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Agribusiness

The Tobacco Board of Zambia – TBZ has announced that it is currently conducting a research on the viability of planting tobacco seeds from Malawi and Zimbabwe in Zambia as way of increasing varieties and revenue in the tobacco industry and bringing more buyers on board.

TBZ Chief Executive Officer James Kasongo has told the Zambian Business Times – ZBT in an exclusive interview that the board has currently grown 34 hectares of tobacco seeds from the named two countries saying the initiative is aimed at contributing to the increase in tobacco production aside sharing the outcome of the research.

He disclosed that the industry had in the 2019 marketing season recorded total production of 28 million Kilograms compared to 31 million Kilograms recorded in 2018 hence the move was also prompted to arrest the decline in production recorded in the previous years.

“This initiative is an agreement between the board and the two countries, once the tobacco is ready, are going to sell it and that’s part of the research because we want to see how it will perform on our soils and our expectation is that it yields positive results, because that will be an added advantage to the Zambian market,” he said.

Kasongo has further revealed that the board is currently undertaking an exercise of yield estimation for all tobacco growers in the country which will determine the yield expected in the country for this year’s marketing season.

He added that the process which is set to be complete by March 2020 will also disclosed the number of farmers involved in this year’s marketing season and will announce the hectares grown. He said the board is ready to engage with stakeholders in declaring profit for the industry by calling for more buyers on the market as it will add to the growth of the industry and improve forex inflow for the country at large.

“We want to get back to the positon where the industry can effectively contribute to the national treasury, before 2014 we were contributing 3% to the nation’s GDP but of late, we have been contributing about 1% due to low production, therefore having more buyers on board will lead to the increase in production and benefit the country as a whole,” he said.

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The Tobacco Board of Zambia – TBZ

Markets

The Pensions and Insurance Authority – PIA has disclosed the authority has for the year 2020 granted licenses to 317 Insurance entities out of which 26 are insurance companies, 17 general insurance companies and 9 are long term insurance companies.

The Authority has also licensed three (3) reinsurance companies, three (3) reinsurance brokers, 44 brokers, 222 agents and 19 other intermediaries.

According to a statement made available to the Zambian Business Times – ZBT on January 20, 2020 by PIA Communications Manager Doreen K. Silungwe, the authority has pledged it commitment to continuously monitor and scrutinize the operations of all licensed entities focusing on prudential supervision and market conduct in order to protect the interests of policyholders and beneficiaries.

Meanwhile, the pensions industry registered a positive growth in net asset value of K7.70 billion as at 30th September, 2019 from K7.60 billion as at 30th June, 2019, representing an increase of 1.3%. On a year to year basis, net assets grew by 5.5% from K7.30 billion at 30th September, 2018 to K7.70 billion at 30th September, 2019.

Equally, total investment income increased from K62 million as at 30th June, 2019 to K182 million as at 30th September, 2019 representing a 93% increase in investment income. This improvement in investment performance is mainly due to exchange gains earned during the period.

The industry also recorded a reduction in contributions from K282 million as at 30th June, 2019 to K274 million as at 30th September, 2019 representing a reduction of 3% as opposed to a 7% increase in the previous quarter.

Silungwe said refunds of contributions upon members leaving the sponsoring employers increased to K241 million as at 30th September, 2019 from K103 million as at 30th June, 2019.This represents a 31% increase in refunds during the third quarter of 2019.

“The pensions and insurance industries also faced some challenges which, included increased delays in remittance of pension contributions, rising insurance claims, poor liquidity and rising policyholder debt. The debt in premiums owed by policyholders to general insurance companies stood at K722 million as at 30th September 2019 as compared to K627 million as at 30th September 2018,” She added.

The Authority is also concerned with the growing policyholder debt as this affects the liquidity of insurance companies causing delays in settlement of claims.

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The Pensions and Insurance Authority – PIA

Companies

By Mulenga Kaluba

Audit and Assurance Services
An audit and assurance service can be defined as a professional service that involves inspecting and evaluating an organisation’s accounts, internal controls and any statutory records, and subsequently expressing an opinion on the examined set of information, as well as whether the organisation’s financial statements and all accompanying disclosures give a true and fair view of its affairs.

Start-up Businesses

A start-up business is simply a business that is in its’ early stages of operation. The early stages may be timed as months and sometimes years since the business’ inception. Such businesses are usually managed by the business idea bearers, otherwise known as entrepreneurial founding members.

Start-up businesses have over the years become a major economic focus, especially in third world countries, with nations such as the Republic of Zambia being ranked at 117 in terms of the ease of starting a business, based on a previously conducted study of a total of 190 selected world economies by the World Bank Group for purposes of a investigating the ease of starting a new business, according to the Doing Business 2020 Report published on October 24, 2019.

Benefits of the Audit and Assurance Service
Expensive as the audit and assurance service may be seen by some start-up and small business owners in a given economy, the service can yield the following benefits;

Providing assurance to the business owners. Start-up businesses may not always be directly managed by the entrepreneurial founders. The founders may instead decide to hire other qualified people to run the day to day affairs of their business, and therefore entrusting such people with the owners’ monetary and physical resources invested into the business. Under such a circumstance, engaging an independent auditor to conduct an audit of how the invested resources are being utilised to generate more profits for the business, what measures are being put in place to ensure these resources yield more returns and how feasible these measures are, would provide assurance to the business owner on the overall running of the business.

Increased chances of access to credit. Banks and other creditors are interested in giving loans to start-up businesses as this segment of their target market is undeniably profitable especially that such businesses have the potential to grow and succeed. Engaging audit and assurance service professionals in the audit of financial statements would increase the confidence of creditors and other capital suppliers in the start-up business’ financial information and therefore increasing the chances of accessing credit from the capital suppliers.

Improving business processes. Managing a robust new business may require business owners to design and clearly define business processes to be used in the business operations. As the operations and events unfold, the business processes may sometimes become inefficient or obsolete and may therefore need to be re-designed or replaced in order for the new business to be run much more efficiently. Involving audit experts in examining and evaluating the existing business processes can be of great benefit to start-up businesses as the audit professionals may offer sound advice on how best such processes can be improved and may also advise new business owners to employ other value adding business processes that would in turn increase a business’ profitability.

Improving controls. A control is simply a procedure to determine the actions of a given process. From a business perspective, controls can be categorized into those that affect the entity as a whole and those that affect particular transactions. Entity level controls ensure that the relevant applicable laws and regulations, and management directives pertaining to an organisation as a whole, are adhered to. Transaction level controls are those that affect particular transactions. Prominent entrepreneurial scholars such as Scarborough and Zimmerer (1993) point out factors such as lack of experience and managerial incompetence together with insufficient financial controls as some of the major causes of small business failures. Engaging audit experts can highly benefit start-up and small business owners as the experts can be of great use in designing and implementing internal or financial controls, as well as reviewing the controls to ensure that they are continuously improving and are operating effectively. This step is key to start-up businesses as it will ensure that the resources invested into the business are adequately safeguarded.

Real life success story thanks to Audit and Assurance Services (India’s Skoda Company)
Quick facts
Skoda is an Indian automobile company that manufactures cars and has over four models in India at the moment. Skoda’s vision for the future had a clear path: ramp up product offerings and drive growth in India’s booming auto market. Critical to success was delivering a consistently excellent customer experience at each of their 70-plus dealerships at the time. Skoda engaged KPMG in India to help steer them in creating a unified and outstanding experience across every dealership’s customer sales and service journey. KPMG’s professionals identified the gaps and ‘pain points’ in Skoda’s existing customer experience and devised a sweeping initiative for dramatic improvement.

The Ultimate Result
A comprehensive new training and innovation program that included: major process changes to integrate technology and mobility platforms; new dealer management and measurement systems; data analytics tools to monitor customer data; and enhanced digital marketing and sales pitches. Customer engagement and satisfaction have increased and so have sales.
According to The Hindu Business line publication made on December 4, 2019, Skoda is now in the fast lane to driving growth, with auto looking at nearly 138 dealerships within India by 2023, up from the existing 63.

Conclusion
As a start-up business owner, one needs to look beyond the cost of engaging audit and assurance service providers and consider the great benefits that the service may come with in the long term. Audit and assurance services remain key to business success at all stages of the business life cycle, especially for the start-ups.

References
• World Bank Group (2019) Doing business 2020 report: USA 1818 H Street NW, Washington DC 20433.
• Scarborough N. M and Zimmerer T.W (1993) Effective small business management: USA, New York Macmillan publishing.
• https://www.thehindubusinessline.com
• https://home.kpmg/xx/en/home/insights/2018/08/skoda-client-story.html
• www.google.com

Mulenga Kaluba is an Accountant with KPMG Zambia. The views expressed in this article are his own and not necessarily those of KPMG.

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By Mulenga Kaluba Audit and Assurance Services An audit

Tech

Airtel Networks Zambia Plc has announced its plans to introduce a more attractive non-expiry data bundles as one of its goals for the year 2020, a pronouncement made few hours after its arch rival and main competitor MTN Zambia introduced the Non-Expiry Data Bundle on the Zambian market.

MTN Zambia on January 16, 2020, lunched the non-expiry mobile data bundles dubbed freedom bundles, an addition to the existing mobile data bundles to offer its customers more choice and contribute to digital inclusiveness. This followed a similar offering made in their home market of South Africa.

Airtel Zambia confirmed that it is in the process of introducing a non-expiry data bundles offer after conclusive discussions with the regular ZICTA. Airtel Head of Corporate Communications Yuyo Kambikambi told the Zambian Business Times – ZBT that the company has always been the pioneer in bringing affordable and customer centric products to its customers hence will as well ensure this development is introduced not because of what has already been introduced on the market but for the benefit of its customers.

“We were the first to make data bundles affordable and followed through with increasing minutes in our flagship product of So Che, Ikali and we will continue to offer attractive Voice only and Data only bundles at an affordable cost to all our customers,” She said.

Kambikambi added that the company’s mission is to continuously provide a better quality data experience for its customers while bolstering its position as worthy partners in the attainment of the Zambian dream to enhance ICT usage as laid out in Zambia 2030 vision as well as the Seventh National Plan.

A random survey by the Zambian Business Times – ZBT was conducted immediately after the pronouncement by MTN Zambian and customers talked to have welcomed the move despite complaining of the high costs involved in purchasing the newly introduced non expiry bundles.

Some consumers talked to in Lusaka, Kitwe and Ndola, the top three major cities in Zambia lamented that the newly launched freedom bundles by MTN Zambia seem to target the high income individuals and not ordinary Zambians as the costs are not affordable for most subscribers with the cheapest bundle being 1GB going at K160, 1.5GB going at K220 and 5GB going at K410 among others.

The mobile phone network users complainers and called on ZICTA to intervene as the average Zambian will not benefit from some of these products, “ most of us the youths who need digital inclusiveness use below K100 per month, so this is out of reach for the majority” said Chanda Bwalya.

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Airtel Networks Zambia Plc has announced its

Tech

Zambia’s energy giant and national power utility company ZESCO has disclosed that load management in the country still stands even with the recommencement of full capacity operation at Maamba Collieries saying the power deficit in the country remains huge.

The country’s largest independent power producer Maamba Collieries had confirmed that it has resumed full capacity operations at its 300MW coal-fired power plant and is now supplying the full contracted power to ZESCO.

But ZESCO Spokesperson Henry Kapata told the Zambian Business Times – ZBT in an exclusive interview on January 16, 2020 that the country’s current power deficit is huge to about 1,000MW and the additional 150MW received from Maamba collieries is not enough compared to what is lacking.

Kapata has since explained that the power producer Maamba Collieries has two machines with 150MW each and that only one out of the two was under maintenance while the other was still in operation.

“Only 150MW has come the other 150MW was already in operation and if we look at the current power deficit, 150MW can’t maximize power generation so If we are still lacking in the deficit system and only 150MW comes back then the deficit is still huge hence load management still stands,” he added.

He further disclosed that the power utility company only evacuates 267 MW from Maamba Collieries because they use part of it for their internal operations.

Maamba Collieries power plant had towards the end of 2019 shut down its operations of one of generation plants that contribute about 150MW coal fired thermal power to the national grid due to what they stated as delayed and non settlement of arrears by ZESCO.

Most members of the public have been expectant to see an end to load shedding after the announcement from Maamba Collieries that it has resumed full power production capacity. Additionally, the Energy Regulation Board – ERB approved an over 100% power tariff upward adjustment seem as a cost plus margin reflective rate.

The expectation was that this would then enable ZESCO to sustain its power imports for at least the first quarter as its technical team had announced that they are expecting Kafue Gorge Lower Hydro power plant to come on stream by end of first quarter.

Moreover, the cost reflective tariffs have been seen as a window to fastrack solar power investment projects which should be able to plug the current deficit in the short to medium term, as well as enable more power generation plants to be constructed to meet the growing national demand and export of excess capacity.

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Zambia’s energy giant and national power utility

Tech

University of Zambia (UNZA) lecturer and researcher, Dr. Lubinda Mukololo has identified ways in which the process of cell division in cancer cells can be slowed down.

In his groundbreaking research that has also received funding from The World Academy of Sciences (TWAS), Dr. Mukololo has identified key proteins whose depletion from cancer cells slows down DNA replication and cell growth.

Dr. Mukololo who is a Lecturer and Researcher in the School of Medicine at UNZA’s Ridgeway campus, has found that specific proteins called PDS5A, PDS5B, ESCO1, and ESCO2 play an important role in DNA replication and cell division. Using scientific methods that include DNA combing, Dr. Mukololo has found that depletion of either PDS5A, PDS5B, ESCO1, or ESCO2 results in delay in DNA replication and a reduction in cancer cell growth.

Dr. Mukololo says this discovery is important as it provides a novel insight into proteins that have the potential to form cancer drug targets. He adds that processes such as DNA replication and mitosis (cell division) are some of the crucial cellular events that are usually exploited in cancer drug design.
‘‘Halting DNA replication and cells division prevents the growth and spread of cancer. Limitless cell division is a contributing factor to the growth and spread of cancer in human bodies’’ said Dr. Mukololo.

Meanwhile, UNZA Vice Chancellor – VC, prof. Luke Mumba, has congratulated Dr. Mukololo for showing commitment to the fight against cancer and receiving funding for his research from The World Academy of Sciences.

Prof. Mumba says cancer is a fatal condition that needs urgent attention to combat through research. The VC adds that UNZA is proud that this kind of research is coming from one of its own. ‘‘We are extremely delighted that UNZA is leading in research aimed at fighting cancer. This is an undertaking that will no doubt contribute to improving the lives of millions of people afflicted by cancer world-over.’’ Prof. Mumba says.

Cancer is a fatal condition that causes cells to divide uncontrollably forming tumors, impairing the immune system and/ or causing other changes that prevent the body from functioning properly.
This is according to a press statement made available to Zambian Business Times – ZBT by UNZA spokesperson Brenda Bukowa.

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University of Zambia (UNZA) lecturer and researcher,

Agribusiness

The Consumer Unity Trust Society – CUTS review has indicated that despite many stakeholders and beneficiaries of the Farmer Input Support Programme – FISP having begun receiving inputs in most parts of the country, many farmers are still experiencing accessibility challenges.

A review by Ishmael Zulu, Programmes Officer at the Consumer Unity for Trust Society – CUTS indicates that most farmers in the Direct Input Supply – DIS have already received inputs but those under the e-voucher system have been experiencing challenges in accessing inputs such as fertilizer.

Despite the Agriculture Minister Micheal Katambo having on January 5th 2020, explained that government has finished distributing both seed and fertilizer in Luapula province which is under DIS, most people are aware, the main challenge in the accessibility of inputs is under the e-voucher.

The challenge is the late payment from government to agro-dealers who are then withholding further release of farming inputs. Government arrears to agro-dealers stand at K374 million and this has adversely affected the capacity of many agro-dealerships to stock inputs to sell to farmers in the current farming season.

And in a statement made available to the Zambian Business Times – ZBT on January 13, 2019 by CUTS Public Relations Officer Njavwa Simukoko, the society’s results from monitoring visits to the various e-voucher districts indicate that only a few agro-dealerships that had submitted their invoices to government for payments early in the first week of November had received their money while the majority had not received any funds hence were unable to restock inputs such as fertilizer to provide to farmers on e-Voucher.

“Some farmers have to travel long distances to get to the agro-dealers and as a result of the payment delays, are being forced to spend nights in corridors at agro-dealers, in the hopes of accessing inputs in the days to come,” Ishmael told ZBT.

He added that the delay in processing payments on governments ends has resulted in many farmers being stranded and the delayed payments to agro-dealers is also threatening the credibility of the e-voucher programme which many stakeholders have acknowledged is better than the DIS as it promotes diversity, creates jobs and saves money for the government.

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The Consumer Unity Trust Society - CUTS

Mining

The ZCCM Investments Holdings – ZCCM IH has recorded a loss of K107 million (about US$7.6 million) in their financial results for the year ended 2019 compared to the profit of K433 million in the previous year. This is despite the company confirming that it deployed assets worth K13 billion (about US$1 billion).

The loss for 2019 has been largely attributed  to the decrease in dividend received from First Quantum Minerals – FQM’s Kansanshi Mining which contributed only K45 million in 2019 compared to K149 Million in 2018. The other notable contributors to the losses posted were loss making subsidiaries like Investrust and Ndola lime.

And in order to address the challenges of the company’s investments portfolio, ZCCM IH has decided to implement new strategies with the key one being the introduction of revenue sharing and royalty models to begin to extract value from its existing portfolio from the top line, which is mostly concentrated in copper mining. ZCCM IH did not however give a timeline on when this will be implemented.

Addressing the media in Lusaka on January 14th, 2020 attended by the Zambian Business Times – ZBT, ZCCM –IH Chief Executive Officer Mabvuto Chipata explained that the previous investment model of waiting for a dividend to be paid after investments make a profit has proved to be challenging. ZCCM IH has for many years now received limited to no dividends from some of the companies in its portfolio.

Chipata has further disclosed that it has some subsidiaries which have been making loses for quite some time now and these include Ndola lime, Misenge, Kariba Minerals and Investrust bank. The company is this year scheduled to implement  turnaround strategies that will ensure the named companies are salvaged from making losses.

“For Ndola lime, we have restructuring plan currently in place to ensure we continue to preserve jobs for people and ensure profitability, and we have heavily invested and pumped in more capital in Investrust bank at the same time we have increased shareholding and pumped in more capital in Kariba minerals which is a key producer of amethyst, considered to be among the best in the world,” he said.

He added that the company has also recorded limited participation in mining value chain hence it is engaging with its partners to seek participation in supplying into the mining value chain which consumes a lot of materials with considerable value. The company is looking at setting up or investing in mine supply companies to leverage this sector.

And in the energy sector and  to support the company’s mining projects, ZCCM–IH is set to invest in renewable energy projects to support its investments in places where electricity is in deficit. Chipata further said that in order to reduce the copper mining concentration risk, the company will further diversify into other minerals like cobalt, manganese, gold and gemstones in order to increase its returns going forward as its strength is in mining.

Chipata further said that the company is aiming to invest in mineral value addition projects and companies so that copper, cobalt, manganese, gold, emeralds, amethyst are processed locally into finished goods in Zambia, to increase export value and returns. This will stem the export of raw materials so that Zambia exports value added products.

ZCCM-IH portfolio consists of six (6) wholly owned subsidiaries and fifteen (15) companies in which it has significant stake. It main asset base is in mining with stakes in key mines that include Chambeshi Metals, Chibuluma mine, CNMC Luanshya copper mines, Kansashi mine, Kariba Minerals,  Konkola Copper Mines, Lubambe Mine, Mopani Copper Mine.

Other Mining assets or shareholding is in NFC mining, Ndola lime, Kabundi resources and Copper Trees Minerals. In the energy sector, ZCCM IH has interests in CEC and Maamba Collieries. Other companies in which they have an interest in include Investrust Bank and Misenge Technical and Environmental Services.

Some analysts have indicated that the portfolio under ZCCM IH (assets of about US$1 billion) is too large and too complex to be managed under one company or team and proposed that it be split into specialised investment portfolios say at mineral level, say copper assets alone, Emerald and precious stones alone etc.

The ZCCM IH team should also be given clear financial targets as they sit on a huge asset base that should be efficiently profitably managed to meet minimum prudent investment management requirements. As it stands, even the IDC whose largest assets are mostly in ZCCM IH has limited leg room to turn the portfolio around, having done a better job so far of reducing the number of loss making entities at their company level.

The other danger at the current set up of ZCCM IH is that losses in most of its companies can easily be masked under a huge dividend declared from just one of the investee mining company. The 21 entities under ZCCM IH has an interest need to be leveraged and profitably managed, failure to which, the boards and management of non performing companies should face the consequences.

 

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The ZCCM Investments Holdings - ZCCM IH

Lifestyle

Zambia Development Agency (ZDA) has confirmed its participation in the Southern Africa Development Community (SADC) Men’s entrepreneurship Conference slated for 16th and 17th December 2019 at Mulungushi International Conference Centre.

In a statement made available to Zambian Business Times – ZBT, ZDA Acting Director General Matongo Matamwandi said the Agency will make presentations on the available business opportunities.

‘‘Men for a long time have not had a chance such as this one to share experiences and business opportunities. As such, the Agency is excited to be part of the SADC Men’s entrepreneurship Conference to share with the Men various business opportunities, local and export markets for various products and the other business development support services they can enjoy from the Agency,’’ said Matamwandi.

He said the Conference blends well with the Zambian Seventh National Development Plan whose main thrust is ‘‘Accelerating development efforts towards Vision 2030’’ without leaving anyone behind. The Confere is said to attract various accomplished, seasoned and successful regional and Zambian Entrepreneurs and Captains of Industry that have stood the test of time and have contributed to employment creation and economic growth.

The Acting Director General further said, the Conference will articulate the business opportunities available in sectors such as Agriculture and agro processing, general trading, fish farming, transportation, animal husbandry, construction, education, banking and insurance.

‘‘The event will also present an opportunity for business-to-business meetings, networking and exhibitions of various products and services on the sidelines of the conference,’’ added Matamwandi.

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Zambia Development Agency (ZDA) has confirmed its

Politics

A joint statement by Civil Society Organizations – CSO’s have called for the rejection of Bill No.10 by well meaning members of parliament stating that Zambia is not in a constitutional crisis hence debates should instead be focused solutions to the current economy crisis.

Meanwhile, the constitutional amendment bill 10 come up for the second reading in parliament on December 3, 2019 and CSO’s have appealed to elected representatives in parliament not to vote for the enactment of the bill which is termed to be wrong and not in the interest of Zambians as it does not represent their aspirations.

Speaking at a media briefing in Lusaka on December 2, 2019 attended by the Zambian Business Times – ZBT, a governance analyst Pamela Chisanga explained that Zambia is currently undergoing an energy crisis which has weakened the country’s economy hence it would be unfortunate to debate about the bill No.10 when leaders should be debating about solutions to the current and urgent economic hardships.

She added that some parts of the country are still experiencing hunger situations and finding a way to solve such problems would be appropriate unlike voting for a bill which is meaningless and meant to keep “some people” in power.

And Transparency International Zambia – TIZ Executive Director Wesley Chibamba said Bill No. 10 removes the National Assembly’s ability to ensure that Zambia does not contract more debt than it can afford adding that debt levels are already rising to new levels that is currently chocking service delivery and governance is having serious challenges in fully meeting its financial obligations.

“This will make us even more poorer than we already are hence we need money for education, health and public services and yet, all we see are new expensive roads, mansions and luxurious cars,” he said.

Chibamba added that the bill further increases powers of the president which is a problem because Zambians have the power to decide how they want to be governed hence the power is under threat.

At the same event, Zambia Congress of Trade Union – ZCTU Sectary General Cosmas Mukuka said there hasn’t been enough consultative processes on bill No. 10 and that citizens have not been engaged to take part hence the bill does not consider the plight of Zambians. He said there is need to fully engage citizens on the matter so they could make informed decisions if the current debates are to be meaningful.

The Government has however stated that the final bill 10 has gotten rid of all contentious issues after review by the parliamentary select committee. The bill debate has since been adjourned to February 2020.

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A joint statement by Civil Society Organizations