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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

Agribusiness

The Cotton Association of Zambia has commenced country-wide training programmes in bio-energy production and cotton value-chain development for all member cotton growers.

Cotton Association of Zambia Executive Director Joseph Nkole says as part of the organizations contribution to the fight against climate change through sustainable industrialisation, member training programs in the manufacturing of briquettes made from cotton stalks – hitherto, a waste from cotton harvest – is underway.

This came to light when representatives of the Cotton Association of Zambia made a presentation on “Empowering Smallholder Famers along the Cotton Value Chain” to Finance Minister Bwalya Ng’andu at the latter’s office in Lusakat on February 11, 2020.

Nkole explained that the use of cotton stalks manufacturing briquettes had significantly improved revenue earnings for participating members.

He said further that the association is currently collaborating with the United Nations Conference on Trade and Development [UNCTAD] to develop skills in bio-energy production among member cotton growers adding that it will contribute to reduced dependency on the national grid for farm electric power.

He confirmed that following the financial stimulus receive from the Government through the Citizens Economic Empowerment Program and other trade financing facilities from development partners, cotton output has significantly improved and has positioned the country as one of the leading producers in the region.

The association submitted that cotton production still provides the most significant opportunity for smallholder farmers to venture in cash crop farming.

Nkole disclosed that over one-thousand farmers from Southern, Muchinga, Eastern, Central, and Lusaka provinces have been trained in cotton-value-chain skills through a GRZ, European Union and COMESA jointly managed programme that is targeted at upgrading their produce to export standard.

Speaking at the same event, Dr. Ng’andu commended the association for its efforts in improving the livelihoods of rural folk as it was in the right direction in the country’s quest to re-establish the textile
industry.

The Minister applauded the association for establishing members’ skills development programmes and for creating job opportunities, especially for the youth, through the cotton-value-chain.

“We need to stop environmental degradation by reducing deforestation so that climatic conditions are stabilized,” commented the Minister on the Cotton Association’s contribution to the fight against climate change through sustainable industrialisation programmes such as the manufacture of briquettes and bio-energy production.

The Minister decried the rapid loss of forest cover due to unregulated cutting of trees but was encouraged by the association’s youth empowerment programmes aimed at sustainable use of natural resources and agriculture value-chain products.

“As Government, we want your programme to succeed,” said the Minister. This is according to a statement made available to the Zambain Business Times- ZBT by the Ministry’s Spokesperson Chileshe Kandeta on February 11, 2020.

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The Cotton Association of Zambia has commenced

Companies

The Zambia Airports Corporation limited – ZACL has disclosed that the on-going works at Kenneth Kaunda International Airport – KKIA are currently running at 87% towards completion and the works have so far progressed to an advanced stage.

Speaking to the media in Lusaka who toured the construction site on February 11, 2020, ZACL Communications and Branding Manager Mweembe Sikaulu said the design and construction of the airport infrastructure at the Kenneth Kaunda International Airport – KKIA was awarded to China Jiangxi Corporation for international economic and technical cooperation.

And when asked how much has so far been utilized from the US$360 million, Mweembe could not immediately disclose the specific amount but confirmed that the project is expected to be completed in good time, and emphasized on its positive progress.

She said the infrastructure development projects that the corporation has embarked on are to accommodate the anticipated increase in traffic, cargo volumes and passenger numbers. The current construction progress at KKIA for the new passenger terminal is at 96%, the Hotel at 94%, the Rescue and Fire Services Station at 98%, Air traffic control tower at 97%, Presidential Pavilion at 88.5%, Cargo Terminal at 98%, Airport Shopping Mall at 98% and the Airport Office Complex at 98%.

Mweembe added that among the 8 buildings being constructed include the refurbishing of the current airport as a way of developing the airport into a Regional hub. “It is part of our strategic plan that in the next few years Zambia will also become a regional hub just like some other countries and this can only be done by these developments so we can raise our standards,” She said.

She further revealed that the hotel has a 70 room capacity and that the corporation is still in the process of finding who will run the hotel or the brand it will be associated with. The projects embarked by ZACL in the past few years include the upgrading of four international airports namely Lusaka’s Kenneth Kaunda International Airport, the Copperbelt’s Simon Mwansa Kapwepwe International Airport, and the tourism capital of Livingston’s Harry Mwaanga Nkumbula International Airport and Mfuwe international airport which is a gateway to the safari tourism hotspot of the Luangwa National Park.

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The Zambia Airports Corporation limited – ZACL

Markets

Zambia’s stock of external debt has increased to US$11.2 billion as at the end of December 2019 from the stock of US$10.23 billion recorded at the end of July 2019.Finance Minister Dr. Bwalya Ng’andu has disclosed that this was on account of new disbursements on existing loans, mostly earmarked for infrastructure development.

Speaking when he addressed that nation on the state of country’s economy in Lusaka on February 12, 2020, attended by the Zambian Business Times – ZBT, the minister further disclosed that the stock of government securities at end of 2019 was K80.2 billion from K60.3 billion at end of June 2019 attributing the increase to the issuance of government securities to finance the budget deficit for 2019.

He added that the stock of Domestic arrears excluding VAT, amounted to K26.2 billion at end of September 2019 from K20.2 billion at end of June 2019. The minister said government had through the Cabinet Memorandum considered to undertake measures which will address debt servicing among which include a moratorium of contraction of external projects loans, cancellation of selected external project loans, and re-scoping of selected externally financed projects in order to reduce the projects and ultimately reduce the undisbursed loan balance.

Dr. Ng’andu however did not indicated as to when such measures will be implemented stating that the ministry may not give a timeline as when the aforementioned measures will be applied but that the process will begin soon.

He added that government is also working towards unlocking liquidity to the private sector and will reduce the stock of arrears to domestic suppliers of goods and services. “Between December 2019 and January 2020, the ministry released a total of K590 million to the National Road Fund Agency – NRFA and paid out K452 million representing 77 percent of the amount owed to local road contractors and consultants. Almost all the contractors undertaking routine maintenance works were paid in full,” he said.

Dr. N’gandu said in order to avoid further accumulation of arrears, Government has as part of its austerity measures enhanced its control systems adding that all erring controlling officers will be held to account in line with the public finance management act. Government has also pledged to return the country to debt sustainability and get the economy on the path to recovery.

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Zambia’s stock of external debt has increased

Lifestyle

Results of the analysis conducted by the Water Resources Management Authority – WARMA on the groundwater data from its ground water monitoring stations for the period 2019 and 2020 indicated that groundwater levels are at their lowest in the last ten years in some provinces.

This has been attributed to reduced rainfall leading to less recharge and increased social economical activities that are dependent on ground water hence it is highly unlikely that there will be full recovery of ground water levels for the period 2019/2020 season as the situation may be worsened by the effects of climate change.

According to a statement made available to the Zambian Business Times – ZBT by WARMA Public Relation Officer Joseph Kapila on January 30, 2020, The Authority has therefore advised the general public and institutions in the following regions; Southern, Central, Copperbelt and Lusaka provinces to consider drilling boreholes at a path ranging from 70 meters to 120 meters depending on the geology of a given area.

Kapila said this measure is meant to ensure that resources spent on drilling boreholes are not wasted as a result of boreholes drying up due to receding ground water levels adding that the public should further employ water conservation practices at all times to ensure sustainable utilization of the available resources.

Kafue River has less water levels than Zambezi River 

“With regard to surface water, the Authority wishes to highlight the water level status for this current season (2019/2020) compared to last season (2018/2019 season) and forecast for the next thirty days for some key stations on the Kafue and Zambezi Rivers,”

“The analysis of data from gauging stations located on the Kafue River showed that the water levels for the season 2019/2020 are comparatively lower than those recorded during the same period last season (2018/2019) and also below the long term average water level. However, for the next thirty days a steady increase in the water level is forecast with discharge expected to rise from the current flows of just below 200m3/sec to approximately 1,300 m3/sec.,” He added.

Meanwhile, for the Zambezi River, the water levels are higher than those for the (2018/2019) during this period, with recorded discharges above 550m3/sec. The Authority has since assumed that based on the brief analysis thus far conducted of the two rivers and if the situation prevails, the water levels reaching the major dams are likely to be comparatively lower than or similar to those for last season (2018/2019) in the Kafue River, and slightly higher to those for last season (2018/2019) in the Zambezi River.

February has however recorded a recovery in rainfall patterns which is expected to result in new forecast numbers after the monitoring and analysis.

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Results of the analysis conducted by the

Tech

A technical survey of safety aspects conducted on the Alick Nkhata Flyover Bridge by the Engineering Institute of Zambia – EIZ has proven that the bridge is not a death trap despite it having some safety concerns which have to be addressed.

The Alick Nkhata flyover bridge which was constructed as a cost of US$2 million is a project set up by the Public Service Pensions Fund Board – PSPFB with the objective of facilitating safe crossing of the pedestrians traffic that will be generated by the shopping complex which is currently being built around the area.

There have been concerns from residents and motorists around the city terming the bridge a “Death Trap”, sentiment was was re-affirmed and amplified by Permanent Secretary in the ministry of local government, Ed Chomba.

But EIZ President Eng. Eugene Haazele says the structure integrity of the bridge is not in question and that the bridge is not a death trap as it is still a contraction site which is only meant to enhance pedestrian safety.

Addressing the media in Lusaka on February 10, 2020, attended by the Zambian Business Times – ZBT, Eng. Haazele said during the easement of the flyover bridge it was noted that the site is highly constrained and there are space limitations hence the project owners are advised to put in place mitigating measures against lack of space and improve pedestrian safety and enhance aesthetics.

Eng. Haazele added that there is also limitation of visibility for a motorist driving over the bridge impacted by the high slope as the slope of the ramps for the bridge is 10.5% and the slope is steep hence limits visibility of a potential hazard on top of the bridge for the approaching vehicle. He said this problem can be mitigated by limiting the approach speed to 40Km/hour saying it should be the speed limit over the structure and there should be strictly no overtaking.

The Engineering think tank has also noted high potential of congestion at the two roundabouts due to their configurations saying certain elements that impact on efficiency need to be addressed such as radii as well accommodation of pedestrians and cyclists.

“There is need to channelize pedestrian movements to improve safety and avoid potential congestion and this should be by way of dedicating foot ways around the structure area leading into and away from the shopping complex,” he added.

Eng. Haazele further said there is need for adequate lighting around the bridge as the area must be well lit to enhance safety adding that visible signs of any distress on the bridge structure are also recommended. EIZ has since pledged to discuss the mitigation measures above with the local authority with a view to getting them implemented.

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A technical survey of safety aspects conducted

Agribusiness

The Cashew nut revival project which will cover about 60,000 ha will be producing an estimated 46,400 tonnes of raw cashew nuts which will generate about K420 million (about USD 30 million) per annum at its full operational point, which is from 10th year onward, with the first crop expected five years from planting date.

The project may be viewed as a step forward from a poverty reduction point of view, but not so attractive from a wealth creation point of view. According to the details in the African Development Bank – AfDB project financing brief, at full maturity (that is, from the 6th year after planting), each household with a new 1ha-plantation (crop budget) will be making a humble income of about K6,000 (USD 429) per year before labour and input costs. This translates to K500 per month for each household.

It is this prospect of an income average K500 per month or K6,000 per annum from 1 hactare of cashew nut which may have discouraged the urban based folks from trekking to the western province to take positions and aggressively take part in the cultivation of cashew  nut trees to be ready for harvest in five years time.

However, Zambia’s President Edgar Lungu challenged the people of western province to drive the cashew nut industry and leverage the US$55.4 million funds invested into the region to revamp production. The Zambian head of state stated that promoting Cashew production is one of the effective measures for supporting alternative livelihoods and climate change adaptation.

He said cashew nut is tolerant to adverse weather conditions and is a high value cash crop, which can become a money-spinner for western province. The president said Western province of Zambia comprises about 168,000 agricultural households out of which about 81% are maize growers and expressed confidence that cashew nut production will transform the lives of many farmers in the region.

President Lungu said the global projection indicates that by the year 2025, raw cashew production global market will be valued at US$10 billion. He added that world cashew industry produces over 3.5 million metric tonnes of raw cashew nut; and more than half of this quantity is produced by African countries such as Ivory Coast, Benin, Tanzania, Nigeria and Mozambique.

He has since urged the provincial administration, working with the ministry of agriculture, and the traditional leadership including, the people of western province to take the cashew project seriously because the country needs to make a return on the US$55.4 million loan from the African Development bank invested in the cashew nut industry in the western province.

President Lungu said government has invested US$55.4 million in western province, specifically to promote cashew nut production through the cashew nut infrastructure development project and envisages that this will make Zambia become a major player in the global cashew industry.

The head of state was speaking during the launch of the cashew nut planting exercise at Simulumbe Research Station in Mongu and pledged his government’s commitment to supporting and improving the cashew nut production.

He however expressed disappointment that cashew nut production in Zambia is currently far from being impressive and noted with displeasure that the country is currently producing only about 850 metric tonnes per annum, and only has about 1.7 million cashew trees. President Lungu has since directed the Ministry of agriculture to ensure that innovative extension services delivery is made accessible to farmers in western province and countrywide.

Neighboring country  to the north east – Tanzania’s total cashew nut sales on the international market dropped 63% to US$196.5 million in 2019, compared with US$529.6 million in the 2017  confirmed by Minister for Finance Phillip Mpango during his 2019/2020 budget presentation. He stated that exports fell to 120,200 tonnes from 329,400 tonnes in 2017 despite the price per tonne on the international market having increased by 1.7% from $1,607.7 to $1,634.2 in the one-year.

Zambia’s south-eastern neighbor Mozambique, reforms introduced since 2000 are reviving the crop, which in 2019 was expected to produce about 140,000 tons, with a market or export value of US$230 million. In the 1970s, Mozambique was on a par with behemoths such as India, reaching record crops of 200,000 tons production per year.

From the above comparative numbers, it would need households or cashew farmers to increase the hectarage so that incomes can be maximized. The current 1 hactare per household should be treated as a starting point with the relevant cashew growers to plan to at least grow their hectarage to at least 10 hactares to move from subsistence farming to farming as a business and for Zambia to grow this export line to at least half a billion dollars.

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The Cashew nut revival project which will

Companies

The Zambia Institute of Charted Accounts – ZICA, one of the prestigious professional bodies in Zambia has announced the release of the December 2019 ZICA examinations results in its four programmes which include Charted Accountant Zambia Program, Diploma in Accountancy, Diploma in Taxation and Diploma in Public Sector Financial Management.

The CA Zambia level recorded a decrease in the overall pass rate for knowledge and Advisory levels as well as all levels of the Diploma in Accountancy programme. ZICA Chief Executive Officer and Secretary Bonna Kashinga revealed that the a higher pass rate was recorded in the Diploma in Public Sector Financial Management programme at 83% while the lowest pass rate was recorded in the Advisory level of CA Zambia at 26%.

The 2019 examinations written from December 9th, to December 13th, recorded a total entry of 8,496 compared to 7,962 entries in June 2019, representing an increase of 6.7%. Speaking to the media in Lusaka on January 24, 2020, Kashinga explained that out of 8,496 entries for December 2019 examinations, 1,274 entries were absent from the examinations representing an absenteeism rate of 15% compared to 14% in June 2019.

He added that of those present in the examinations 5,056 entries were male candidate representing 70% of the entries while 2,166 entries were female candidates representing 30% of the entries compared to percentages recorded in June 2019 were male candidates recorded 70.5% while female candidate recorded 29.5%.

The institute recorded an increase in the overall performance of the candidate that sat for the December 2019 examinations in the Diploma in Public Sector Financial Management and all levels of the Diploma in Taxation programme compared to the June 2019 examinations.

He added that the institute observed lack of appropriate qualified lectures in selected provinces which led to a number of ZICA students studying under self-study mode with statistics showing that students on full time study perform better compared to those on self-study and part time study programme.

The institute has since announced its plans to digitalize study materials starting this year stating that the digital journey is aimed at accelerating the way business will be conducted focusing at interacting more with students through digital channels.

In addition, the ZICA CEO disclosed that the institute has a plan to upgrade from Diploma programmes to Degree programmes but that not for the year 2020. ZICA has also opened registration for the March 2020 examinations and its due date for payment of the relevant examination fees is 7th February 2020.

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The Zambia Institute of Charted Accounts –

Tech

The Zambia Information and Communication Technology Authority – ZICTA has for the fourth time permitted Unitel, which was to launch the country’s fourth mobile phone operator UZI Zambia to postpone the launch of its mobile network to March 2020 due to lack of resources by its parent company Unitel International Holdings BV.

The launch of UZI Zambia has for the fourth time been pushed to March 2020 and this was confirmed by Permanently Secretary in the Ministry of Transport and Communications Misheck Lungu through an exclusive interview with the Zambian Business Times – ZBT on January 22, 2020.

He explained that the delay in the launch of the mobile network is attributed to lack of resources from its parent Company Unitel as it requested ZICTA to consider extending its license for 6 months due to challenges in externalizing funds.

Lungu disclosed that the ZICTA had granted UZI an extension of up to end of May 2020, which is the expiry date of its initial license period hence hoping that the company begins to operate before the stipulated date.

“UZI faced some challenges with finances from its parent company hence they asked us if we can extend their license to the closure date, so they can find a way of sourcing the required funds. Aside that they have started talks with companies they would sign contracts with and are planning to rent out towers for them to start their business,” he added.

Lungu further stated that once operational, UZI is expected to buy some services from ZESCO and Liquid Telecom and will co-locate some facilities. “They are making progress in sourcing resources, hence we are hopeful that they get on the ground before March 2020”. Efforts by ZBT to reach UZI’s local representatives in Zambia proved futile before press time.

UZI Zambia whose shareholder is Unitel International Holdings BV registered in the Netherlands secured a very competitive mobile phone network license in March 2018 and was first scheduled to launch in December 2018.

Questions have arisen on the viability  and feasibility of the future launch of UZI with calls to cancel the license and re-issue it to another company company growing, following international media reports that one of the major shareholder in Unitel, Africa’s richest woman, Isabel Dos Santos is facing graft allegations from her home country government of Angola which are projected to drag.

The parent company, Unitel in which Africa’s richest woman, Isabel Dos Santos, the daughter of Angola’s former president owns 25 percent pledged to invest more than US$350 million through a local unit to be called UZI Zambia Mobile Network.

A review done by the Zambian Business Times – ZBT indicates that, In January 2019 UZI issued a statement confirming it would launch operations in February 2019 and said at the time that the delay was the result of making sure equipment was properly installed and thoroughly tested.

Then minister of Communication and Transport, Brian Mushimba, now minister of higher Education, confirmed to the media in March 2019 that the launch of the fourth mobile network operator had been pushed forward to November 2019.

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The Zambia Information and Communication Technology Authority