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Markets

Finance Minister Dr. Bwalya N’gandu has stated that the Zambian government budgeted income will fall short of target by at least K14.8 billion or 19.7 % [approximately 20%] of the approved 2020 budget, adding that the reduction by tax type will be determined as more information unfolds.

He also confirmed that the International Monetary Fund – IMF has projected that Zambia’s economy will shrink by a negative 2.6% in 2020 from the earlier projection of 3.6% amid to COVID -19.

Speaking when giving an update on the country’s economy on April 20, 2020 in Lusaka, the Minister of Finance announced that the economic adjustment due to COVID- 19 will further result in a severe drop in revenue.

Dr. Nga’ndu further said that this estimated impact does not include the revenue loss arising from the tax relief measures that were announced two weeks ago but are based entirely on the expected economic adjustments due to COVID-19.

“In our projections, we have assumed that the peak period for impact of the Corona Virus on revenues is April and May. If we further assume that the pandemic will be quenched by August 2020, we project that the negative impact on revenue will continue until December 2020,” He said

In addition, the Minister said projections suggest that the reduction in the price of copper on the London Metal Exchange – LME will continue until June resulting in a drop in mineral royalty and income tax payments from mining companies.

He said Pay As You Earn (PAYE) from the mining sector is also expected to fall as some contractors may lose their contracts going forward hence the scaling down of mining sector activities will lead to reduced engagement of foreign providers of management services and will affect Withholding tax receipts on management fees and consultancy.

Meanwhile, the scaling down of economic activities in the country is expected to cut across all sectors including manufacturing, transport, power generation and transmission, wholesale and retail trade, tourism and the hospitality industry in general, however, this will basically translate into a reduction in all tax and non-tax revenues among them PAYE, VAT, customs duty, excise duty, fuel levy, export duty, road user charges, fees and fines.

Zambia has so far witnessed disturbing developments as the virus has increased in terms of numbers of people confirmed as positive and also in terms of geographic spread. As at April 20, 2020, the country recorded 65 confirmed cases, 35 recoveries and sadly 3 deaths due to COVID- 19?

The globally rampaging corona virus is no longer confined to the capital city of Lusaka only, but has spread to other parts of the country which include Zambia’s mining and industrial hub region of the Copperbelt, Central province [Kabwe] and other parts of Lusaka province [Kafue].

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Finance Minister Dr. Bwalya N’gandu has stated

Companies

Following the directive for the closure of night clubs, restaurants and bars as a preventive measures towards further spread of COVID-19, Zambian Breweries – ZB has recorded a reduction in beer consumption and as a result cut its alcohol production by about 50% during this pandemic period.

The company has seen a slowed down consumption and sales volumes and therefore cut production volumes on threats of the coronavirus outbreak and it likely to record huge losses if the situation persists.

ZB Corporate Affairs Director Ezekiel Sekele has told the Zambian Business Times – ZBT in an exclusive interview on April 17, 2020, that the company has since lessened on beer production as producing more than enough will result into huge losses.

He however stated that despite the closure of bars and night clubs, alcohol is still being purchased in chain stores on take away basis, hence the company has not completely been negatively affected as responsible citizens have continued to adhere to government’s directive by drinking from their homes.

Sekele said ZB is still operating through its off-premise channel (distributors, wholesalers and supermarkets) for take-home occasions only and has pledged to complement governments preventive measures that have been announced to fight the COVID-19 pandemic.

“During this period, we are working tirelessly to keep our operations running in a manner that is safe and in accordance with the law and current public health measures. However, we are joining government in urging all consumers to enjoy and drink responsibly from home,” He added

He has further called on bars and night club owners to adhere to governments’ directive as doing so will not only protect people’s lives, but also avoid complete shutdown of stores which would negatively impact local businesses.

“We are grateful to government for allowing liquor stores to operate on take away basis because the complete closure of these premises would result in closure of business and to Zero percent performance and further have a huge impact to VAT and other statutory contributions which ZB makes which is about K80 to K100 million,” He said

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Following the directive for the closure of

Markets

Zambia’s inflation rate for the month of March 2019 has recorded a decrease of 0.3 percent the largest decrease in four months.

The March inflation rate decreased from 7.8 recorded in February 2019 to 7.5 recorded this month and this has meanly been attributed to the reduction in fuel and Lubricants (Diesel and petrol) and solid Fuels such as charcoal and petrol.

Despite the reduction in fuel prices that led to a decrease in the inflation rate, the annual food inflation rate has recorded a 0.5 percent increase from 7.7 percent recorded last month to 8.2 recorded this month and this has mainly been attributed to the price change in products such as maize grains, Samp, meat products and fruits, Acting Director of Census and Statistics Central Statistics Office (CSO), Goodson Sinyenga has said.

Although the annual food inflation rate has recorded an increase, the annual nonfood inflation rate has recorded a 1.1 percentage point decrease and this has mainly been attributed to the price change of items in the transport CPI main group such include both liquid and solid fuel.

Meanwhile the month on month inflation rate for the month of March has recorded a 0.4 increase from 0.7 percent recorded last month to 1.1 percent recorded this month. This means that on average, prices of goods and services increased by 1.1 between last month and this month and this increase has mainly been attributed to the change in the prices of food and non-alcoholic beverages.

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Zambia’s inflation rate for the month of

Companies

ZESCO Limited has with immediate effect closed its Kafue Customer Services Centre located in Kafue Estates until further notice.

This is in a bid to complement Government efforts of mitigating the further spread of the Coronavirus (COVID – 19) pandemic, after the country recently recorded three (3) confirmed cases in the Kafue area.

The Corporation further advises its customers and the general public countrywide that it has suspended services such as new installations, processing of new applications and construction because of the risk they pose not only to ZESCO Limited employees, but also to its esteemed customers.

“We continue to urge our customers to minimize walking into Customer Service Centers in all parts of the country, but instead utilize the available online platforms to buy electricity through service providers such as commercial banks, mobile money platforms (MTN, Airtel and ZAMTEL) and KAZANG, a super-vendor”, said Director – Commercial and Customer Services, Mr. Chiti Mataka.

According to a statement made available to the Zambian Business Times – ZBT by ZESCO Head of Public Relations Hazel Zalu on April 16, 2020, the power utility company has ontinued to encourage its customers and the general public to all the time adhere to preventive measures as directed by the Ministry of Health by, amongst others: consistently wearing face masks and face shields when in crowded and work places, regular and correct washing of hands with soap and water, avoiding handshakes and hugs, keeping social distances of at least one meter from each other, drinking a lot of fluids and frequent rubbing of hands with alcohol-based hand sanitizers, to mention but a few.

Mataka said with strict adherence to the above measures, ZESCO Limited is confident that these preventive measures will contribute to mitigation against the further spread of the COVID-19 pandemic.

The Corporation also wishes to advise it’s esteemed customers in the Kafue area that it is continually monitoring the situation, and will keep all concerned informed about developments concerning the area office.

Mataka added that ZESCO’s objective is to ensure that an enabling occupational health environment is attained before due consideration can then be given to the re-opening of the area office.

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ZESCO Limited has with immediate effect closed

Tech

Airtel Zambia Head of Corporate Communications Yuyo Kambikambi exclusively told the Zambian Business Times – ZBT that the company has put in place measures to support e-money transactions where Tier 1 customers [mostly retail] can now transact up to K20,000 per day from K10,000 while on Tier 2 customers [mostly enterprises] can transact up to K100,000 from K20,000.

“We are also currently not charging for any Airtel to Airtel transactions until 30th April 2020. All these measures have been put in place to ease the needs of our customers including those working from homes and those undertaking e-learnings,” She added

Kambikambi said the service provider is also disseminating messages about the pandemic at no costs to the entire base of Airtel customers every day and has donated some phones to the Lusaka Provincial Health Office to assist them as they follow up patients.

Airtel further told ZBT that it has tailored some solutions to meet the customers’ voice and data needs from homes during the current COVID-19 period by offering a 10GB free data package when a customer purchases a 4G pocket Wi-Fi device for K249.

Customers can also get 40GB free data when they get a smart box for K499. This package is aimed at easing the needs of customers in the current COVID-19 pandemic period and enable them access internet services especially for those working from home.

There has been calls from the general public requesting Zambian network providers to further reduce voice and data tariffs to enable individuals doing their work online and taking school lessons from home to have access to affordable internet especially during the period of the COVID- 19 pandemic.

On the question of reducing tarrifs for voice and data services in view of the need for more access during the pandemic period, Airtel however indicated that it offers the most affordable product on the Zambian market called “Ikali”. This offering has both voice and data bundles that come with daily, weekly and monthly options.

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Airtel Zambia Head of Corporate Communications Yuyo

Markets

The Bankers Association of Zambia – BAZ has called on local businesses in the country that have been impacted by the COVID-19 to take advantage loan packages offered by the banking sector to sustain their businesses during this period.

BAZ chief executive officer Leonard Mwanza told the Zambian Business Times – ZBT in an exclusive interview on April 16, 2020, that those in need of financial assistance should approach their respective banks to seek help for additional cash flow and loan restructuring.

Meanwhile, the Central Bank has taken strong measures aimed at ensuring businesses and households can be supported directly working through commercial banks and these include the establishment of a medium term refinancing facility of K10 billion which will enable banks and other financial services providers support businesses.

Absa Bank Zambia has also announced a loan repayment package holiday for 3 months for eligible customers impacted by COVID – 19 to ease the financial and economic implications the virus has brought on the country.

Mwanza has noted that local businesses have adversely being affected as cash flow has reduced, hence in order to meet their obligations, the banking sector has realized the need to help by providing them with options of financing their businesses.

He added that the closure of businesses and suspension of works inclusive of the businesses in the tourism industry has not spared the banking sector, however solutions are being found to enable the continued flow of funds in the country’s economy.

“We have also seen the mining industry advocating to go on care and maintenance, all these are signs that the economy is not doing well across most sectors, however financial solutions are being identified to help business sustain themselves especially in this period.

Mwanza has also encouraged the use of digital channels and mobile payment mechanisms to prevent the spread of the disease by minimizing person – to – person contact and decongesting Banking halls.

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The Bankers Association of Zambia – BAZ

Markets

Zambia and its largest African trading partner, South Africa have agreed on modalities of how the smooth flow of traffic and in effect trade would be attained despite the restrictions on movement due to the health measures to contain the coronavirus – covid 19 transmission.

Despite Zambia running a deep trade deficit with South Africa, the country has continue to facilitate expanded trade with South Africa being the major supplier of consumer goods to Zambia while Zambia has little exports to South Africa to talk about. South Africa also uses Zambia as a transit route for its exports to the vast market in the Democratic Republic of Congo – DRC.

The statement received from the Ministry of Finance by the Zambian Business Times – ZBT stated that Zambia and South Africa have formed a private sector working group to create a framework targeted at ensuring the smooth flow of essential goods and services, during the Covid-19 partial lockdown in Zambia and full lockdown in South Africa.

The two countries have discussed the necessity of ensuring that South African Chain Stores operating in Zambia open their doors wider to local producers and suppliers to ensure that there is business continuity and empowerment during the Covid-19 period and beyond.

Speaking at a meeting chaired by Deputy Secretary to Cabinet Christopher Mvunga on 9 April 2020, the Zambian Government has placed the sustenance of the value chain and continued empowerment of local businesses at the centre of its economic sustainability and emergency purpose plans for the immediate term and the future.

And Finance Minister Dr. Bwalya Ng’andu encouraged the Zambian private sector to rump-up participation in the value-chain and take advantage of the internal market platforms while maintaining quality standards, regular supply and stable prices to the greatest extent possible.

And South African High Commissioner to Zambia George Twala said his office is ready to work with Zambian authorities to facilitate strengthened engagement between private sector players of the two countries and ensure that the value and supply chains are kept in motion.

Twala called for a proactive review of trade and economic affairs that need to be reviewed in the entire value chain to ensure a fast paced programme that will mount a lasting positive impact on the future economic relations between the two countries.

Among the other key issues discussed was import substitution, mutual market access, supplier payment systems, banking and financial services, transport and logistics, smoothening of regulatory matters, border clearance and transit insurance, and the creation of the Zambia and South Africa working group on trade and economic facilitation during Covid-19 and beyond.

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Zambia and its largest African trading partner,

Mining

The Centre for Trade Policy and Development – CTPD has urged Government to promote and safeguard the environment in the exploitation process of the gold resource by crafting legislation that prohibits the wanton use of mercury in the booming artisanal and small scale gold mining operations.

This call comes after an observation that the artisanal and small-scale gold mining – ASGM sector in Zambia is increasingly being seen as a source of wealth and future employment opportunities for those who cannot get jobs in the formal sector.

CTPD has stated that the use of mercury in the gold mining sector is a serious health and environmental threat for communities hosting the gold resource, as the wanton use of Mercury in gold processing results in the contamination of rivers and streams hence poses a serious health risk for people who drink and fish from those water bodies.

The Center’s senior researcher Webby Banda has told the Zambian Business Times – ZBT that there is need to sensitize and train artisanal and small – scale gold mining operators on efficient use, provide them or help them acquire mercury capture devices such as retorts or fume hoods to capture mercury vapor emitted when the mercury/gold amalgam which is burnt.

“In mineral processing, the gold is usually mixed with mercury to form an amalgam and the formed amalgam is heated to separate the gold from the mercury. This heating process discharges toxic mercury vapours which are very dangerous to human health. Mercury in its vapour form is known as elemental mercury. This form of mercury attacks the central nervous system, destroys kidneys, and leads to auto-immune impairment and respiratory distress. High exposures can lead to long life disability,” He added.

Banda further notes that a safe environment and healthy miners are critical aspects of promoting responsible and sustainable supply chains in the artisanal and small-scale gold mining sector. He warned that Zambia should learn from other countries on the dangers of unregulated or untrained use of mercury in gold processing.

CTPD has called on Government to sensitize gold diggers and mineworkers on the safety and health protocols that can be followed to avoid poisoning, saying if the use of mercury cannot be limited or prevented, there is need for Mineworkers to work in well-ventilated areas to reduce the exposure to the mercury/gold amalgam.

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The Centre for Trade Policy and Development

Lifestyle

Zambian Breweries country manager Jose Moran has disclosed that the Brewing company, through its Budweiser brand, is sponsoring online parties to reduce the temptation of opening night clubs.

“The health and safety of our customers is top priority. It is for this reason that we have partnered with Zambian DJ Sébastien Dutch to host online parties on Saturdays for party lovers to club while at home,” he said.

Moran has pleaded with distributors and bar owners to follow government’s directive to close bars and night clubs during the COVID-19 outbreak. President Edgar Lungu had on March 25, 2020 directed the closure of bars and night clubs across the country as a measure to curb the spread of COVID – 19.

And Zambia Breweries Country Director Jose Moran says the company stands with the authorities in fight against the coronavirus hence people should also come together in doing the right thing to protect the country.

“As a law-abiding corporate citizen, Zambian Breweries stands together with the authorities and the nation in the fight against this virus. Government has stopped people meeting together in public places, including bars and restaurants. Licensed outlets may still sell alcohol, but it cannot be consumed on the premises, however this should be followed, He added.

In a statement made available to the Zambian Business Times – ZBT, Moran has dvised bar owners to consider incorporating takeaway services in their businesses to continue running during the COVID-19 outbreak.

“For bar and pubs owners, we can still operate our businesses as takeaways for home consumption. But we need to stay closed and avoid unnecessary crowds. Let’s be part of the solution, and not the problem,” he emphasised.

The Zambian Breweries country director maintained that beer-lovers can enjoy responsibly from home until COVID-19 was defeated adding that one can still buy beer at any licensed outlet, but enjoy responsibly at home not at a bar, in a pub or in any public space.

Moran is however confident that business would go back to normal soon as meausres government has put in place are being adhered to and he stressed the need for togetherness in the war against COVID-19.

“We are all in this together, and together we need to fight and stop this virus for us, for our families, for our country and our future,” he noted.

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Zambian Breweries country manager Jose Moran has

Markets

The South African Reserve Bank has cut the repo rate by 100 basis points or one percent point brining South Africa’s repo rate to 4.25%.

In a tweet seen by the Zambian Business Times – ZBT, Reserve Bank governor Lesetja Kganyado said the decision by the bank’s monetary policy committee – MPC was unanimous and the cut will go into effect on April 15, 2020.

This announcement is the second major cut in less than a month after the Bank cut the rate by one percentage point in mid-march. In mid-January the bank lowered the rate from 6.5% to 6.25%. The repo rate is the benchmark interest rate at which the reserve bank lends money to other banks.

And when the Bank of Zambia was reached for a comment on whether Zambia is considering reducing the MPR and in effect the lending rates as per trend set by the likes of regional economic powerhouse, South Africa, given the current situation of COVID- 19 which has impacted the global economy, BOZ Head of Communications Besnat Mwanza said the decisions on the monetary policy rate – MPR will be decided during the next MPC meeting set for May 20th 2020.

She said the Bank has taken strong measures aimed at ensuring businesses and households can be supported directly working through commercial banks and these include the establishment of a medium term refinancing facility of K10 billion which will enable banks and other financial services providers support businesses and individuals.

“You may wish to note that the COVID – 19 response measures we have taken so far are risk based and appropriate for our economic environment,” She added.The Bank has since pledged to continue supporting the private sector and retail lending clients by easing provisioning rules in the current situation.

Meanwhile, BOZ had on February 19, 2020 through its Monetary Policy Committee decided to maintain the policy rate at 11.50% on account that inflation is expected to remain high in the earlier part of the forecast period which is the first half of the year but decline towards the upper bound of the target range as food supply improves.

The committee also noted that economic activities have continued to weaken in the country and liquidity challenges have persisted hence they continue to pose risks to financial stability.

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The South African Reserve Bank has cut