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Agribusiness

Tobacco Board of Zambia – TBZ has invested in a farmer electronic registration and monitoring system called the “Bright Leaf System” aimed at enhancing its regulatory role in the production, buying and selling of tobacco in the country.

TBZ disclosed that tobacco being a regulated crop needs a sophisticated system to facilitate and tracking of production, processing, manufacturing and export of the crop. Zambia currently exports over 90% of all the tobacco produced locally, making the crop a viable alternative for increasing forex earnings.

Zambia has experienced challenges were some farmers involve themselves in what is called vending and site selling which has frustrated the full growth potential of the tobacco outgrower farming model. Some farmers whose inputs where sponsored by particular buyers or out-growers with an ultimate goal of selling back to them end up selling the commodity to other buyers and in return, disadvantages the sponsors.

TBZ Chief Executive Officer – CEO James Kasongo told the Zambian Business Times – ZBT in an exclusive interview that site selling and vending has since pushed buyers to limiting their investments in the outgrower model.

To address this challenge, TBZ has invested in the development of an electronic system that would facilitate registration of sellers (mostly farmers) and buyers, tracking of outgrower contracts through inputs distribution and reciprocal deliverly of the crop and eventual marketing and sales through the official tobacco sales floors.

He added that the farmer registration system which came into effect this year 2020 is also meant to capture every tobacco farmer in the country, issue membership cards to be used to both capture farmer activity and be used as a basis to grant access to official trading floors, which would eventually weed out those involved in site selling and vending.

“We came up with the idea of creating a system to facilitate the registration of farmers and outgrower as well as regulating the buying and selling system of tobacco. If the industry is left uncontrolled, most buyers who first have to invest in outgrower schemes will not have interest of staying in such a business environment as their investment is not protected”.

Hence, as TBZ, we needed to arrive at a win win situation for both the tobacco buyers and the tobacco seller (mostly local farmers) on outgrower Schemes or contracts. So given that the industry already has limited buyers of tobacco, we came up with this system that takes from the best practices in the region such as South Africa, Zimbabwe and Malawi who are big tobacco producers, He said.

Kasongo further told ZBT that the board was previously registering farmers manually which was difficult and tedious when it came to tracing farmers, but that the new system makes it much easier to trace farmers, their farm locations with information being available at the finger tips. In addition, the system is able to show the trading and sales flow and keeps a record on quality of tobacco grown by a specific farmer.

TBZ further disclosed that the bright leaf system is also meant protect sponsors or uptakes who invest in outgrower farmers then end up losing out when the tobacco is being vended out despite the farmer signing outgrower contracts and receiving inputs. This system also has global positioning system – GPS and is being loaded with details for both sponsored and self-sponsored farmers.

TBZ is now able to monitor who sponsors who, as well as have an updated electronic tobacco farmer register which is vital for tracking production and industry dynamics, He added. This system together with the updating of the regulation is expected to dramatically change the tobacco landscape in Zambia and move the country to produce competitive volumes and export earnings from this crop, Kasongo said.

Tobacco in Zambia is currently being produced in six regions and has 5 official sales floors across the country. Lusaka Province has two (2) sales floors or points, Eastern Province has two (2) while Western Province has one (1).

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Tobacco Board of Zambia – TBZ has

Companies

The National Water Supply and Sanitation Council – NWASCO has disclosed that only 452,000 households are connected to piped water, trailing the electricity utility ZESCO which surpassed 1 million household customers last year 2019.

NWASCO Public Relations and Communications Manager Patricia Litiya told the the Zambian Business Times – ZBT in an exclusive interview that a total number of 452,279 households are connected to piped water across the country as of end of 2019 and this is from 11 water and sanitation companies.

Water utility companies have been challenged to be more agile and provide water piped solutions to meet the need of over an estimated 5 million households in Zambia. The lack of innovation and aggressiveness in water utilities has led to the proliferation of borehole drilling companies which charges over K15,000 for one borehole.

It has been argued that if Zambian households can afford to hire these borehole drilling companies at such price points (over K15,000 per borehole), the same amounts could have been utilized by the water utilities to pay for infrastructure and equipment on a self financing model to provide piped water, as the case with electricity provision.

And on the applications made by the water and sanitation companies to hike water tariffs, Litiya stated that NWASCO is still reviewing the proposal and no decision has been reached yet.

The council has indicated that it is cautious of the current environment as a result of the COVID pandemic which demands a lot more water usage, hence the public will be informed once the decision on the proposed increase in tariffs is effected.

Water and Sanitation companies are mandated to propose for an increase in water tariffs annually and the council has indicated that it’s still reviewing this year’s applications considering the current situation of the Covid -19 outbreak.

She said it should be noted that consideration for tariff increases are primarily the operation and maintenance costs and that in some utility companies that are able to meet their operation and maintenance costs, investment costs are considered but to a limited extent.

Litiya added that there are various infrastructure projects being undertaken across the country by government with support from Financiers and cooperating partner, and that NWASCO is available as the regulator to support investments by water and sanitation companies who undertake their projects under the umbrella of the Ministry of Water Development, Sanitation and Environmental protection.

“NWASCO therefore remains committed to ensure that Water and Sanitation companies continue to offer safe and affordable water to consumers through the formulation of regulation. This is done through the development of guidelines in line with changing trends in service delivery of water supply and sanitation. NWASCO has since developed over fifteen guidelines all aimed at enhancing regulation,” She said.

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The National Water Supply and Sanitation Council

Markets

ActionAid Zambia has called on the Zambian government to consider cancelling or overhaul of unbalanced Double Tax Agreements – DTA or tax treaties with other countries saying Tax Treaties have recently not only been found to be unbalanced but also a source of tax evasion by most multinational companies, denying the host countries the much-needed revenue.

Zambia currently has DTA’s with Germany, Ireland, Norway, Sweden among other countries with no annual reviews or cost benefit analyses done and made public to check whether the country benefits or is on a net basis losing out. The DTA’s have been abused as a conduit for transfer pricing and “management fees” profit repatriation.

The Zambian Government recently cancelled its Double Tax Agreement with Mauritius and ActionAid has welcomed the saying it has for a long time been campaigning for cancellation and re-negotiation of problematic DTAs Zambia has with different countries and has been calling for revision and/or cancellation of regressive DTAs like the now cancelled Zambia and Mauritius DTA.

ActionAid Country Director Nalucha Ziba has told the Zambian Business Times – ZBT in an exclusive interview that the DTA between Zambia and Mauritius provided for 0 Percent Withholding Tax (WHT) on technical fees paid for technical services adding that with this provision, a Mauritius based Multinational Company, would take advantage of such provisions and not pay any WHT on technical services which is currently capped at 15 percent.

“For example, if this company engaged a sister company from Mauritius to provide technical services at a cost of USD100 million. This company when making this payment (USD100 million) to a sister company will not deduct any WHT. This implies that the entire USD100 million is untaxed. On the Contrarily, if the DTA provided for 15 Percent WHT on technical fees then USD 15 million would be deducted as Withholding Tax and remitted to Zambia Revenue Authority (ZRA),” She said.

Nalucha added that there is need for an impact assessment/cost benefit analysis to be done before signing is done and that the Zambian government should not follow the OECD model treaty but develop its own model.

She said government should also negotiate for favorable and/or fair DTA’s Withholding Tax rates (10%-15%) which will not only promote foreign direct investment but also ensure that government collects adequate tax revenue.

ActionAid has further suggested that all treaties should be re-negotiated transparently, and draft versions made available to the public prior to sign offs to ensure that the country benefits and remove opportunity for corrupt practices.

Nalucha has further disclosed that Zambia has signed DTAs with different countries such as Germany, Ireland, Norway, Sweden, Mauritius (now cancelled) to mention but a few and that a tax treaty will spell out how companies investing in a country that Zambia has signed a DTA with their country of origin should be taxed.

 

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ActionAid Zambia has called on the Zambian

Lifestyle

The development of the Northern Tourism Circuit has continued to receive lip service with more projects expected to strengthen the infrastructure and world class hotel service offering being either delayed or simply shelved.

For instance, the date of commencement of the construction of the Samfya hotel and resort expected to be financed by the workers compensation Fund Control Board – WCFCB is not yet set. This resort is expected to be a landmark and anchor development that would then support the development of side industries and smaller boutique hotels.

The Zambian Business Times – ZBT had received concerns that despite the hype and talk of developing the Northern Tourism Circuit, the construction of the Mosi-oa-tunya Livingstone resort based in the already more developed Southern Circuit has commenced while the Samfya beach resort is still on paper despite it having been on the cards for years.

When a check was done by ZBT, Workers’ Compensation Fund Control Board (WCFCB) Head of Communications and Customer Service Maybin Nkholomba confirmed in an exclusive interview that they are planning to build a hotel, shopping mall and international convention center but a market survey must first be done and concluded.

“At the moment, we have engaged a market consultant to do a market survey on what we are going to construct on the shores of Lake Bangweulu. We have tentatively planned to put up a hotel, a shopping mall and an International Convention Center”, he told ZBT.

In addition, he said that WCFCB is very impressed with the pace at which the project is moving and that the land was only given to them about two to three months ago.

“That project in fact is moving very fast, the land was given by the council 2/3 months ago, we first got interested to invest in Samfya after we attended the Luapula Expo. But we were looking for suitable parcel of land until we were given land some 2/3 months ago by Samfya township council and we have moved. We are receiving a lot of support from the provincial administration in Luapula and there is a committee in place that is expediting the development in Samfya”, he said.

Nkholomba further stated that the total cost for the whole project has not yet been ascertained because there is a consultant who is still doing a market survey. The estimation of the investment cost and development of the project will only be done after the market survey has been concluded.

“We cannot establish the cost now until the market survey has been done and the market survey will tell us exactly the kind of development to take there in terms of infrastructure, then we can be able to understand the actual cost. The market survey is done to understand the customer needs and what the region requires”, he said. He however stated that WCFCB is looking at delivering the project by next year.

Various stakeholders have indicated that the Northern Tourism Circuit development receives more lip service and nothing tangible is actually done on the ground. If you look at the expansion of the Mbala Airport, which was meant to house both military and civilian aircrafts, it has also been shelved, blocking the air transport option for high end tourist who are key customers for five star facilities.

In order to grow, diversify and jump start Zambia’s tourism offering, the development of the Northern Tourism Circuit has been on the cards for years. The current tourism master plan includes development of the Samfya waterfront and peninsula as well as the Kasaba bay and Tanganyika lake shore.

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The development of the Northern Tourism Circuit

Lifestyle

The confirmation that the treasury had released funds for clearing outstanding retirement, pension and retrenchment benefits for ex-Tazara, Zamtel and other government workers seems to have a different picture on the ground as some workers are now doubting if really these funds have been released.

An ex-Tazara worker John Chiufya, told the Zambian Business Times – ZBT that the ones handling the pension must provide updates and information as to why the payments of their packages is delaying so that they know what is happening.

I retired in 2013 from formal employment. Till date, I have not been given my money from my pension contributions from ZSIC. I just want to appeal to the government of the day to intervene in this matter because it seems like there is no one caring.

Furthermore, Chilufya said that the institutions that are handling the money should address the workers, keep them updated and let them know why its taking long to pay out the money when the treasury has confirmed disbursing the funds.

As you are aware, money has been released by government to pay off all retired employees. So, we should be addressed by NAPSA and ZSIC who are the custodians of the released funds. They should come and give us a statement, to show how much is due to us, so that if there is anything, we will know where to go. We need a well tabulated statement from the time one started work to when one retired.

Even though the K14 million has already been released, they do not know when they will be given their money.

Right now we are blank, we are in darkness. Apart from rumors, there is nothing I can tell you, there are just rumors as at now. And how we cope with life is that we depend on our creator, he gives us wisdom when he tells you to do something then you start doing it because if just fold your arms and do nothing, then you put your children to shame.

Chilufya says NAPSA and TAZARA have given the something but has not got anything form ZSIC and stresses that he has been contributing to ZSIC for a very long time.

When I retired, I was given something like leave days from the company and what we call golden handshakes and something from NAPSA, we were given. From TAZARA and from NAPSA, we were given something but from ZISC for pension, we never got anything.

He says he has been contributing to ZSIC pension from 1978 till 2013 and has not been given anything todate. “We were supposed to given something from ZSIC a long time ago, In my case I started contributing to ZSIC in September 1978 till 2013 June”, he said.

Even though they received something from NAPSA, he says there is still huge problem between them and NAPSA.

“We got from NAPSA but there is still a very big problem between us NAPSA especially those of us who retired in 2012 to 2014 we have a problem with NAPSA because what they promised us never happened. For example when we were given those small amounts from NAPSA, we were promised by the branch manager here in Mpika who said this money we are giving you is just a form of advance to cope with life as we are preparing your terminal benefits”.

He said that “when TAZARA remits the remaining amount, which its supposed to remit to NAPSA, then they will compute the monthly pension benefits. And when they start releasing the monthly pension, they will now start knocking out what they had given us or what they gave us last time. And when that was over, that’s when we were going to start enjoying the full monthly pension”, he said.

There is an urgent need for the government to clear the air on outstanding pension benefits for its former employees to restore a functional and self sustaining state pension fund. Responses from from ZSIC and Napsa were still being awaited by ZBT by press time.

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The confirmation that the treasury had released

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