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Agribusiness

One of Zambia’s top five tobacco buyers, Pemba Leaf Tobacco Company – PLTC said that tobacco is a high return crop but stressed challenges faced in the tobacco industry which include lack of a market for small-scale tobacco farmers in the country.

The Company which operates from Zambia’s Eastern Province in Chipata was formed in 2008 with the main aim of buying tobacco from sponsored and self-sponsored farmers who then sell the commodity on the regional and international market.

Pemba Leaf Agronomy Shepard Banda told the Zambian Business Times – ZBT in an exclusive interview that currently the company is has an out-grower scheme catering for over 300 small-scale tobacco farmers who have been provided with farming in puts and in return sell their tobacco to Pemba leaf.

He added that apart from buying tobacco from sponsored/scheme farmers, the company has also been buying from self- sponsored farmers disclosing that so far, the company has for the 2019 season bought over 800 tonnes of tobacco from both self-sponsored and sponsored farmers in Eastern province.

Banda further revealed to ZBT that this year’s projection in tobacco production is likely to reach 1,000 000 tonnes compared to 800 tonnes attained during the 2018/2019 farming season stating that the market has been favorable and farmers have not had many difficulties in growing the crop.

“The way tobacco is grown is different, when we have too much rain the crop doesn’t grow well but again when it’s completely dry production automatically goes down, however this kind of crop only grows well when there is just enough rain. However, this year’s projection in production is likely to go up because the season has been favorable and we have been buying about 600 tonnes about above compared to the 300 tonnes that we were getting last year,” he said.

Banda further stated that despite the progress recorded in the industry, the tobacco market has been under pressure as tobacco has been declared a harmful substance by the World Health Organization – WHO, which has driven away some customers and key stakeholders from supporting the industry  hence resulting in further challenges to getting on the world market.

He confirmed that response and support from farmers has been overwhelming and has since advised small-scale tobacco farmers to increase their production saying the market and the company is ready to support their Agro-businesses.

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One of Zambia’s top five tobacco buyers,

Agribusiness

The Indaba for Agricultural Policy Research Institute (IAPRI) have observed that there is need to get fully prepared with measures to mitigate the effects of climate change which is affecting the entire world negatively.

IAPRI Executive Director, Chance Kabaghe stated that the emphasis with reference to climate change for 2020 Budget should have been mostly been on Agriculture because technically it is the main economic sector that suffers worst from climate change.

Kabaghe was speaking during the deliberations of the 2020 Agriculture Sector Budget Analysis in Lusaka on 17 October 2019, attended by Zambian Business Times – ZBT.

‘‘This year’s budget was with emphasis on climate change, yes though climate change                                                                                                                                                affects power supply, we have the black out because of climate change, but technically, when you talk about climate change, the main sectors of economy that really suffers is the Agriculture sector. So true the emphasis with reference to climate change for 2020budget should have been on agriculture’’, said Kabaghe.

With information from the Intellectual departments on weather forecast, who have projected that this year there will be good rains, Kabaghe questioned how prepared the nation is, to respond to floods which is also an effect of climate change.

‘‘When you talk about climate change its not only drought, it is also floods, are we ready? How much money have we put in reserve for developing crop varieties, for developing Livestock varieties the breeds that can stand the average of changes in climate’’, he questioned.

Kabaghe said IAPRI wants to see actions on the ground on the much talked about climate change. He said the analysis carried out by the highly qualified analysts contains data collected from various ministries to reflect exactly how much has gone into Agriculture.

And delivering the analysis, IAPRI Research Associate Auckland Kuteya said Agriculture is so important because it is the biggest employer in the rural areas of the country and it is also recognized as one of the key sectors that can drive economic diversification and growth.

Kuteya however said despite this recognition of the importance of the sector to driving the economy, the budget allocations for the 2020 for Agricultural have declined by 25%. He stated that in monetary terms, it has declined from K5.3 billion in 2019 to K3.97 billion in 2020 budget and as a share of the national budget; the decline is from 6.1% in 2019, to 3.7% in 2020.

Kuteya noted that this decline is mainly attributed to more resources being channeled to servicing of the debt burden, which is seen in public spending.

‘‘Another worrying thing is that, the projected K31 billion for more borrowing in the coming year, will end up making the cost of servicing the debt to be even higher, now with these reductions in the allocations to the Agriculture sector, how then can we achieve more with less? There’s need to protect ourselves against climate change, and this can be achieved through increasing productivity and improve the resilient’’, said Kuteya.

The Indaba also pointed out the positives from the 2020 national budget as the specific allocation of funds for construction of dams at Mwomboshi irrigation scheme in Chisamba, Lusitu Irrigation Scheme in Chirundu, Musakashi South Irrigation Scheme in Mufulira and Chiansi Irrigation Scheme in Kafue saying there is need to expand to all provinces and especially areas that are more vulnerable to climate change.

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The Indaba for Agricultural Policy Research Institute

Tech

Southern Cross Motors Ltd has disclosed that it has invested over USD15 million in the automotive industry for all its 3 facilities in Zambia and that the company is looking forward to growing its market share of the Zambia automotive market.

The Company has also launched its new Haval Motor Vehicle Brand on the Zambian market meant to respond in addressing to the needs and aspirations of a modern day driving community.

Speaking at the launch of the new brand in Lusaka on October 16, 2019, Southern Cross General Manger Anthony Voorhourt said the company focuses on acquiring top talent in the automotive industry and it is working to create world class manufacturing and highest quality of vehicles with Zero defects.

He said the company has invested heavily in research and that the newly introduced brand on the Zambian market provides high value proposition to its customers, packed with luxury feels and high technical features which are seldom found in any directly competing products.

“Haval has also put safety as a priority in its development and production efforts with all its models achieving highest safety ratings among world leading vehicles safety bodies. The car is also generously equipped with all technologies that assist drivers to operate them safely,” he said.

Anthony added that despite the current challenges in the Zambian economy, the company will go out of its way to ensure customers receive the best attention, services as well as support while they own the product.

He said the general performance and revenues in the automotive industry has declined by 35% from the previous year due to the current challenges facing the Zambian economy hence hopeful that going forward things will turn around by end of the year.

Southern Cross Motor Vehicle is also looking forward to open new facilities in the country particularly in Solwezi of North Western Province. Haval a subsidiary of Great Wall Motors – GWM of China, it is specialized in manufacturing SUVs and are market leaders in the pick-up and SUV categories commanding market shares of over 10 and 33% from among the six vehicles manufactures in China.

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Southern Cross Motors Ltd has disclosed that

Companies

The Zambia Revenue Authority – ZRA has pledged to address the Value Added Tax – VAT administrative challenges as per new proposed changes in the 2020 budget by the Minister of Finance, stating that the decision by Government to maintain the VAT will be implemented by the Authority with renewed vigor and initiatives based on smart technologies.

ZRA Commissioner General Kingsley Chanda told the Zambian Business Times – ZBT in response to a query on October 17, 2019 that the Authority will ensure the effective implementation of VAT and will immediately address the compliance and administrative challenges especially falsified refund claims, double claims and transfer pricing through over invoicing.

“As the body charged with the responsibility of administering tax policy on behalf of Government, the Authority fully supports all government policies including the maintenance of VAT. To this end, the Authority will be upgrading the Tax Online system for domestic taxes and interface it with customs system to ensure that all claims of refund for input VAT paid to Customs Services during importation of goods are validated through systems based controls against data in the customs system,” he said

He said the Authority will also undertake measures to ensure the mandatory use of Electronic Fiscal Devices – EFD for VAT and other tax types and facilitate accreditation of additional EFD distributors and Virtual EFD software suppliers and vendors.

Chanda added that the mandatory capture and electronically transmission to ZRA of the Taxpayer Identification Number – TPIN and the Names of both the buyer and seller of goods and services in all Business to Business and Business to Government transactions has already been implemented across businesses that include chain stores and other VAT registered suppliers.

He further said two new units have already been set up to enhance data analytics and bulk data matching with third party institutions and to enhance enforcement and compliance activities, Implementation of stiffer penalties for evasion including prosecution and ensure timely audits of VAT claims, including outsourcing services of external forensic auditors whenever necessary.

“The Authority believes that the comprehensive tax review of the tax system which the Government intends to undertake as pronounced in the 2020 Budget will promote investment and broaden the tax base through increased economic activities,” he added. The Authority has since pledged to continue taking actions to ensure that Zambia’s tax regime is transparent, professionally managed and sustainable.

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The Zambia Revenue Authority - ZRA has

Tech

The Zambia Development Agency – ZDA Acting Director General Matongo Matamwandi says the energy challenges that the country is currently facing should be a great opportunity for investors to invest in alternative sources of energy such as solar and biodiesel.

Matamwandi has stated that Zambia has unlimited investment opportunities in various sectors of the country and that every challenge presents a business opportunity for an investor. Zambia is currently experiencing a power deficit which has negatively impacted on agricultural production, business on the Zambian community and other economic sectors.

Energy Minister Matthew Nkhuwa had last month announced that Zambia is facing on-grid power deficit of over 750 MW due to lack of water in the Kariba dam, the country main source of hydro power and that government will hence forth import 300 MW of power from South Africa.

Government has pledged to stay committed to addressing the current power deficit but energy experts and various stakeholders talked to have questioned its implementation referring to the fact that the Minister’s pronouncement to imports 300 MW from SA has not yet been actualized.

In a statement made available to the Zambian Business Times – ZBT by ZDA Public Relations Manager Faith Musonda, Matamwandi said the Agriculture sector’s total land areas is 75 million hectors but that only 14 % is currently being utilized hence the need to fill the gab through investments by both local and foreign investors.

“Infrastructure development is another sector with various opportunities including such opportunities as the contraction of grain storage facilities, real estate, health facilities, education and industrial structure, Zambians can find partners to invest in these areas” he said.

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The Zambia Development Agency – ZDA Acting

Mining

The Jesuit Centre for Theological Reflection – JCTR has urged government to reinstate the mining revenue sharing mechanism in form of Local Authority Development fund for the benefit of the local authorities and ultimately the communities hosting the mining firms.

JCTR Programmes Officer Innocent Ndashe has told the Zambian Business Times – ZBT in an interview that it is only rational for the country to develop a dedicated mechanism to make use of mining revenues from finite resources, considering they form part of the nation’s subsoil capital wealth.

The Centre’s concern is in response to the mechanism’s absence in the 2020 budget and a statement issued in parliament by Minister of Finance Dr. Bwalya Ngandu, where he stated that the Mineral Revenue Sharing Mechanism will not be included in the 2020 budget as aspects of sharing revenue with mine host communities form part of the Local Government Equalization Fund.

Ndashe has since explained that it is worth noting that the Local Government Equalization Fund does not take into consideration parameters of loss of livelihood and environmental degradation in allocating resources to local authorities.

“We demand for the reinstatement of the Mineral Revenue Sharing Mechanism, as we believe that its relevant in safeguarding the livelihoods and mitigating impacts of environmental degradation in mine host communities,” he said.

Ndashe further said that there is need to ensure that, in the absence of the Mineral Revenue Sharing Mechanism, local authorities hosting mining activities are allocated a reasonable potion of their budget towards community development and environmental related programs to mitigate the effects of mining.

The Minister of Finance is however expected to amend proposed 2020 budget by including strategies for investing windfall earnings and mineral rent into sovereign wealth funds including economic stabilization funds.

A desktop research done by ZBT indicates that mine host communities from known areas like Kalumbila district in Northwestern Province and some parts of the Copperbelt province have been raising concerns of not benefiting from the mining activities in the areas despite investors encroaching part of their land which has originally been used for agriculture and other natural economic uses.

It is expected that investors that plan to invest in communities around the country consider developing the areas by way of creating job opportunities for the labor. The corporate social responsibility that is currently availed is welcome but should be done within agreed parameters with the affected communities.

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The Jesuit Centre for Theological Reflection –

Companies

Zambia hosted the Confederation of Indian Industry (CII) – EXIM Bank Regional Conclave on India-Southern Africa Project Partnership which ran from October 14 to 15, 2019 in Lusaka, marking a strengthening of ties between the two countries.

Over 30 leading companies in India travelled to Zambia with the aim of investing in Pharmaceutical, Healthcare, Power and Energy, Information Technology, Agriculture and Manufacturing sector among others.

President Lungu was at hand to officiate the Conclave and urged investors to invest in Zambia’s key priority areas that he earlier emphasized to them when he visited India from August 20 to 21, 2019. He said the Zambian Government has invested heavily in infrastructure, which was an enabler to any development.

The event attracted the attendance of delegates from Angola, Botswana, DR Congo, Eswatini, Lesotho, Madagascar, Seychelles, Malawi, Mauritius, Mozambique, Namibia, Tanzania, Zimbabwe and Zambia among other SADC member states.

Top Government officials, members of the local Indian business community and other business players in Zambia also attended the event. The key partners of the Regional Conclave included the the Government of Zambia, EXIM Bank of India, COMESA Business Council (CBC), Government of India, SADC and Confederation of Indian Industry (CII)

In addition, Commerce, Trade and Industry minister, Christopher Yaluma said the Conclave will provide the country with the opportunity to consolidate the bilateral economic ties with India and facilitate the growth of business linkages. The minister assured the Conclave that Zambia is a peaceful country in which investors can freely interact and look for business opportunities of interest.

Speaking at the same event, Zambia Chamber of Commerce and Industry (ZACCI) president Chabuka Kawesha stated that the Conclave on Zambia and the larger Southern Africa and India will serve as a robust platform for dialogues between India and the SADC member countries. He added that the event will also focus on economic and commercial deliberations through Business to Government (B2G) and Business to Business (B2B) engagements.

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Zambia hosted the Confederation of Indian Industry

Markets

Lusaka based business consultant and economist Chibamba Kanyama has stated that Zambia’s multinational companies are hesitant to list on the Lusaka Securities Exchange – LuSE because the country’s Gross Domestic Product – GDP growth rate is low and cannot realize the total capitalization that companies have put in.

Kanyama told the Zambian Business Times – ZBT in an exclusive interview that Zambia’s market is not deep enough to realize the multinational company’s profits on the stock exchange as it seems to only attract 2% out of the total capitalization hence not sufficient.

Zambia’s current state of the economy is one facing serious headwinds on account of adverse weather conditions which have affected the energy and agricultural sector. Earlier the country projected the growth rate for 2019 at around 4% but has been revised downwards to about 2% which is 50% cut.

In 2018 the country’s GDP grew by 3.8 % compared to 3.4% in 2017 indicating a huge drop to this year’s projected growth rate of 2%. Meanwhile, Minister of Finance Dr. Bwalya Ngandu had during the budget presentation announced that among the macro-economic targets for 2020, Zambia aims to achieve a real GDP growth rate of at least 3% for 2020.

According to the Trading Economics Global Macro Models and Analysts, Zambia’s GDP is expected to be US$30.8 billion by end of this fourth year’s fourth quarter while is it expected to trend around US$34 billion in 2020.

Kanyama further told ZBT that the country’s desire to have almost all multinational companies list on the Lusaka’s Securities Exchange to enhance transparency and drive local Zambians participation and ownership will be difficult to achieve  as the country is not generating enough growth hence leading to a high listing cost.

“GDP refers to the amount of money that the country generates and determines how much is available in investments of funds and what households and companies have. Therefore, without growth, it is difficult for a company to realize profit within the country hence decide to diversify their investments to other countries,” said Chibamba Kanyama.

Some economic and financial experts have indicated that Zambia’s accumulation of high debt levels have led to a deceleration in growth of the country’s economy and provision of social services. The rise in foreign denominated public debt over the years has raised concerns among the general public and other stakeholders in Zambia as its payment causes a reduction in national foreign exchange reserves hence starving the growth of the economy and causing instability of the local currency, the Kwacha.

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Lusaka based business consultant and economist Chibamba

Agribusiness

National Milling Corporation, a local unit of the United States based Seaboard Corporation, with a history dating back more than 90 years had invested in a new plant meant to grow its Zambian Business.

Commissioning the modern US$ 37.5 million National Milling plant in Lilayi on 11 October 2019, Zambia’s President Edgar Lungu stated that ‘‘this investment by National Milling and indeed other investments across the country are a clear indication that the private sector is responding positively to the conducive business environment in the country’’.

The Zambian leader reaffirmed government’s commitment to curb the power deficit, which is negatively affecting agricultural production. He further stated that ‘‘wheat being an irrigated crop, our farmers are faced with a number of challenges to grow it. One notable challenge is the current power deficit which is affecting wheat yields and profitability’’, president Lungu said.

He added that the plant, which has a production capacity of four million metric tonnes will first start milling 600 metric tonnes of Wheat per day and later begin the processing of Maize after 12 months. Wheat and maize contribute significantly to national food security, president Lungu said.

He therefore, urged local farmers to grow more wheat to meet the market demand, but cautioned against abandoning Cassava farming, which is easy to grow and is drought – resistant in the wake of climate change effects. The president said Cassava has many industrial uses and is the second largest food crop, which can support Government’s strategy to uplift the welfare of small- scale farmers.

Minister of Agriculture Michael Katambo expressed gratitude and thanked government for standing with the farming community in the midst of climate change devastating effects. NMC managing director David Bosse said the new milling plant took about five years to be completed.

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National Milling Corporation, a local unit of

Lifestyle

Street vending has formally resumed in Lusaka city, allowing venders to sell their merchandise along Lumumba road, from 18 hours to 20 hours as directed by the ministry of local government.

The move by the local government ministry to designate only Lumumba road has been received with mixed feelings by vendors who have since cried out to government to designate another street on which they can trade from, amidst economic austerity and a huge number of informal traders.

A check conducted by the Zambian Business Times –ZBT through the streets of Lusaka’s Lumumba road found hundreds of vendors doing business on the street. One trader who deals in shoes said Lumumba road cannot cater for all the vendors.

‘‘It is a good thing that government has allowed vending back on the streets but we are too many traders, what happens to others who can not find space?. The markets are also full and some have no business. There are no jobs and we have the climate change effects which is impacting so negatively on the country’s economy, so if vendors and informal petty traders are given alternative trading spaces, many economic challenges we are facing can be reduced’’.

The vendor representative pointed out that climate change has affected the energy and agriculture sectors causing a rise in the price of goods and services, saying if government opens up several trading areas, it can help alleviate the sufferings of the local people, as they will have a place on which to sell their goods instead of engaging in illicit activities to generate the much needed incomes.

But Independent ward 14 councilor George Daka, appealed to vendors trading illegally on undesignated streets to return to Lumumba road. And local government permanent Secretary Eddie Chomba called for engagement of the traders selling on undesignated streets.

Street vending was banned last year by government when the country underwent an acute cholera out break that posed a health risk to goods and especially foods sold on the streets. The streets also do not have social and public health facilities such as public washrooms. This left hundreds of traders helpless thereby causing an economic breaking down in mostly high density residential areas were the majority of the informal and street petty traders reside.

Traders have since appealed to government to quickly provide additional convenient trading sites for them so that the economic hardships can reduce. Most traders have complained that they are experiencing low sales and this is putting pressure on household incomes.

The ministry of local government which is mandated to attend to community needs has consistently failed to implement revenue generating activities to boost their ability to attend to public and community needs. This is one ministry that needs strong leadership as it affects the livelihood of the majority of the citizens by being the responsible ministry for regulation public transport, markets and local employment creation.

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Street vending has formally resumed in Lusaka