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Markets

The low to no uptake of the K10 billion covid 19 relief package has exposed both the Bank of Zambia – BOZ and generally the financial services industry and vindicated the notion that there is limited to no lending facilities that is availed to local small and medium size enterprises – SMEs.

SMEs are among the most affected by the impact of the covid 19 restrictions that had seen some industries and sectors like hotels and lodges, bars and restaurants, schools and universities closed as a health measure to prevent the spread.

But the lack of uptake of the K10 billion financing facility by covid 19 affected local corporates and SME businesses perhaps demonstrates the disconnect with the financial services sector. The high Kwacha interest rate is also another challenge for SMEs, the cost of funding in Zambia is very high and there is need to advise at what interest rate these funds will be availed for.

Moreover, most SMEs don’t have notable lending facilities with banks and so could not access the funds. The banking industry in Zambia is dominated by multinationals and foreign banks branches which indirectly commit their lending to other multinationals and local branches of foreign multinationals.

Despite government through the Bank of Zambia – BOZ making available the K10 billion facility to provide medium term liquidity to businesses affected by COVID- 19, accessibility of these funds is not known to most businesses in the industry and so far, no bank or financial institution are proactively engaging their clients.

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.

President Edgar Lungu had in his fourth address to the nation on COVID-19 noted that awareness of disbursement of the K10 billion under the BOZ has not been adequately communicated to the would be beneficiaries. He directed the Ministry of finance to ensure that modalities are urgently communicated and the collateral demanded from the intended beneficiaries are realistic.

In a statement made available to the Zambian Business Times – ZBT by the ministry of Finance spokesperson Chileshe Kandeta, its indicated that the BOZ will under this facility provide liquidity to eligible Financial Service Providers – FSPs for onward lending to viable non-financial corporates and households.

Further, additional incentives will be given to the priority sectors identified in the Seventh National Development Plan – 7NDP such as agriculture, energy, manufacturing and tourism with a view to stimulating private sector led growth.

“A relatively smaller portion of the facility (about 40%) will also be made available to FSPs for the support of non-financial corporates in other sectors as well as households which could have otherwise been viable without the outbreak of COVID – 19.”

The Zambian economy is facing significant challenges as reflected reduced national revenue generation by the Zambia Revenue Authority – ZRA, rising inflation and debt service obligations on foreign denominated debt. The outbreak of COVID- 19 has compounded the situation resulting in unprecedented public health and economic challenges.

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The low to no uptake of the

Agribusiness

Zambia is said to have huge potential for massive economic development and wealth creation, but the failure to timely implement game changing policies, laws and projects, the failure to hold resposnsible implementing officers accountable is what is perhaps its weakest link.

Talk of the time it takes to resume gold mining when gold deposits are lying on the surface at Kasenseli, Mwinilunga. Talk of the time it’s taking the BOZ to implement the establishment gold reserves and unshackle itself from the chains of the US dollar.

Talk about the time it takes to implement debt restructuring which is considered a normal procedure for credible national treasuries and big corporates, talk of the time it takes to start exporting medical marijuana, forget about the massive national land titling program that unlocks the massive potential of the local financial services industry etc.

These and other key projects and initiatives that could bring in the much needed forex revenues and drive financial services that could be utilized to build infrastructure and housing for the citizens, that could be used to pay off debt are implemented as what can only be described as a snails pace make developing Zambia a very slow and onerous process.

On the matter of medical and export grade marijuana, Green Party President and Copperbelt based businessman Peter Sinkamba has expressed concern over the delayed implementation of the Marijuana legalization in Zambia stating that implementation has been extremely slow since its pronouncement in December 2019.

Government had through a cabinet meeting last year approved a proposal to legalize the production of marijuana in the country but restricted to exports and medical purposes only. The move to legalize, though unorthodox, was welcomed by a cross section of society and held as an extraordinary attempt needed for a third world country like Zambia to jack up its forex earning power.

Sinkamba told the Zambian Business Times – ZBT in an exclusive interview on May 12, 2020, that since the pronouncement last year, the responsible ministry(s) tasked has not shown any serious commitment on the matter despite the demonstrated financial projections that this move would deliver huge business opportunities and forex for Zambia.

He added that if given a chance, the Green party would have used the massive medicinal potential of cannabis for the Covid – 19 vaccines and treatment research adding that this opportunity could have attracted huge amounts of money into the country if government wouldn’t have been reluctant with the implementation.

Sinkamba said it is time for government to capitalize this agenda as a stimulant for the economy especially at a time where the country’s economy has been devastated with effects of the coronavirus pandemic.

“Legalizing of marijuana was announced even before covid – 19 started and it has been about 6 months now without it being treated with the urgency it deserves especially that it’s a huge thing that could revamp the economy. It should also be a solution to the country now that the global economy has been blocked because of the pandemic,” He said.

Sinkamba has since urged government and the responsible officers who have been mandated to hasten the process of implementation and help save the economy. Some Zambians would rather go beg from the donors when they are sitting on agendas that could deliver the much needed revenue.

Sinkamba also added that there is need to also engage the vision carries of the agenda to advise on how best government can run with it. He disclosed that the Green party has not been fully engaged in the process as only peripheral consultations are being done, hence has reiterated the need to fully involve the visions carries of marijuana if it is to become a game changer for the Zambian economy.

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Zambia is said to have huge potential

Markets

The European Union – EU has extended €12 million as its immediate-term contribution to the Covid-19 response in Zambia.

And in another development, the Swedish Government has scaled-up resources under the current Sweden-Zambia Development Cooperation with a grant of US$12 million. The funds are tied and are to be utilized for health, social cash transfer, nutritional programmes and sexual and reproductive health programmes.

According to a letter received by Finance Minister Dr. Bwalya N’gandu from the EU Head of Delegation to Zambia Dr. Jacek Jankowski, the EU’s planned immediate contribution to the Covid-19 response in Zambia consists €2 million grant under the EU Global initiative for Covid-19. The funds are for procurement of essential medicines and related commodities.

These funds will be channelled towards strengthening health systems and addressing the social and economic impact of the Covid-19 pandemic in Zambia.

Dr. N’gandu disclosed that future additional support expected from the EU, include €96 million blended facility from the European Development Fund (EDF) and the European Investment Bank (EIB) to facilitate increased access to finance by private sector players in the agriculture and renewable energy sectors.

He added that further, there is €6.3 million grant for eligible Civil Society and Non-Governmental Organisations, for children and youth protection programmes and K402 million projected grants fom EU member states through new allocations and reprogramming of existing allocations for the benefit of water and sanitation service programs and, strengthening prevention, health, and social protection systems.

In a statement made available to the Zambian Business Times- ZBT by the Finance Ministry’s spokesperson Chileshe Kandeta, the Minister has welcomed the remarks rendered by Dr. Jankowski that the success of the reforms that Zambia has embarked on to ensure debt sustainability and restore the viability of key sectors such as energy, is crucial in unlocking direct foreign investment and expanding opportunities for the country to benefit from international financial assistance.

Dr N’gandu has pledged that, together with his senior management team and the rest of the staff, the Ministry of Finance is ready to engage the EU in exploring ways in which Zambia can further access facilities using the options already available under the on-going EU-funded programmes or through other possible facilities and means.

Dr Ng’andu welcomed the proposal from the EU for the Zambian Government to make the most of potential new multilateral emergency support as well as the recent G20 initiative on debt relief.

Through the World Bank, Sweden has also upscaled its social cash transfer contribution to US$6 million. And through UNICEF US$1 million has already been disbursed by Sweden for the fight against the Covid-19 pandemic.

Further, Sweden has also extended direct financing support to Zambia’s Covid-19 multi- sectoral plan with support amounting to US$ 3 million.

Dr. Ng’andu pointed out that the directorates of finance and audit units in all Ministries, Provinces and spending Agencies are the principal custodians of rules and regulations as contained in the Public Financial Management Act and these should ensure probity in the use of the funds.

Zambia is currently shortlisting for selecting financial advisors to aid in the restructure of its national debt held with both bilateral and multilateral foreign lenders. The perpetual depreciation of the Kwacha has led to the strain on the treasury on debt servicing obligation for foreign currency denominated debt.

Once successfully executed, the restructuring of the debt is expected to create enough fiscal space to enable the country complete its massive infrastructure projects, some of which compose of rural schools, universities and road projects at over 70% completion rates.

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The European Union - EU has extended

Companies

First National Bank Zambia Limited – FNB has announced the appointment of Bydon Longwe as a new Chief Executive Officer to take over from Leonard Haynes who has served in the position for the last four years.

FNB Chairman Renatus Mushinge announced the appointment of Bydon Longwe as CEO designate for FNB Zambia and that will take over the reins as CEO effective 13 July 2020.

Commenting on Longwe’s appointment Renatus Mushinge said the Bank is thrilled to announce Bydon Longwe as incoming CEO of FNB Zambia with great confidence in the depth of talent and management experience in the banks’ business, which allowed the board to replace Leonard from within the Executive team.

FNB has confirmed the appointment to the Zambian Business Times – ZBT on May 12, 2020 that this appointment also marks another milestone in the 11-year history of the bank to have a Zambian citizen as an incoming CEO.

“We are confident that his leadership capabilities, coupled with his astute and prudent financial management expertise, will enable the Bank to build on the successes recorded to date.” Mushinge said

Longwe has over twenty (20) years of financial services experience which spans across the South African Region (including: Zambia, Botswana, South Africa and Mozambique). Prior to this appointment, he was the Chief Financial Officer of FNBZ, in charge of the Bank’s overall finance portfolio.

He is the holder of an MBA (Herriot Watt University) and a member of the Association of Accounting Technicians (UK), Association of Chartered Certified Accountants (UK), Association of Corporate Treasurers (UK) and the Zambia Institute of Chartered Accountants (Zambia).

“I am privileged to be afforded this opportunity to lead the business toward even more success on the back of the robust legacy built by my predecessors. I have inherited a gifted team of executives and staff at FNB Zambia, whose expertise and commitment to delivering innovative products and excellent service I am confident of.

I also welcome the opportunity to make even greater contributions toward the growth of the Financial Services sector in Zambia,” Longwe commented.

“It gives me great pleasure to express my earnest congratulations to Bydon on his appointment as CEO. He is a respected leader within the business, and I look forward to Bydon leveraging his wealth of experience as Chief Financial Officer, which I believe will be instrumental to his leadership artillery, as we navigate this challenging economic period.

In the same token, I would like to thank Leonard for his service as CEO and his tangible contribution to FNB Zambia. Bydon, I wish you good luck in cementing our position as a relevant, profitable bank in Zambia,” added Johan Maree, CEO FNB Rest of Africa.

The FNB board has since wished Leonard the very best on his return to the FirstRand Banking Group in Johannesburg and has thanked him for his invaluable contribution towards the growth of FNB Zambia over the last four years.

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First National Bank Zambia Limited – FNB

Mining

The total Copper production at Konkola Copper Mines – KCM two Mines located at Nchanga in Chingola and Konkola at Chililabombwe has dropped by about 24%.

Permanent secretary at the Ministry of Mines Barnaby Mulenga has disclosed that there has been a reduction in production at Konkola Copper Mines – KCM following its pending liquidation process with Vedanta.

Mulenga said the company has not been operating on a full scale capacity as normal production which includes underground mining has not been resumed hence affecting its production volumes.

He told the Zambian Business Times – ZBT in an exclusive interview on May 8, 2020, that KCM had in the first of quarter [Q1] of 2020 produced a total of 15,715 tonnes of copper compared to 20,596 produced in the first quarter of the previous year 2019 attributing the decrease to the current incomplete operations at the mines.

“Production at KCM has gone down because the company is still under the liquation process. In January KCM produced 5,406 tons, February production was 4,496 tons and 5,800 tons in March 2020 while April reports have not yet been submitted. All these figures have recorded reductions and once production gets back to normal things will stabilize again,” he told ZBT.

He added that the Konkola deep mining project is also pending and once full operations resume the company is expected to starting mining ore at Konkola deep.

Concerning the remitting back of export proceeds which the former owners Vedanta were accused of not doing, Mulenga said export proceeds under the current liquidation team will be remitted back to Zambia to enable KCM properly run its operations and pay salaries to its workers.

When asked for the current update on the case with Vedanta, Mulenga could not share more information stating that the matter is still in court hence awaits final update.

Meanwhile, commenting on the current economic challenges and the threat of Covid -19, Mulenga said the mining sector has not been spared from effects of the pandemic as seen from some mining companies who are reviewing their production level for the year 2020.

He said Zambia being a player on global market is among the affected countries due to lock downs in some countries, hence government has put in place measures to enable the mining sector mitigate the negative impacts being faced amidst covid – 19.

“We do not know how long this [covid 19 pandemic] will take and some companies have complained to us on how they are even failing to get supplies, however we are in discussions with the ministry of commerce on the matter to ensure the private sector is given a lift and that we support them in this crisis,” He added.

The government of Zambia through its mining investments arm, ZCCM IH instituted liquidation action that saw Indian firm, Vedanta lose its ownership of KCM. Vedanta, who had claimed that they had never made any profits in over 15 years of their operating the two mines however turned back and are currently legally contesting the loss of their ownership stake.

The move to liquidate KCM and get rid of Vedanta was welcomed by local mine suppliers, employees and the powerful mine workers union who accused the Indian owners of failing to run the copper mines.

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The total Copper production at Konkola Copper

Agribusiness

The concept of driving Agribusiness in Zambia via the concept of establishing farming blocks may seem rosy on paper and viable academically, but the practical aspect of attracting a credible private sector anchor investor to drive the Agro processing and connection to global Agro value chain has its own special challenges.

Agriculture Minister Michael Katambo has disclosed that the 110,000 hectare Nansanga farm block located in Serenje District of Central province has to date not been able to secure any viable anchor farm investor as the Zambia development Agency – ZDA is still scouting around for a core investor to drive the core activities in the farming block.

The Agro minister told the Zambian Business Times – ZBT in an exclusive interview on May 8, 2020, that the Zambia National Correctional Service under the Home Affairs Ministry is currently doing farming activities with 9 Centre pivots but that an anchor investor for major activities has not yet been found.

He said government notes the delay in finding an investor for the land but that no potential or viable applicant or investor has shown interest yet, hence the government is still looking around to find one to manage and become the core venture and drive the farming processes.

When asked about which farming and processing activities are targeted to take place at the Nansanga farm block, Katambo said details of the processing activities will be availed once an anchor investor is found. It’s the anchor investor who will lay down the type of Agro investment to venture into at the core or the main farm.

Katambo further confirmed that roads or other support infrastructure has not been set up yet because these are activities to be planned by the anchor investor. Our plan is to develop the area and the anchor operators should ensure all the facilities at the farm block are put in place and these include infrastructure as well as the decision on what types of farming activities to take place such as perishable vegetables or other Agro activities,” He told ZBT.

The Agro minister has since called for experienced citizens with the capacity to manage the farm block to make their submissions to the Ministry of Agriculture, stating that farm blocks are key in enhancing national food security and enables the country to grow more, become self-reliant and export to earn the country the much needed foreign exchange.

He said farm blocks could also enable the country become the next big exporter of multiple agricultural products, hence he urged Zambian farmers to venture into all categories of farming at both small, medium and commercial scale in order to increase production.

Zambia has had plans to set up at least one productive farm block in each of the ten provinces. Nansanga farm block is part of governments programme to open up viable farm land in various parts of the country to be involved in not only primary production, but connect the local farmers who would become out-growers to the lucrative global Agro commodities value chain.

One of Zambia’s most successful farm blocks with an active out-grower program for local farmers is Illovos Zambia Sugar, located at Mazabuka in Southern Province. It’s has resulted in Zambia being self sufficient in Sugar and sugar related products, and is able to bring in notable export dollars into the copper dominated economy.

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The concept of driving Agribusiness in Zambia

Agribusiness, Lifestyle

Zambia’s staple food, mealie meal (corn meal) prices have dropped by about K15 despite the overall cost of living going up, this is according to the Jesuit Centre for Theological Reflection – JCTR’s Basis Needs and Nutrition Basket (BNNB) data.

JCTR has stated that the effects of COVID – 19 on the health sector and the economy at large cannot be over emphasized as the cost of living for many Zambians has continued to go up with many responding that they are failing to meet their basic needs.

According to JCTR’s Basis Needs and Nutrition Basket (BNNB) which is a measure of the monthly cost of living for a family of 5 and conducted in 16 towns, the April 2020 basket stood at K7,159 for Lusaka with an increase of 2 percent or by K145 from K7, 015 in March 2020.

The noted slight increase in the food basket cost has been attributed to increases in food items prices such as fruits, which increased by K66 from K365 to K426, Kapenta which increased by K58, up from K164 to K221 and onion which increased by about K21 from K59 to K80.

Other items such as chicken, vegetables, soya pieces and beans price increases were between K10 and K16. Some items from the non-food essential items also recorded price increases. Charcoal price increased by K14 from K344 to K358, washing paste increased by K6 from K49 to K55 and while toilet paper moved by K6 from K23 to about K29.

JCTR’s Programme Manager for Social and Economic Development Chama Bowa said in a statement made available to the Zambian Business Times – ZBT on May 8, 2020 that the basket also recorded decreases in the prices of items such as tomatoes which reduced by K25 moving from K91 to K66, potatoes which reduced by K19 down from K49 to K30 and mealie meal which reduced by K29 from K279 to 251 for two (2) 25kg bags.

She added that for the April 2020 basket, a considerable number of both food and non-food essential items recorded price increases and that this comes at the backdrop of current income challenges due to job losses and reduced incomes in the wake of COVID-19.

JCTR has since called on Government to take urgent measures to cushion households that have been negatively impacted by COVID-19 adding that with the projected close to 20% loss in revenue, Government faces significant challenges ahead therefore the need to put in place measures to especially protect the poor and vulnerable.

“We recommend that Government through its relevant agencies develops a clear roadmap and budget for “victims” of COVID-19 similar to the one being used for households hit by the 2020 floods. For example, vulnerable homes whose livelihoods depend on hand to mouth small scale businesses, may have been badly hit by the pandemic as their business activities have now reached their lowest ebb due to, among others, the stay at home preventive measure,” She added.

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Zambia’s staple food, mealie meal (corn meal)

Lifestyle

The University of Zambia (UNZA) Acting Dean in the School of Health Sciences Dr. Sody Munsaka has been appointed to the World Health Organization (WHO) board of experts that will develop guidelines and ethics consideration for issuing of immunity passports in the COVID-19 pandemic.

Dr. Musanka joins a team of scientists involved in antibody testing that will be used as a measure to give people an immunity passport to move across borders.

Dr. Munsaka who is also a Lecturer and Researcher in Immunology, Virology, Molecular Biology, Research Methods and Biostatistics in the School of Health Science is the only African board member among the 10 member scientists from the United States, Europe and Asian region.

He sits on a number of national committees that include the Health Professions Council of Zambia (HPCZ) and Higher Education Authority (HEA). Dr. Munsaka’s research interests include patho-immune mechanisms of HIV-associated neurocognitive disorders and interactions with drug abuse and other infectious diseases including malaria and tuberculosis.

According to a statement made available to the Zambian Business Times- ZBT by UNZA Head of Communications Dr. Brenda Bukowa, Dr. Munsaka is a Neuroimmune and Infectious Diseases Scientist at the University of Zambia School of Health Sciences. He holds a Master’s and PhD degree in Biomedical Sciences-Tropical medicine from the University of Hawaii, Manoa, Honolulu, Hawaii, USA.

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The University of Zambia (UNZA) Acting Dean

Companies

TopStar has launched StarTimes GO, an integrated e-shopping platform of premium selections only, offering access to no-contact e-shopping experience with special offers and fast home delivery.

StarTimes provides multiple interactive e-shopping methods featuring the “TOP” shopping experience, through the integrated services available via TV, Online and Phone-call. The newly born e-shopping service will cover the whole Zambia.

With the slogan “Better Life, Let’s GO”, StarTimes GO frequently displays smart products such as TV sets, solar power systems and decoders, and the category will be expanded gradually.

The hosts of the programme of the same name, which will be on air on Diamond TV, Power TV and ABN channels will explain the feature, quality and usage of each product thus the audience shall know the specific information without risky physical contact (#covid 19) with the salesperson.

In a statement made available to the Zambian Business Times – ZBT, Topstar has indicated that aside from the safety considerations, it is possible for the customer to select affordable products available such as a decoder, solar power system and a TV set.

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TopStar has launched StarTimes GO, an integrated

Mining

Mine Workers’ Union of Zambia – MUZ President Joseph Chewe has commended the decision by Mopani Copper Mines – MCM and its holding company Glencore for its decision to resume operations while it continues to engage with government on potential solutions to its current challenges.

MCM has indicated in a statement released on May 3, 2020 by its Public Relations Manager Nebert Mulenga that the company is to re-start operations and issue a notice of its intention to place the mining operations on care and maintenance after 90 days.

And when reached out for further information as to when Mopani will exactly resume operations, Mulenga told the Zambian Business Times – ZBT in an exclusive interview on May 5, 2020 that the company has already started calling back employees to work provided they go through a health induction before operations fully begin but he did not clearly indicate the date that operations will fully resume.

“We started calling back employees on Monday and we have so far had an overwhelming turnout of over 80% and we are hoping to have over 100% turnout tomorrow then later fully resume operations,” He added.

Meanwhile, in a different exclusive interview, MUZ president Joseph Chewe has disclosed to ZBT that the company is set to resume full operations on May 6, 2020 as they give a notice to put the mines on care and maintenance.

Mopani Copper Mine was last month abruptly placed under care and maintenance by its parent company Glencore which resulted to sending over 11, 000 workers on force leave. This decision was however disapproved by government and Mopani had since rescinded its decision to put its copper mines under care and maintenance.

Chewe said putting the company under care and maintained is not a wrong decision provided the law is follow hence Mopani’s rejection by government was due to it not following the law and not involving the union in its early decisions to give room for interrogations.

“Mopani has the right to put the mines under care and maintainance provided they follow the law which requires them the give notice to government and the unions so that interrogations as to why this decision has been made are done,” He added.

Chewe has also assured mine workers that while dialogue between Mopani and Government is ongoing, the union will ensure no jobs will be lost as it will further meet with Mopani to discuss the way forward.

The Zambian authorities have challenged Glencore to hand back the license if they are not willing to arrive at a win win situation. Mopani is the anchor company of two major towns in Zambia, these are the city of Kitwe which is Zambias second largest city by population and the mining town of Mufulira were the Mopani has its underground mines.

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Mine Workers’ Union of Zambia – MUZ