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Mining

Zambia is expected to sign a Memorandum of Understanding (MoU) with Angolan that will facilitate for the commencement of a feasibility study on the establishment of the Angola-Zambia Oil Pipeline.

The long-held plans for the Angola-Zambia Oil Pipeline are still in play as the Ministry of Energy is currently finalizing the MoU that will pave way for technocrats to undertake a feasibility study to ascertain the viability, cost, duration and capacity of the proposed pipeline.

Speaking in an exclusive interview with the Zambian Business Times – ZBT, Energy Minister Mathew Nkhuwa said the signing of the MoU will take place in [May 2021] within the next two weeks.

“Well, we are currently to finalizing the MoU so that we can sign with our Angolan counterpart, suffice to say that, the MoU signing might be done virtually or we will have to travel to Angola depending on the Covid-19 situation.

“The MoU is to allow technocrats to start working on the feasibility study to come up with the costings, duration and capacity of the pipeline,” he said.

Zambia currently imports all its petroleum requirements, mainly from the Middle East, through the port of Dar-es-Salaam in Tanzania. Other refined petroleum products are imported via Mozambique, Tanzania and South Africa.

Nkhuwa said the coming into play of the oil pipeline would help to reduce of burden of importing fuel. He noted that transporting fuel from Tanzania and other neighboring countries using trucks was expensive, hence its envisaged that using the pipeline from Angola would be much cheaper.

“To transport fuel from say Tanzania using trucks is expensive, so if we are going to use the pipeline, the price will be cheaper. As the Government, that is what we are looking at and also we will have two sources of transporting fuel, the existing Tazama pipeline and the Angola-Zambia oil pipeline in case we have a problem on one, the other one remains working,” Nkhuwa told ZBT.

He said, “for example in May this year, the single storage point where they offload fuel from in Dar-es-Salaam is going to be under maintenance, so if it is under maintenance for one month then we will have only Beira in Mozambique.

Nkhuwa explained that if there is an alternative line, it makes life easier for the Government to be able to facilitate supply fuel to the country.

He said the Angola-Zambia oil pipeline will act as a source of security of supply and the pipeline is cheaper than trucking the fuel from Dar-es-Salaam. “The demand for fuel is forever increasing, so we must make sure that we are on top of demand otherwise if do not do anything, we will find that we will not be able to supply.

“At one time, just the Tazama Pipeline alone was enough to supply fuel to the whole country, but now it only supplies 40 percent of the total current demand and the other fuel has to be trucked it,” he said.

Nkhuwa said Government will still continue trucking in fuel because it does not want to push the truckers out of business. “We have the truckers that are in business, so if we remove them completely, we will kill them. We do not want to push them out of business, so they will still be bringing in fuel.

“The pipeline will be up to some depot where we will be putting in the tanks, and from the tanks, then it has to be moved by the truckers to their respective filling stations. So we will still need to depend on one another,” he added.

He said the pipeline will definitely make it easier to transport fuel and lighten the burden of fuel procurement and logistics once in place. Petroleum remains one of Zambia’s main import commodities. A trade deal with Angola would make result in huge economic benefits to both countries as Zambia can supply Agro and food products at a lower rate while Angola can likewise supply fuel With reduced logistical costs.

Zambia neighbour to the west, Angola has huge petroleum reserves and is currently Africa’s second largest producer to Nigeria. The two countries had some historical differences which were mostly caused by colonial legacies. The two countries have been working through to mend fences and be able to meaningfully trade with each other.

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Zambia is expected to sign a Memorandum

Companies

Some clearing agents have explained that the move by the Zambia Revenue Authority – ZRA to introduce a module on the ASYCUDA world system, that gives rights to importers and exporters to lock appointed clearing agents against their tax registration numbers has two sides.

The agents say that ZRA and all key stakeholders need to be give due consideration to both sides of the debate to arrive at an optimal decision that would help local companies to defend their currently low market share and have a base to grow from.

The Zambian Business Times – ZBT took time to speak to all the four registered associations for clearing agents and can reveal that the introduction of the new module in itself is not an issue, but that there are deeper concerns that this may lead to further shrinking of local clearing agents businesses who only have 5% share when compared to multinational clearing agents which enjoy 95% market share.

Southern Freight Forwarders Association – SFFA Secretary General Dennis Shaluchiso said the association supports ZRA’s decision, as this is an existing law, which the authority is simply implementing but further stated that there are two sides to this issue.

Shaluchiso told ZBT that every clearing agent is aware of what ZRA’s rule is when applying for a import license as it states clearly that when applying, the importer needs to appoint an agent in order for that agent to carry out those duties.

He however noted that every coin has two sides and this debate on this new module implementation also has two sides. Under this module, an importer is only allowed to appoint five agents and most importers get their clients directly from exporters, adding that an agent may clear one this week, next week the person is cleared by someone else, which is where the challenge is. This opportunity will he lost once this module comes into place.

Shaluchiso told ZBT that some agents are skeptical about this move because they are subsisting on less than 5% of the volume and most of these businesses are interchangeable. Some agents are concerned that this module will take away this interchangeable revenue, further cutting down the 5% share.

Some members of the public have accused ZRA of not doing enough to influence strategic policy formulation by the Ministry of Finance that would result in the growth of local clearing agents. The revelation that local clearing agents only control 5%, with the remaining 95% being controlled by multinational has been described as a strategic risk that should have been dealt with by now.

You can’t have a situation where local clearing companies only have 5% share when this is local business in Zambia. ZRA though mandated to collect government revenue can not just sit and wait for policy from ministry of finance to change this, they are in the best position to advise and push for the right policies to be formulated. They have Zambia’s top experts in their staff compliment.

ZRA should be strategic enough not to entrust 95% of this business to non-local or non Zambian companies. We are in the Information age, and the 95% information which the multinationals gather on Zambia’s imports and exports is of strategic importance.

This information should not be entrusted to a few non-Zambian entities, only ZRA which is a public institution should have 100% of this very strategic information. If Zambia intends to have a resilient economy, this situation should be treated as a serious breach of national and economic security.

Customs Clearing Agent’s Association of Zambia President Bruce Kaembe raised alarm bells against the move by ZRA to introduce a module on the ASYCUDA world system, that gives rights to importers and exporters to lock appointed clearing agents against their tax registration numbers.

However, ZRA Commissioner General Kingsley Chanda later explained that the ZRA modernization agenda which started in 2016 is about digitalization and automation of all its manual processes in order to enhance revenue and minimize leakages and vowed that the authority will not legitimize smuggling.

Stakeholders have however cautioned the ZRA Chief to deal with the issue of market share of local clearing agencies with the same zeal. Kaemba raised the matter of a shrinking share of local clearing agencies which he estimated to now be at 5%. The last official statistics from ZRA in 2019 showed that local clearing agents had about 20% market share.

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Some clearing agents have explained that the

Agribusiness

The Timber Producers Association of Zambia (TPAZ) has accused the Zambia Forestry and Forest Industries Corporation – ZAFFICO of distorting the pricing of Mukula timber logs in the country, in the process short changing local traders.

Association President Charles Musange questioned the role that ZAFFICO is playing as it’s actions have resulted in local Mukula timber traders being short changed and not fully benefitting from the lucrative Mukula trade.

TPAZ has challenged ZAFFICO to start declaring the real price at which it is exporting Mukula timber as the prices it’s buying from local traders is way too low when compared to the market prices.

Speaking in an exclusive interview with the Zambian Business Times – ZBT, Musange said the country and its local timber traders will not benefit from the timber industry with ZAFFICO in place as their buying prices are way to low when compared to market prices.

Musange told ZBT that ZAFFICO was buying a 25 tones container of Mukula timber logs at between K75,000 to K100,000 per container when TPAZ members have information from private buyers who are willing to pay US$37,000 [about K815,000] for the same 25 tonnes container of Mukula logs.

The Mukula timber trading is supposed to benefit indigenous Zambian traders but if you look at the buying price of K100,000 per 25 tones container of logs compared to the market offer price of about K815,000, the difference is too wide. Something is wrong somewhere.

And if ZAFFICO says they are selling at less than US$37,000, then there is need for investigating why they should sell or export at a price lower than what some buyers are offering even within Zambia.

Some Chinese and other foreign buyers are willing to buy at over US$37,000 per 25 tonne container of logs and this is were the catch is. If ZAFFICO is selling below market price, who is benefiting from the difference? And if they are selling at the market prices, why are they short changing local Zambian timber traders?

TPAZ has since called for the implementation of Timber Auction Floors as announced in the 2019 budget speech which would bring price transparency as opposed to propping up a monopoly exporter in ZAFFICO that has led to these price and market distortions.

Musange further told ZBT that as this stand, there might be a few individuals who are benefitting but not the whole country. Local Timber traders should be allowed to benefit from these high prices and not merely some selfish individuals. Timber exports should also contribute to increasing export earnings by locals.

He said ZAFFICO should instead focus on planting trees and developing nurseries as that is its original mandate and let the Ministry of Commerce, Trade and Industry or other more experienced government trade agencies handle the trade, not the Ministry of Lands who have no experience of expertise in economics of trade.

He added that the pronouncement made during the 2019 budget speech under then Financr Minister Margaret Mwanakatwe was that timber should be sold at an auction floor transparently, where all foreign importers of timber should bid and offer competitive prices.

He further suggested that an auction floor can be established in every timber producing province which would promote organised trade, unlike what is currently happening adding that an auction floor establishment is being sabotaged by some interest groups that are benefiting from the current opaque system.

Musange further challenged ZAFFICO to re-invest in softwood production which seems to have been abandoned. Zambia used to produce and sell softwood to Congo and even contributed to cutting down foreign exchange outflows from the country. But the institution seems to have now concentrated on hardwood only when there are other areas that they can serve the country better. More to follow as ZAFFICO was yet to respond to ZBT queries by press time.

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The Timber Producers Association of Zambia (TPAZ)

Mining

All large scale mining companies in Zambia will effective June 2021 be required to pay all their tax obligations directly to the Bank of Zambia (BoZ) in US dollars.

BoZ has revealed that following the initial decision to collect mineral royalty in US dollars, the central bank was able to use the proceeds effectively, which resulted in the reduced decrease in the international foreign exchange reserves.

Speaking in an exclusive interview with the Zambian Business Times – ZBT, BOZ Assistant Director for Communication Besnat Mwanza stated that this measure was in addition to the earlier requirement in September 2018 for mining companies to pay mineral royalty tax directly in US dollars.

“This move was intended to shore up foreign reserves. In 2020, mining companies paid a total of US$468 million directly to the Central Bank,” she said. Government will effective 30 June 2021 require mining companies to pay the remaining tax obligations directly to BOZ in US dollars.

Mwanza said the earlier move to collect mineral royalty taxes in US dollars from the mines contributed to slowing down the rate of decline of gross international reserves. She told ZBT that, to augment reserves, BoZ also purchases foreign exchange from the market when conditions allow.

At the end of December 2020, gross international reserves declined by about US$118 million to US$1.2 billion equivalent to 2.4 months of import cover from US$1.3 billion at the end of September equivalent to 2.3 months of import cover.

The decline was largely on account of foreign exchange interventions and debt service. Mwanza said the amount of foreign exchange used in interventions in the fourth quarter of 2020 was about US$340 million while US$51.2 million was spent on debt service.

BoZ explained that “Foreign exchange interventions were largely supported by selling back some of the US dollar proceeds of mining taxes into the market,” she added.

Analysts expect this move to shore up US dollar inflows into the Zambian economy in the short to medium term, as international copper prices continue to remain buoyant at over US$9,500 per tone.

Zambia’s battle to gain control and manage its currency, that Kwacha, remains one of the biggest huddles that every consecutive finance minister faces. Despite the country exporting large quantities of copper, the economic system has struggled to tame its appetite for imported goods, which has resulted in perpetual depreciation of the local unit.

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All large scale mining companies in Zambia

Markets

Now that all commercial banks have gone live on the National Financial Switch (NFS) on Automated Teller Machines (ATMs) and Point of Sale (PoS) channels, the industry intends to fight back by enhancing their automated mobile money or mobile banking offering

The banking industry mobile money and mobile banking platforms are expected to go live at the end of the second quarter of 2021 [by 30 June 2021].

The NFS, which went live on September 28, 2018 on a trial basis, is the first ever local nationwide shared platform, which will facilitate exchange of information on digital payments throughout the country.

Speaking in an interview with the Zambian Business Times –ZBT, Bankers Association of Zambia (BAZ) chief executive officer Leonard Mwanza said so far all banks that have deployed card services are live on the NFS on ATMs and POS channels and everything is working well.

“All banks who have deployed card services are live on the NFS on ATM and POS Channels and all is working well. The only remaining bit is on mobile money or mobile banking platforms, which are expected to go live by end of second quarter of 2021,” Mwanza said.

He said the other phase, which involves the mobile payment channels had already kicked off with some participants already using the platform. The establishment of the NFS started in 2014 as a project under the auspices of the Zambia Electronic Clearing House Limited, a company owned by the Bank of Zambia (BoZ) and commercial banks, but operates as an independent entity, whose objective is to provide interbank clearing and payment services in the country.

The NFS project has been implemented as a two-phased project; with phase one involving the switching of ATM and PoS transactions from the VISA, MasterCard or any other international switching platform to the NFS platform, while phase two will involve switching mobile payments transactions.

The full implementation will be a major milestone and will fundamentally transform the way business is conducted in Zambia with great benefits accruing to the economy as a whole. The NFS transactions now are much more cheaper than what obtained when switching with international payments providers.

This will also increase the security of transactions as they will predominantly take place in an electronic environment as opposed to paper based payment instruments as well as allow for faster circulation of funds in the economy due to the reduced delays in customers receiving funds.

Prior to this migration, all domestic card transactions were switched outside the country and treated as international transactions and were accordingly priced as such. However, following the migration locally, all domestic ATM and POS transactions by various commercial banks are now being switched or carried on the NFS platform with effect from September, 2018.

This means that debit or credit card holders can now transact on any of the 14 participating banks’ ATMs countrywide and their transactions will be switched locally through the NFS following a successful trial and cut over period for the implementation of the ATM phase of the project.

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Now that all commercial banks have gone

Agribusiness

Msekese Fisheries has revealed that the biggest challenge for most fish farmers today is the high cost of inputs, most especially feed, which has contributed to farmers not aggressively expanding to cut the fish deficit that the country has been experiencing.

Msekese Fisheries Managing Director Michael Hacking said lowering the cost of inputs can transform and massively contribute to the increase in fish production as farmers would be able to expand their businesses, which would effectively encourage others entrants to venture into fish farming thereby notably growing the aquaculture industry in Zambia.

Speaking in an exclusive interview with the Zambian Business Times – ZBT, Hacking said if fish farmers make very little profit, they are likely to be discouraged from continuing or expanding their dams because no one wants to be in a business that will not sustain them and their family.

Hacking said the depreciating Kwacha against the dollar has tremendously increased the cost of fish production for farmers in Zambia, as most raw materials are dollar based. He said there is need for establishment of strategic partnerships within the industry in order to help optimize the value chain of fish production if the fish deficit is to reduced and eventually eliminated.

“The biggest challenge is lining up everything, we [Msekese Fisheries] have got a number of hatcheries which also produce the feed, but now it’s up to us to make sure the farmers have access to fingerlings. Once that is done, they need access to feed, if we can get the farmers all the right inputs, once the fish is ready, they need to get that to the market and all those can be aligned through strategic partnerships”, he said.

When asked if imposing a six months fish ban would help increase fish production in natural rivers,lakes and water bodies, Hacking noted that in theory, the six months fish ban can help reduce fish deficit but practically it has no effect because rivers where there is supposed to be a fish ban have fishermen catching fish with illegal equipment, it’s a practice that has been happening throughout the fish ban.

He said the problem is that due to resource constraints, the active monitoring is not happening on these rivers. So anglers tend to stop angling, but in fact, it’s the netting from the fishermen that is causing a problem, which somehow continues.

“They go in there with their small nets, they net out the really small fingerlings and that is affecting our fish resources in the rivers and until they can stop those people from such practices, this problem is going to continue”, he said.

He also noted that government has invested heavily in aquaculture and this has resulted in new fish farmers getting on board thereby increasing the demand for fingerlings. Hacking further told ZBT that the company increased their production from the breeding aspect as well as the nursery aspect where it holds and grows their fingerlings to a specific size before selling them.

He further said the company doubled its production from an estimated 200,000 fingerlings per month to close to 400,000 fingerlings, adding that their holding facility is still available. Msekese Fisheries has the ability to hold about 700,000 fingerlings.

He said the company expanded their operations last year, but expansion required a lot of equipment, which is not available locally, as a result, bringing the equipment into the country was very costly due to the various import charges and duties that come with importing.

Hacking said last year’s fingerling production was reasonably good despite challenges like diseases from January to July, which compromised the production, but from August to December, the production was good.

Fish farming in Zambia has gained attention after it has emerged that the country has a large consumption deficit despite boosting of hosting huge fresh water resources that includes rivers, lates and underground water.

The demand for fish on the local market continued to expand with neighboring countries such as the Democratic Republic of the Congo – DRC and Angola proving a yawning export market currently being satisfied by imports of seafood.

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Msekese Fisheries has revealed that the biggest

Markets

Cross border trading has effectively been paralyzed at some border points between Zambia and its neighboring countries which are still not allowing public transport to cross. Most of the local cross border traders rely on busses to conduct their trading activities.

In an exclusive interview with the Zambian Business Times – ZBT, a Trade expert whose identity has been withheld as they are not authorized to speak publicly told ZBT that the work of small scale informal cross border traders involves frequent but low cost crossing of borders to buy and sell various products, hence the need for public or shared low cost transport.

The source sited Chirundu border with Zimbabwe and Mwami border with Malawi as the two borders which have had an adverse effect on local cross border traders. These borders have remained restricted for buses to cross despite the existence of a wider regional agreement that has allowed mass movement of people with specific Covid guidelines.

The source stated that despite the fact that the initial total closing of borders severely and negatively impacted on the traders as they deal in small volumes and values, these borders remaining restricted have exacerbated the negative economic impact of the pandemic on the affected traders.

“You see, most of them do not have huge savings to provide themselves with a buffer. The continued failure to allow public transport across some of these borders is causing loss of economic livelihoods. There’s is urgent need to come to the aid of this sector which is key to promoting regional trade”, the source explained.

The trade expert told ZBT that some efforts had been put in place to try to help with the easy movements of people and goods. COMESA developed the regional guidelines for facilitating movement of persons and goods during the Covid-19 period. But when these guidelines are reviewed in detail, they did not specifically deal with the issue of small scale cross border traders.

Subsequently, at the tripartite level involving the East African Community (EAC), COMESA and Southern African Development Community (SADC), tripartite guidelines on trade and transport facilitation for the movement of persons, goods and services across the tripartite region during the Covid-19 pandemic were developed to harmonize those that were separately developed by the three Regional Economic Communities (RECs).

Under the guidelines, it is provided for resumption of inter-State mass movement of persons by buses/minibuses and other vehicles. The provisions of the regional guidelines are clear took into account the plight of local traders.

But the implementations is subject to national laws and regulations. The success is largely constrained by measures taken at the national level such as continued restrictions on travel and prevention of busses from crossing these borders.

The source further added that the requirement for COVID-19 certificates for travelers and the high cost for such certification makes life even harder for the small scale and local cross border traders whose capital base is small.

The development of local cross border traders is key to unlocking the economic value and driving up intra-Africa trade. One of the biggest challenges which African countries face to grow their local economies has been partly due to failure to support and grow local trade which would result in profits and value being returned between the trading countries.

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Cross border trading has effectively been paralyzed

Agribusiness

One of the key reasons Zambia has continued to import clothes and needlessly lose foreign exchange is due to the challenges that the cotton industry continues to face as well the continued reduction in production of the crop for over seven years now.

Ministry of Agriculture Director Moses Mwale said the production of cotton has been declining over the past years from about 260,000 metric tonnes in 2012 to about 41,000 metric tonnes in 2020, adding that the cotton industry’s performance has been below par when compared to other African countries.

Mwale said the poor performance of the cotton sub-sector can be attributed to gaps in the current legislation such as the lack of oversight over the entire cotton value chain, therefore the need to revise the Cotton Act in order to protect local farmers.

Speaking in an exclusive interview with the Zambian Business Times – ZBT, Mwale said the challenges in the cotton industry can be unlocked by enhancing policy and legislation, which is weak therefore the need to amend the Cotton Act in order to safeguard the industry.

He said the amendment of the Cotton Act is expected to revive the cotton industry and finalising the review of the Act will ensure the legislation responds to the demands of the industry players, most especially the farmers.

He also said the amendment of the Act will lead to the desired increase in production and productivity, exports and foreign earnings as well as job creation. Mwale further said the ministry is yet to have a stakeholders meeting which will address the many issues that are affecting the cotton sector such as how to handle the seed, business linkages and the ginneries.

Mwale said the ministry has set up a task force, which is specifically working on the process of amending the Cotton Act and has set up terms of reference for the task force, which will be discussed in the upcoming stakeholder meeting. He mentioned that government is looking at making a number of reforms in the agriculture sector and has plans of amending a number of Acts.

Zambia is currently a net importer of clothes and apparel when the country has suitable soils and weather conditions to grow Cotton. Cotton can then be processed for both local use and exports cutting off the need for imports.

Analysts say there is a need for the country to re-align its business mindset. The Kwacha is perpetually depreciating due to a default to importing even for items that can be locally produced and processed, and clothing and apparel one basic need that can contribute to import substitution.

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One of the key reasons Zambia has

Mining

Geo Petroleum Limited, the company that is said to have made progress in the oil and gas exploration in block 31, which covers Luapula and Northern Provinces, has opted to remain mute when asked to confirm the progress made so far.

The company which was working with Tullow Zambia B.V on this project has already Incurred expenditure of US$4.8 million regarding exploration work.

From the results of the work done so far, Tullow Zambia believed that there was a heightened risk in conducting further exploration in block 31 stating that the depth of the basin was not deep enough for oil and gas generation and decided to transfer the majority interest to Geo Petroleum Limted in 2020.

When contacted exclusively to find out how far the company had gone with the oil and gas prospects, Geo Petroleum Limited country representative Dr. Sixtus Mulenga said, “When we are in a position to update, we will contact you and give you the update, we are not yet ready to talk about it at the moment.”

On Friday, March 19 2021, Minister of mines and minerals development Richard Musukwa announced that substantial progress had been made with regards to oil and gas exploration in blocks 31, 32, and 54 held by Geo Petroleum Limited, Mafula Energy Limited and Sargas Oil Limited respectively.

Musukwa said surveys covering a total line distance of 7,076 kilometers and an area of 20, 000 km were undertaken to determine the presence of geological basins for possible oil and gas accumulation.

This year 2021, Mines Minister Richard Musukwa stated that the company intends to commence the acquisition of seismic data and bathymetry survey data to help identify targets for oil exploratory wells for possible commercial discoveries of oil and gas.

Geo Petroleum has committed to undertake exploration work at an estimated cost of US$4.3 million from 2021 to 2024. This will involve conducting seismic data acquisition and slime hole drilling.

In addition, Geo Petroleum Limited also committed to spend at least US$10 million for drilling of an exploration well if the results for seismic data, slime-hole drilling and bathymetry surveys come out positive, read the statement from the mines ministry.

Zambia currently imports most of its oil and petroleum products from the gulf region and other finished products via South Africa and other neighboring countries. Petroleum imports constitute one of, if not the highest forex drainers in the Zambian economy.

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Geo Petroleum Limited, the company that is

Mining

Zambia’s gold reserves have started to take shape as the central bank is now following through to meet the annual target set. The Bank of Zambia (BOZ) has confirmed that they have so far purchased about 283 kilograms of gold since December 2020 at a cost of about K346 million (about US$16 million)

The central bank said it purchased about 196 kilograms from FQMs Kansanshi Copper Mining at a cost of K242 million while 87 kilograms was purchased from ZCCM IH owned Zambia Gold Company at a cost of K104 million.

The Central Bank plans to purchase around 25,200 ounces of London Good Delivery gold from Kansanshi Copper Mining Plc and 21,000 ounces of dore gold with a minimum of 88% purity from Zambia Gold Company per year.

According to information made available to the Zambian Business Times-ZBT by BOZ, these estimates are based on the gold purchase agreements signed with Kansanshi Copper Mining and Zambia Gold Company in December 2020.

BOZ said the objective of this initiative is to shore up and diversify the international reserves adding that the viability and attractiveness of this venture is that the gold is being purchased in local currency.

The central bank stated that the dore gold purchased from Zambia Gold Company will only reflect in international reserves after refining. BOZ noted that the purchase price of the commodity is not fixed but is determined by the London Bullion Market Association – LBMA.

The new BOZ Governor Christopher Mvunga has been challenged to increase the annual target for gold purchases for the year 2021 after it emerged that Kansanshi Mining alone in 2020 produced gold valued in excess of US$200m.

With the coming on board of Zambia Gold Company and ramping up of mining at Kanseseli in Mwinilunga as well as purchases from artisanal local miners, Zambia can easily build up gold reserves worth in billions of US dollars.

A big gold reserve chest can then be used to defend and arrest the perpetual Kwacha depreciation which today accounts for the vast amount of economic challenges the country is experiencing.

Analysts say the Kwacha depreciation is one of the major factors behind the sharp increase in inflation and in effect household commodity prices which the general public is currently grappling.

The depreciated Kwacha has also contributed to increased cost of debt service as governments revenue generator – Zambia Revenue Authority has most taxes denominated in local currency which is then converted to forex to service.

Gold reserves when held in sufficient quantities are expected to provide a war chest or am alternative lever to US dollar reserves that the central bank can use to defend the local currency – Kwacha.

Gold is now being mined in Zambia and the country can leverage this fact to build a credible gold reserve balance or buffer that would help defend the Kwacha and in effect defend locals whose earnings and purchasing power is determined by the fortunes of the local unit.

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Zambia’s gold reserves have started to take