money not knowing that the email had been tempered with and the message was not from our clients, so we transacted.

He said when the company discovered that it had sent the money to a wrong account, they called their bank, ECO Bank to try to cancel and reverse the transaction but it was too late because the swindlers in Mexico had already withdrawn the money.

“I called Ecobank to reverse the transaction, it was about a week later that is when we received the news to say our clients didn’t receive the money.

The bank tried to help us recover the money but because the transaction happened like on a Thursday and we only discovered that we lost the money the following week on Tuesday and by then the money had already gone through and was in Mexico and the frausterd withdrew it,” Mushi said.

He said, “We gave the report to the Financial Intelligent Centre (FIC) who tried to recover the funds but they also said it was complicated to get the thieves arrested or get the money back.

“When we lost that money our financial situation was bad and we were trying to see how best we could get back the contract online and meet the requirement by ZESCO but it was difficult. At the time we had meetings with ZPPA we had someone who was willing to come in and finance the project on our behalf but I think it was too late,” Mushi said.

He said the company understands that ZPPA has suspended them because it did not meet the requirement by ZESCO Limited and that it did not respond to the notice by ZESCO on its intention to terminate the contract.

“This move by ZPPA is going to affect our business because we are not only involved with ZESCO but we understand, it happens,” he said.

ZPPA in a circular issued to all permanent secretaries and controlling officers, chief executive officers of parastatals and statutory bodies, all town clerks and council secretaries of local authorities, noted that the decision to suspend Global Seal Zambia Limited was pursuant to section 96 of the Public Procurement Act No. 8 of 2020 and regulation 167 of the Public Procurement Regulations, 2011.

ZPPA Director General Idah Chella advised all procuring entities to enforce the suspension by ensuring that they do not award contracts, sale or issue solicitation documents or in any other way invite bids from the company; and enter into any other dealings or communications with the company except in respect of existing contracts signed prior to this suspension.

She noted that the suspension includes any “successor in interest” including any entity which employs, or is associated with any partners, directors or other officers considered as successors in interest.

“The suspension does not in any way limit Global Seals Zambia Limited from performing outstanding contracts that were entered into before the date of the Circular,” Chella said. She urged procuring entities not to enter into any new contracts with the company after the date of the Circular and during the period that the suspension will be in force.

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Zambian businesses have been cautioned to be