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Agribusiness

Agriculture Minister Micheal Katambo has announced this year’s maize production is forecast to increase to 3,387,469 from 2,004,389 metric tonnes produced last season presenting an increase of 69 percent.

The minister has also disclosed that the country has a maize carry-over stock amounting to 179,247 metric tonnes as at May 1, 2020 therefore the total supply of maize available for the 2020/2021 marketing season is 3,566,716 metric tonnes.

Speaking at media briefing in Lusaka on March 27, 2020 attended by the Zambian Business Times- ZBT, Katambo said the increase in maize production is largely attributed to favorable weather, the early delivery of inputs under the Farmer Input Support Programme and the renewable confidence in growing maize.

He added that the ministry has this year factored in a purchase target of 1,000,000 metric tonnes for the Food Reserve Agency’s buying target with a surplus of more than 710,000 metric tonnes from the usual purchase of 500,000 metric tonnes.

He said despite factoring in the higher FRA maize purchase target, the country has still managed to record a maize surplus of over 210,000 metric tonnes in 2020 implying that the country is food secure and will remain as such for the next year to come provided smuggling is controlled.

“With a projected population of over 17 million people, the total maize required is 3,356,617 metric tonnes and these are broken down as 1,603,383 metric tonnes for human consumption, 1,000,000 metric tonnes for strategic food reserves and 409,018 metric tonnes for industrial requirements. Taking into account all the requirements and post harvest losses, the country is expected to have a surplus of 210,099 metric tonnes, “ He said

Katambo also mentioned that small and medium scale farmers are expected to contribute up to 93 percent or 3,160,185 metric tonnes of the total maize production while the large scale farmers are expected to produce 227,284 metric tonnes of maize or 7 percent of the total maize production.

He said the ministry is currently facilitating the export of 83,000MT of early maize which is both expensive and is not required on the local market, however, the early maize and humanitarian related exports will have no bearing on national food security.

The ministry has since pledged to focus on enhancement of productivity particularly for small scale farmers adding that the ministry’s major thrust is to ensure production increases to a minimum of 4 tonnes per hectare through the promotion of good agriculture practices.

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Agriculture Minister Micheal Katambo has announced this

Mining

The Zambian Government has confirmed that Gold producing companies such as Kansanshi Mines Plc and Lumwana Mines are not currently compelled to sell their gold to Bank of Zambia – BOZ.

Mine permanent secretary Barnaby Mulenga stated that the though the current policy tasks ZCCM-IH Plc to be involved in the opening of new gold mines at small and large scale levels, this has not been fully realized.

He confirmed that the new policy was approved by the Government in October 2019. After the Policy, the legislative changes are required to implement the policy in full because before that, there is no legal basis to compel a mine licence holder to sell the Gold to ZCCM-IH Plc.

In line with the Policy, Cabinet on Wednesday 20th May 2020 approved a proposal from the Minister of Mines and Minerals Development, Richard Musukwa, for the Mines and Minerals Development Act to be amended.

The reason for that decision of Cabinet is because there is an acknowledgment that a Policy on Gold alone will not work without the laws and regulations being aligned with the Policy, the amendment to the Act will enable full and legally backed policy implementation and also look at other gaps in the laws including improving monitoring and evaluation, licencing and other lucunas identified by stakeholders.

Public concerns have been building following now confirmed position that the country has sizeable gold deposits. No official report has been shared on the estimated total reserves held but calls for proper handling of gold deposits to pay off national debt and use the excess proceeds to fill the large infrastructure gap are growing louder.

It is also known that to pass laws in Zambia, the process is so gradual as there has to be various sittings, committee stages to follow and other bureaucratic procedures which may render this whole exercise to futility and leave the gold open to exploitation at the expense of the collective interests of the country.

Below is the full statement from the ministry of mines:

STATEMENT BY THE MINISTRY OF MINES AND MINERALS DEVELOPMENT OVER GOLD EXPLOITATION IN ZAMBIA AND THE ZCCM-IH PLC PARTNERSHIPS.

The following is the explanation on the various aspects raised as concerns by the public and the Ministry position on the matters.

1. Government Policy on Gold and the steps taken

Zambia is endowed with gold resources and the government remains committed to ensuring that gold deposits benefits the people of Zambia. Government has declared gold as a Strategic Mineral meant to allow all citizens benefit from its exploitation.

This means that gold must be differently handled compared to other Minerals in the country. In that vein, ZCCM-IH Plc has been mandated to coordinate efforts to purchase the gold from Artisanal miners and to also coordinate the gold trading business in Zambia.

ZCCM-IH Plc has also been tasked to partner with players in the sector (Small and Large Scale mining licence holders) to promote more gold mining. So far ZCCM-IH Plc has been establishing gold trading centres, which would afford the Artisanal Gold Miners an opportunity to sale their gold and the Ministry is involved in the fomalisation of the small scale and artisanal sector, to empower Citizens.

The Government Policy and the law i.e. the Mines and Minerals Development Act No. 11 of 2015, is that licences can be given to both Zambians and non-Zambians except for Artisanal Licences that are reserved exclusively for Zambian Citizens.

This policy has consistently been followed from the time that the Mine Privatization Policy was adopted in 1991. This means some licences are owned by foreigners, others jointly owned by Zambians and Foreigners while others are owned by Zambians only.

Almost 92% of all licences in Zambia are owned by Zambians. The government policy in mining is to encourage both Local and Foreign Direct Investment (FDI) in the sector. Mining requires huge capital investment which prompts licence holders to borrow from Banks and other investors. Licence holders are free to use any lawful sources of capital available to them to achieve the licence conditions.

Government has not said that Gold will exclusively be mined, processed and handled by Zambians only or ZCCM-IH Plc only; instead the Policy is to ensure that all gold from Artisanal miners is bought through ZCCM-IH Plc to Bank of Zambia to build our strategic gold reserves as a nation.

The Policy also tasks ZCCM-IH Plc to be involved in the opening of new gold mines at small and large scale levels, hence the involvement in Kasenseli in Mwinilunga. The policy does not entail grabbing or expropriating existing gold licences from the holders in favour of ZCCM-IH Plc but rather encourage more gold mines to be established in the country whose gold production would end up with Bank of Zambia.

License holders are free to partner with ZCCM-IH Plc to exploit the gold resources. This Policy has not been fully realized because the law is yet to be amended to actualize the policy aspirations. This is why Gold producing companies such as Kansanshi Mines Plc are not currently compelled to sell the gold to Bank of Zambia.

This Policy was approved by the Government in October 2019. After the Policy, the legislative changes are required to implement the policy in full because before that, there is no legal basis to compel a mine licence holder to sell the Gold to ZCCM-IH Plc.

In line with the Policy, Cabinet on Wednesday 20th May 2020 approved a proposal from the Minister of Mines and Minerals Development, Hon. Richard Musukwa, MP for the Mines and Minerals Development Act to be amended.

The reason for that decision of Cabinet is because there is an acknowledgment that a Policy on Gold alone will not work without the laws and regulations being aligned with the Policy. The amendment to the Act will also look at other gaps in the laws including improving monitoring and evaluation, licencing and other lucunas identified by stakeholders.

As a Ministry, we welcome views from Zambians and Stakeholders on how the law can be enhanced to ensure we maximize our benefits as a people from the extractive sector.

As earlier alluded to, Government declared gold as a strategic mineral and that declaration will entail a specific law be prepared that will guide the ‘dos’ and the ‘donts’ tied to gold. The approval by Cabinet to amend the existing Mining law paves way for the completion of measures on this important topic so that the issues are further clarified through regulations.

The debate on gold is welcomed because it justifies why Government is moving the direction of amending the Mining laws to allow the policy on the declaration of gold as a strategic Mineral to be realised.

2. Status of Gold Exploration and Mining Licences in Zambia

There are a lot of gold occurrences in Zambia involving almost all Provinces. The gold occurrences and resources are more pronounced in Eastern Province, North-Western, Central and Lusaka Provinces.

Zambia is not fully mapped, meaning there are still areas of Zambia where we do not know what minerals are present at those locations. Gold exploration is even more difficult because in some areas the exploration may not yield promising results of sufficient gold mineralization to justify commercial exploitation.

What however sometimes happens is that people later discover substantial quantities of gold e.g. In Mwinilunga, Kasenseli area. Zambia currently has 3,666 Licences as at the end of the first quarter of 2020 broken down as follows:

Type of Licences and Number of Licences:

1. Artisanal Mining Rights 418
2. Small Scale Exploration Licence (SEL) 1,306
3. Large Scale Exploration Licence (LEL) 1,252
4. Small Scale Mining Licence (SML) 541
5. Large Scale Mining Licence (LML) 109
6. Mining Processing Licences (MPL) 40
TOTAL 3,666

3. Ministry’s position on the partnership of ZCCM-IH PLC with Karma Limited

ZCCM-IH Plc has partnered with Karma Limited, a company owned by Sudanese Nationals. Karma Limited set up a gold processing plant in Rufunsa at a cost of about USD$3.5Million. Later the company partnered with ZCCM-IH Plc.

That partnership has been actualised through a special purpose vehicle called the Consolidated Gold Company Zambia Limited (CGCZ). CGCZ has been granted a Mining Processing Licence in Rufunsa District where the company has approached two (2) Licence holders namely Chembe Gold Mine Limited and Sabi Gold Mine Limited.

The partnership is to use the mineral ore material from these mining companies to process gold. That partnership entails that 65% of the gold will be for CGCZ and 35% for the Licence holders.

Currently CGCZ has applied for another Mineral Processing Licence for Mumbwa where the company has approached a licence holder called Array Limited to utilize their mineral ore material. In other words, both CGCZ or Karma Limited are not undertaking any mining of the gold ore material but partnering with existing licence holders.

All the gold recovered through this partnership shall all be sold to Bank of Zambia – BOZ, as per government policy. Even though the Law on the declaration of Gold as a Strategic Mineral has not yet been concluded, the guarantee of securing the gold from this partnership comes from the contractual obligations of the parties and the directive to ZCCM-IH Plc by Government.

The partnership in Mumbwa involves Array Limited supplying gold ore for processing to CGCZ in Mumbwa and Karma will invest USD$2.5 Million for the establishment of the processing Plant. This is a commercial transaction in which a private licence holder (Array Limited) elected to partner with CGCZ for the mineral ore material to be processed by CGCZ.

The concept of partnering in business, is done for different reasons including the fact that one would like to mitigate the risks of not having the technology to process. As can be seen from the explanation above, this ZCCM-IH Partnership with Karma is for the purpose of establishing Gold Processing facilities in two sites namely Rufunsa and Mumbwa.

The processing facilities have partnered with 3 existing licence holders out of a total of 3,666 Licences in Zambia. The Government encourages several companies to invest in the mining sector and some have specialised only in processing materials such as Karma Limited, the subject of the current debate.

There are 39 other companies that have mineral processing licences over Tailings Dumps and other mine tenements. The Ministry has no objections to partnerships that ensure we increase the gold production because ultimately ALL THE GOLD FROM THE PARTNERSHIPS MUST END UP WITH THE BANK OF ZAMBIA.

Government and ZCCM-IH Plc have been learning from other countries that have high gold production in Africa. For example Ghana is the largest producer of gold in Africa, followed by South Africa and Sudan is third.

In 2018 for example, Ghana produced about 150,000 Kilogrammes of gold, South Africa produced 117,000 Kilogrammes while Sudan Produced 93,000 Kilogrammes. In the same year Zambia, produced about 4,000 Kilogrammes of Gold.

Zambia has a long history of being a copper producing country and can teach a lot of countries lessons on the skill of producing copper. Zambia also needs to learn valuable lessons from other African countries that have perfected gold production and recorded higher gold production figures, therefore lessons can be learnt from Sudan, through the Karma partnership.

4. Way forward over Gold in Zambia

Gold presents many opportunities for Zambians. It is our firm belief that the discovery of the many gold occurrences and resources in Zambia is a game changer for the country. Government through Cabinet has given directives over matters involving gold and as soon as the law declaring gold as a strategic mineral is finalized, several benefits will alight.

This gold will benefit the country greatly and offers the following opportunities for Zambia:
a. The Majority of the Zambians who own the licences (Almost 92%) can rise to the challenge and begin to mine or process whichever the case might be. This includes the option of approaching ZCCM-IH Plc to partner;
b. More Jobs and social economic development is expected in mining towns where the gold will be commercially exploited;
c. Zambian citizens granted Artisanal licences can continue to partner with ZCCM-IH Plc who will buy the gold nuggets recovered through their gold panning activities and the Ministry will continue to formalize the sector;
d. The trading of gold presents more opportunities for various Citizens to further benefit that will be further clarified as soon as the law declaring gold as a strategic Mineral is finalized.

In other words, we have learned from Ghana and Tanzania, where the trading of gold has created many jobs for the private sector such as gold dealers, gold brokers and separate users or miners that will all be registered by the Government as a regulator of the gold sector.

The partnerships of ZCCM-IH Plc are steps meant to realize the goal of recovering as much gold as possible. The 3 licence holders in Rufunsa and Mumbwa respectively, who have chosen to partner with CGCZ to supply mineral ore, out of a total number of 3,666 licence holders in Zambia, cannot reasonably be condemned as frustrating Zambia’s ability to benefit from Gold.

On the contrary such partnerships compliment efforts to account for all the gold in Zambia. The steps are not in any way an attempt to disadvantage Zambian Citizens but rather a positive move to learn from those who have experience in gold mining so that ultimately Gold is sold to the Bank of Zambia for use as strategic reserves for the Country.

Zambia shall remain a country committed to the promotion of both local and foreign investment in the mining sector.

Barnaby Bwalya Mulenga
Permanent Secretary
Ministry of Mines and Mines Development

24th May 2020

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The Zambian Government has confirmed that Gold

Tech

The National Technology Business Centre – NTBC has issued a grant of K100,000 for the production of low cost ventilators to help in the COVID 19 fight. The grant would also enable UNZA develop its ventilator prototypes and proceed from design stage into tangible actual ventilators as final products.

The grant presentation event held at Unza Confucius Institute attended by the Zambian Business Times – ZBT on 26 March, 2020 was made from the Technology Business Development Fund – TBDF. The total amount of funds held in the TBDF was not however availed but institutions are free to apply to access the fund.

In the UK, a similar innovation was announced by Cranfield University on 6 April 2020. The UK university stated that its experts had rapidly developed a simple, low-cost Bag Valve Mask (BVM) ventilator to help critically-ill COVID-19 patients.

The BVM ventilators though developed in the UK was later physically built from Georgia Tech (USA) in a matter of days. According to Cranfield University, the developed makeshift ventilator can serve two patients simultaneously and due to its flat-pack design, can be quickly manufactured at scale, costing less than US$100 (K1,800) per unit.

Speaking during the signing event of the grant, NBTC Director Dr. Kasase Chitundu stated that NTBC is honored to manage the TBDF on behalf of government and the Ministry of Higher Education in particular, as the award will go a long way in fighting COVID 19.

“We are aware that that the world is currently facing a  global novel corona virus pandemic which has not spared the country, the main challenges it has come with include management and treatment. Countries have turned to home grown solutions to stop the spread of COVID 19 and also managing the people infected by the virus”.

“When NTBC received an application from UNZA to support the development of three prototypes of medical ventilators, we did not hesitate to approve the award of the TBDF grant of K100,000”, he said.

He also congratulated the UNZA management and the team of technical experts at UNZA for coming up with home grown innovative design of medical ventilators.

And Minister of Higher Education Dr. Brian Mushimba said that his Ministry of higher is responsible for promoting science and innovation in Zambia and to make this possible, the ministry implements this by using institutions such as NTBC through TBDF.

“NTBC is mandated to transfer appropriate technologies which address various challenges through its statutory mandate. It is contributing towards the development of medical ventilators by UNZA in an effort to compliment government’s efforts through Ministry of Health to treat and manage COVID 19 patients”, he said.

Mushimba also stressed that the proposed design is technically feasible and top notch. He believes that UNZA and people behind this concept have the necessary skills, facilities and expertise to developed and produce the ventilators locally.

“In view of this. the Ministry is hopeful that the grant of K100,000 will go a long way in facilitating the production of ventilators, improvement on the medical ventilators, explore more efficient and cleaner methods of producing the technology and, ensuring preparedness of the sector in combating COVID 19″, he said.

The ventilators will be unique. They will have a solar battery system and also use normal source of power (from ZESCO), making it efficient and not be affected by load shedding.

Zambian Universities have been accused of heavily concentrating on teaching at the expense of research and development. This initiative marks a step for UNZA to challenge that negative narrative and contribute to delivering solutions for challenges facing the country.

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The National Technology Business Centre - NTBC

Mining

Gemfields Kagem Emerald Mine has suspended the hosting of its next auctions which were originally scheduled for May and June 2020 due to prevailing levels of uncertainty arising from the COVID-19 pandemic.

The mine has also extended the suspension of operations for a period of one month to safeguard employees welfare during the COVID- 19 pandemic. Over 1,000 people are employed at Kagem which is currently operated by Gemfields in partnership with the Zambian government which owns 25% of the business through ZCCM IH.

According to information made available to the Zambian Business Times – ZBT by Kagem Mining Public Relations Consultant Gillian Langmead, Kagem and Gemfields Chief Executive Officer Sean Gilbertston said it is also conceivable that the subsequent emerald and ruby auctions originally scheduled for November and December 2020 may be cancelled altogether.

He added that the widespread travel restrictions arising from COVID – 19 mean that the company cannot presently host auctions and that once the travel restrictions are lifted additional time will be required before life and business returns to a relative normal.

He has disclosed that in 2019, 93% of Gemfields revenue was derived from six gemstone auctions at which clients were able to carefully inspect the gems before bidding, however due to this year’s uncertainties the company will not host auctions.

Gilberston further said the turmoil stemming from COVID – 19 represents one of the most serious challenges faced by many companies globally and Kagem is not an exception hence a significant detrimental impact on its operations, revenues and business is inevitable during 2020 and possibly beyond.

He has since warned that in a notice to the London Stock Exchange, there is a risk that travel restrictions may be extended or re-introduced should a second wave of virus infections take hold in key countries.

“We would also like to mention that the suspension of operations is crucial given the nature of the work at Kagem which involves close contact during physical searches, biometric fingerprint security procedures and weekly shift changes of production staff,” He added.

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Gemfields Kagem Emerald Mine has suspended the

Lifestyle

The country’s biggest tourism site, the mighty Mosi-oa-tunya Victoria Falls which is among the seven natural wonders of the world has already started attracting visitors a week after being opened by republican president Edgar Lungu.

The Victoria falls has already attracted 1,719 (about 2,000) local tourists as of 21 May, 2020. This is barely a week after the re-opening of the site.

Victoria falls site manager, John Zulu during an exclusive interview with the Zambian Business Times – ZBT, elaborated that most of the local tourists visiting the site are coming in from within Livingstone, Lusaka , Kitwe, Ndola and other parts of the country.

Zulu also stated that among the estimated number of tourists visiting the site are three  Non-Zambian nationals said to have come into the country from South Africa before the closure of airports.

Zulu added that the site management team have put in place preventive measures as well as a special surveillance team, ensuring that tourists are being screened for Corona virus even before purchasing of ticket for entry to the site. Some of the measures are that all tourists allowed access are masked up and are sanitizing of hands.

“Quite a number of monitoring points have been put up to ensure that tourists keep sanitizing and washing of hands and also to ensure that physical distancing is maintained, only 200 tourists are allowed to be at the site every two hours.”

The site manager further stated that operation hours of the Falls have since been reduced by three hours. Before the closure due to covid 19, the standard operating hours were from 06 AM to 6PM, but since the reopening operation hours are now from 08 AM to 5PM.                                                                                                      

The income from the Victoria Falls has undoubtedly been affected seeing that airports have been closed and no international tourists are coming into the country at the moment. The charge for Zambian citizens at the Falls is only K12 for adults and K6 for children. For Non-Zambian citizens, the charge is $20 for adults and $10 for children.

The site manager called on local tourists to take time where possible to visit the local spectacle. It is in fact quite strange that some Zambian citizens manage to visit foreign based sites but have never taken time to visit one of the Seven wonders of the world which is located within the country, but tourists from across the world have been seen flying into the country from as far as Europe, Asia and America’s just to see the beauty of the MOSI-O-TUNYA.

The Victoria falls is one of the world’s greatest sheet of falling water and is significant worldwide for its exceptional and geomorphological features and outstanding beauty attribute to it. The site since it’s discovery has been the biggest tourism site in Zambia and remain a to be huge income and numbers driver in Zambias tourism sector.

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The country’s biggest tourism site, the mighty

Agribusiness

Trade and Industry Minister Christopher Yaluma has called on the manufacturing industry to ensure products being produced locally meet standards and regulations whilst satisfying customer quality expectations.

The minister says in order to complement the President’s directive of ensuring chain stores across the country prioritise and promote local agriculture products within their localities, the need to apply accurate measurements is essential in making sure there is uniformity of measurements in industry production, packaging and selling of products.

He said the use of accurate measurements promotes research and innovation in infrastructural technological advancements, enhancement of fair completion and trade, improved consumer protection in areas of trade, health, law enforcement and environmental protection

“You’re aware that most products are sold by weight, volume or length. Therefore, for a seller and a buyer to agree on quality during a commercial transaction, measurements play a pivotal role,” He added

Speaking when he launched the 2020 World Metrology Day Commemorated under the theme “Measurements in Global Trade” which falls on May 20,2020, Yaluma has also encouraged the formation of cooperatives by local citizens to ensure that quality and safety requirements of local products are met.

He added the ministry with other stakeholders have continued to provide the necessary technical support to micro, small and medium enterprises – MSME’s to focus on the significance of adhering to packaging and labeling requirements in line with the best international standards.

In a statement made available to the Zambian Business Times – ZBT, Yaluma further said compliance to correct packaging and labelling requirements shall in turn speak directly to the Presidents call for the promotion of local agricultural products in the Zambian chain stores.

Meanwhile, the COVID – 19 pandemic has disrupted the global economy and world trade to levels not experienced in a long while, this is due to reduction in the production and provision of goods and services as a result of various actions that have been instituted following advice from medical experts among the measures are border restrictions by various countries which have led to decreased trading across the globe.

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Trade and Industry Minister Christopher Yaluma has

Markets

The Bank of Zambia – BoZ has disclosed that it has not imposed restrictions on who commercial banks and financial institutions can lend the K10 billion medium-term facility to and has clarified the position following reports indicating that the facility is only intended for customers with existing loans with their respective banks.

In the wake of the COVID- 19 pandemic, BoZ introduced a K10 billion Medium-Term Refinancing Facility to enable Financial Service Providers (FSPs) support businesses and households that are being negatively impacted by COVID-19 through credit facilities with an interest and repayment moratorium.

Concerns as to who is eligible to apply for the facility and access the funds have arisen with some individuals and local businesses being turned away and confirming that they are unable to access the funds as most commercial banks have restricted the facility to existing lending customers only.

But BoZ governor Dr. Denny Kalyalya told the Zambian Business Times – ZBT on May 20,2020 that the K10 billion facility is not only for existing bank credit customers but both existing and new customers saying commercial banks where not restricted as to whom they can lend to.

He said the bank only indicated that the facility is intended to be disbursed to individuals and businesses through their respective FSPs, however priority is to support sectors and businesses that will propel economic recovery and stimulate private sector led growth.

“This facility is available for all and we did not put constraints on commercial banks regarding who they can lend the funds to, we only said the facility will prioritise sectors identified in the 7th National Development Plans – 7NDP such as the agriculture, manufacturing, energy and tourism which will receive 60% of the funds while the rest of the sectors shall access the remaining 40%.,” He added.

At the same event BoZ Deputy Governor Operations Dr. Francis Chipimo said FSPs will access this facility from BOZ at an interest rate of 12.5%. He said that this interest rate is part of the normal banking system services that happen between the central bank and commercial banks in the lending market.

He added that individuals and businesses can also use government securities as collateral to borrow from the Banks, however each bank will have to vet this collateral and that it should pass the internal test set for one to be able to get a loan.

He added that this facility was created to strengthen and enhance financial sector resilience particularly in the wake of the outbreak of the Coronavirus and its potentially devastating impact on the domestic economy.

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The Bank of Zambia – BoZ has

Tech

Zambia’s power utility giant ZESCO Limited have signed an Engineering Procurement and Construction EPC deal that comes with financing from PowerChina worth US$548 million to develop 600MW (AC) grid connected Solar Photovoltaic – PV Power Plants.

The construction is expected to begin this year while the duration period to commence full production is projected to take from 12 to 18 months.

The three plants would be located in three provinces that include Central province -Chibombo, Lusaka Province – Chirundu and Southern Province – Siavonga Districts. The three-grid connected Solar PV projects will have a capacity of 200MW each.

ZESCO Managing Director Victor Mundende says the signing of the three contracts is historic for ZESCO and Zambia as a whole, as it is a significant step towards diversifying renewable energy development in power generation.

In a statement made available to the Zambian Business Times – ZBT on May 20, 2020, Mundende said that the project, will among several benefits, greatly profit the over one million current and potential customers by increasing access to reliable electricity, enhance industrial development and create employment opportunities to local people.

He urged Power China to ensure that the plant technology takes advantage of the tremendous technologies that are continually improving on the market.He further urged Power China to expedite the works on time with due care to quality, performance, and safety.

And PowerChina authorized representative Wang Junzhou said his company was proud to partner with ZESCO in the provision of clean energy which will contribute to optimizing power structure, grid stability and the economy.

According to an Energy Regulation Board – ERB report, Zambia’s power generation mix has been heavily skewed towards hydro power which commands over 80% of the total power generated in Zambia. With climate change effects such as drought, Zambia has experienced load shedding partly due to over dependence on hydro power generation.

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Zambia's power utility giant ZESCO Limited have

Markets

The Bank of Zambia’s Monetary Policy Committee – MPC has cut the benchmark monetary policy rate by 225 basis points (by 2.25%) to 9.25% to mitigate the adverse impact of COVID – 19 on financial sector stability, economic activity and ultimately on peoples’ livelihood.

Bank of Zambia – BoZ Governor Dr. Denny Kalyalya announced during a media briefing in Lusaka on May 20, 2020, that the cut in the benchmark interest rate complements the other broader set of measure that the bank has already announced to mitigate the impact of COVID- 19.

However, analysts say the efficacy of the benchmark interest rate has waned following the lifting of interest rate caps which banks and financial institutions place to price loans and arrive at the final interest rate to their customers. As it stands, banks and financial institutions are free to set their margins as no cap on the margins has been set.

The central bank Governor added that although the overall average annual inflation rate increased to 13.5% and that the projected path for inflation is higher than the February 2020 monetary policy committee – MPC forecast band, inflation is expected to still remain within range but trend towards the upper bound of the 6-8% medium-term target range at the end of the forecast horizon.

Dr. Kalyalya said the committee noted that the economy is projected to record a recession in 2020 on account of the COVID-19 shock hence, to effectively deal with COVID – 19 and its effects, the committee is calling for concerted efforts and strengthened collaboration among all stakeholders.

“Moreover, implementation of fiscal and structural reforms that deliver inclusive and sustainable growth remains an urgent imperative,” He added.

Meanwhile, inflation pressures have persisted in the first quarter of 2020, driven by the earlier increase in retail fuel pump prices and electricity tariffs, as well as the pass-through effects from the notable depreciation of the Kwacha against the US dollar.

In April 2020, the Zambia Statistics Agency reporter inflation to have risen to 15.7% largely due to lagged pass-through effects from the depreciation of the Kwacha that led to the increase in prices of especially imported goods and foodstuff.

The Governor has reiterated that although the projection path for inflation rate is higher that the February 2020 MPC projections, overall inflation for 2020 will trend towards the upper bound of the 6-8% medium term target.

He said the deterioration in the global economy is also likely to dampen copper prices and export earnings adding that the aforementioned factors are expected to exert pressure on inflation through one or more channels like the interest rate, expectations and the exchange rate.

In the wake of the COVID- 19 shock, the global economy is projected to plummet to -3.0% in 2020 against the outturn of 2.9% in 2019. It is also projected that as the pandemic abates and economic activity normalizes, global growth will recover to 5.8% in 2021 depending on the effectiveness of the policy measures taken by the authorities.

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The Bank of Zambia’s Monetary Policy Committee

Tech

Zambia currently does not have local sources of petroleum, and has heavily relied on imports from the gulf region (Saudi Arabia and UAE). The annual import bill is in excess of US$700 million which is a massive drain on the country’s locally available foreign exchange and this has greatly contributed to the perpetual depreciation of the Kwacha.

The impact of adverse movements in international oil prices on the Zambian economy is pervasive. From its direct impact on food prices, its impact on transport costs and its ability to filter through the breath and depth of the economy is now well appreciated across all sectors.

Analysts have pointed out three major methods through which Zambia can overcome the persistent drain of forex to foot the ever growing petroleum import bill. The solution would also aid stabilize the Kwacha through reduced petroleum import bill pressure. These three proposals have been arrived at after taking into consideration the country’s comparative advantage. These options include

1. Develop biofuels sector and target to grow the mixing ratios for biofuel to over 50%. This would involve the use of the massive arable land to grow biofuel producing crops which would then be used to make biodiesel for instance. Brazil has already demonstrated that this can be done.

2. Pivot from importing petroleum from the gulf region and engage neighboring Angola. Zambia is more able to negotiate a favorable bilateral deal with Angola relative to the gulf region producers, and the Zambia could equally and easily export its other local products to offset the balance of payments between the two countries and lessen the drain of forex on a net basis.

3. The third and least possible route is to strike deals with Saudi Arabia and the UAE to counter the current one way trade were Zambia imports petroleum and virtually exports negligible values and volumes in local products to the gulf region. This is said to be least viable as its the one that has been attempted for years now with only promises of exporting “1 million goats” which never seems to come to fruition.

So, the Zambian Business Times – ZBT engaged the Energy Regulatory Board – ERB and they disclosed that production of biofuels in Zambia if fully implemented is expected to reduce the country’s petroleum import bill which currently stands at more than US$700 million per annum and could enable Zambia save US$96 million (about US$100 million) per annum from petroleum import bill.

ERB Public Relations Manager Kwali Mfuni told ZBT that the production of biofuels locally could help fill part of the portion of the total annual consumption in line with the approved blending ratios which stand at 10% for Bioethanol and 5% for Biodiesel.

She disclosed that Zambia’s current consumption is about 1.3 million liters of petrol per day and 2.7 million liters of diesel per day and that the country could save 130,000 liters and 135,000 liters of petrol and diesel imports per day (estimated at US$100 million per annum).

She further said that it should be noted that Zambia’s petroleum requirements do not only contain costs associated with petrol and diesel which can be blended but also contains other products such as Jet A-1, Heavy Fuel Oil, Kerosene, Petroleum Gas and Bitumen which are not blended.

And when asked to at least list the top 10 biofuel producers in Zambia current, Mfuni said there are currently no major biofuel producers in Zambia at a scale that would feed into the national fuel supply chain which has been set at a minimum capacity of 2,000 liters per pay.

Mfuni stated that there are some participants in the sector that produce biofuels primarily for their own use such as the Copperbelt Energy Corporation – CEC and that ERB is currently considering and would welcome investor interest in the sector seeking to venture into biofuel production in the near future.

When further asked if cars can use mixed petroleum and biofuels in Zambia currently, she said Motor Vehicles in Zambia can operate on the government recommended blending rations which are 10% for Bioethanol and 5% for Biodiesel saying this conforms to the current majority of engine types in the country and does not require re-configuration of motor vehicle engines.

Giving an overview on the current status of the biofuel sector, ERB has stated that Zambia’s biofuel sector has been faced with some challenges which include producer price for biofuels and availability of feedstock, stating that the former is important for promoting growth of the sector hence issues of conflicting needs on feedstock also being food sources frequently come up and raises concerns over the potential impact on foods security in the long term.

“ERB has also set standards for biofuels vis-a-vis biodiesel and these standards have been approved by the standard body, Zambia Bureau of Standards – ZBS. The Board also has in place a framework to regulate biofuels which falls under the Renewable Energy Regulatory Framework”.

“The Renewable Energy Regulatory Framework primarily focuses on licensing, technical requirements, quality in the production blending, storage and handling, distribution and retailing and pricing of biofuels in Zambia,” She added.

Sorting out the one way trade with countries that supply petroleum to Zambia needs serious attention and development of a long term strategy that would take Zambia’s collective interests first. All the three options discussed above can be vigorously followed through and this would aid in creating more local business opportunities, jobs as well as aid to stabilize our beloved Kwacha.

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