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The Bank of Zambia – BoZ has disclosed that negotiations on the resumption of the purchase of gold to establish gold reserves have advanced and that the central bank has concluded the initial negotiation stage and submitted a draft contract to the identified supplier that will govern gold purchases.

The Central Bank had in December 2019 announced plans to start the process of buying gold locally as an alternative to US dollar forex reserve as a way of revamping Zambia’s national reserves as well as diversifying from the concentration risk of only holding US dollar reserves.

And BOZ has confirmed to the Zambian Business Times – ZBT that they have sent out a draft contract to the identified supplier(s) and currently expecting feedback. BOZ told ZBT that the supplier is to deliver purified gold bullion to a standard that it can be held as part of international reserves.

BoZ Acting Assistant Director for Communications, Besnat Mwanza, told ZBT on May 18, 2020, that the date of resumption of gold purchases is dependent on the conclusion of the contract. She said that the mechanisms of purifying gold to international bullion standard and stored safely have also been agreed in principle with the relevant stakeholders.

And when asked if the Central Bank could disclose the initial supplier(s) for gold bullion, Mwanza said the Bank will disclose the supplier at an appropriate time this time, it’s not at liberty at the moment to disclose until all formalities are concluded.

On the question of engaging local artisanal gold miners to supply gold, Mwanza said local small gold mines or artisanal miners that wish to supply gold to the Central Bank would need to be aggregated or collated by a third party such as the ZCCM-IH Gold company and BoZ could then be an off–taker if appropriate arrangements are put in place considering that gold must be of a certain purity standard to qualify to be kept as international reserves.

When further asked on what the target gold reserve value to be held by end of 2020 by BOZ is, She added that the amount of gold likely to be in the reserves portfolio by end of 2020 is also dependent on the time it takes to conclude the contract negotiations and sign off between BoZ and the supplier(s).

The Central Bank has since explained that the delay in implementing the gold reserve is also on account that the process of buying gold involves contractual obligations which can only be concluded when both parties agree to the arrangements.

However, as we await the response from the supplier(s) on the draft contract submitted, it is important to note that, even when the purchase of gold commences, the primary factors determining the ability to build up US dollar reserves will continue to be based on export earnings and how much debt service is to be made.

The higher the export earnings than debt service and other uses of foreign exchange, the better for reserves build up,” She added.

Zambia’s US dollar reserves have been under pressure following the perpetual depreciation of the local currency – the Kwacha. Servicing US dollar denominated external debt has been ballooning as more Kwacha is needed to be converted to US dollar to service debt.

Establishing of gold reserves is viewed as a diversification strategy that would enable the country to buy gold which is locally mined in the local currency – Kwacha and be used to shore up reserves over and above the direct US dollar forex earnings and inflows.

The advantage of establishing gold reserves include the greater security of gold reserves kept at home. Relative to foreign exchange reserves, which are claims against foreign banks and authorities, which can be blocked any time for political reasons.

The other known advantage is that most suited to Zambia is that gold reserves would provide a more stable asset to diversify from only holding US dollar reserves. Zambia has struggled to have a stable Kwacha and gold reserves could provide a war chest to draw on and counter the perpetual Kwacha slides experienced year in year out.

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The Bank of Zambia – BoZ has

Lifestyle

The Zambia Revenue Authority – ZRA has donated 20,000 litters of fuel and disinfectants worth K500,000 to help curb the COVID-19 situation at the Nakonde border.

ZRA Commissioner General Kingsley Chanda says, given that Nakonde border is the second largest and busiest border in Zambia, all efforts will be done to ensure the COVID situation which has affected employees of ZRA, Immigration and other agencies is controlled.

Chanda further stated that ZRA is the lead agency at the border, hence the Authority has decided to make a donation of fuel in order to help transport all COVID suspected patients to the quarantine Centre in Chinsali, which is close to 200 kilometers from Nakonde.

In a statement made available to the Zambian Business Times – ZBT by ZRA Corporate Communications Manager Topsy Sikalinda, the Commissioner also announced that the border has been re-opened for only critical essential goods such as food, fuel and medical supplies although the comprehensive list will be issued to the public soon.

He said disinfection of the entire border is also being done by the Ministry of Health using materials donated by ZRA for all offices at the boarder including Immigration, Road Transport and Safety Agency (RTSA), Compulsory Standards and other government departments.

“The disinfecting exercise will also be extended to residences of all government border agency personnel in an effort to protect lives and combat the spread of COVID-19 which has also negatively affected revenue collection with inevitable devastating impact on the economy and our people”. He added

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The Zambia Revenue Authority - ZRA has

Companies

Fly Emirates has announced its plans to resume passenger flights from 21 May, 2020 to 9 destinations which includes London Heathrow Frankfurt, Paris, Milan, Madrid, Chicago, Toronto, Sydney and Melbourne.

The Airline will also offer connections in Dubai for customers traveling between the UK and Australia.

Emirates had on March 20, 2020 temporarily suspendered its operations to Lusaka, Zambia and Harare, Zimbabwe after a Zambian couple that traveled to France and landed back into the country using Fly Emirates tested positive to COVID-19.

In a statement made available to the Zambian Business Times – ZBT by Fly Emirates Public Relations Consultant Gillian Langmead, the airline has indicated that travelers will only be accepted on these flights if they comply with the eligible and entry criteria requirements of their destination countries.

And this includes an approval from the Federal Authority for identity and Citizenship for UAE residents who wish to return to Dubai.

Emirates Chief Executive Officer Adel Al Redha says the company is pleased to resume scheduled passenger services to the named destinations providing more options for customers to travel from the UAE to their cities.

“We are also working closely with the authorities’ to plan the resumption of operations to additional destinations. We have implemented additional measures at the airport in coordination with the relevant authorities in respect to social distancing and sanitization. The safety of our employees, customers and communities remain our top priority,” He added.

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Fly Emirates has announced its plans to

Lifestyle

The Zambia Corporative Federation – ZCF has disclosed that’s its community run solar milling plants dotted across the country are charging only K10 to mill a 50kg bag of maize into Millie meal and this should aid to further bring down the price of the commodity.

ZCF further confirmed the completion of the US$170 million solar milling plant project across the country, achieving 84% target. ZCF also disclosed that of current installed equipment, 65% of the plants are currently operational.

The Corporative had in 2015 set out to install 2,000 Solar Mini-Milling Plant in various rural districts of the country under the Presidential milling plant initiative. This initiative was aimed at providing an alternative milling option at affordable prices to cushion seasonal escalating mealie meal prices from private millers.

ZCF Executive Director James Chirwa has told the Zambian Business Times – ZBT in an exclusive interview that a total of 1,683 Solar powered hammer mills have been installed across the country out of the 2,000 targeted, saying some adjustments were made due to price differences and model of equipment installed.

He added that other adjustments were made to accommodate and include three (3) more service and training centers built in North Western, Western and Northern Province out of the 5 center’s initially set to be built in Lusaka (for Lusaka Province), Serenje (for central province), Chipata (for Eastern Province) , Kalulushi (for Copperbelt Province) and Choma (for Southern province).

“We included three more training center’s so that people from the provinces mentioned above would benefit as well given that this is a national project which intends on having every beneficiary on board from communities across the country,” He added.

He further said that ZCF is looking forward to have the 35% of hammer mills operational stating that the process has been slowed down due to some plants being broken down as a result of some individuals in communities vandalizing or in some extreme cases blatant theft of solar panels. The ZCF Director said however that replacement of these solar panels and some vandalized plants equipment has begun and the target is to get all of them operational before end of this year’s maize marketing season.

When asked about the affordability and the current charge for milling a K50 bag of maize, Chirwa said the price is only K10 per bag and that the money collected goes back to primary cooperatives in communities for improvement of operations.

ZCF has since appealed to the community cooperatives and citizens of Zambia at large to take keen interest in supporting this important national project. There is need to guard the equipment from vandals and by means of capacity building and education among others to ensure Zambians get the benefits intended.

The current official price of mealie meal in Zambia today stands at K137 per 25kg bag of maize. For those interested in cutting costs, a 50kg bag of recently harvested maize price at local markets has dropped to between K80 and K120, meaning that a trip to the nearest solar milling plant can cut the price of mealie meal at household level by about half.

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The Zambia Corporative Federation – ZCF has

Companies

FNB Zambia has announced that it will begin to distribute Short-Term Insurance solutions for both Retail and Business customers through a partnership with Minet Zambia. Customers can now get affordable General Insurance with monthly payment options through FNB Zambia outlets.

In a statement made available to the Zambian Business Times – ZBT by FNB Head of Strategic Marketing and Communications Clotilda Mulenga, the Short-Term Insurance Partnership between FNB and Minet is a significant milestone in the strategic intent of both businesses and will further enhance financial inclusion and increase insurance penetration in Zambia in line with the Government’s Financial Literacy Agenda.

FNB outgoing Chief Executive Officer Leonard Haynes says the bank is thrilled to announce the enhancement of its insurance offering, enabled by a landmark partnership with Minet as the insurance broker.

“Effective 4 May 2020, FNB became the first bank to act as a distributor for Household, House Owner, Building, Motor and Fire and Allied Perils cover, under this model, FNB will be the first bank to be able to print Motor Insurance Cover Notes (Car Insurance Disks) at branch level.

These documents can then be collected at a branch of choice to avoid customers queuing up, while all other policies can be communicated electronically or printed if requested by a customer,” He added.

Haynes said over the last 11 years, FNB Bank has worked to become a complete one-stop financial services provider to its customers, with a strong focus on digital solutions and that the timely launch of its new paperless, and system-driven model ensures that customers can get cover safely and conveniently, further reducing the risks associated with the ongoing COVID-19 pandemic.

“With a transformative approach to insurance and risk advisory business modelling over the last 70 years, Minet Zambia is excited to partner with FNB Zambia as a distribution link to deliver various products and services to its clients through easy to access digital platforms” added Humphrey Kabwe, Minet Zambia MD.

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FNB Zambia has announced that it will

Markets

The Bank of Zambia’s – BOZ has revealed the targeted interest rate to be applied on the K10 billion Medium – Term Refinancing Facility to enable Financial Service Providers (FSPs) as not more than 17.5% to support businesses and households that are being impacted by coronavirus (COVID-19), questions on how this facility will be implemented and accessed have risen.

BOZ Head of Corporate Communications Besnart Mwanza told the Zambian Business Times – ZBT on May 14, 2020 that sectors identified in the seventh national development plan – 7NDP such as the agriculture, manufacturing, energy and tourism are priority and will receive 60% of the fund of the facility while the rest of the sectors shall access the remaining 40%.

She said FSPs will access this facility from BOZ at 12.5% and that this interest rate is arrived at by taking the current Monetary Policy Rate (MPR) of 11.5% and adding 1 percentage point, further FSPs will have a one-year grace period (moratorium) for both principal and interest payments on the facility.

Mwanza reiterated that Businesses and individuals can access the Facility through their FSPs adding that FSPs will determine the interest rates at which the funds will be on-lend to their clients.

“However, FSPs are obliged to pass on the benefits of lower interest rates, fixed interest rates and the possibility of a repayment holiday to their clients. BOZ will check on the benefits being passed on prior to the disbursement of funds,” She added.

Further, the Central Bank has provided additional incentives to FSPs which lend to their clients at no more than 5 percentage points above the cost of funds from BOZ. If FSPs borrow the funds at 12.5% from BOZ and lend to clients at no more than 17.5%, then they have access to more funds from the facility. It is one of the requirements stipulated under the terms and conditions of the Facility that FSPs should demonstrate how the benefits obtained on the Facility are passed on to their clients.

The BOZ will regularly monitor performance and any FSPs that fail to comply will be subject to mandatory repayment as provided for under section 13 with regard to interest rates, the Bank has provided incentives for FSPs that offer lower interest rates to their clients

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The Bank of Zambia’s - BOZ has

Companies

The Workers Compensation Fund Control Board – WCFCB has secured 6 hectares of land in Samfya district for the development of a hotel and an international convention Centre meant to boost the tourism sector in Luapula province.

The Board had on May 11, 2020 signed a Memorandum of Understanding with Samfya district council for the purpose of constructing a multi-million international conventional Centre in Samfya on the shores of lake Bangweulu.

WCFCB Head of Communications and Customer Service Maybin Nkholomba has disclosed to the Zambian Business Times – ZBT in an exclusive interview on May 14, 2020, that about K250,000 has already been paid for the parcel of land and that implementation phase will begin soon after a consultant engaged in estimating the total investment for the project is concluded.

He said currently the total investment needed for the project is not known as the board is looking forward to engaging a consultant for the purpose of developing details of the actual cost of the project.

Nkholomba further said that apart from the international conventional Centre, the project also composes of a hotel and a shopping mall meant to provide facilities to about 2,000 delegates that will be expected to attend the events, adding that Samfya will also be the gateway to the northern region tourism circuit.

He added that the board is expected to complete the project within the period of 16 months as the province is already set for other conventions for the year 2022 hence the need to prepare the facility within 2020-2021.

He said the investment will help the board remain in a strong financial position to be able to meet its current and future liabilities and manage funds received through the management structures while helping to administer compensation to workers who get injured in the line of duty.

“We have an investments policy were some of the surplus funds that we receive which are not used for the immediate compensation of workers is used to invest in appropriate ventures that are deemed viable, and one of the investment vehicles we identified is the investment in real estate infrastructure and Samya has been identified as a strategic location particularly for a hotel and convention Centre because of its natural environment and attractiveness,” He added.

In addition, Nkholomba said the board is also looking forward to partner with local and international operators for the hotel that will run and deliver work class hotel experience according to what is required and that identification process will begin once works on the ground get started.

The pace of implementation of this project has however been slow. As confirmed by WCFCB, the appointment of the consultant to come up with the total investment cost is still pending and this may take time. The northern tourism circuit has been a start and stop project with limited progress made.

The commercialization of Mbala airport is also yet to be finalized and airport infrastructure at Kasama and Mansa are now we’re near what obtains at Livingstone and Mfuwe, the other key tourism sites.

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The Workers Compensation Fund Control Board –

Tech

The Zambia Revenue Authority – ZRA has confirmed that it remains ready to implement the taxation of global digital companies that are generating significant revenues in Zambia but have no physical presence and are currently not being directly taxed.

One of the taxation principles is that all revenue and transactions originated in Zambia are subject to being taxed but most global digital companies are currently managing to collect massive revenues from the country without being directly taxed.

In February 2020, Facebook CEO Mark Zuckerberg announced his support behind international reforms that would require Silicon Valley tech giants to pay more tax. According to the voice of America, Zuckerberg backed plans for digital tax reform on a global scale and admitted that the current system for taxing multinationals is based on where they are physically located, which sees internet companies such as Facebook pay the majority of their tax in the United States.

And ZRA corporate communication Manager Topsy Sikalinda has confirmed exclusively to the Zambian Business Times – ZBT that government is currently working on a law that will enable the taxing of entities like Facebook, Google and other digital businesses and that once discussions come to conclusion, ZRA will implement the measures as the authority only operates within the confines of the laws.

Entities such as Facebook, Google, Twitter among others are currently generating huge revenue from Zambian entities and individuals despite not having their presence in the country and being taxed. This has however raised concerns as to why government is not taxing such entities despite receiving direct payments from Zambians individuals and businesses.

On the closure of the Zambia – Tanzania border, ZRA has stated that despite the Nakonde border being physically closed due to its high risk COVID – 19 entry point, the authority is still conducting online transactions and clearance to individuals that wish to record entries.

Sikalinda told ZBT in an exclusive interview on May 13, 2020, that ZRA systems at all borders across the country are still operating through online transactions hence individuals are able to clear goods without them entering the country.

He said tax collection by the authority has also been affected amid COVID – 19 pandemic and it is in this line that ZRA has supported governments approach of giving relief to the business in terms of tax waivers as announced by the Minister of Finance in his latest address on the country’s economy.

When asked how much in terms of revenue loss will the authority record amidst Covid -19 pandemic, Sikalinda said the amount is not predictable as operations are still on-going via online transactions.

“It’s difficult to give revenue impact in terms of amounts because the borders may be closed but systems are not closed meaning one can still go ahead to clear goods and do certain transactions with ZRA online and people are still able to log in their entries except that the goods will not enter the country but still pay in advance,” He added.

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The Zambia Revenue Authority - ZRA has

Agribusiness

The Food Reserve Agency – FRA is in the next two weeks expected to outline its plans for the 2020 crop marketing season and will within the plans avail to the public its buying price for maize and other designated commodities immediately after the Ministry of Agriculture announces the crop forecast survey results.

Minister of Agriculture Michael Katambo has disclosed that despite the COVID – 19 outbreaks, the ministry has managed to complete the crop forecast survey, field data collection in all provinces and soon embark on the process to analyze the data to come up with the final crop forecast figure.

Speaking at a media briefing in Lusaka on May 12, 2020, the minister said the crop forecast survey will be announced by the end of May 2020 in readiness for the commencement of the maize marketing season in June 2020.

He said the process at which FRA takes to arrive at the buying price for maize and other commodities has begun and stakeholders are currently being consulted and that the process aims at taking into consideration as many views and recommendations as possible.

The minister has since advised small scale farmers to be patient and resist to sell their crop before FRA announces its maize purchase price to avoid selling at a price that do not offer a fair return on investment and labor.

Further, Katambo has warned those engaged in smuggling of maize and mealie meal to neighboring countries to immediately stop this illegal act stating that existing law on smuggling maize and mealie meal is very clear for those that persist and continue to engage on this illegality.

“I also wish to advise all provincial agriculture coordinators and all agricultural extension officers to be vigilant in advising farmers not to sell to unscrupulous traders and farmers but wait patiently for FRA to announce the price within the next weeks or so,” He added.

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The Food Reserve Agency – FRA is

Markets

Absa bank Zambia has announced that it has offered K450m loan payment relief to 300 customers who have been financially impacted by the Covid -19 pandemic.

On 15 April 2020, Absa bank became the first bank in Zambia to announce its opt-in loan payment relief programme as a direct response to the global pandemic and to date the bank has offered support to customers in sectors such as manufacturing, agriculture, aviation, hospitality, retail trade and transport.

Absa Bank managing director Mizinga Melu says the Bank’s focus during this difficult time is to support its customers as Covid-19 pandemic remains a global concern adding that the financial impact that it has had on economies across the world has been significant.

“As Absa, we are aware that some of our customers have been adversely impacted as a result and today, we are pleased to announce that we have offered payment relief to 300 customers to the value of K450m,” She said

According to a statement made available to the Zambian Business Times – ZBT on May 13, 2020, the payment relief programme which is aimed at assisting with cash flow needs is a comprehensive solution that applies to Absa’s credit products that includes personal loans, business loans, asset finance loans as well as mortgages and allows customers to reduce or defer their monthly instalments.

As part of its solution based approach to meet the unique requirements and operations of its respective clients, the bank is also adjusting relevant agreements by revising the loan repayment period and capitalizing interest (adding interest to the outstanding loan balance) during the relief period. This entails that the tenure of the loan may be extended by the same period for which the payment relief has been offered.

“This relief package is for an initial three-month period, we will continue to review the programme and assess the necessary support our customers and clients will require should the effects of the pandemic adversely affect macroeconomic conditions.” Mizinga melu added.

In implementing this programme, Absa bank is complying with applicable laws and regulations in Zambia whilst remaining committed to delivering banking solutions that are tailored for its diverse customer base.

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Absa bank Zambia has announced that it