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Mining

The Association of Mine suppliers and Contractors – AMSC has expressed disappointment at Glencore owned Mopani Copper Mines – MCM decision to offer one-month contracts to all its contractors and suppliers following its insistence to place the mines under care and maintenance.

Placing the mines on care and maintenance is in effect considered as a closure as only few staff are retained leading to massive job losses. Mopani is the anchor company for two major mining towns in Zambia. One is Kitwe which is the second largest city in Zambia by population and the other is mufulira, both on the Copperbelt province.

Mine Suppliers Association president Augustine Mubanga disclosed to the Zambian Business Times – ZBT in an exclusive interview that Mopani had on July 20, 2019 written to the association suggesting to offer one month contracts to all its suppliers and contractors, pending the outcome of the appeal process against government’s second rejection for the mining firm to put its operations under care and maintenance.

Recently, Mopani received a notice from the Mines Development Department that it has rejected its proposal to suspend its operations pursuant to Section 37(2) of the Mines and Minerals Development Act (2015) (MMDA) and place its mines in Kitwe and Mufulira on Care and Maintenance.

AMSC president has bemoaned the impact that Mopani’s move will have on business as a result of terminating contracts adding that those employed by contractors will suffer the consequences as work will not be provided hence has urged the mining firm to become a good corporate citizen that will create confidence amongst its stakeholders as issues of trust are based on confidence levels created in the industry.

Mubanga added that government will also lose revenue from the collection of tax through mineral experts, contractors and suppliers and that employees will be affected most on family level.

“We are in business and long term planning is key, Mopani cannot just make decisions with short notice because this will affect our members who will not even be privileged to approach the Bank or financial institution because they will not lend you money based on monthly operations,” He said.

He said, given that copper prices on the market have started appreciating to about K6,500 per ton, it should motivate the firm to get into mining saying some boarders which closed due the Corona virus pandemic have as well opened, hence movement of goods is now facilitated.

Mubanga has since charged that Mopani should come clean about its consistent decision to close the mines saying the recent abrupt decisions can only be attributed to other unknown reasons and not the ones disclosed earlier.

Glencore, Mopani parent company was earlier in the year challenged to hand over the mining license if it had no interest in running the mine. The mine had also threatened to close the mine some time back after electricity tariffs were increased across board. The mine has also not made available its cost of copper mining per ton to help the market better appreciate its challenges in relation to copper market prices.

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The Association of Mine suppliers and Contractors

Sport

The Zambia Basketball Federation – ZBF has disclosed that they have lost out about K800,000 in gate taking and other auxiliary revenues due to Covid 19 restrictions.

Speaking in an exclusive interview with Zambian Business Times – ZBT, ZBF General Secretary Rodrick Ndhlovu reiterated that approximately K800, 000 has been lost in terms of gate takings.

“We could have started the league by end of March and this is July, so we have lost revenue for about four months, which is close to about K800, 000 in gate-taking revenue. Apart from that, we have lost affiliation fees from Associate members”, he said.

Ndhlovu also disclosed that the federation has also come up with a strategic plan to help the players stay fit and train on daily and weekly basis,

“We have put up some sort of mitigating plan to keep the players fit through our Technical Coordinator with his Technical Team and the National team coaches, who put up a plan with the players and gave them training regimes on what should be done on a weekly basis. And they have a monitoring mechanism to see to it that the players are sticking to those plans”, he said.

He also stressed that the Federation will follow the guidelines put by government as it’s for everyone’s benefit. The Federation Internationale de Basketball – FIBA, which is ZBF mother body, has also advised the federation to follow the guideline made by the local Authorities.

“As you may be aware, no one can operate outside government guidelines. With this COVID 19 situation, no one can supersede Country and Local Government guidelines. Meaning at FIBA, our mother body will say if you have start our league, you have to work hand in hand with your country and local government, as they say, we can recover economically and sport wise but we can’t recover lost lives”, he said.

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The Zambia Basketball Federation - ZBF has

Lifestyle

A Zambian micro-finance startup, Lupiya Loans, has raised a US$1 million funding from Enygma Ventures, a US based venture capitalist that was looking to invest into Sub-Saharan African startups.

Lupiya loans was short listed among other applicants and raised $1 million funding to help it continue to scale and roll out its services that ensure Zambians, especially women are able to participate in the economy through its financial inclusion strategy.

Lupiya loans Chief Executive Officer – CEO Evelyn Kaingu told the Zambian Business Times – ZBT in an exclusive interview that the company has so far attracted over 1,000 customers, shared in a ratio of 60% women to 40% men and is since glad that more women are accessing its products.

She said that the company which is now going into its third year of operation had prepared to look for outside funding in order to begin to scale up its operations and has set out to seek as many opportunities that would be available for it’s kind of business.

“We are a fintech start up that provides micro loans to individuals, small businesses and specifically women micro entrepreneurs. Our goal is to provide financial opportunity for many Zambians who do not have access to financial services to progress economically. We leverage technology to streamline our processes and continuously allow us to build more affordable products to target more market segments,” She said.

Kaingu has since urged small businesses to leverage social capital saying this can be obtained from family, friends, colleagues or networks with people engaged in platforms such as village banking. She said village banking has become an impactful platform to raise capital, hence effort should go towards setting up a business into a professional entity and trust worthy persona even with very little resources.

She added that the company remains excited about its future particularly its financial inclusion strategy to help a lot of Zambian have access to more financial services. “We look forward to working with SME’s and providing them with tailor made financing options, we are also yet to roll out a couple of new products via mobile money,” She concluded.

Zambian start ups have faced numerous challenges especially when it comes to raising capital but Lupiya has provided the much needed example. Village banking is now a big phenomenon in Zambia and participants can use it to initiate their ideas into a start up business which can then seek venture capital to scale. For more, email info@zambianbusinesstimes.com

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A Zambian micro-finance startup, Lupiya Loans, has

Companies

Tanzania Zambia Railway Authority (Tazara), was one company that got a huge chunk from the released K30 million meant for former Tazara, Zamtel and Zambia Railways (former Railway system of Zambia) workers released. Tazara got allocated K14 million from the total amount released, but even that is not enough to cater all the outstanding unpaid retirement benefits.

In a statement made available to the Zambian Business Times – ZBT on 20 July, 2020, Workers Union of Tazara (WUTAZ) General Secretary Julius Banda has asked for government to be more consistent in releasing funds as the money released only caters for about 9% of the total required amount. Only 334 former employees qualify to get the full pension from the guidance that has been shared.

This money is only 9% of the required amount to clear all the ex-workers, we appeal to government to be more consistent in the releasing of funds towards retirees. Beneficiaries that qualified for the full pension under the guidance given are only 334. However, Banda stated that despite the money being too little compared to the number of beneficiaries, it is a step in the right direction.

“All we are appealing is consistency and perhaps look at increasing on the amounts released so that the retirees’ and ex-workers end the suffering they are enduring as these moneys are long overdue”, he said.

In addition, he said that former workers that are to receive their funds through National Pension Scheme Authority (NAPSA) where given the go ahead to start claiming. But as for those workers under the Zambia State Insurance Corporation – Zisc Life Limited, a guideline on how they will make payments has not been communicated.

“For NAPSA, the retiree where asked to start claiming especially those that retired between 2010 and 2013. However, ZSIC has not yet availed us a road map on how they will start to pay, he said.

The issue of unpaid pension and retirement benefits seems to be a black hole for the government as there seems to be no clear roadmap on how this liability can be extinguished and handed over fully to be managed by specific pension funds. There is need to come up with a holistic solution and return the government pension system normalcy.

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Tanzania Zambia Railway Authority (Tazara), was one

Markets

The Energy Regulatory Board – ERB has disclosed that notable progress has been made on the Electricity Cost of Service Study being undertaken by Energy Market and Regulatory Consultant – EMRC despite the covid 19 pandemic. EMRC has do far successfully completed and submitted the Inception Report which outlines the roadmap for the study.

Energy Minister Matthew Nkhuwa had in December last year launched the Electricity Cost of Service study which will among other reports indicate the cost of electricity, undertake the load forecast and develop the system expansion plan to meet the future demand in an efficient and effective manner.

ERB Public Relations Manager Kwali Mfuni told the Zambian Business Times – ZBT in an exclusive interview that two stakeholder consultation workshops have so far been conducted in Lusaka and Kitwe and that draft reports on the second and third tasks have also been submitted.

She said the study which is set to be conducted within a period of one year has been made possible with financing from the African Development Bank – AfDB which will establish the cost of generating, transmitting and distributing power in the most efficient manner and translating the costs into the unit cost of energy for each customer category.

Mfuni said among the drafts submitted, one is the review of the market structure and conduct of the power sector including the Legal and Regulatory Framework while the other is the electricity load forecast. She added that it is worth noticing that EMRC is expected to submit reports on 12 tasks prior to completion of the Cost of Service Study and currently they have successfully submitted one report, while two reports are still in draft form.

“So far, ERB is happy with the stakeholder co-operation and wishes to commend institutions that have provided inputs towards the study specifically, the Bank of Zambia, Zambia Statistics Agency, Metrological Department, Department of Energy, ZESCO, Copperbelt Energy Corporation – CEC, Zambia Chamber of Mines, Rural Electrification Authority – REA, Maamba Collieries and the North-Western Energy Corporation,” She said.

EMRC is a UK based consultancy firm and was engaged at a total cost of about US$600,000. The Electricity cost of service study is expected to provide a paper on which future electricity policies and plans will be formulated. Tarriffs which are mostly cost reflective are also going to be analyzed with recommendations proposed.

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The Energy Regulatory Board – ERB has

Agribusiness

The Industrial Development Corporation – IDC has disclosed that it will invest K17 million (about US$1 million) to revamp the Mununshi Banana Estate in Mwense, Luapula province.

The estate went under shortly after being privatized to a local investor who is said to have had limited experience in management of Agro firms. Zambia currently has a banana deficit estimated at about 11,000 tons per annum which provides immediate advantages for local production.

IDC Chief Executive Officer – CEO Mateyo Kaluba disclosed to the Zambian Business Times – ZBT in an exclusive interview that the company is in the process of planting the first 50 hectors of banana’s and has so far directly employed about 40 people who are currently on the ground to execute work.

He said IDC decided to undertake this project due to the country’s serious deficit in Banana production of about 10,800 metric tonnes per annum, hence saw it fit to invest in bananas as part of the corporation’s agriculture portfolio push. Banana being a perennial crop has another advantage in that it takes on average 9 to 12 months from sowing to harvesting.

He added that expected production target per year for the revamp estate is 6,500 tons and that the corporation intends to push the hactares of bananas cultivation to 330 hactares and reach 730 ha in the next 3 years. The revamp Mununshi scheme will also offer an out grower scheme for people in the surrounding areas to enable the company be self-reliant and expand production creating business and employment opportunities for the local community.

“We are also going to take advantage of the export market particularly the Democratic Republic of Congo – DRC which is nearby and we are in the process of recruiting a qualified management team for what will now be called the Mununshi Fruit Company that will in the near future, see the company diversify into production of other fruits like Avocados. So, once the company is up and running, the new management team will begin to identify other fruits with high demand for both the local and export markets given that management skill, expertise and infrastructure will already be provided,” He said.

When asked whether the Mununshi Fruit Company will not take away market from existing private banana farmers, Mateyo told ZBT that the corporation will instead compliment what local farmers are already doing for both commercial and small and emerging farmers. The Mununshi Fruit Company will initially focus on plugging the deficit and intends to grow and contribute to making the country become self-suficent and later pursue export markets.

“We intend to export to the DRC especially that it has new entry routes and roads around the area to facilitate foreign trade, we have roads now between Luapula province and the northern Province from Kasama, so we expect that it will open up a serious export market for us and bring in additional foreign exchange,” He added.

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The Industrial Development Corporation – IDC has

Markets

The Zambia Statistics Agency – Zamstats has disclosed that the rebasing of Zambia’s Gross Domestic Product – GDP is still on the table as the Agency and other stakeholders are currently working on sourcing more funds to enable the agency undertake an integrated GDP rebasing approach.

The country is currently grappling with what some experts have described as adverse debt and debt service ratios due to among others, the long period of time taken to rebase or recompute the country GDP numbers. Zambia’s last GDP rebasing was done when now current largest copper miner – First Quantum Minerals was in its development stage, which is now the largest copper producer.

Zambias debt is where it is now, and solutions are needed to re-profile and find a path to debt sustainability. Even as the ministry of Finance has employed Lazard Freres as liability & Liquidity management advisors, periodic rebasing the GDP is a low hanging fruit that can be immediately be executed.

If for instance the GDP is rebased upwards, some of the adverse ratios that the Ministry of Finance and Zambia is grappling with such as Debt to GDP ratios, Debt servicing to GDP ratios and even the performance of revenue collection such as tax collection as a percentage of GDP would be enhanced.

As announced in the 2019 budget speech, government planned to commence the exercise of rebasing GDP in 2019 and complete the exercise by 2020, but Finance Minister Dr. Bwalya Nga’ndu said during an oral answer session in parliament on August 1, 2019 that the process of rebasing the country’s GDP was going to be postponed due to lack of resources.

And Zamstats Assistant Director Economics and Financial Statistics Joseph Tembo has said that the team is still waiting on donors who pledged to assist with the execution of the process saying currently, no much development has been recorded as Covid-19 pandemic has also contributed to the slowing down of the process.

Zamstats told the Zambian Business Times – ZBT in an exclusive interview last year’s that the agency had estimated the budget for GDP rebasing at US$2 to US$5 million, however the cost is likely to reduce depending on the resources available and the number of donors to come on board.

“We are currently in the process of engaging donors through the new normal as Covid –19 has disturbed a lot of things, so we need to revisit our plans and begin to engage stakeholder’s on the way forward because as things stand right now, we do not even know when these donors will make their donations because we have not engaged them hence we’ve opted to resume discussions in the new normal,” He said.

Meanwhile, he disclosed that African Development Bank is one of the donors that have shown interest in funding part of the phases of the project but that discussions have not matured hence still engaging with other parties. Tembo added that Zamstats in collaboration with Ministry of Planning and Development may consider using the Census to get the required information to rebase the GDP.

He however stated that it should be noted that things may not be possible considering that census is conducted on households while GDP rebasing deals with enterprises.

The rebasing of GDP is ideally supposed to be done every after 5 years in a bid to account for changes that have occurred in an economy over time. The rebasing provides government with information on the size and the composition of the economy, however Zambia last rebased its GDP in 2010 and the results clearly revealed that it was understated by 25%.

Experts have estimated that from 2010 to current year 2020, the Zambian economy has comparatively expanded and the GDP should definitely have followed the same trend. Regular GDP rebasing has gained prominence with some advanced economies rebasing their economies even annually, it is an important exercise that should not wait for donor funding.

The country GDP number used in coming up with key performance, debt and various other country ratios that are used by multilateral lenders and development finance organizations.

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The Zambia Statistics Agency – Zamstats has

Companies

The Railway Workers Union of Zambia has disclosed that only 13% of Zambia Railways (formerly Railway Systems of Zambia) ex-workers who took litigation against government have so far been paid leaving out about 87% who took the dialogue route still waiting for payment of their terminal benefits.

Speaking in an exclusive interview with Zambian Business Times – ZBT, Railway Workers Union of Zambia president Nathan Zulu stated that only 112 (13%) out of the total number of 866 ex-employees have been paid their outstanding retirements benefits and these are the ones that took government to court.

In total number of ex-employees are 866, 112 decided to go the litigation route. 754 employees thought dialogue with government would result in payment. The ones who took government to court are the ones who have been taken care of by the allocation of K3.6 million. And I’m told that all them or almost all them have been paid as these funds were paid to their lawyers.

Zulu stressed that this is where the huge problem is, because the ones who took government to court has received payment before those who chose the dialogue route with government. It basically means that taking the court route is more viable than dialogue.

Not all former Zambia Railways (formerly Railway Systems of Zambia) workers have benefitted from the K30 million released by government to pay off retiree or retrenched workers. The money that has so far been allocated to the former Zambia Railways workers is only K3.6 million, but this is not enough to cater for all the outstanding retirees as the total amount that can cater for all the ex-workers is US$5.1 million

“This is where now the 754 ex-employees who are remaining to be paid now have a genuine complaint. It’s like now, for you to get money from the government, you have to take them to court. This is interpretation that the loyal 754 people are looking at. Because here are the loyal 754 who thought that through dialogue, they would get their money but don’t get it. 112 take the litigation way and take government to court. Which to us is not the first option, it’s like you are rebelling. But you are rewarded for that”, he said.

Furthermore he said that the union is facing a big problem because of other beneficiaries, who are orphans, widows and other vulnerable persons. However, Zulu disclosed that government is undertaking a verification process and fingers are crossed, hoping that this will lead to the loyal ex-employees will be given their share as soon as possible.

Right now what is being done, there are auditors who are doing verification of the remaining 754 ex-employees who have not been paid by the allocation from the ministry of finance. So we hope now with the verification which is being done which is almost complete, will materialise into a payment. That’s the hope of everyone now.

“We have seen that government has already shown that zeal to pay off their ex-employees. They have already shown that gesture by giving those who took them to court, and now with the verification that is being done we will hope to see now the other 754 equally getting their money”, he said.

The genesis of the whole issue started from the cancelling of the concession between the republic of Zambia in 2012 and the then Rail Systems of Zambia which was operated by a South African company. The company was supposed to have cleared its workers but this matter is still under litigation. Those employees who were employed by Railway Systems  of Zambia are now to be paid their money after the cancellation by government in principle.

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The Railway Workers Union of Zambia has

Mining

Mopani Copper Mines Plc – MCM has been notified by the Mines Development Department of the Ministry of Mines that it has rejected its proposal to suspend its operations pursuant to Section 37(2) of the Mines and Minerals Development Act (2015) (MMDA) and place them on Care and Maintenance.

At the beginning of May 2020, Mopani Copper Mines Plc notified the government of its intention to place the mining operations on care and maintenance after 90 days.But the Mines Development Departs has rejected the proposal, making it the second time that MCM has been turned down from placing its operations under care and maintenance.

On its first attempt to place the mines under care and maintenance, the company decided to unilaterally place the mines at Nkana in Kitwe and Mufulira all on the Copperbelt, but government disapproved its decision stating that there are rules and procedures guided by licensing conditions and laws of Zambia which the company had not followed.

This eventually led to MCM parent company Glencore then rescinding its decision to unilaterally and overnight place the mine on care and maintenance and proceeded to give the 90 days notice as per laid down regulation. There was a call for dialogue for the two parties but it seems very little has been achieved and the 90 days has now expired.

Mopani Public Relations Manager Nebert Mulenga told the Zambian Business Times – ZBT in a statement that the mine remains of the belief that the only way to protect the company’s value and preserve the option to deliver its growth projects when conditions further improve is to transition the operations to Care and Maintenance.

He said Mopani is currently assessing its options and will initiate an appeal pursuant to the MMDA against the Director of Mines’ decision within the permitted timeframe and it will further explore all options available to it to preserve the long-term value of the Mopani business.

“Mopani will continue mining operations pending the outcome of the appeal processes, pursuant to the Director of Mines’ decision and the MMDA. We will further continue to engage with the relevant government ministries on identifying potential solutions to address Mopani’s current challenges,” He said.

Mining experts have called on Mopani to be transparent on its operating costs and engage the mines department to find a way round to keep the mine operating and forestall job losses. The two mines are the economic lifeblood of two major cities or towns in Zambia, i.e Kitwe which is the second largest city in Zambia by population and Mufilira, which is also a major town on the Copperbelt.

The Association of Mine contractors had earlier in the year issued a press statement accusing Mopani of shifting its head office to South Africa and deliberately giving all major contracts to foreign entities at the expense of local companies. Augustine Mubanga, the Association president stated that the company has been systematically terminating contracts for its members.

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Mopani Copper Mines Plc – MCM has

Markets

Despite the negative impact of covid 19 which has weighed down overall economic performance and compromised the credibility of the 2020 national budget, Non-Tax Revenue category is projected to outperform the budget of K11.3 billion by 7.3% to hit about K12.1 billion.

Finance Minister Dr. Bwalya Ng’andu has estimated that although the overall resource envelope will fall short of target by approximately K17.2 billion of the 2020 budget, non tax revenue category will be 7% above target.

Speaking when he was giving a ministerial statement in Parliament on July 14, 2020, Dr. Ng’andu said some of the key factors leading to a fall in the 2020 budget include the loss of exceptional revenue, covid – 19 related tax relief measures and the overall general reduction in economic activities.

He said on the domestic front, the ministry has continued to review the performance and projected growth of the economy amid the Covid 19 pandemic and that domestic revenues in 2020 are projected to be 17.8% below the budget target.

He added that tax revenues are now projected at K47 billion against a budget target of K54 billion representing a decline of 12.7%, while Non-Tax Revenue category is now projected to outperform the budget target of K11 billion by 7.3 % at K12.1 billion attributing the performance to receipts from dividends and on-lending activities.

The Minister further said government spending in 2020 is expected to increase by an estimated K9.7 billion due to increased government spending on Covid-19 related interventions and increased external debt payments adding that external debt service is expected to increase by K2.2 billion.

“Mr. Speaker, the decline in revenues and the increase in expenditures is expected to create a financing gap of K26.9 billion due to a loss of resources amounting to K17.2 billion and an increase in expenditures amounting to K9.7 billion,” He said.

Dr. Ng’andu said the economic situation continued to be challenging and fiscal situation is extremely constrained hence treasury will strive to mobilize more resources to respond to the various competing developmental needs of the country.

The Zambian Business Times – ZBT has challenged governments implementing agencies and officers to automate non-tax revenue collection methods to ensure that the country derives maximum benefits from both revenue engines.

Automated traffic fines for instance was seen as a key technology to enhance the collection of additional traffic related non tax revenue as the set up of using human traffic officers lead to massive revenue leakages and accountability gaps.

Other non-tax revenue measures such as council levies, land and property rates, parking fees and a host of other alternative revenue lines continue being un-optimized due to mostly lethargy and unbridled personal interests by a few government officers who have continued to frustrate efforts to automate.

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Despite the negative impact of covid 19