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Tech

Zambia Information and Communications Technology Authority (ZICTA) has confirmed that the contract of employment for its Director General, Engineer Patrick Mutimushi has expired and has not been renewed.

The authority’s board Chairperson Frightone Sichone said the contract of employment for the erstwhile Director General ended on 7 May 2021.

According to information made available to the Zambian Business Times-ZBT, Sichone said consequently, the Director responsible for Economic Regulation, Mulenga Chisanga has since been appointed to act as Director General until the position is filled.

The Board of Authority has thanked Engineer Mutimushi for his immense contribution towards the regulatory framework of the ICT and postal sectors and wishes him all the best in his future endeavors.

The board has not made public the reasons behind the decision not to renew but sources within ZICTA told ZBT that the issues that engulfed the initial issuance of the mobile network licence initially to Unitel/UZI and later to Beeline as the fourth mobile network operator in Zambia attracted too many powerful interests.

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Zambia Information and Communications Technology Authority (ZICTA)

Agribusiness

You may have been one of those people that believed that Zambia is capable of manufacturing fertilizer locally, especially with the nostalgic stories attached to Kafue’s Nitrogen Chemicals of Zambia – NCZ, that the company in not so distant past, used to locally manufacture and meet all fertilizer needs of Zambia.

Well, think again. Information has now emerged that Zambia has no requisite raw materials needed to locally manufacture the high usage basal and top dressing fertilizers needed to meet the growing demand of the Agro sector.

One of Zambia’s organic fertilizer companies who asked that their name be withheld has exclusively revealed to the Zambian Business Times – ZBT that Zambia is unable to locally manufacture fertilizer, as it does not have the key minerals required to do so.

The source revealed that the only thing that can be done in the country is a process called blending in order to produce Urea (for top dressing), D Compound (for basal dressing p) and all the common types of fertilizers used in the country.

The organic fertilizer source told ZBT that some of the ingredients used to blend which are gotten [or imported] from outside the country include potassium sulphate, potassium nitrate, magnesium sulphate, potassium hydroxide, potassium carbonate, magnesium nitrate, iron sulphate, phosphoric acid and citric acid among other things.

The Source said phosphorous potassium Sulphur and iron are some of the elements, which build up Nitrogen Phosphorous and Potassium (NPK) and are used to make fertilizer. He said some of the minerals which are used to manufacture fertilizer, are not mined in Zambia and only specific countries have these minerals.

“For example urea being a very common and high usage fertilizer in Zambia, is not readily available in the country. Urea a byproduct of gas production process, we don’t have any local gas production, most of the gas companies are Arab companies, so they are able to produce urea. If we had these key required minerals, we would be able to manufacture fertilizer locally”, he said.

He added that some companies import some of these key fertilizer manufacturing materials and engage companies like Export Trading Group (ETG) or Nitrogen Chemicals of Zambia (NCZ) to blend for them.

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You may have been one of those

Mining

The Association of Zambian Mineral Exploration Companies (AZMEC) has said there is urgent need for new and more geophysical surveys in the country to increase exploration activities, which in-turn leads to increased mining production.

Increased mineral exploration activities are a forerunner to the expansion of the mining industry as this is the first stage of investment, which when successfully completed develops to opening of large scale mining operations.

Speaking in an exclusive interview with the Zambian Business Times-ZBT, AZMEC secretary general Alex Matthews said geophysical surveys has an important role to play in reducing geological uncertainties in mining.

Matthews said freely available cutting-edge new geoscience data has been a demonstrated route to growth of the sector in some countries. He said the geological survey department need to publish more geological maps of areas that are currently unmapped.

“The challenges that are there are availability of ground maps, delays in awarding and renewing licences, access to geological data from the survey department, and lack of availability of recent regional/ national geophysical surveys among others,” Matthews said.

Matthews said currently, the association members often experienced difficulties in accessing geological data. He said ready availability of such data has the ability to attract more investments into the country as investors usually look for such data to make investment decisions.

“The geological survey department has been telling us that they are addressing that and are trying to go online where you can actually log on and look for things that you want, so we are still waiting”, stated AZMEC

“As you may be aware, when an exploration company wants to come in the country, they look for information related to what they want to do so that they can build up from there, they wouldn’t want to be doing the same things that others have already done, because it’s expensive to carry out an exploration exercise,” Matthews said.

He said the aim for exploration companies is to make a discovery and give their investor return on their investment. These discoveries are what leads to Mine developments which then contribute to increased mineral production for the country.

Matthew said, “If you have the best data, regional survey people will pick places where they want to go into. So there is need to provide data.

The association currently comprises of five large-scale exploration companies, four associate members and 3 individual members. The large exploration companies include ZCCM-IH, Rio Tinto, Anglo Exploration Zambia limited, Goviex Mining Limited and Universal Mining and Chemical Industries Ltd (UMCIL).

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The Association of Zambian Mineral Exploration Companies

Companies

Puma Energy Zambia Managing Director Pinchi Simukwai has resigned from the energy company. Reasons for Simukwai’s resignation were not made publicly available, but the energy company proceeded to announce the appointment of his replacement as Knight Silumesii.

According to information obtained by the Zambian Business Times – ZBT from, Simukwai had a rich industry work experience and had previously served in various portfolios such as Finance Director, Finance Manager and Business Planning Manager before ascending to the top position as Puma Zambia Managing Director.

His replacement, Silumesii has over 17 years of experience in various portfolios in the petroleum industry as well the mining industry, Puma energy reported.Prior to his appointment, Silumesii served as Puma Energy Zambia Country Retail Manager for several years.

Company secretary Kalunga Lutato said Silumesii is a graduate of Mechanical Engineering from the University of Zambia and holds a post graduate qualification in Business Administration from the Copperbelt University.

“The Puma Board wishes to thank Simukwai for his immense contribution to the Company over the past few years and wish him continued success in his future endeavors, as well as to congratulate Silumesii on his appointment, and looks forward to his contribution to the Company,” Lutato said.

The government of Zambia had recently threatened to revoke Puma Energy operating License over what then Energy Minister Mathew Nkhuwa termed as the company running out of fuel stocks deliberately creating an artificial shortage. See earlier article on Puma energy Zambia by ZBT Puma risk losing Zambia operating license

It is however not clear if Simukwai exit from the top job is related to this spat between Puma Energy And the Zambian government. The fuel supply situation in Zambia has improved but sporadic short term shortages are still common.

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Puma Energy Zambia Managing Director Pinchi Simukwai

Markets

The National Pension Scheme Authority (NAPSA) has effectively taken control of Zambia Industrial Commercial Bank – ZICB by increasing its equity stake from 16% to 65%.

ZICB is a product of the restructuring of the former Intermarket Banking Corporation Zambia Limited, which the Bank of Zambia took possession of in November 2016, with the then Bank of Zambia Governor Dr. Denny Kalyalya confirming that the central bank had managed to save the bank from total collapse.

Bank of Zambia in October 2018 confirmed that they “managed to secure agreements with the majority of the large corporate depositors, i.e. National Pension Scheme Authority (NAPSA), the Madison Group and the Workers Compensation Fund Control Board to convert their deposit liabilities into equity while the Industrial Development Corporation (IDC) came on board to participate in the process to ensure solvency.

According to information made available to the Zambian Business Times-ZBT, NAPSA Director General Yollard Kachinda said NAPSA has increased its stake following participation in a Rights Issue at a nominal price of K1 per share and upon obtaining the requisite regulatory approvals. The capital raised by ZICB through this transaction would strengthen its capital position and improve its cash flows.

“As a result of this transaction, NAPSA through its Special Purpose Vehicle, NAPSA Investments Holdings Company Limited has increased its stake in ZICB from 15.83% to 63%.

Kachinda said this capital injection was aimed at building capacity for market competitiveness, achieving operational efficiencies and realigning the strategic direction of the bank to facilitate growth in the Small and Medium Enterprises (SME) sector in the country, which has remained untapped.

“We are pleased to be part of the transformation of ZICB through this capital injection,” The Napsa Director General said.

ZICB was set up as a specialty bank to fund industrialization of Zambia but stakeholders say the bank is yet to show how this would be done significantly. Funding for local industries and local business still remain a challenge in Zambia. More information to follow…

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The National Pension Scheme Authority (NAPSA) has

Companies

The Competition and Consumer Protection Commission (CCPC) has disclosed that it has gone ahead and undertaken a countrywide survey to check and confirm whether the three cement companies ordered to revert to pre-cartel prices have obliged.

This is despite the cement firms confirming separately that they have not reduced their cement prices and instead appealed the decision to the competition tribunal, exercising their legal options,

But CCPC Senior Public Relations Officer Namukolo Kasumpa said once the compilation of the information collected from all the provincial headquarters is done, the commission will then advise on the next course of action

According to information made available to the Zambian Business Times-ZBT, Kasumpa said the deadline that was set by the board for the cement companies to reduce prices was 8 May, which has since elapsed.

She noted that the three companies namely, Lafarge Zambia Plc, Mpande Limestone Limited-Sinoma and Dangote Cement Zambia Limited were ordered to revert to the pre-cartel factory prices by 8 May this year.

A check done by ZBT with the top cement firms confirmed that non of them had reduced their prices, with the firms confirming that they have proceeded to appeal the order. What is most shocking is that CCPC has gone ahead to collect evidence that the prices have not been reduced.

CCPC has since stated that they will soon be making their stance known on the way forward. Consumers had been eagerly waiting for the reduction to take effect but analyst say this matter is likely to end in a long protracted legal battle.

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The Competition and Consumer Protection Commission (CCPC)

Companies

The top three cement companies who were last month ordered to cut cement prices and revert to what was described as pre-cartel prices ranging between US$4.5 to US$5 per 50kg bag have all defied the order.

A check done by the Zambian Business Times – ZBT with all the three cement producers who had been ordered to cut prices has revealed that non of them has reduced prices. One of the cement companies ordered to cut prices – Lafarge Zambia has confirmed with ZBT that they have mounted a legal challenge against the decision.

Lafarge Zambia has confirmed that they have appealed against the Competition and Consumer Protection Commission (CCPC)’s decision alleging that the company contravened the Competition and Consumer Protection Act.

The company has denied participation in an alleged price-fixing and market allocation collusion in the cement market and looks forward to presenting its case.

Responding to ZBT, Lafarge Corporate Affairs and Communications Manager Sarah Banda said in its notice of appeal filed before the Competition and Consumer Protection Tribunal, the company has emphasized that it has cooperated with the CCPC throughout its investigation into the cement industry.

Banda said Lafarge provided numerous detailed submissions, documents and testimonies to demonstrate the lawful nature of its operations in the market. The prices have therefore not been reduced pending the tribunal process.

A further check with the other cement firm that was also fined and ordered to cut cement prices, a source who asked for their details to be withheld from Mpande Limestone Limited ( popularly known as Sinoma cement) has confirmed that the company has not reduced its cement prices.

Speaking exclusively to ZBT, the source said according to the information circulating within the company, Sinoma does not intend to revert to pre-cartel prices.

“Before any price adjustment or increment they need to inform us internally, so we haven’t been informed, it means we are not reducing. We need adequate time to communicate to our clients to say okay, cement prices are going up or they are being reduced”, the source told ZBT.

The most shocking thing is that even the cement company that was not fine but ordered to cut price,Dangote Cement, has also refused to badge. Dangote Cement has also confirmed that the company has maintained its cement prices but did not confirm if they have also taken the legal route to hold prices.

Cement prices were today expected to come down after CCPC confirmed that they had given the cement companies one month probation to implement the order. It seems instead that the cement firms opted to use the one month to put together a legal defense that would effectively derail the order.

Court processes in Zambia take time to settle, some legal experts have estimated an average of three years needed to litigate and have a judgment issued in complex cases such as this one. We now await a counter action CCPC who are yet to comment by press time. More details to follow…

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The top three cement companies who were

Agribusiness

The National Union for Small Scale Farmers in Zambia – NUSFAZ, which represents local farmers has appealed to government to recaptalise the Nitrogen Chemicals of Zambia (NCZ) or immediately facilitate the set up another local fertilizer manufacturing plant so that fertiliser can be produced locally at affordable prices.

Union Executive Director Ebony Loloji said one of the reasons Zambia has continued to import fertiliser is because it has no capacity to produce locally and the equipment at NCZ is obsolete, therefore the need to recaptalise the plant is urgent.

Speaking in an interview with the Zambian Business Times-ZBT, Loloji said places where Zambia is importing fertiliser from have modern plants which has made it easy for them to produce fertiliser efficiently.

Loloji mentioned that the fertiliser produced locally and the fertiliser that is imported is sold at the same price on the local market which is surprising, because importations come with extra costs such as transportation that local producers do not incur.

He said the fertiliser that is produced locally is supposed to be cheaper than the imported one but that is not the case on the local market. This is not right if we had modern plants that would manufacture fertilizer efficiently. Zambia has all the key and bulk raw materials.

“You will find that D Compound that is imported is K650 for a 50kg bag and the one from Nitrogen Chemicals of Zambia – NCZ is also K650. We need to recapitalize NCZ or set up other local manufacturing plants so that we can start producing fertiliser competitively”, he said.

Loloji has commended government for the early delivery of fertiliser under the Farmer Input Support Programme (FISP) as it will advantage farmers because when one plants early, the chances of maximising their yields are high.

He said two factors are considered in terms of maximising profit in agriculture production, these are increasing yield and better quality, adding that receiving inputs early and access to certified and high quality seeds means farmers will plant on time and the yields will be maximized.

The Bank of Zambia – BOZ recently revealed that importation of Agro inputs as well as fuel Imports made up the two biggest contributors to the recent Kwacha slide. Stakeholders have since called on government through the Industrial Developments Corporation – IDC to prioritize fixing this gapping annual forex outflow.

The forex bleeding initiated by the huge annual Agro import bill can be stopped by IDC spearheading either revamping NCZ or coming up with a new company to manufacture fertilizers and other Agro blends locally.

Experts have stated that this forex bleeding is the very reason why NCZ was set up in the first place, but successive governments neglected local manufacturing opting for the easy option of importing.

Experts say IDC also has the option of engaging and partnering with local fertilizer trading and blending company’s such as Export Trading Group – ETG to set up local manufacturing plants and exploit local sources of raw materials. This is expected to lead to stopping the forex bleeding, contribute to stabilizing the Kwacha as well as more securing jobs locally.

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The National Union for Small Scale Farmers

Mining

Only two out of Zambias top nine large scale mining companies have been declaring profits in the country, meaning that only two mines pay corporate income tax, making the proposal of anchoring mining taxation on corporate income tax an academic exercise.

Zambia Revenue Authority (ZRA) commissioner General Kingsley Chanda disclosed during the 2021 Mining Indaba held in Lusaka last month that only two mining companies and one smelter are currently declaring profits in the country. He however did not name the two profitable mines.

But a check by the Zambian Business Times – ZBT has revealed that only First Quantum Minerals (FQM) Mines (Kansanshi and Trident Kalumbila mines) and Barrick’s Lumwana Mine, are declaring profits, with the others financial report and declarations to ZRA showing unprofitable bottom lines.

This is a scenario that has made Mineral Royalty Tax – MRT the only viable tax option to employ if the Zambian treasury is to collect any form of taxes from the other seven large scale mines. MRT is a revenue tax that is levied on sales volumes with reference prices being derived from internationally renowned London Metal Exchange – LME.

According to the Ministry of Mines and Minerals Development, which collects month on month production data from all mines in Zambia, ZBT confirmed that Zambia currently has nine top or large scale mining companies.

The large scale mining companies include [in no particular order] Konkola Copper Mines – KCM, Lubambe Copper Mines, Kansanshi Mine, Lumwana Mine, Mopani Copper Mines, Kalumbila Mine, NFCA, SINO Metals Leach Plant and CNMC Luanshya Mine.

It is also notable that non of the Chinese owned and controlled Mines are declaring profits in their operations, raising questions on their strategic and long term ability to contribute to growing the Zambian treasury, which is used to finance public infrastructure.

Chinese owned mines [NFCA, Sino Metals Leach plant and CNMC Luanshya mine] make up three out of the top nine (one third) of the large scale mining companies in Zambia. This is a significant portion that needs to become profitable and contribute to boosting public finances which need to expand to meet the needs of a growing population.

Chinese owned mines have since been challenged to work on their corporate social responsibility expectations as well as transparency in their financial reporting so that communities in which they operate can benefit. They need to start contributing significantly through both MRT and Corporate Income Tax – CIT to the Zambian treasury.

Some mining experts have called on the review of individual tax accounts of all of Zambia’s top mining companies to investigate if some mines are net contributors to the tax revenue pot. This follows the trend were some mines pay MRT but continue to draw large sums of Value Added Tax – VAT refunds from the Zambia Revenue Authority – ZRA.

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Only two out of Zambias top nine

Markets

The ministry of Finance is currently in the second phase of the three phase process of the debt restructuring which involves applying for a common framework and conducting a Debt Sustainability Analysis (DSA).

Speaking in an exclusive interview with the Zambian Business Times-ZBT, Ministry of Finance Permanent Secretary for Economic Management and Finance, Mukuli Chikuba said the Government was working with the restructuring advisor, Lazard frères during this phase of debt restructuring.

Chikuba said the second aspect of debt restructuring was currently underway and an update on what has been done so far will soon be issued. Zambia’s external debt currently stands at US$12.75 billion, with debt restructuring seen as a credible way to ease liquidity conditions in the Zambian economy.

“The debt restructuring process is being conducted in phases; the first phase (Phase 1) involved implementing a debt standstill, which Zambia got from most of official creditors and some of the Chinese who are commercial and other commercial creditors in Europe and America.

“The second aspect is underway and is being conducted now. It involves us applying for a common framework and doing a DSA which we have been working on in the past few weeks with the International Monetary Fund (IMF), a statement will be released once we are done with the IMF on that end,” he said.

Chikuba said the DSA would be shared with the creditors and the creditors will then take a view on how much of relief would be given within the framework.

He said Government would soon give an update on the development of each creditor, as it requests Zambia’s non-official creditors to form a London club for easy sharing of information.

“Updates on what is happening with each creditor regarding debt management will be shared with creditors while part of it will be posted on the Ministry of Finance website. We are working with Lazard within this space as the transaction advisor, and we will be sharing more information with creditors post what we are doing now.

“But the most critical part is on transparency, where we are with different creditors in terms of debt management. So the updates will be shared, these are updates on what is happening with each creditor,” Chikuba told ZBT.

Chikuba also said Government had requested the non-official creditors to form what is called a London club for easy sharing of information to non-official creditors similar to what the Eurobonds creditors had done.

“As you know, Zambia like most countries has many creditors and sharing information individually to the creditors can be very taxing. That information will be shared with them as soon as they are well organised and part of it will be shared on our website,” he token ZBT.

Once debt restructuring is concluded, it is expected that the economy will get relief and Ben unlocked, with more funds being made available for local and foreign payments over and above allocation for the high debt serving requirements.

However, there is need for the stability of the Kwacha, which is one of the main causes of the current debt repayment stress. Most of the taxes, high are the highest revenue generators for government in Zambia are collected in Kwacha.

A loss of value basically entails that more Kwacha is needed to service foreign debt which is mostly contracted in US dollars. Spend on Foreign payments for imports for essential commodities such as fuel also increase resulting in crippling imported inflation.

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The ministry of Finance is currently in