Connect with:
Thursday / June 12.
logo
mobile-logo
HomeStandard Blog Whole Post (Page 175)
Agribusiness

Cassava cropping has taken a new turn in Zambia following the industrial use of the crop in the copper manufacturing process as well as the industrial use in ethanol manufacturing that has further added to the traditional demand as a food crop

Zambia National Farmers Union – ZNFU Vice President Joseph Mungandi told the Zambian Business Times – ZBT in an exclusive interview that one good example of where cassava has taken root as a commercial crop is Kaoma in western province.

Mungandi said Kaoma district now has about 1,800 hectors of cassava fields and each hectare is producing approximately 340 bags of cassava. Farmers in Kaoma are growing a lot of cassava and farmers in the district are very interested in the new usage of cassava.

“In the recent past Cassava farmers were sub-contracted with Premiercon Starch Company limited of Kalumbila to supply starch, the said company supplied the starch to the Mines for use in the purification of copper at Kalumbila and Lumwana Mines. They also supplied alcohol brewers and the largest quantity that was supplied of 42,000 metric tonnes was supplied to the said company,” Mungandi said.

He further told ZBT that the union has been running an out-grower’s scheme on cassava in Kaoma district. Four years ago, cassava cuttings distribution was made bringing on board about 350 beneficiaries and each farmer was given half an hectare which equates to 50 x 100 meters and the agreement was that after two years the beneficiaries would give back the cuttings and another 350 farmers would benefit from the scheme and since then there has been an increase in the number of cassava farmers to-date.

He concluded by saying the new expanded discovery of the uses of cassava in Zambia to make alcohol based hand sanitizer has been warmly welcomed by cassava farmers in Kaoma district as it will further increase the market value of the crop.

“It is a very good that the industrial use of cassava has been discovered in Zambia and because the Covid-19 pandemic, Cassava production now can save the country some foreign exchange as hand sanitizers which were previously imported can now be locally produced,” Mungandi added.

Cassava in Zambia is said to be the second most economically important harvest crop as a food crop after the staple national crop, Maize. The crop is widely grown in Luapula, Northern, North-Western and Western provinces although it is also grown in other parts of the country.

In the past cassava was produced in Zambia only by small-scale farmers but in recent years, cassava farming industry and cultivation of the crop has been growing in the sense that there is quite a good number of cassava farmers producing large quantities of the crop in the country.

1 Comment
0 likes

Cassava cropping has taken a new turn

Companies

Toyota Zambia, the official distributor and dealer for brand new Toyota vehicles has disclosed that the company will be introducing new financing schemes that include trade-in and leasing effective this month – June 2020.

Toyota Zambia Chief Operations Officer – COO Nenad Predrevac told the Zambian Business Times – ZBT in an exclusive interview that this scheme will promote new financing methods such as trade in and leasing for customers and that it will be done in conjunction with a bank to be unveiled soon.

“In order to make lives for our customers better and provide financing options, we are creating a financing scheme to promote trade in and leasing and currently we have engaged 3 banks out of which, one will be identified to collaborate with us,” He told ZBT.

When asked on the impact of coronavirus on the company, the COO disclosed that Toyota Zambia has lost over 40% of its expected sales since the outbreak Covid – 19 as a result of the inevitable health restriction and slow down in business.

He stated that car sales business has been slowing down since the second the quarter of 2019. Toyota Zambia has lost about 65% in sales volume from the second quarter on the market and this has seen a decrease in its overall sales numbers.

He disclosed that the current challenges facing the Zambian economy have led to a drop in performance for the automotive industry. The further stated that tight liquidity conditions on the market has made it hard for its customers to be able to pay on time.

The automotive industry has also been affected by the high interest rates currently prevailing, making car financing expensive for customers. “The cost of money is high for our customers”, stated Predrevac.

Pedrevac however said that despite the current hardships and decrease in sales, the group company has continued to manufacture vehicles and is hopeful that economic activities in the country will soon revamp to see other sectors resume to grow.

He further said the company is currently working on reducing its cost with the aim of keeping all its employees even after the global pandemic.

He said Toyota has on the other hand been adhering to Covid-19 health guidelines from health authorities for both its employees and customers and has since pledged to continue complimenting government’s efforts towards the fight against this corona virus.

1 Comment
0 likes

Toyota Zambia, the official distributor and dealer

Markets

The Capital Markets Tribunal which was formally inaugurated on 20th May, 2020 by Chief Justice of Zambia Justice Irene Mambilima will enhance efficiency in dispute resolutions and settlement that would enable further growth of the sector.

Before the establishment of the specialised tribunal, disputes within and between capital market players had to go through the normal litigation process which is costly and can be time consuming.

Capital markets are key in any economy as they provide an alternative platform for Small and Medium Enterprises (SMEs) and large enterprises to raise capital (funds) for medium and long term financing other than from loans and banks lending facilities.

Capital Markets Tribunal newly appointed Chairperson Chanda Nkoloma Tembo told the Zambian Business Times – ZBT in an exclusive interview that the Capital Market plays an important role in an economy as bridges the gap between would be savers/investors and would be borrowers for the provision of commercial financing for medium and long term investment.

She disclosed that financing is raised by issuing of shares, debentures, stocks, bonds, and other long-term investments aimed at achieving desirable outcomes such as growth, profitability, productivity, competitiveness, efficiency and/or innovation critical for driving both business and economic growth.

She added that while the Capital Market provides opportunities for mobilizing, sourcing and accessing commercial financing for businesses, the market can only function optimally if it is well organized and regulated, and that is were the tribunal will play its critical part.

“Recent experiences from the financial crisis of 2008 show the catastrophic effects of a Capital Market that malfunctions due to poor regulation and poor enforcement. The industry therefore, requires the establishment of effective and robust institutional and supervisory arrangements to assist, firstly, in shaping the functioning of the Capital Market to avoid malfunctions in industry caused by misconduct by market players”.

“Secondly, well organized and regulated capital markets to protects funds of investors whether local, foreign, individual, small, or large from risks in the market,” She said.

Tembo further disclosed that key market players in the Capital Market sector in Zambia include the Lusaka Securities Exchange (LuSE), issuers of stock such as companies listed on the LuSE, the International Finance Corporation (IFC), investors such as Pension funds, institutions and individuals, Capital Market operators such as brokers, investment advisors as well as transfer agents and representatives. All these parties and players will have an efficient dispute resolution mechanism through the tribunal.

The Capital Markets Tribunal in Zambia was established as a quasi-judicial body under the Securities Act, No. 41 of 2016 and formally inaugurated on Wednesday 20th May, 2020 following the swearing in of Tribunal Members by the Chief Justice of Zambia.

The Capital Markets Tribunal is established to be a dedicated, industry-specific and fast-track adjudicative body for resolving and settling disputes in the Capital Market. This provision is meant to deliver a more efficient capital market for Zambia which is key to growth and expansion of the sector.

1 Comment
0 likes

The Capital Markets Tribunal which was formally

Agribusiness

Tobacco, a cash crop which sees about 90% of all its production volumes exported has potential to further grow and deliver over half a billion dollars (over US$500 million) in foreign exchange earnings for Zambia per annum once the bottlenecks are cleared out.

The Tobacco Board of Zambia – TBZ Chief Executive Officer James Kasongo told the Zambian Business Times – ZBT in an exclusive interview that to ensure the industry reaches its potential, there is need to urgently amend the outdated legislation.

He told ZBT that once legislation is updated, the industry will be empowered to attract more buyers into Zambia, streamline finance for small and medium scale farmers with favorable interest rates as well as enable the use of multiple business models.

Zambia has in the past years recorded a decline in production of tobacco with this year’s output forecasted to reduce. Burley tobacco is forecasted to reduce by 58% to 3,861 metric tonnes, down from 12,839 tons, while Virginia tobacco has been forecast to decline by 7% to 11,955 metric tonnes, down from 12,8839 produced in the last season.

Kasongo told ZBT that the other factor leading to low production of tobacco include limited number of buyers on the market which is mostly attributed to the legislative challenges. “Zambia currently has only about 3 key tobacco buyers which include Japan Tobacco International- JTI, Tombwe Processing Limited and Alliance one. The country can attract many more players to provide better prices and alternatives to farmers.

He added that tobacco being a specialized crop, it has specialized buyers who look for a particular quality and quantity based on international standards and contracts, hence buyers determine the offtake and farmers can only grow up to the volumes projected and demanded. These off-take volumes for Zambia can be increased once the legislative challenges are attended to.

TBZ further stated that the lack of financing for local small and medium size farmers in the tobacco industry can largely be attributed to outdated legislation which does not provide investment protection for out-growers and major off-takers. This has severely contributed to low production despite the crop being a key export commodity and contributing to the country’s treasury.

“About 90% of tobacco grown in Zambia is exported basically to China and and other countries. Tobacco crop is about 14 times more profitable than cotton and about 7 times more profitable than maize per acre. So, it’s a crop that gives much more returns from the same piece of land.

And in terms of its contribution to the GDP, in 2013 it contributed about 3% but currently we are contributing about 1% and it’s an indication that the industry is not doing well,” He said. If you look at production volumes and foreign exchange generated from tobacco in Malawi and Zimbabwe, you can see that the potential is enormous for Zambia.

He lamented one of the most important factors which urgently needs to be addressed is the need to have a conducive legal framework which will fully meet the business aspirations of the industry as the current Tobacco Act Cap 237 was last reviewed in 1968 hence the business model on how people operate within the industry has completely changed.

The board has since advocated for the updating of the legal framework which if well formulated and implemented will attract more investors and buyers on the Zambia market, help establish a robust auction system, aid investment protection by eliminating vices such as tobacco vending as well as avail the key tobacco players source financing to fund extensive out-grower schemes.

Meanwhile, Agriculture Minister Micheal Katambo had on May 27, 2020 announced that in order to revamp the production of Tobacco as a key export commodity, Cabinet has already authorized his Ministry to begin the process of reviewing tobacco legislation in collaboration with all stakeholders and proceed with amendment and updating of the legislation.

Katambo stated that Government has noted the continued decline in tobacco production which is unfortunate as it translates in a loss in foreign exchange earnings, and the reasons cited for the poor performance in the tobacco industry is outdated legislation hence, he pledged that his ministry will proceed with amendment of the relevant legislation to stimulate the growth and re-energize the tobacco industry.

1 Comment
0 likes

Tobacco, a cash crop which sees about

Companies

First National Bank – FNB Zambia has confirmed that the Bank is participating in the K10 billion Medium-Term Refinancing Facility and is currently in the process of fulfilling terms and conditions required by the Central Bank to facilitate drawdown on the facility.

The Bank has disclosed that for new-to-bank or non-borrowing customer wishing to apply for a loan, FNB’s normal credit criteria will apply and is subject to assessment of but not limited to the three (3) years’ Audited Financial Statements, Projected Cash flow statements demonstrating ability to service debt and Primary banked with FNB.

Speaking exclusively to the Zambian Business Times – ZBT, FNB Head of Marketing and Communications Clotilda Mulenga said other credit criteria include acceptable collateral to cover requested facility and any other documentation the bank may require such as licenses and CVs of Directors based on the respective sector that the business is in.

She added that FNB has long prided itself as a digital bank hence customers can apply for help through the FNB App, reducing the need for unnecessary exposure in public places and that the amount that each customer qualifies for will be determined by their individual circumstances.

“As mentioned by BOZ, this assistance is a loan and the Financial Services Provider (in this case, FNB Zambia) carries the full risk of the facility and will be responsible to pay interest to BOZ from the date of drawdown, and capital when due. Therefore, we wish to note that normal credit principles will apply,” She said

“However, we remain committed working with the Central Bank to ensure that we responsibly help our customers where we can. We are committed to ensure financial stability and are committed to working with the Central Bank to ensure the right results are obtained,” She said

The Bank of Zambia – BOZ facility has been put in place to assist qualifying customers who have been negatively affected by COVID-19, with a focus on the Central Bank’s prescribed sectors as per the Seventh National Development Plan – 7NDP (i.e Agriculture, Manufacturing, Energy and Tourism).

The funds are therefore intended to protect businesses and individuals whose accounts were in good standing with commercial banks but are now facing temporal difficulties due to the COVID-19 pandemic. All customers from Small and medium enterprises to corporates that meet the criteria are eligible to apply.

0 Comments
0 likes

First National Bank – FNB Zambia has

Sport

Motor Sport Association of Zambia has reaffirmed that its 2020 calendar remains suspended due to the health threats caused by the corona virus. The Association has confirmed that it has lost out on sponsorships and donations valued at over K1 million due to suspension of its activities.

Speaking in an exclusive interview with Zambia business times – ZBT, Motor Sports Association of Zambia president Sam Chingambu stated that they have cancelled some tournaments and events because they don’t want the drivers and crew the scores of people who attend the rallies to risk getting infected with the Corona virus.

He said that the Motor Sports Association also has international affiliation obligations to mother body organizations such as Federation Internationale de l’Automobile – FIA and Federation internationale de motorcycleme – FIM for Motor cycles.

“Motor sport is a crowd puller. Many people attend these motor rallies and so social distancing becomes very difficult. Secondly, the rally drivers and navigators who are sitting in the front seat, there is no aspect of social distancing about it. And also the crew members who rush to service their vehicles. They bump into each other when going to the car”, he said.

Chingambu also disclosed that the association has lost out on funding because many sponsors can’t fund an event if there is no activity and the sponsors have also directly been affected by  the pandemic. The association runs events such as the motor rally’s, motor cross Championships, motor sport Spin & drifting, go-Kart’s and enduro’s.

“In terms of finance we have been hit. If we combined al the disciplines, we are looking at a budget of over K1.5 million per annum just  to smoothly run these events and also participate in international events”, he said.

He also stressed that another major factor that makes it difficult to continue their normal routine of events is that their activities are done on privately owned land and the owners of this land are understandably skeptical to allow people on their property because of the virus.

“In terms of rallies, we run on private land and farms. And there is no farmer or landowner who is going to allow you to go in their farm with COVID 19 in the air. He/she has got animals, workers and a family to protect from the virus. So definitely, they cannot permit you to go run these events on their farm”, he said.

Meanwhile, Chingambu says that this year is a bit challenging for them and that all tournaments remain suspended until when the situation changes. In line with acting in line with the new normal, wearing of masks still remains a challenge for the sport but the association would sit and advise we’re new measures and actions are agreed.

The association is also looking out for guideline from the National Sports Council of Zambia as well as its international federations to see how best these various motor sports disciplines can be resumed.

0 Comments
0 likes

Motor Sport Association of Zambia has reaffirmed

Opinion

By Trevor Simumba

Mining has been Zambia’s economic mainstay and the Copperbelt Energy Corporation – CEC, the engine that has unfailingly powered the wheels of mining. CEC accounts for between 45-50% of Zambia’s national energy consumption.

Beyond its role on the Copperbelt, CEC is an indispensable member of the Southern African Power Pool (SAPP). It co-owns and operates, with DRC’s national utility, Société Nationale d’Electricite (SNEL), the transmission lines interconnecting the Zambia and DRC electric grids, and which form an integral part of the SAPP central transmission corridor.

This is the only connection between DRC and Southern Africa, hence, it’s an indispensable enabler of an interconnected regional power market.

In 2006, Cinergy Global Power (USA) and the National Grid (United Kingdom) who, jointly, owned a controlling stake of 77% in the company sold off their interest to a group led by local entrepreneurs – Zambian Energy Corporation Limited (Zam-En).

More importantly in 2008, CEC was listed on the Lusaka Securities Exchange – LuSE, empowering thousands of Zambians, through direct and indirect ownership of CEC’s shares, including employees who were allocated 5% of the share offer.

Despite the company’s continued growth and effective strategies to explore business potential by establishing partnerships (such as the agreement with Dangote Cement) and diversifying into alternative forms of power (such as solar energy), the biggest challenges the business faces are policy related: Zambia fiscal policies, the standoff and potential liquidation of Konkola Copper Mines (KCM) which has also affected ZESCO, power shortages arising from low hydrology, and the non-renewal of the Bulk Supply Agreement (BSA) with ZESCO.

It is important to highlight that CEC has not been sitting on its laurels. The company have attempted to invest further in its own generation capacity but has been thwarted by the Government’s inability to provide the required policy framework, approvals and incentives to implement projects.

Public records show that the company has invested about $3m on the potential Luapula River hydropower sites in feasibility studies with plans of generating up to 750MW of hydropower. We have heard of investment activities of over $35m in Kabompo. They led the way with the Riverside Solar PV in Kitwe which was commissioned two years ago and became the first utility-scale solar plant in the country to be connected to the national grid. Aren’t we supposed to be proud of this as a country?

The irony of the whole saga is that the mining  sector, from a power supply perspective, is  important  for  ZESCO  and, therefore, one would have expected that the Government  and  ZESCO  would be keen to negotiate and agree for a  successor agreement to the BSA to progress and finalise in the next few months.

CEC remains an important source of foreign currency (as it pays in dollars for the power it buys from ZESCO) for the utility company and for ensuring continued mining activity on the Copperbelt. In fact, ZESCO relies on CEC for its bankability in terms of credit facilities. More importantly, Government through ZCCM-IH owns a large stake of 24.11 percent of CEC while the Zambian Energy Corporation, which they associate with certain individuals, only owns 13.25 percent.

They are clearly strangling CEC but receiving a dividend, courting new players into the industry but not supporting the existing ones. So, one wonders why the Government would “cut off their nose to spite the face” as they have a vested interest in both ZESCO and CEC. One would have thought the Government would be at the forefront of ensuring an amicable solution but instead they have been fomenting rebellion.

They want to encourage private sector investment and participation in energy, yet thwart projects that would actualize that that desire and are now acting in a manner intended to strangle an existing investor.

Today, because of the key factors laid out above and the challenges CEC faces as a result of inconsistent public regulations and policies, Zambia may lose another iconic Zambian company that is fully managed by Zambians and which impacts thousands of Zambian lives. The KCM saga has created a potent mix of confusion amidst a genuine need to review the ZESCO/CEC relationship.

The question is, if KCM is producing and selling copper, why are they failing to settle their dues to CEC? Where is the money going? Surely, is it not in the interest of Zambia and ZESCO that KCM pays for its power which would also be a huge boost to ZESCO particularly at this time of economic recession?

We need a much more comprehensive response from the Government, and it is hoped that when Parliament is in session Members of Parliament can make queries in relation to this. Zambia cannot afford anymore politics in the mining and power sectors. We need sanity to prevail.

About the Author:
Trevor Simumba is an International Trade Economist

0 Comments
0 likes

By Trevor Simumba Mining has been Zambia’s economic

Tech

The license to operate a mobile network in Zambia by Unitel’s UZI has expired. UZI, a mobile phone operator, who were set to be the fourth mobile network operator in Zambia, has failed to start its operations due to what has been described as failure to raise insufficient funds.

UZI kept on pushing forward the date to launch its network and the last timeline given to them to launch was end of May 2020. Zicta’s deadline to UZI to launch and begin operations was end of May 2020 as confirmed by the ICT regulator.

When ZICTA was contacted, Manager for corporate communications Ngabo Nankonde acknowledged that the extension given expired on end of May and promised to issue a comprehensive statement this week.

According to records seen by the Zambian Business Times – ZBT, UZI issued a statement agreeing to launch operations in february 2019 an reasons for the delay was because they wanted to insure that the equipment was thoroughly installed.

The Permanently Secretary – PS in the ministry of Transport and Communications, Misheck Lungu had earlier in the year through an exclusive interview with ZBT on January 22, 2020, explained that the delay in the launch of the mobile network was attributed to the lack of resources from its parent company Unitel, as it had requested ZICTA to consider extending its license for 6 months due to challenges in externalizing funds.

Lungu then disclosed that the ZICTA had granted UZI an extension of up to end of may 2020, which is the final expiry date of its initial license period hence hoping that the company begins to operate before the stipulated date.

“UZI faced some challenges with finances from its parent company hence they asked us if we can extend their license to the closure date, so they can find a way of sourcing the required funds. Aside that, they have started talks with companies they would sign contracts with and are planning to rent out towers for them to start their business,” he had added.

UZI’s parent company, Unitel in which one of africa’s richest women, Isabel Dos Santos, the daughter of Angola’s former president owned 25% pledged to invest more than US$350 million into Zambia.

The failure of UZI to launch operations has delayed the Zambian Telecoms market from getting a forth mobile network operator that was expected to enhance competition as well as provide a forth option for consumers. The telecom sector in Zambia only has three players that include publicly listed Airtel, privately held MTN and state owned Zamtel.

0 Comments
0 likes

The license to operate a mobile network

Markets

Prominent economist Professor Oliver Saasa has commended government’s move of awarding the contract to Lazard as the best evaluated bidder to advise Zambia on its debt restructuring.

Prof. Saasa has stated that though the decision has attracted significant interest among economic and political players, Zambia however urgently needs re-profiling of its national debt which is almost due and its restructuring should not be a questionable matter.

Ministry of Finance had last week announced it had selected Lazard, a financial advisory and asset management firm as advisor to provide consulting services to the Zambian government for liability management and restructuring of its debt portfolio over a period of three years.

Prof. Saasa has told the Zambian Business Times – ZBT in an exclusive interview that government’s decision was based on the competency of the firm, therefore nationality of which company needed to be selected to restructure debt should not be an issue as a tender was issued we’re all those who have the skills and expertise would have lodged their papers.

He further stated that it is important to recognize that debt restructuring particularly sovereign debt needs certain proved skills and expertise, hence, he is hopeful that Lazard will bring on board what the country is looking for.

“There should also be the will [from top officials at the ministry of finance] to take in advise while this process in ongoing, whether its from an international or local firm. Lazard can come in and make proposals to government on how best the restructuring can be done or negotiated but the political will to take in advise has to be there,” he said.

Prof. Saasa added that there is need to also understand that debt restructuring is different from minimizing a default as this is the reason why Lazard has come in to help stop the possibilities of Zambia’s debt defaulting which if left unattended too becomes more dangerous for the economy.

“At the same time, I don’t see why someone should pay so much money [US$5 million] to bring in a foreign company because the country and the Southern African region has enough competence that can help government put in place systems that can manage debt restructuring. However, this decision must have been analyzed and was seen worth it, and this cannot be questioned,” He said.

There has been some concerns by some sections of the society in Zambia on why a foreign firm was selected and that the contract which has been pegged at US$5 million has been considered as high.

But analysts have countered this by stating that a request for proposals was initially sent out and that only a combined bid from Barclays and ABSA who have a presence in Zambia was the only response that was listed among the firms which had successfully tendered for the job.

0 Comments
0 likes

Prominent economist Professor Oliver Saasa has commended

Mining, Tech

Zambia’s power utility company ZESCO Limited has confirmed that they have resumed direct transmission of power supply to Konkola Copper Mine – KCM on negotiated commercial terms.

ZESCO Senior Manager-Corporate Affairs Dr. John Kunda has told the Zambian Business Times – ZBT in an exclusive interview on June 02, 2020 that the firm has started the supply of power to KCM mines effective yesterday 1st June, 2020.

By implication, this confirmation from Zesco means that the Copperbelt Energy Corporation – CEC statement released yesterday that they have commenced power restriction process to KCM may turn out to be an academic exercise.

CEC had on 1st June 2020, through their corporate communications Manager Chama Nsabika stated that they had commenced what they termed as “ CEC commences KCM power restriction process” due to there being no contractual basis to provide service as well as to recover outstanding debt.

To safeguard the continued power supply to the mines located on the Copperbelt, a Statutory Instrument (SI) was issued by the Minister of Energy on 29th May, 2020, where ZESCO was given the ‘right of passage’ to supply power to KCM directly and that transmission and distribution lines (part of which belongs to CEC) was declared as a common carrier and that CEC would be rewarded for usage via wheeling charges.

Dr. Chanda has since confirmed with ZBT that transmission of power to KCM has begun on 1st June 2020 premised on existing charges as both Zesco and KCM work on concluding negotiations and final sign off on new terms and conditions.

“The wheeling charges will need to be agreed on as as per SI through the Energy Regulation Board – ERB, but in the meantime we will be using the CEC infrastructure to transmit power to our client KCM, so it will be on applicable terms and conditions not for free,” He said.

He added that the timeframe as to when negotiations and new contract will be concluded is not yet known but that given any outcome, terms and conditions will still be applicable from the agreed effective date of 1st June, 2020 as that’s what has been agreed on.

He said the firm will keep its stakeholders informed once negotiations on terms and conditions are concluded and that it will continue to supply power to all Copperbelt based customers and to KCM which happens to be a new client.

0 Comments
0 likes

Zambia’s power utility company ZESCO Limited has