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Markets

The Bankers Association of Zambia (BAZ) says the introduction of the Central Bank regulatory sandbox will give banks an opportunity to refine new products and services before obtaining regulatory approval and putting them on the market thereby avoiding market credibility risks.

The Bank of Zambia (BoZ) identified the need to develop sandbox regulations for FinTech companies and financial institutions, to foster innovation whilst managing the risks that these technologies may present and set up a sandbox regulatory framework to allow for controlled live testing of innovations under its supervision.

A regulatory sandbox is a framework set up by a regulator that allows financial technology – fintech start up or new product innovations to conduct live experiments in a controlled environment under a regulators supervision. According to BoZ, the Regulatory sandbox is one of the initiatives that falls in its strategic plan and is an enabler of development in terms of financial products and services.

Speaking in an interview with the Zambian Business Times-ZBT, BAZ chief executive officer Leonard Mwanza said the regulatory sandbox would allow the testing of new innovations before they are fully ready for the market.

Mwanza said by operating in the sandbox, banks and startup companies will be able to test a variety of innovative products, services and other emerging financial technologies that have the potential to transform the financial sector and promote financial inclusion before they are deployed on the market.

“As you may be aware, the process of developing a product requires the developer, which can be a bank or a startup entity to invest some money in the technology. So if the product is put on the market and then it fails to perform according to the expectations, it creates market credibility and financial losses if the product has to be withdrawn from the market.

“Banks usually come up with products that are technologically inclined and might want to test them or put them in an incubation before they can fully put them on the market,” he said.

Commenting on the Central Bank’s move to adjust upwards the daily limit for over-the-counter cash transactions for commercial bank account holders from US$5, 000 to US$10, 000, Mwanza said the banks are already complying with the new regulation.

“Commercial banks have already complied with the new regulation to allow customers to buy or sell forex over the counter up to US$10, 000. Before this, banks were only allowing US$5000 but now it’s US$10,000. “This move will help cross border traders who mostly deal with foreign currency for trade,” he said.

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The Bankers Association of Zambia (BAZ) says

Mining

ZCCM Investments Holdings (ZCCM-IH) has dispelled assertions that they are more focused on finding an equity partner than driving production and keeping Mopani Copper Mines in local Zambian hands.

ZCCM IH acquired Mopani Copper Mines from Glencore and FQM. The move received wide ranging support from the mining unions, suppliers and communities on the Copperbelt and accross the country as it was seen as a move to have a wholly owned Zambian Coppper mine. But comcerns have been raised after indications from the mines ministry that that foreign equity partners have expressed interest in taking over the mines.

However, ZCCM IH which is the holding company has told the Zambian Business Times – ZBT that they are currently focusing on ensuring the development and growth of Mopani Copper Mine Plc’s production to generate more revenue for the company. ZCCM-IH Public Relations Manager Loisa Mbatha-Kakoma said the focus for Mopani Coper Mine was on mining and producing copper to ensure more revenue was generated for both current and future operations.

When asked on how far plans have gone to get onboard an equity partner and if the move confirmed fears that a local Zambian management cannot run the large copper mine, Mbatha-Kakoma said, “As you can understand, this is a high quality asset of which there are not many out there in the world. “Therefore it is not surprising that we were approached by several interested parties.

“Our focus for now is to ensure the development and growth of the mine in terms of production by the current Mopani management team who have so far had a provided a good track record,” she said. Mbatha-Kakoma said post deal closure, Mopani has continued operating normally and able to meet its operational needs.

She said all jobs have been retained with a new collective agreement concluded in record time. Mbatha-Kakoma said the Company is currently using its sales revenue to sustain its operations.

“Both Mining and Processing have continued without disruptions and the focus now is on mining and producing Copper so that more revenue is generated for both current and future operations,” he said. Government through ZCCM-IH acquired a majority stake in Mopani Copper Mine following a conclusion in negotiations with Glencore recently.

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ZCCM Investments Holdings (ZCCM-IH) has dispelled assertions

Agribusiness

The Lifting of the ban on importation of potatoes which was expected to result in market price reduction has had little to no effect on the obtaining market prices.

This has been confirmed by the the Zambian Fruit and Vegetable Traders Association who have exclusively told the Zambian Business Times – ZBT that the prices of potatoes in the country have remained the same despite the lifting of the ban. The traders association has attributed this policy failure to the exchange rate depreciation which has negated positive effect that would have resulted from flowing in of imports.

Association President Bernard Sikunyongana told ZBT that the price of potatoes has not gone down because of the Kwacha, which has not stabilized and continued to marginally depreciate, thereby making the cost of doing business or importing high.

Sikunyongana said whenever imports were allowed in the past, prices would come down to K85 and K90 but now the price of a 10Kg bag is K130 and looking at how much is being spent on the importation, prices are going to remain at above K120.

Speaking in an exclusive interview with ZBT, Sikunyongana said a 10kg bag of imported potatoes is going at K130 with locally produced potatoes being sold at K135 for the same quantity.

He noted that the exchange rate is limiting the price reduction but prices will not exceed K130 and if the kwacha can appreciate and come to 18.5 or 18, a 10Kg bag of potatoes can be sold below K100, which cannot be done now, as that would result in losses.

“The exchange rate here has continued to be high; the exchange rate in South Africa is dropping, as am speaking now it is at 14 rands to one US dollar, while here it is at 22.90 per one US Dollar, look at the difference, we are losing a lot of money”, he said.

“When we are buying there, we are buying in rands meaning when you get US dollars from here, you reach South Africa you have to change them into rands, rand is at 14, and here we are buying at 22 so look at the gap”, he said.

He further said if the local supply does not improve, government would extend the importation quota in order to ensure that the product is available in the country and prices remain stable adding that if the country completely runs out, prices may go to over K150.

Sikunyongana however commended the Bank of Zambia (BOZ) Governor Chris Mvunga for increasing the withdrawal amount as limiting withdrawals was a challenge, which has now reduced.

“Before the Bank of Zambia extended the figure, you were only allowed to withdraw K25, 000 and that K25, 000 you have to withdraw it through writing a letter to the bank. Imagine if I want K400, 000 to make a truckload, how many times will I be withdrawing that money for me to make K400, 000”, he said.

He said people were hesitating to keep money in the bank because it would take long for them to get huge sums of money adding that this increase will make it easy to make transactions with the bank. He mentioned that people would now increase their deposits, as they would be assured of easy access to the money when they need it.

The Bank of Zambia – BOZ has struggled to hold and defend the Kwacha which has led to imported inflation. This imported inflation has also driven local inflation and increasing of the cost of food and non food items.

Analysts have challenged the central bank to be more innovative and come up with novel ways to claw back some of the lost value of the Kwacha. It seems the Kwacha can only depreciate and never seems to claw back its value once lost, why is this the case in Zambia?

BOZ on paper boosts of having highly trained experts and technocrats who are well paid, yet the so called experts at BOZ never seem to come up with any innovative ways to defend the Kwacha. Yes there are some fiscal challenges but innovation is also needed as these times are compounded by the COVID pandemic.

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The Lifting of the ban on importation

Companies

The Zambia Association of Manufacturers (ZAM) has urged Zambian based manufacturers to not only concentrate on the local market but also take advantage of the country’s location to exploit the opportunities presented by the export market.

ZAM Chief Executive Officer Florence Muleya said the association has identified South Africa and the United States of America (USA) as the two trading partners which Zambia has a huge trade deficit with where locally based Manufacturers can increase their non-traditional (non Copper) exports.

Muleya said Zambia has been trading with South Africa under the Southern Africa Development Community (SADC) for 30 years while it has been trading with the United States of America under the African Growth and Opportunity Act (AGOA) for 21 years.

She said that despite trading for all these years with the two markets, Zambia had a negative trade balance of about $1.5 billion and $96 million adding that according to data from Trade Map, non-traditional exports increased and accounted for 95% of exports to SADC and 96% of exports to the AGOA in 2019.

She further said for this reason, the association with support from the USAID TradeHub is hosting the inaugural Zambia Export Awards 2021 on 17 June 2021, which target manufacturers that are currently exporting to South Africa and the United States of America.

She noted that the awards seek to recognise champions of industry and celebrate their ability to overcome the export market entry challenges as they have achieved successful and consistent trade. The ZAM CEO added that the awards will also recognise the export ready companies which have the potential to become big exporters.

Muleya said categories which will be awarded include the Outstanding Trade Performance which shows that the manufacturing sector can export huge volumes to South Africa or America, Best Emerging Exporter which shows that there is room for export ready companies to begin exports to the awards target markets and the Exporter with Greatest Social Impact which shows that exports play a key role in social economic development and poverty alleviation.

She said other categories include the Most Collaborative Exporter which shows how cardinal collaborations are to achieve exports into the awards’ target markets, Best AGOA Export Performance which shows the possibility of consistently exporting into America and the Most Progressive Exporter which shows the small steps which have led to giant strides in exporting to the awards’ target market.

She also said the last two categories are the Top Exporting Businesswoman which demonstrates that women led businesses can overcome the hurdles and challenges which come with exporting to the awards’ target market and the final category which is Top Exporting Young Entrepreneur which demonstrates that youth led businesses can overcome the hurdles and challenges which come with exporting to the awards target markets too.

Muleya said the association recognises that despite the vast potential these markets hold, lack of available market information is a serious problem most Zambian manufacturers are facing to effectively utilise these international export markets.

She added that some companies require technical assistance in aspects such as quality standards, packaging and labelling in order to be able to export to these market destinations, which they are currently not aware of.

She said this is because the quality, packaging and labelling standards for a market like the USA are very high and require training in order to be followed.

She said ZAM is currently leveraging its partnerships with institutions such as ZABS and the Ministry of Commerce, Trade and Industry to ensure that quality, packaging and labelling trainings are conducted specifically for Micro, Small and Medium Enterprises.

She noted that more has to be done in order for Zambian manufacturers to fully utilise South Africa and the United States of America in terms of exports but it is important to recognise those manufacturers who have managed to export and overcome all the challenges.

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The Zambia Association of Manufacturers (ZAM) has

Markets

The real estate sector has been adversely affected with most firms struggling to keep and attract new tenants. Some firms with property holdings in the hospitality and entertainment sector have had to suspend collection of rentals and lease payments as the covid 19 restrictions halted business for almost half of the year 2020.

And one of Zambia’s leasing property firms – Real Estate Investments Zambia PLC (REIZ) who are the owners of landmark properties like Arcades Retail Centre, Central Park, Eureka park among others has recorded a loss of K29.9 million (about US$1.4 million) for 2020 compared with a profit of K19.8 million in 2019 mainly due to the adverse impacts of Covid-19 pandemic.

In a statement of financial results made available to the Zambian Business Times – ZBT for the year ended 31 December 2020,  REIZ Company Secretary Louis Pulu said the Covid-19 pandemic had a significant adverse impact on the business and on the group’s revenue.

Pulu said the company had no option but to stop invoicing tenants in the hospitality and entertainment sector for a four-month period as most of them particularly bar owners, cinema operator, night clubs and casinos were temporarily shut down by government in a bid to halt the spread of the corona virus.

Restaurants had their operations curtailed in the interest of the public’s health and safety. “In addition, in an effort to assist the group’s tenants cope with the effects of the pandemic and the ensuing adverse economic conditions, further measures such as rental discounts and capping of the Dollar rental invoices in Kwacha were introduced,” he said.

Pulu said these reliefs resulted in revenue reduction of K17.2million. He said whilst these measures negatively impacted on the group’s top line it ensured the Board of Directors desire for having sustainable clients for the future.

Pulu said the deprecation of the Kwacha by about 51% percent during the year created a major mismatch between the group’s dollar denominated obligations and the aforementioned measures, which effectively rendered the group’s income in local currency.

“Some of the other key drivers of the group’s performance include the K151 million exchange loss in 2020 as compared with K41million in 2019 brought about by the Kwacha depreciation and an increase in finance costs by 76%, again driven by the depreciating Kwacha, from K22.8million in 2019 to K40.2million,” he said.

Pulu said the fair value of the Group’s investment property portfolio increased to K 1,179 million, up from K1, 041 million mainly due to the 51% depreciation of the Zambian Kwacha against the United States Dollar (USD) from ZMW13.95/$1 as at 31 December 2019 to close at K21.15/$1 as at 31 December 2020.

He said the fair value of the Group’s investment property portfolio was determined by external independent and professional property valuation experts, Knight Frank Zambia Limited, who possess appropriate internationally recognized professional qualifications and have requisite experience in the location and category of the properties that were valued.

Pulu said the Group recorded an increase in net cash generated from operating activities to K47 million, from K32 million for the same period in prior year representing an increase of 46% mainly attributable to a higher recovery on receivables in 2020.

He explained that overall, the Group experienced a slight decrease in cash and cash equivalents during the period to K6,070 in 2020 from K6,094 in 2019.

“The Group is expected to perform better in 2021 as most of the rental concessions previously granted to tenants were either reduced or removed completely as they were no longer deemed necessary. However, it is worth noting that concerns remain over the persistent pandemic climate, and the disruptions brought about by the Covid 19 virus,” he said.

Pulu further said it is anticipated that the planned vaccines roll out during the year will restore confidence in consumer patterns bringing about increased economic activity.

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The real estate sector has been adversely

Markets

The trade volume has started to rebound with the Zambian economy posting an increase in cumulative trade volumes by about 83% in 2021 compared to 2020. This signals that the economy is slowly starting to rebound.

The cumulative total trade volumes recorded for the period January 2021 to April 2021 was K114.4 billion while the total trade volumes recorded in 2020 for the same period was K62.5 billion indicating an 83% increase

Despite the Covid 19 pandemic, Zambia has recorded another consecutive trade surplus of K10.2 billion in April 2021 compared to a trade surplus of K7.4 billion in March 2021, posting a 38% increase which had been attributed to an increase in exports.

Exports mainly comprising domestically produced goods, increased by about 17% to K22 billion in April 2021 from K19 billion in March 2021. The increase is mainly on account of a 23% increase in earnings from Copper which has seen better international prices.

Zambia Statistics Agency interim statistician General Mulenga Musepa stated during the monthly bulleting presentation on Thursday 25 March 2021 attended by the Zambian Business Times – ZBT that imports also increased by about 4% to K12 billion in April 2021 from K11 billion in March 2021.

He said refined copper export earnings in April 2021 increased by 25.4 percent to K17.2 billion from K14.1 billion in march 2021. “The cumulative total trade recorded for the period January 2021 to April 2021 was K114.4 billion while the total trade recorded in 2020 for the same period was K62.5 billion indicating an 83.2 percent increase.

“Refined copper export volumes in April 2021 increased by 17.2 percent to 86,118 metric tons in March 2021,” Musepa said.

He said the volume of refined copper exported for the period January to April 2021 was 314.2 thousand tons while that of 2020 for the same period was 280.5 thousand tons representing a 12.0 percent increase.

Musepa further said that even Traditional Exports (TE’s) earnings (non copper exports) increased by 24.0 percent to K17.7 billion in April 2021 from K14.2 billion in March 2021. However, the share in total exports, TEs accounted for 81.2% of export earnings in April 2021, buttressing the need for continuing with the diversification drive.

The major export destination in April 2021 was Switzerland (Booking Centre for Copper exports), which accounted for 44% of the total export earnings while Singapore (also mostly for copper export buying Centre) was the second main export destination accounting for 17.6 percent of the total export earnings with the major export product being copper anodes.

China was the third main destination of Zambia’s exports accounting for 17.6 percent and Congo DR was the fourth main export destination accounting for 8.4 percent of the total export earnings.

Luxembourg was the fifth main export destination accounting for 2.2 percent of the total export earnings. These five countries collectively accounted for 90.1 percent of Zambia’s total export earnings in March, 2021, another indicator for the need for export diversification to reduce the concentration risk on copper.

The rebound of trade volumes and consecutive trade surpluses is supposed to result in more forex earnings for Zambia but complications with remitting back export earnings remain a challenge. The exchange rate is also supposed to be favorably impacted but it is yet to be seen if the effect is lagged.

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The trade volume has started to rebound

Markets

Zambia’s annual inflation rate has continued to increase with the rate for May, 2021 increasing to 23.2%, up from 22.7% recorded in April, 2021 mainly attributed to price increases in food prices.

A deeper review of the statistics shows that prices for some frequently sought out food items have continued to increase putting pressure on household incomes which have remained relatively flat while some homes have even lost some sources of income on the back of the Covid 19 pandemic.

Some of the food items whose prices recorded notable price increment includes meat, eggs, dried kapenta, cooking oil and sugar. The increase in price for these items accounted for the key contributors to the upsurge in May inflation .

Zambia Statistics Agency interim statistician General Mulenga Musepa stated during the monthly bulleting presentation on Thursday 25 March 2021 attended by the Zambian Business Times – ZBT that the annual food inflation rate for May, 2021 was recorded at 28.5% compared to 27.2% recorded in April 2021, representing an increase of 1.3 percentage points.

Mupesa said this was mainly attributed to increase in prices of food items such as Fish such as Frozen Fish, Buka buka, Fresh Kapenta, Kapenta (Mpulungu, Chisense); and Oils and Fats like Margarine, Peanut butter and cooking oil.

Among the most essential foodstuffs, mincemeat recorded the highest year on year inflation rate at 66% while T-bone and butter recorded the second and third highest at an average price increase of about 56% respectively.

Other meat products such as mixed cut, rump steak, fillet steak, beef sausages, ox-liver, offals, chicken frozen, chicken live and brisket year on year inflation was recorded between 42 to 52%. Meat prices generally have escalated across most types.

Meanwhile, the Non-Food inflation rate for May 2021 was recorded at 1.4 percent, indicating a decrease of 0.7 percentage points from the 2.1 percent recorded in Aril, 2021. This development was mainly attributed to price movements of Non-food items such as accommodation services like bed and continental breakfast single room in a guesthouse.

The annual inflation rate by province shows that the annual inflation rate for May 2021 increased for Copperbelt, Eastern, Luapula, Lusaka, North-Western and Southern province and decreased for central, Northern and Western provinces.

As food prices continue to escalate unabated, consumers have cried out to the Competition and Consumer Protection Commission – CCPC to investigate and confirm if these price hikes are justified, but the commission is yet to timely investigate these consumer concerns.

CCPC had earlier directed cement firms who had hiked their prices to cut prices, but the order has been legally challenged and an appealed made to the government established tribunal, who are yet to issue their verdict.

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Zambia’s annual inflation rate has continued to

Agribusiness

Talk about the adage that local problems need local solutions, a Zambian entreprenuer has raised to the challenge of escalating imported cooking oil prices on the market by locally manufacturing the commodity with locally grown oil seeds.

The local oil processor based in Lumezi district of Eastern Province has defied the odds and is manufacturing and retailing a 2.5Ltrs cold pressed cooking oil container for K88 when compared to the imported industrial processed ones that are now fetching between K150 to K200 for a 2.5ltrs container. The cold pressed cooking oil is organic and is about 80% de-ordourised.

Mangaliso Chihana, the entreprenuer behind the locally manufactured cooking oil that cuts the price by over 50% said he started processing sunflower into cooking oil in 2017 after identifying an opportunity to close the gap in terms of local cooking oil production as well as a means to build a business.

Chihana said he is currently producing about 1,000 litres of cooking oil per day, which he is selling at K40 per litre, adding that prices may fluctuate due to the price of sunflower and soyabeans, which has continued to increase.

He told ZBT that lack of financial institutions that places on premium on local innovation and entrepreneurship is the major financial constraint that his company is facing to scale up and increase production. We need to increase the crushing capacity which requires acquisition of additional machinery and more raw materials.

Speaking in an exclusive interview with the Zambian Business Times-ZBT, Chihana said he use the by-products or remains from the crushing or pressed oil seeds to makes animal feed, that is out of the soyabeans and sunflower by-products, which is also being sold separately.

He told ZBT that he buys the sunflower and soya beans from farmers around Lumezi district (which lies between Chipata and Lundazi) as well as from other villages and farms nearby. He sourcing is local and therefore not directly subjected to abrupt exchange rate movements.

He said people from around Lumezi district as well as Malawi are his key customers who mainly buy the cooking oil in bulk and resell in small quantities and he is now working on expanding the reach in order to be able to supply to other parts of Zambia.

He noted that the cooking oil his company is producing is organic, has known health benefits as there are no chemicals added to it and the recommended time of use is within four months from the time the cooking oil is purchased to about 2 years.

People in Zambia just for psychological reasons or sometimes wanting to buy from shopping malls prefer imported cooking oil when our locally produced cooking oil is even much better and more healthy for consumption. Our cooking oil is competitively priced, stated Chihana.

Chihana said his business is currently not able to meet the high and expanding demand and told ZBT that he is hopeful that they will be able to acquire more machinery as he has plans of increasing production to about 10,000 litres a day.

To contact the company or get connected to locally produced cooking oil, kindly email to info@zambianbusinesstimes.com or editor@zambianbusinesstimes.com

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Talk about the adage that local problems

Companies

RUBiS Energy Zambia managing director Vincent Freury has disclosed that the energy company has officially launched their presence in Zambia following the successful acquisition of Kobil and Samfuel.

Freury told the gathering at the launch event that the acquisition has enabled RUBiS Zambia to strengthen their share of the Zambian Petroleum sector, with 40 service stations across the country.

“Important to note, this is a brand for Zambians and through them, we commit to offering efficiency, excellence and above all consumer confidence to our new and already existing clientele,” Freury said.

He stated that despite the negative impact of the COVID pandemic, RUBiS Energy Zambia, a local unit of RUBiS energy based in France believes in the potential of the Zambian economy to bounce back stronger albeit gradually.

Freury said it is in the same spirit that the company chose to introduce fresh RUBiS Energy at this time to fuel the Zambian economy. He said for RUBiS, this energy is unleashing new frontiers through the rebrand, and creating new opportunities for Zambians to succeed.

He said to further devolve the accessibility, it is the company’s intent to expand its  footprint and to invest heavily in the market through leases, land purchase, acquisitions and through modernization of its existing retail outlets into state-of-the-art service stations built by Zambians for Zambians.

Fruery said the launch of the Ibex service station RUBiS brand is the first step in the pipeline of activities aimed at meeting customer needs for mobility with high quality fuel and lubricants, and also cooking with RUBiS’ LPG K-gas brand through its service stations.

“In addition, we are working on innovative concepts aimed at satisfying the needs and desires of customers on the go.

“These will include our convenience store brand, RUBiS Express, providing nice snacks and drinks to motorists on the go, but also Quick Service Restaurants, Service Bays, ATMs and all the concepts, which will make our customers to feel at home at RUBiS. We also provide automotive fuel cards offering exclusive offers and services to promote customer loyalty at our retail outlets in all four corners of the country,” he said.

Rubis East Africa group managing director Jean-Christian Bergeron said Zambia is an important market for the company as it sees not only significant growth potential but, more importantly, many ways in which the company can make life’s journey better for Zambians.

Bergeron said Rubis’ vision for Zambia is to become the preferred brand of customers on the move by providing quality products and services with convenience and efficiency while focusing on safety and environment.

“As you can see and you will continue to see, our Kobil and Samfuel stations are one by one becoming Rubis and this transformation has much more in store for our customers than just a new name and logo.

“First and foremost, we are upgrading and modernizing our service stations such as this Ibex service station with the highest quality of products in state-of-the-art facilities offering a safe, clean and modern environment,” he said.

Bergeron said in all Rubis service stations, there would be Rubis Express shop concept added to provide an excellent convenience shopping experience to save time and money.

“For individual as well as commercial customers, we offer the Rubis Card which provides a convenient and secure payment solution for both fuel and shop purchases, and a fuel discount to thank you for your loyalty,” he said.

And the Zambian Government has called on Oil Marketing Companies (OMCs) to continue expanding the number of fuel service stations in the country to increase access to petroleum products.

Speaking during the launch of RUBiS Energy Zambia at the Ibex Hill Service station in Lusaka which the Zambian Business Times-ZBT attended, Ministry of Energy director Mandona Miyova said there is need for OMCs to come on board as Zambia works to improve the energy sector in the country.

Miyova said petroleum is key as it determines economic, social and political outcomes.

“Your contribution to Zambia’s petroleum industry is important; we welcome the move to launch as part of your efforts to serve Zambians efficiently. Petroleum is a key industry that determines economic, social and political outcomes.

“We urge other oil marketing companies to continue expanding the number of filling stations in the country not only in the urban areas but also in the rural areas to increase access to petroleum products,” she said.

Miyova said government was looking forward to having more investors and forging of more project partnerships that will offer more opportunities to Zambians.

“As you may be aware, for importing countries such as Zambia, petroleum accounts for a large amount of foreign exchange expenditure. So this launch is important as it opens doors for Zambians not only for consuming fuel but also creation of job opportunities for local Zambians in different capacities.

“The coming of this is a strong indication of favorable market dynamics and a growing economy. Competition brings about improved service delivery; I would like to call upon other OMCs to come on board as we improve the energy sector in Zambia,” she said.

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RUBiS Energy Zambia managing director Vincent Freury

Mining

Zambia Consolidated Copper Mines Investments Holdings (ZCCM-IH) says it is currently offering a very competitive price for buying gold in the country at K1,150 per gram (about K1.2m for 1kg of gold), which is in line with global gold prices.

ZCCM-IH public relations manager Loisa Mbatha-Kakoma told the Zambian Business Times – ZBT that ZCCM-IH’s pricing has been competitive considering its presence in the market since it started and has raised the prices from the previous prices of about K250 per gram to have more market reflective pricing.

“Our pricing has actually been competitive considering our presence in the market since we started; we raised the prices from the previous unofficial exploitative ones of K250 per gram to have more market reflective pricing. We reached as high as K1,150 per gram from December 2020 to early this year,” she said.

Meanwhile, the price of gold being offered on the black market or by private buyers is currently K1,100 per gram.

Mbatha-Kakoma said in addition, ZCCM-IH does not charge any tax when buying the gold as it pays the tax on behalf of the artisanal small-scale miners.

“We do not charge any tax when buying the gold, as a matter of fact; we actually pay the tax on their behalf. Therefore, our pricing still remains competitive on the market and reflective of the global prices,” she reiterated.

Mbatha-Kakoma said the buying programme of gold is ongoing, and that ZCCM-IH has continued undertaking stakeholder awareness and engagement on the program. She said further, the company has so far set up gold-buying centres in strategic panning areas such as Lumezi, Vubwi and Rufunsa districts.

She also disclosed that from June 2020 to March 2021, the Zambia Gold Company, which is part of ZCCM-IH, has produced cumulative of 91 kilograms (KGs) of gold. Mbatha-Kakoma said that monthly production of gold varies depending on the availability of ore material.

She said in terms of formalizing artisanal small scale miners, ZCCM-IH’s role is working with licensed artisanal miners. Mbatha-Kakoma said so far, it was working with registered and licensed cooperatives in Rufunsa, Vubwi and Lumezi.

In March 2020, ZCCM-IH started buying gold from artisanal and small-scale miners in the country. However, some artisanal gold miners had complained to ZBT stating that the black market prices were more attractive, leading to most Gold not being mopped up by the formal market.

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Zambia Consolidated Copper Mines Investments Holdings (ZCCM-IH)