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Markets

The Bank of Zambia – BOZ has 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.

BOZ Governor Dr. Denny Kyalyalya announced that the committee has noted that economic activity has continued to weaken in the country and liquidity challenges have persisted hence they continue to pose risks to financial stability.

Meanwhile, the Bank had in November 2019 increased the Policy Rate to 11.50% from 10.25%. in December 2019, the statutory reserve ratio was increased to 9.0% from 5.0% and the period of compliance on statutory reserve requirement reduced to daily from weekly. These measures were aimed at addressing emerging exchange rate pressures in order to rein in inflationary pressures.

Addressing the media is Lusaka on February 19, 2020, attended by the Zambian Business Times – ZBT Dr. Kyalya reiterated the need for effective and sustainable implementation of fiscal adjustment and structural measures to address elevated debt levels and debt service obligations, containment of the continued accumulation of domestic arrears and resulting liquidity constraints in order to restore macroeconomic stability and promote robust sustainable economic growth.

The governor further disclosed that some risks that expected to be encountered in the period include, further increase in maize grain prices in the short term, slow progress on fiscal consolidation and second round effect of the increases in electricity tariffs and fuel prices.

He said the rise in inflation has mainly been driven by rising food prices hence the only way to resolve the situation is by increasing food supply adding that it is the bank’s expectation that the country will be able to produce enough foods as seen from this year’s rainfall patterns which show that the country is receiving enough rains.

“The Bank is also taking measures to contain and control the situation and this is evident from the rise in policy rate to 11.50% which is still at play from November 2019. We also want to state that Policy Rate alone will not address the issues of inflation hence individuals should also be able to make economic decisions based on the information that we are releasing regarding the current economic challenges,” He added.

Last week, Finance Minister Dr. Bwalya N’gandu during an economic quarterly briefing stated that his team is expected to conclude the work of re-scoping and review of the current debt with a view to cancel undrawn facilities and stem further drawing on existing facilities were its legally and economically viable.

Dr. N’gandu further assured the nation that the Chinese authorities have not refused to restructure the debt to Zambia, stating that the engagement on debt restructuring with the Chinese and other lenders awaits the completion of the debt rescoping exercise and clearance from the ministry of justice and attorney general on legal options available.

With the rainfall patterns being experienced in Zambia, food production is expected to rebound and result in downward inflationary pressure. The rains are further expected to boost power production with Zambia having its energy production mix skewed towards hydro power productions.

To retain the economy to macro economic stability and better growth rates, the new finance minister is expected to put more emphasis on debt restructuring so that more fiscal room can be created to release funds and pay down domestic arrears which would ultimately result in restoring domestic and market liquidity.

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The Bank of Zambia – BOZ has

Agribusiness

The Bank of Zambia – BOZ, has noted that the expected increase in Agro production of foods in the 2020 harvest season is projected to mitigate the high inflation which had mainly been coming from the rise in the price of food items on the market.

During the Monetary Policy Committee update held on February 19, 2020, at the Bank of Zambia Head offices attended by the Zambian Business Times – ZBT, BOZ governor Denny Kalyalya explained that inflationary pressures continued to mount in the fourth quarter of 2019, driven mainly by a further sharp increase in prices of maize grain and related products and the significant depreciation of the kwacha against the US dollar.

Dr. Kalyalya said the increase in maize prices was mainly due to relatively low production and supply from the 2018/2019 season. Subdued supply amidst heightened demand for foreign exchange relating to the importation of electricity, petroleum products, and agricultural inputs were the key drivers of the depreciation of the kwacha in the fourth quarter.

“Annual overall inflation increased to an average of 11.1% from 9.5% in the third quarter. Average food inflation rose to 14.0% from 10.7 % while non-food inflation slowed down to 7.8% from 8.3%. In December 2019, overall inflation was 11.7% and it averaged 9.1% for the year as a whole”, said Dr. Kalyalya.

The BOZ governor further announced that in January 2020, inflation rose further to 12.5% following the upward adjustment in electricity tariffs and fuel pump prices. Inflation is projected to remain elevated over the earlier part of the forecast period and thereafter decline towards the upper bound of the target range of 6-8%.

The governor said underlying this projection are the effects of on-going electricity supply challenges and increased external debt service payments on inflation through the expectations and exchange rate channels.

He added that the upside risks to the inflation outlook include further increases in the prices of maize grain and related products, the sound round effects of the increases in fuel and electricity prices and slower progress on fiscal consolidation.

Analysts contend that the normal to above normal rainfall currently being experienced across the country is expected to result in better food harvest, boosting supply and expected to result in downward pressure on food inflation. The country staple food, Maize prices have already surged downwards for fresh cobs of maize selling on the fresh and green markets.

Energy production in Zambia has further being boosted by the increased flows in the major rivers, with the Zambezi River Authority – ZRA stating that the water levels have increased by about 25% from the same time last year, which will boost hydro power production.

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The Bank of Zambia - BOZ, has

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