Cross border association backs calls for suspension of passenger services

The Cross Boarder Traders Association – CBTA has backed calls to suspend cross boarder public passengers at boarder entries to curb the spread of Coronavirus (COVID -19). This follows public concerns over the Chirundu border, Zambia’s border with Zimbabwe which is said to handle the highest traffic from South Africa.

South Africa is considered to be southern Africa’s epi-center, and has so far recorded the highest number of laboratory confirmed cases in both southern and Eastern Africa. South Africa is Africa’s second largest economy by GDP.

CBTA Secretary General Jacob Makambwe told the Zambian Business Times – ZBT in an exclusive interview that the recommendation to end cross border public passenger services would help to mitigative further spread of the virus which has a massive negative impact on businesses in the country.

He said Zambia is already grabbling with a weak economy which is likely to be exacerbated if the number of confirmed cases continue to increase hence the need to urgently close passenger entry points to curb the disease.

Makambwe added that local manufactures should take advantage of the situation and begin to look within the country by improving production of local products in order to boost the local industry.

“Yes, COVID-19 has negatively affected our businesses but we urged our members to look within and get products from local manufactures to complement the ‘Buy Zambia’ campaign. It is time to improve our production and manufacturing capacity if we are to sustain ourselves with products that we need in this COVID-19 situation,” He said.

The cross border traders board has since urged all its member to abide by the rules that have been prescribed by health experts and has called on government to put in place restrictions on land boarders that are still open with countries that have confirmed cases of COVID-19.

Health Minister Dr. Chitalu Chilufya had told ZBT in an exclusive interview on March 18, 2020, that the Ministry has placed health officers at all land boarders and Airport entries across the country to monitor travelers and ensure those with symptoms of COVID-19 are invested and quarantined.

The Cross Boarder Traders Association – CBTA

Businesses battle for survival on COVID 19, inflation & Kwacha slide

The continued rise in the number of new cases of the COVID-19 across the globe and in Zambia threatens to bring the economy to a halt and something needs to be done. Local and private businesses risk losing their capital during this difficult period.

So far, government has curtailed certain businesses and social activities deemed to be high risk of facilitating the spread of COVID 19 as the minister of health announced safety measures to prevent further spread. The three edged sword of COVID19, Kwacha depreciation and escalating inflation is already breaking down some businesses.

Some of the businesses that attract huge crowds such as bars, nightclubs, casinos, cinemas, and gyms have been shut down for an initial period of 14 days. Revenues for these businesses have disappeared overnight leaving the employees and taxman grappling.

This move has hit harder on the business owners, with some of even finding themselves on the wrong side of the law, some abrogating the health directives just so that they can survive and be able to keep their staff.

Small and Medium scale traders that deal in imported goods are equally affected by the Pandemic due to restrictions in the movements of both people and goods, across countries. Though some measures have been put in place for trucks to relay the goods, this is mostly for large businesses that can negotiate for these provisions.

Zambian Business Times-ZBT spoke to some local traders on March 27, 2020, who sell fruits such as, Bananas, Oranges, Apples and Nuts at City Market and Town Center and they expressed concerns that it has become so difficult to order and restock their wares now, unlike before.

One trader identified as Samuel Mulenga told ZBT that the price of Bananas and oranges has swiftly gone up due to COVID-19 presence. He said this has badly affected his income. ‘‘I cannot manage to pay all the bills and rentals now, because we are barely breaking even, profits if any is very small. Before, I used to make 50% to 70% return from one order, now am making only 20% before costs of operations due to the fall in Kwacha against the dollar.

The problem with our business is that some fruits are not locally produced and with restrictions in movement, it means at some point, imported fruits may completely stop getting into the country, so we may be forced to divert to new businesses which is not an easy thing,’’ he said.

Another trader, appealed to government to consider the economic stability of especially private citizens and business owners, saying people will soon be left homeless, as they will be evicted from houses due to non-rental payments, which will pose a further risk of disease contraction.

“I am not against the preventive measures that government is undertaking, but, my concern is that about more or less 70% of people live in rented houses in this country and these people are rooted into self-employment. Very few are into formal jobs, so basically its very tricky to just leave them like that, some solutions need to be found.

Personally I sell Nuts that come from South Africa and Mozambique and it has been in low supply to almost extinct of late after COVID 19 outbreak, so no income at the moment ,’’ he said.

The country’s economy has continued to receive economic shocks, it has just recovered from chemical and gas attacks on citizens across the county and is now faced with the spread of the coronavirus.

The continued rise in the number of

Zambia revises downwards its 2020 GDP growth rate

Minister of Finance Dr. Bwalya Ngandu has confirmed that following the outbreak of COVID-19 across the globe, Zambia’s economy has negatively been affected with global trade slowing down following closure of borders and the lock down in major economies.

Speaking at a media briefing in Lusaka on March 27, 2020 attended by the Zambian Business Times- ZBT, the Minister explained that the reduction in merchandise trade has impacted negatively on revenues particularly for commodity exporting economies like Zambia and the cancellation of flights by major carriers which has further impacted negatively on trade in services such as tourism.

He disclosed that in view of the recent developments, Gross Domestic Products – GDP growth rate has been revised downwards from 3.2% to around 2%. This is despite the anticipated significant recovery in the agricultural sector.

Dr. N’gandu stated that tourism, mining, manufacturing, construction and retail trade sectors are projected to slow down adding that the full extent of COVID 19 impact will depend on the severity and duration of the pandemic.

“In the case of copper, prices opened the year at US$6,165 per metric tonne but are now at about US$4,754 per metric tonne on Wednesday 25th March 2020, this will negatively affect Zambia’s revenues,” He added.

The Finance Minister said financial markets have not been spared by the pandemic as the international economy has seen investors divesting their funds from traditional assets such as Commodities, stocks in emerging markets, to safe havens and currencies that include the US Dollar, hence has resulted in the US Dollar strengthening against other currencies, including the kwacha.

And in response to the challenges that the country’s economy is facing on COVID-19 threats, Cabinet has approved a COVID-19 contingency and response plan with a budget of about K60 million under the Disaster Management and Mitigation Unit – DMMU.

The Minister added that if the situation persists, government will scale up resource mobilization from the 2020 budget to curb the spread of the disease. As of March 30, 2020, Minister of Health Chitalu Chilufya confirmed at a media briefing that Zambia has recorded 35 cases of COVID-19.

The latest update from the World Health Organization – WHO indicates that over 470,000 confirmed cases have been recorded around the world and more than 20,000 deaths have been reported. The Zambia Public Health Institute has been actively engaged to spearhead the fight against #COVID19

Minister of Finance Dr. Bwalya Ngandu has

Finance Minister Dr. Bwalya Ngandu outlines actions to combat COVID-19

Zambia’s Finance Minister Dr. Bwalya N’gandu has outlined government’s financial and fiscal measures meant to aid the country as it goes through the heavy impact of the coronavirus – COVID 19 global epidemic.

Dr. N’gandu stated that these are initial measures and that follow through actions will be announced in due course as the health and economic environmental effects unfolds. The briefing was attended by the Zambian Business Times – ZBT. Below are the measures implemented to mitigate the impact of COVID-19.

The finance minister echoed President Lungu’s 7 point plan to combat the spread of covid-19, and that the finance ministry working with other ministries has taken the following measures:

1, Set up an epidemic preparedness fund under the ministry of health amounting to k57 million;
2, Cabinet approved a covid-19 contingency and response plan with a budget of k659 million under the disaster management and mitigation unit;
3, The government has started mobilizing funds through the budget and engagement with various local and international stakeholders.
4, Government is in the process of making applications to multilateral partner and lender organizations for covid-19 support. As announced, the international monetary fund is making available a total of $50 billion to affected countries via rapid disbursing emergency facilities while the world bank group has approved support of up to $14 billion under a fast track covid-19 facility.
5, To support the easing of liquidity in the face of the adverse effects of covid-19, Dr.N’gandu stated that government will release K2.5 billion to:
Reduce domestic arrears owed to domestic suppliers of goods and services;
Reduce outstanding arrears to pensioners under public service pension fund and retirees under ministry of justice; and
Reduce outstanding third-party arrears and other employee related commitments.
In addition, k140 million will be released to pay local contractors in the road sector.

ZBT will give more details on the effects of some of the key proposed actions that included changes in tax rates and other fiscal measures. Missing conspicuously was the Bank of Zambia governor who also needs put on the table some immediate actions under monetary policy.

Zambia’s Finance Minister Dr. Bwalya N’gandu has

Zambia posts a trade deficit of K120 million

Zambia has recorded a trade deficit of K119.5 million (about US$6.6 million) in February 2020, a reversal from a January 2020 trade surplus of K2,352 million.

The Zambia Statistics Agency told the Zambian Business Times – ZBT that exports declined by 6.5% to K7,829.1 million in February 2020, down from K8,375.0 million in January 2020, while imports increased by 32.0% to K7,948.6 million in February 2020, from K6,023.3 million in recorded in January 2020.

Zambia Statistics Agency Interim Statistician General Mulenga Musepa told ZBT in a an emailed statement on March 26, 2020, that the fall in exports was mainly attributed to a 9.4 decline to K5,626.0 million in traditional (copper and copper related products) exports earnings, while non copper exports rose by 1.8% to K2,203.2 million in February 2020.

Musepa explained that Copper export volumes during February 2020 fell by 11% to 64,000 metric tonnes. “The London Metal Exchange – LME copper prices declined by 6% to US$5,686 per metric tonne in February 2020. During February 2020, Agricultural traditional exports increased by 21% while non-traditional Agricultural exports (Agro NTEs) declined by 5%. Agricultural traditional for Zambia exports include Tobacco, Sugar, and Soyabean products while non traditional exports mainly include Emeralds, Sulphuric Acid and Cement,” he said.

He said higher import bills mainly driven by the increase in imports for consumer goods which accounted for 58% while capital goods accounted for 25%. He explained that major export destination in February 2020 continued to be Switzerland at 40% followed by China at about 24% copper products. Switzerland is head office for Mopani copper mines parent company, Glencore were copper exports are booked.

The Congo DR was third accounting for about 15% of the total export earnings in copper concentrate. These three countries accounted for 78% of Zambia’s total export earnings.

On the Imports side, major source for February 2020 was China at 28% mainly for Machinery and construction equipment for various uses. This was followed by South Africa with about 25% which is mainly composed of consumer goods and then the UAE accounting for about 14%. The gulf region is the main source for crude oil for Zambia, and these three countries accounted for 67% of Zambia’s total imports”, he added.

Zambia risks running a steep trade deficit as copper demand and prices have been negatively affected by the global covid 19 outbreak. The flip side though is that imports are also expected to drop as South Africa, who are the largest consumer goods exporter to Zambia have put in place a lockdown which has slowed down cargo and people movement.

Chinese exports to Zambia for machinery and construction equipment is also expected to slowed down, together with crude oil imports as the Zambian economy is also slowing down on COVID 19 health measures being implemented.

Zambia has recorded a trade deficit of