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Markets

Government has unveiled the first ever board of directors for the Zambia Statistics Agency (ZAMSTATS) with a call for the directors to be committed to the task.

The board of directors which is chaired by Charles Mpundu is comprised of 9 members including Dr Jeremiah Banda, Ms Bwalya Salamu from the Attorney general’s office, Isaac Muhanga from Bank of Zambia and Patricia Mulenga from EcoBank.

Others are Dr Mirriam Chiliba from the University of Zambia (UNZA), William Mayaka from UNZA, Elizabeth Musukwa from Cavendish University and Charles Banda from Ministry of National Development Planning (MNDP).

Speaking during the unveiling of the board of directors, Planning minister Alexander Chiteme said the unveiling of the board of directors represented a significant milestone in the government’s statistical reform programme.

Chiteme said it represented the beginning of a new era in the development of integrated national statistics; an era of enhanced coordination and dialogue in the production, dissemination and use of official statistics, and an era of a knowledge society anchoring its policies and decision-making on a strong statistical foundation.

“The attainment of the foregoing will require a strong and visionary board which I am confident you comprise, as the task is huge. Let me remind you that you will not be taking over from another board as you are the first ever-board of the new organization,” he said.

Chiteme said the board is one of the most serious boards because it will be responsible for all statistics that will be produced in the country.

He said, “Therefore I urge you to acquaint yourselves with the Act and operations of the Agency, to effectively conduct your duties as a Board.

“Chairperson your team has been carefully selected to bring to the table unique skills and experiences that will be of value to the full implementation of the Act and proper functioning of ZAMSTATS.

Chiteme also implored the new board members to familiarize themselves with the ZAMSTATS Act, in order to effectively carry out their duties.

The Minister noted that the board stands to benefit from the vast experience of successful similar boards in the African and European region.

And Mpundu said the board will aim and work to not only meet the stakeholder expectations but to also surpass them for the benefit of the nation as a whole.

He said the board will ensure that it upholds professionalism, transparency, accuracy and quality of statistics that is expected but in process improve the integrity of data collection and dissemination process that will culminate in raising of confidence in the system.

“In this regard, we will endeavor to ensure that ZAMSTATS adheres to the international best practices and ensure we move up in terms of the World Statistical Index. The importance of accurate and timely statistics cannot be overemphasized given the impact that statistics have on decision making,” he said.

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Government has unveiled the first ever board

Markets

The government through the Ministry of Finance is working with the Lusaka Securities Exchange (LuSE) to introduce Retail Bonds which are issued specifically to retail investors.

Ministry of finance permanent secretary for budget and economic affairs Mulenga Pamu explained that retail Bonds are bonds that are specifically issued for retail investors and will be denominated in Zambian Kwacha and can be bought in relatively small intallments.

He noted that both government and corporate bonds traded on the secondary market of the LuSE demand significantly higher investment amounts than purchasing shares and because of this, most of the general public have found it difficult to meet the minimum investment amount for purchasing bonds.

Dr. Pamu Mulenga said with the introduction of the retail bond, Zambians will be able to purchase a retail bond with as little as K500 in comparison to the current K 30,000 for a competitive government bonds.

“In addition to the lower investment amount, retail bonds also encourage domestic participation, promotes financial literacy, gives citizens an alternative form of savings, away from the traditional bank account and offers a fixed interest that ensures the aspect of predictability for investors.

“Once the retails bonds are launched, they will be made available to the LuSE online trading platform,” he said.

LuSE board chairperson Raphael Kasonde said LuSE has embarked on introducing market development projects to ensure availability of a greater diversity of financial securities to the investing public.

He said amongst the LuSE’s market development projects is the introduction of retail bonds which are ordinary shares broken down into smaller units that cater to the needs and purposes of retail investors.

“Retail Bonds will enable retail investors to participate in Government Bond purchases. With the MyLuSE platform being launched today, Retail bonds will also be accessible using a mobile phone and mobile money platforms to make purchases,” Kasonde said.

He said LuSE was also working on the Commodities Market, which was launched by Minister of Finance, on behalf of the Vice-President, in February 2020.

Kasonde said the Commodities Market presents investors with the opportunity to trade commodities with the MyLuSE App on the market using warehouse receipts with the Spot Market being the initial step taken in the development of the Commodities market.

He said the LuSE is aware that there is demand for derivatives in the agricultural commodities market space where market players can also use the MyLuSE App to trade the derivatives by locking in a price and quantity of commodities for delivery at a future date.

“This demand is one that the LuSE will look to meet in the future with the involvement of all stakeholders,” Kasonde added.

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The government through the Ministry of Finance

Companies

Nitrogen Chemicals of Zambia (NCZ) says the K89 million that was released by government will clear all the 166 retirees that were being owed their retirement packages by the company. This will enable the company to now concentrate its efforts on revamping local fertilizer production

Company Sales and Marketing Manager Cleopatra Chanda said these are all the retirees that are currently being owed their benefit packages by the company and as soon as they are paid, the only retirees that will be owed are the ones retiring this year.

Speaking in an interview with the Zambian Business Times-ZBT, Chanda also mentioned that the company has plans to revamp Nitrogen Chemicals of Zambia and has activities in their strategic plan, which they expect their stakeholders to support.

She also noted that the company is currently producing fertiliser for the government, which is meant for the Farmer Input Support Programme (FISP) for the 2021/2022 farming season.

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Nitrogen Chemicals of Zambia (NCZ) says the

Companies

The Zambia Revenue Authority (ZRA) has assured local clearing companies that the issue of [a few] multinational companies controlling a higher percentage of clearing and forwarding sector in Zambia is being dealt with by the government.

This follows revelations by the Customs Clearing and Forwarding Agents Association of Zambia (CCFFAAZ) President Bruce Kaemba that about 10 multinational clearing companies control a whopping 95% of the local business while over 200 local companies are left to scramble for the paltry 5%.

Kaemba further revealed that one multinational clearing agent whose identity is withheld controls almost 50% of the market, a situation that is said to posse concentration and national security risk. Some local agents called on the Zambian anti-trust agency – the Competition and Consumer Protection Commission to take interest in the revelation.

In a statement made available to the Zambian Business Times – ZBT, ZRA Corporate Communications Manager Topsy Sikalinda said ZRA has decided to extend the pilot phase of the module to end of December 2021.

ZRA has confirmed that they have met with p the executive committees of all clearing associations from Nakonde and have resolved to proceed with the implementation of the Customs Clearing Agents Management Module (CAMM) in a phased approach.

ZRA Commissioner General Kingsley Chanda assured the clearing agents that all fears and speculations would be handled during the extended period adding that the module is being implemented in good faith unlike what is being portrayed by some sections of the clearing sector.

Chanda assured the agents that the module will not take away any business from them and the issue of multinationals controlling a higher percentage in the sector is being dealt with by government.

And on the question of what ZRA has done to prevent dominance of the clearing business by a few multinational, the ZRA Commissioner General stated that the authority presented a proposal to the government last year on how the local clearing companies could be supported and some of those recommendations have already been incorporated in the new Procurement Act.

On the fears that the new module would further shrink the 5% that the local agents have been left with, the ZRA statement stated that the Customs Agents Management Module has been implemented in various countries across the globe and it is part of ZRA’s modernization agenda as it provides for the electronic appointment of customs clearing agents by importers and provides for clearing agents to accept or reject the appointment by importers.

ZRA also reported that the agency has exceeded its target for the first four months of 2021 by collecting K5.8 million above target representing 29% above target for January to April 2021 addng that most of these collections are from direct taxes and customs duties.

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The Zambia Revenue Authority (ZRA) has assured

Agribusiness

The Zambian Fruit and Vegetable Traders Association has disclosed that government has lifted the ban on the importation of table potatoes and has allowed the importation quota of 2,000 metric tonnes.

Association President Bernard Sikunyongana said information on the shortage and sharp increase in prices of potatoes after the ban on the importation reached the government who have now decided to lift the ban.

Sikunyongana said government has seen the effect that the ban has had on the availability of the commodity and the price which has led to it’s decision adding that if the situation does not improve, the association will ask government to allow more imports.

Speaking in an exclusive interview with the Zambian Business Times-ZBT, Sikunyongana said the importation has began and he is thankful to government for allowing the imports as this will stabilise the availability and price of the commodity.

He also noted that Buya Bamba; one of the major producers of potatoes in the country has disclosed that it is unable to meet the demand.

He emphasized that the ban is a control measure meant to support and protect the produce of the local farmers so they can also have a market because people think imported products are better than local products.

He however said that when local farmers do not have the product, imports are allowed as the small quantities, which are available end up being very expensive and consumers suffer.

“It’s a must when a product is in short supply; we just have to open imports”, he said.

In February this year, government banned the importation of onion and table potatoes in order to prioritize and promote consumption of locally produced fruits and vegetables adding that the country was able to meet the demand for the two commodities.

This ban saw a shortage and sharp increase in the prices of the two commodities, which later led to government lifting the ban initially on the importation of onion, and now eventually on Potatoes.

A check on the market has indeed shown that local producers need to increase their volumes as the price for onions reduced shortly after the ban was lifted. It is also expected that table potato prices will also fall as the current high prices were largely driven by low supply.

 

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The Zambian Fruit and Vegetable Traders Association

Markets

Financial Analyst Trevor Hambayi has urged the Finance Minister to prioritize debt restructuring to a sustainable level to grow the international reserves as well as help stem the pressure on the Kwacha.

Hambayi noted that the international reserves were being depleted because of the need to pay debt, which is unsustainable. These huge payments are made in US dollars and this is resulting in perceptions and actual increased in demand for US dollar

According to the Bank of Zambia – BOZ, Gross international reserves declined by US$117.7 million to US$1.2 billion equivalent to 2.4 months of import cover at the end of 2020 from US$1.3 billion at the end of September equivalent to 2.3 months.

This decline was largely attributed to the need for foreign exchange interventions, debt service as well as Fuel and Fertilizer imports.

Hambayi observed that Zambia’s international reserves were being depleted because the country has to pay a debt that is unsustainable. Debt restructuring if executed would result in reduced monthly or scheduled payments but increased tenor, which would reduce the amounts being utilized for debt servicing.

He said this is the reason why the Government needs to restructure debt and ensure that it is sustainable and in a situation which it cannot put pressure on government to have to dip into the reserves to meet the debt liability payments.

“The first consideration the country should be having is restructuring our debt situation; our reserves are being depleted because we have to pay a debt that is unsustainable.

“So we need to restructure our debt so that the debt is sustainable and it is not in a situation of having to put us in pressure to dip into our reserves to meet those debt liability payments,” he said.

Hambayi who is also senior managing partner at the Development Finance Associates (DFA) said there is also need to work towards economic recovery in order to increase the Gross Domestic Product (GDP).

He said the increase in GDP will enable the country generate more revenue which will speak to creating a sustainable recovery in terms of international reserves.

“We need to work towards economic recovery. Our economy needs to recover so that we can increase our GDP, when we do increase our GDP, we will generate more revenue, which will speak to creating a sustainable recovery in terms of our reserves as well,” Hambayi said.

He said Government should ensure that the country gets the right returns from the mining sector. Hambayi said the long-term strategy is to be able to develop to support domestic investments.

He said government should support small scale miners to start to develop their mines so that they are producing copper for which the revenue that they are going to generate is going to remain in the country.

“That is a long term strategy and it is absolute. When the number of local investors increases, domestic investors increases beyond foreign ones then we will find that we are generating more revenue and foreign exchange that is staying in the country than the ones that are externalizing,” he added.

He said Government needs to put in place the right policies, which are speaking to supporting or incentivizing domestic investors and allow the private sector to be able to have access to finance to be able to invest in the mining sector or any other sector of the economy that is export oriented.

Hambayi said, “This will enable the economy to start improving and have an increased GDP growth as well as increased US dollar inflows. This is what is going to change the dynamics in our foreign exchange reserves.”

BoZ has started building up gold reserves and released a schedule of gold buying targets. Experts say this is a welcome move but there is need for a more aggressive gold buying programs and gold reserves build up.

Restructuring the debt remains the immediate solution to current economic challenges that would then be boosted by the medium to long term built up gold reserves. The ministry of Finance hired an international firm Lazard to help in the process of debt restructuring but no monthly updates are being made of its work to the public.

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Financial Analyst Trevor Hambayi has urged the

Mining

The Chamber of Mines in Zambia has asked Government through the ministry of mines to be more clear and categorical on earlier announced intentions that the state intends to increase stake or shareholding in mining companies in Zambia to avoid scaring away investors.

Speaking during a panel discussion at the just ended 2021 Mining Indaba, which the Zambian Business Times-ZBT attended, Lubambe Mine representative Nick Bowen said the statement that Zambia wanted to take significant stakes in unspecified mines led to fears of nationalization and slowing down of investments in the sector.

Bowen said if the country is to attract [foreign direct] investments, messages like these needed to be clear and categorical as the international investors follow what is happening and what is being said.

“Government needs to be clear on its intentions on mines, the statement that it wanted to hold more stake in mining companies does not specify what really Government wants to do. Zambia needs to attract more Investments now that copper price projection are favorable so that the country can be poised to continue to benefit from the green revolution”.

“If the government wants to attract investments into the country, it needs to come out clear, we need to be accurate with the information we are putting across,” he said. He said there is need to be mindful of what message is being put across as that changes the perception about Zambia and investments may come in depending on that.

However, Finance Minister of Finance Dr Bwalya Ng’andu had explained that Zambia is not looking to take over more mining companies, nor is the government planning to nationalize the industry.

The Zambian government has recently acquired 100% of Glencore’s Mopani Copper Mines and Vedanta’s Konkola Copper Mines – KCM local operations in the past two years. The take over of KCM was however through ZCCM IH liquidation process, after complaints by local contractors and suppliers of not being paid for extended periods of time.

A check by ZBT however found that the minister of Finance had categorically stated that the statement of increasing mining stake was only related to Mopani and KCM. “We are at this point in time not looking at any other specific mining operations that we want to go into a relationship with,” Dr. Ng’andu had earlier stated.

The Minister said, “In some quarters the president’s statement was misunderstood to mean that Zambia is contemplating taking over other mining firms by force or nationalizing mining companies. We are not in that business at all.”

Dr Ng’undu pointed out that government cannot engage in nationalization of mines because it has learnt lessons from other copper mining countries. “We have to make sure we run these as proper businesses without interference in their operations,” he said.

The Finance Minister further stated that Zambia will also get a better understanding of mining taxation and royalties from running operations like those previously owned by Glencore such as Mopani. Govt will not just be a spectator but also an industry participant through ZCCM IH.

The Chamber of Mines however stated that there is need to be more clear and categorical by specifically stating what and where these intensions to increase stake in Mines end. Mining is a long term business and the need to clearly state if the acquisition of more stake in Mines have ended with KCM and Mopani should be made clear.

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The Chamber of Mines in Zambia has

Companies

Zambia Postal Services Cooperation (ZAMPOST) is in the process of digitizing the post office and launch virtual postal boxes to make it responsive to the needs of the customers.

A virtual PO Box is having a physical PO Box that you can access online and manage all your mail and packages, without needing to go to the Post Office. Virtual boxes would help people who previously used physical PO Boxes to receive mail when they live in areas where mail is not delivered directly to their homes.

Speaking during the launch of the National Postal Policy and the National Cyber Security Policy in Lusaka, which the Zambian Business Times-ZBT attended, ZAMPOST postmaster general Brighton Ngoma said the post office is being digitalized to ensure that it plays a major role in the postal space.

Ngoma noted that the postal services especially in terms of usage have gone through a decline largely due to the developments in the digital space.

“Although postal services play a vital role in connecting people, businesses and governments across the world, the postal industry is grappling with its greatest challenge yet: digital disruption.

“We know that the postal sector especially the postal services have gone through a decline in terms of usage because of the digital space that came in and the post office has remained behind,” he said.

Ngoma said, “I can assure you that the post office is being digitalized and will play a major role in the space of postal sector. We are in the process of digitizing the post office where the usage of postal boxes which is traditional business will see the introduction of virtual postal boxes this will allow the public to order through ecommerce from AMAZON.”

He said, “I see students struggling trying order books and phones, All these things will become a reality in the next two months.” Ngoma said the launch of the policy shows that the government supports the postal sector and was keen to see it thrive.

“We welcome the move to launch the policy as it shows that government supports the sector, we are also expectant that as we journey into the implementation of the policy, the legislation that will come with it will be able to create opportunities for all players in the sector,” he added.

Transport and Communications Minister Mutotwe Kafwaya said the traditional postal business has been one the most affected by developments in the Information and Communication Technology sector.

Kafwaya said the Government recognized the key role that the postal sector plays in the delivery of services to all including those in far-flung areas of the country.

He said the launch of the policy speaks to the Governments intentions to among other things to modernise the postal sector in order to make it responsive to the aspirations of consumers and to promote access to postal services for all.

Kafwaya said the policy also speaks to Governments intention to enhance the competitiveness in the sector in order to increase efficiency in service delivery; and human and technical capacity in the postal sector.

“Government will support this sector to grow and continue with projects such as the national addressing and postcode system which will ensure the efficient delivery of postal services.

“These policies are a demonstration of the government’s pledge to develop the country without leaving anyone behind,” he said.

With respect to the cybersecurity policy, Kafwaya said it is Government’s intention to establish a coordinated cyber security framework which enhances resilience of national ICT systems to cyber incidents in order to attain the desired transformation into a smart Zambia that is underpinned by trust and confidentiality.

He said the framework should have sufficient capacity to anticipate, identify and manage cyber security risks in a manner that maximises benefits and minimizes loses to all players that transact business on any cyber platform.

“I wish to urge all sector players, our multilateral partners to come on board and work with the ministry to ensure the postal sector continues to grow and serve the community with modern approaches to service delivery.

“Let us work together to ensure that we safeguard all users of electronic platforms for corporates, individuals and children through appropriate sustainable interventions,” Kafwaya said.

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Zambia Postal Services Cooperation (ZAMPOST) is in

Mining

Vice President Inonge Wina has stated that the steadily rising copper prices on the international market is a good indicator for Zambia’s mining industry and plays an important role in the equation of rebooting Zambia’s economy.

Copper prices on the London Metal Exchange have hit record highs of over US$9,500 per tonne. Experts indicate that this copper rally may continue as motor companies are now focusing on electric cars which are expected to back the growing demand.

The veep said the movements in economic indicators are important for the economy as they signal what adjustments that are needed to be made in order to reboot the economy back to the path of growth as indicated in the economic recovery plan.

She was speaking at the 2021 Mining Indaba which the Zambian Business Times-ZBT is attending. “It is gratifying to note that one of the key economic indicators ‘the price of copper on the international market has continued to register a steady growth.

“This is certainly a good indication for the industry and plays an important role in the equation of rebooting our economy to growth,” she said. The veep acknowledged that a positive working relationship between Government and the mining industry players and stakeholders was critical in promoting a sustainable, diversified and export orientated industry.

She signaled Government’s determination to resolve policy and regulatory issues that investors have been raising regarding investment in the mining sector. She stated that the mining firms had constantly complained of being over taxed, thereby making their investment unattractive.

The two days indaba is being held under the theme “Building for the Future: reflecting on Zambia’s Mining Taxation Policy Towards Sustainable Investment in the sector.

Mining taxation policy and the tax administration has been a topical issue in Zambia’s policy debate since the privatisation of the mines. “At the heart of this is the question of how the Zambian Government can maximise revenues from its extractive sector without compromising the profitability of mining firms,” she stated.

She further stressed the importance of mining firms contributing their fair share to the treasury through equitable taxes.”Our vision is to develop the mining industry into a catalytic, transformative and innovative developmental industry by growing the existing mining activities, formalising Artisanal small scale mining and promoting new investments in order to set Zambia in a pole position to benefit from the new and emergent green energy wave,” she added.

And ZRA Commissioner General Kingsley Chanda stated that their is need for striking a balance and not just have a one way debate on taxes rate reduction and tax refunds. There are some mines which have operated in Zambia for over 15 to 20 years, but have never declared a profit.

“If these Mining entities who have never declared a profit but continue mining are not taxed via top line mineral royalty tax, then it may lead to a situation were they exit the country, deplete the copper deposits and not contribute anything to the treasury and people of Zambia” Chanda stated.

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Vice President Inonge Wina has stated that