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Mining

The global impact of the coronavirus has finally directly hit home as Zambia’s largest copper miner, First Quantum Minerals – FQM which relies on its Zambian mines for over 60% of its group global copper production, with talks being delayed for the planned minority share sell deal.

The rapid spreading of the deadly Coronavirus has sparkled concerns from markets around the world that the virus outbreak will slow demand in China, the largest consumer of most commodities, that includes copper, which is Zambia’s single largest export product.

According to Reuters, copper miner FQM which in the past has been in talks with a Chinese company about a possible sale of shares, said on Friday that discussions to sell the minority stake in its Zambian mines have stalled amid the coronavirus outbreak in China.

The Virus has temporarily derailed talks to sell a minority stake in First Quantum Minerals’ Zambian operations, company executives said. They revealed that the Virus outbreak is preventing face-to-face meetings with potential Chinese buyers, postponing a sale that’s key to the Vancouver-based First Quantum’s US$2-billion debt-reduction plan, the copper mine said during its fourth-quarter earnings call.

First Quantum President Clive Newall said the epidemic hasn’t yet materially affected First Quantum’s physical sales and that the broader market impact is being mitigated by the miner’s hedging program.

“Our hedging program, now extended through 2020, provides some protection from copper price volatility, at the same time, a strong balance sheet has made us more resilient to black swan events such as this”, Newall said.

In December, Newall disclosed that the company’s focus for the next two to three years will be cutting debt by at least $2-billion. The executives said that the sale of a minority stake in First Quantum’s Zambian operations would help achieve the debt reduction target faster but talks are unlikely to resume until the second half of the year.

Jiangxi Copper has been seen as a potential buyer. Newall said the First Quantum required the Chinese company to sign a non-disclosure agreement restricting it from buying more than 20% of First Quantum’s shares.

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The global impact of the coronavirus has

Companies

The National Pensions Scheme Authority – NPSA has received a dividend of ZMW 7.98 million (about US$560,000) from ZCCM-IH, a demonstration of the authority’s investment in various assets as guided by investment guidelines.

NAPSA is major player in Zambia’s financial and social security sectors with a goal of providing long term income security to its members and their families.

Speaking at the dividend handover ceremony on February 12, 2020, NAPSA Director General Yollard Kachinda said the authority has since 2014 continued to make profits from its investments in ZCCH-IH adding that it paid a dividend total sum of K55,833,959.26 from profits made in ZCCM-IH so far.

He further disclosed that the authority currently has over 16,000 pensioners on its payroll with a total pensions payout in 2019 standing at over K1 billion, the cash which is ploughed back to turn the economic wheels of the country.

“On behalf of the board and management of NAPSA, I would like to assure all workers contributing to NAPSA that their interests will always be at the center of every investment decision we make. It is therefore important to note that we will always ensure that we invest and grow the fund in a transparent and prudent manner which will result in a financially sustainably scheme,” He said.

And ZCCM-IH Chief Executive Officer – CEO Mabvuto Chipata said the fourth dividend cheque handed over to NAPSA is a fulfillment of one of its major strategic pillars and a demonstration of its commitment to its stakeholders.

“Even though copper remains the mainstay commodity within our group, we are widening our footprint in the mining sector by developing new product lines such as manganese in central province, and gold processing in Runfunsa, Mumbwa and Mwinilunga,” He said.

Mabvuto added that the named projects are just awaiting finalization of statutory approvals which will be concluded soon. ZCCM-IH has reiterated its focus on generating consistent and predictable income through investments in brown field and greenfield projects while ensuring and maximizing for its shareholders.

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The National Pensions Scheme Authority – NPSA

Companies

The Center for Trade Policy and Development – CTPD and the Zambia Tax Platform – ZTP have expressed disappointment at the speech delivered by the of Minister of Finance, Dr. Bwalya N’gandu which they described as not offering hope to ordinary Zambians as it was merely a reminder of how citizens should brace themselves for tough days ahead.

Minister of finance Dr. Bwalya Ng’andu had last week addressed the nation on the state of the country’s economy and pledged to return the economy on the path to recovery through implementing debt management measures and enhance revenue collection.

But the ZTP is disappointed that looking at the measures government plans to undertake, it does not seem to have tangible solutions to address the various challenges the country is facing.

Speaking at a joint press briefing with CTPD on February 14, 2020, attended by the Zambian Business Times – ZBT, ZTP Chairperson Leah Mitaba also expressed concern at the rise in public debt which she said is now a threat to spending towards critical social sectors.

She has since called on government to be more transparent on the country’s debt situation as it has been silent on key information around debt especially with regards to the value of the pipeline debt, for both domestic and external.

“With regards to government’s announced plans to rescope debt, ZTP urges government to provide clarity on the specific projects it intends to rescope in an attempt to reduce project costs and undisbursed loan balances, as they relate to underspending in key sectors from 2019 fiscal year,” She added.

Leah has further noted the need by government to disclose how much it owes to financial institutions for the loan deductions it’s been collecting from civil servants saying it is wondering how dismantling of arrears seems more biased towards road constriction and the construction sector in general without considering other strategies towards unlocking private sector participation.

And CTPD Executive Director Isaac Mwaipopo said there is need to stimulate growth in the economy by placing government resources into sectors that can generate economic activities like the Agriculture sector.

He added that government should not only concentrate on dismantling arrears owed to local contractors but also deal with Agro dealers in the Agriculture sector as this may go a long way in facilitating their active participation specifically within the Agro space and the general economy at large.

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The Center for Trade Policy and Development

Sport

Newly appointed Chipolopolo coach Milutin Sredojevic popularly known as Micho has stated that the biggest challenge that Zambian soccer players have is the lack of mental strength. Micho stated that “I know that Zambian football has no problem in talent and quality, however, strongly believe that the biggest problem we have is the level of mental strength.”

During the unveiling ceremony at Barca Academy, Micho said that although other suitors had been on his case, he was more convinced that the Zambian expedition provided the most exciting challenge.

“I had chances and options to go somewhere it is much more comfortable but my respect for Zambian football made the decision easy. It is a big challenge, it is not a walk in the park”

In statement made available to Zambia Business Times – ZBT, Micho said he was preaching a never die spirit for the Zambian game under his watch. “As Zambian football we shall not allow things to get away from us, never say die, and never give up needs to be our identity. We have to do everything we can to show that we belong where we belong.”

The Serbian national said that Zambian players needed a stronger mental psyche to succeed in foreign soils. “You know it is painful that countries below Zambia have players in Aston Villa, all countries are watching Mbwana Samata (Tanzanian) playing for Atson Villa, yet as Zambia we have none,” he said.

Micho further stated that he has seven phase plan that has its tip, Zambia playing at the Qatar 2022 FIFA World Cup.

“I would like to present to you a technical master plan, that has seven phases, and a dream on top of that pyramid. In ghose seven phases we have the dream of going to the World Cup Qatar in 2022,” he said.

“Any success in life starts with a dream, I would like us not only to dream when we are sleeping but even when we are awake with our eyes open. We have an oblia to go beyond the March 26 match against Botswana, the match against Botswana is not played on the 26th but it is starting to be played now.”

a said he will have deep assessment of local players, continental and European based players as he builds his squad.

“We want to go and do deepest assessment of the present state of the players that as individuals are supposed to be the Parsifal mosaic the national team, to have a bracket of players playing locally, playing in Africa and brackets of players playing worldwide. And put those brackets of players in right shape of mind that is extremely strong,” he said.

Micho added: “I am standing here in front of you in order to make our team mentally strong, physically fit, technically effective and tactically competitive because it is all about that result. We are not here only for a beauty contest of course to have a theoretical awareness of what is in front us.”

Meanwhile Kamanga said Micho would get down to work immediately with the task of salvaging the Cameroon 2021 Africa Cup of Nations dream.

Zambia plays Botswana on March 26 at home while the Chipolopolo will be away on March 31 on back to back fixtures that will be critical in putting the AFCON campaign back on track.

The Chipolopolo also have the CHAN tournament in April where they are among the 16 African countries battling for honours.

Zambia has also the World Cup campaign on radar in October where they are grouped with Tunisia, Mauritania and Equatorial Guinea.

Micho takes over from Sven Vandenbroeck whose contract was not renewed in March 2019 after failing to qualify Zambia to the 2019 Africa Cup of Nations in Egypt.
He has been signed on a two year contract and will be joined by two foreign coaches comprising his first assistant and goalkeeper trainer.

Micho will also have Oswald Mutapa as his local assistant and Stephen Mwansa as goalkeeper coach who will understudy the foreign goalkeeper coach.

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Newly appointed Chipolopolo coach Milutin Sredojevic popularly

Companies

Absa bank Zambia plc, a subsidiary of Absa group limited and which is formerly known as Barclays bank Zambia plc has received a license to operate and trade under its new name Absa.

The name change marks the start of a new era for the bank’s operations, one that sees the realisation of an ambition to become an independent African bank.

The company, which has been operating in Zambia for over 100 years, reiterated its commitment to the country’s growth and economic development under the Absa brand.

Speaking during the official transition event from Barclays to Absa in Lusaka on February 10, 2020, Absa Managing Director Mizinga Melu said the bank has invested in crucial sectors of the national economy, including mining, energy, agriculture, public sector, oil & gas, manufacturing, telecoms, financial services, and trading p.

She said that therefore, Absa will continue to play a critical role by investing in these sectors without neglecting the ordinary citizen who seeks quality financial services and safe investments for their hard-earned money.

“Today we begin a new chapter as Absa Bank Zambia plc adopting our parent company’s name and brand while retaining our indelible commitment to Zambia and its people. Our new brand is a commitment to Zambia and to the wider continent: Absa is a truly African bank, with global scalability and reach,” She said.

Mizinga reaffirmed that the bank would remain a significant player in the banking and financial services sector in Zambia and a contributor to the country’s economy.

“As Absa, our ambition is to become a digitally-led bank that is centered around the ever-changing needs of customers. Fie believe we have a role to play and intend to leverage digital technology to expand reach and access of financial services but also provide affordable services,” she added.

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Absa bank Zambia plc, a subsidiary of

Markets

Zambia’s economic growth rate in 2020 is expected to be above 3% and is expected to continue to grow despite the current challenges that have led to a high cost of living. This is because of the improved prospects in the energy and agro sectors.

Finance Minister Dr. Bwalya Ng’andu revealed that risks to the medium-term growth projection relates to climate change, ineffective implementation of fiscal consolidation measures and uncertainty in the global economy.

Zambia’s economy has been affirmed as one the fastest growing economies in Africa based on its copper-mining industry and that the aggressive infrastructure drive is expected to provide the base from which future economic growth will be anchored from.

The finance minister announced that Zambia’s economy is expected to continue to grow in 2020 and continue with this momentum in the medium term on grounds that government is implementing measures that will enhance revenue collection, return the country to debt sustainability and onto the path of recovery.

Speaking when he addressed the nation on the country’s economy in Lusaka on February 12, 2020, Dr. Ng’andu said the fiscal deficit is expected to be narrowed to around the projected 5.5 percent of GDP and this will be on account of measures government is undertaking to enhance revenue collection as well as deal with the debt portfolio.

“The Ministry will also give special focus in 2020 to funding social sectors particularly pensions, social cash transfer, health and education sectors whose allocation in 2019 was not fully met. Further the ministry will focus efforts at domestic arrears dismantling,” he said.

The year 2019 was challenging economically with GDP growth revised down to 2 percent from an initial projection of 4 percent and this was attributed to adverse weather conditions, low agriculture output and low electricity generation.

Analysts however have called for the GDP growth rate of over 7% for it to have an effect on reducing poverty levels and drive wealth creation. The copper mining industry is the low hanging fruit that would be tapped to drive the growth rate but the impeding elections in 2021 are also said to be impending some investments.

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Zambia’s economic growth rate in 2020 is

Companies

The Zambia Development Agency (ZDA) has signed a Memorandum of Understanding with the Center for Innovative Governance and Research (CIGR) with a view to increase competitiveness and investor friendly practices benchmarked on charter city best practices and building capacity in areas under the scope of ZDA in Zambia.

In a statement availed to Zambian Business Times –ZBT, ZDA Acting Director General Matongo Matamwandi says the cooperation aims at transforming the Agency’s internal systems and procedures so as to create an investor and export friendly climate in Multi-Facility Economic Zones, Industrial Parks and Farm Blocks in Zambia.

‘‘The MOU marks an important milestone in the promotion of the zones which should have quality investments that deliver the much required skills, technologies and capital which add value to the countrys’ natural resources which transforms the economy.’’ elaborated Matamwandi.

He said the Agency looks forward to sharing knowledge on key aspects regarding global investment trends and governance. ‘‘We are sure the capacity building programmes will yield the necessary results for both parties and the nation as a whole,’’ he added.

Meanwhile, CIGR Executive Director Mark Lutter explains that his team has global experience, transformation, enhancing administrative, and management practices in city developments in Africa, Asia, and Latin America.

He adds that CIGR’s objective is to work with ZDA to develop robust and competitive business practices benchmarked on Charter City standards making Zambia the preferred investment destination of choice. The duo were speaking in Lusaka at the ZDA headquarters during the MoU signing ceremony.

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The Zambia Development Agency (ZDA) has signed

Markets

First National Bank (FNB) Zambia has partnered with the North-Western Energy Corporation (NWEC) Limited to further enhance the construction, operation and distribution management of electricity in the non-mine areas of Lumwana, Kalumbila and Solwezi (Kabitaka) concession and surrounding areas.

Acting FNB Head of Business and Commercial Banking, Lubasi Katundu said the Bank was thrilled to support the financing of the NWEC’s community-uplifting projects based on the strength and viability of its vision for the North Western Province and in context of the current and growing demand for power supply and related services in the region.

Katundu added that being part of the US$20 million overall investment demonstrates FNB’s ability and ambition to enable its clients ‘vision for the future.

The company, whose project is now in its 13th year of operation, has supported the supply of power to over 4,000 households to date and has also enabled the connection of essential commercial entities such as banks, filling stations, schools and clinics that support the population in the area.

‘‘We believe that this venture serves as another clear example of FNB Zambia’s commitment to playing a pivotal part in driving growth and development by securing current and future infrastructure and local job creation demands in North-Western province and beyond,’’ said Katundu.

Speaking on the partnership, NWEC Limited Chairperson, Andrew Kamanga, said the organization is thrilled to have a banking partner that recognizes pressing topical challenges and is prepared to invest in impactful and workable initiatives to address them. The financing partnership will ensure the continuation and extension of power supply to nearly 10,000 households and businesses through to 2023.

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First National Bank (FNB) Zambia has partnered

Companies

Zambia Forestry and Forest Industries Corporation (ZAFFICO) on 12 February 2020, scored a first as it listed on the Lusaka Securities Exchange (LuSE), giving hope to other state-owned entities under the Industrial Development Corporation (IDC) Group to follow.

The company, which raised almost K300 million from the initial public offer (IPO), also becomes the first firm to list on LuSE in five years and brings the total number of companies listed on the capital market to 23.

IDC Group chief executive officer Mateyo Kaluba said the capital raised from the IPO will be deployed into new forest plantations across the country, thus increasing the lifespan of the company. Kaluba said the listing of Zaffico on the wider platform will actualize its potential stating that it is the first IPO in the forestry sector and also restricted to Zambian investors.

Finance Minister Bwalya Ng’andu urged the LuSE and Securities Exchange Commission – SEC to take bold and decisive measures that will make it easier for companies to list. Dr. Ng’andu said this when he officiated at the Zaffico listing ceremony in Lusaka on 12 Februarry 2020.

The Minister said the listing of Zaffico will contribute to increasing supply of stock to LuSE and presents an opportunity for domestic retail and institutional investors to diversify their portfolios.

And Zaffico Board Chairperson Anna Kunda said the development of listing Zaffico will enable the company to expand its plantations, such that the company will have at least one plantation in each of the 10 provinces. Kunda stated that Zaffico will be consolidating its position in the market to be leading supplier of wood and timber related products, while it also supports the re-afforestation efforts to address the effects of climate change.

Speaking at the same function, LuSE Acting Board Chairman Richard Phiri said the listing of Zaffico will raise capital for the long term without incurring high costs that come with traditional modes of financing such as debt. And Securities Exchange Commission CEO Philip Chitalu, said the commission will continue to facilitate a conducive environment to enhance participation in the capital market.

Zambia State Insurance Corporation – ZSIC is the other company that was specifically listed by government for listing in 2019 but is still outstanding. Listing on LuSE is also a control function that aids with companies putting in place good corporate governance measures to meet listing rules. The bourse also offers opportunities for Zambians to have a direct equity stake in companies operating in Zambia.

Analysts have observed that SEC and LuSE management teams need to be reformed to held drive the viability and increase the numbers of listed companies. Just by aggressively working with IDC, LuSE can attract more than 50 companies which are currently state owned.

The Securities market in Zambia needs to be further developed to offer a viable alternative for raising capital other than from banks and financial institutions. LuSE also houses the alternative exchange which needs awakening to offer Small and Medium Enterprises a platform to raise capital for expansion and further creating the much needed employment opportunities.

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Zambia Forestry and Forest Industries Corporation (ZAFFICO)

Markets

Zambia’s Gross International Forex Reserves have increased to US$1.45 billion equivalent to 2.1 months of import cover as at end of December 2019 from the US$ 1.41 billion equivalents to 1.6 months import cover recorded at end of June 2019.

Minister of Finance Dr. Bwalya Ng’andu has announced that the increase in reserves is attributed to net purchases of foreign exchange from the market by the Bank of Zambia and continued payment of mineral royalties in US dollars.

This means that in an event of a major crisis, the country can continue to survive on imports for a period of 2.1 months as there is a buffer for international trade and balance of payment funds. This further means that in situations where there is no any other foreign currency coming into the country for the period of 2.1 months, the country should be able to pay for its key imports such as fuel and any other goods imported from outside the country.

Meanwhile, the Minister also announced that the exchange rate of the Kwacha against major currencies generally depreciated in the third and fourth quarter of 2019 saying this was at the back of heightened demand in the market induced by petroleum, electricity and fertilizer imports, amidst reduced supply of foreign exchange.

Addressing the nation about the country’s economy in Lusaka on February 12, 2020 at Intercontinental Hotel, Dr. Ng’andu has also disclosed that inflation is expected to remain high in the first half of the year on account of the past-through effect of the exchange rate depreciation and the increase in fuel and electricity prices.

He said the rate is expected to start tapering down in the second half of the year due to a reduction in food prices as fresh produce begins coming onto the market. Dr. Ng’andu added that government will continue implementing measures aimed at stabilizing and augmenting external reserves and these measures include reducing outlays on debt service, Bank of Zambia purchase of foreign exchanges from the market as well as purchase of gold as a reserve assert once the process comes to a conclusion.

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Zambia’s Gross International Forex Reserves have increased