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Companies

Finance Minister Dr Bwalya Ng’andu has justified that government moved to maintain Value Added Tax – VAT instead of Sales Tax comes after inherit problems that were discovered around sales tax which include cascading effects, negative impact on GDP growth and job losses through elimination of intermediaries in the supply change.

However, some economists and financial analysts have raised concern questioning why Zambians should be asked to ensure austerity while the copper mining houses are allowed to draw huge VAT refunds, amounts that could even pay off the country debt without international borrowing.

ZRA Commissioner General Kingsley Chanda in May 2019 revealed that VAT refunds had increased from K 774 million per month to K1.4 billion (about US$108 million) a month, meaning that VAT refunds annually would reach in excess of US$715 million to US$1.3 billion. The first Euro bond due for repayment is US$750 million.

The newly appointed Finance Minister had last week during the presentation of the 2020 National National Budget announced government’s plans to maintain VAT and instead, introduce administrative measures to strengthen its enforcement and efficiency, which some analyst doubt would yield much due to the highly complex and financially powerful mine owners,

In the 2019 budget address by former Finance Minister Migrate Mwanakatwe, government proposed to abolish VAT and replace it with Sales tax, which was meant to stem the massive VAT refunds mostly by mining companies. However, the mines threatened to cut off the middlemen which led the the proposed sales tax implementation to be widely rejected by the business community who mostly are mere traders in the copper industry value chain.

Speaking at the Post Budget analysis at Lusaka’s government complex on 27 September 2019, Dr Ng’andu said a wide analysis on Sales Tax was conducted and that various stakeholders highlighted problems which could have risen in the implementing Sales tax hence its decision to maintain VAT.

“The debate that took place around VAT/Sales tax was quite interactive and I came out with this horrible feeling such that I had no idea of what was right or wrong because I was completely lost, but with the continued discussions we finally concluded with my ministry that we will maintain VAT and address challenges that surrounded it,” he said.

He added, maybe the problem was not with changing the VAT policy but examine the VAT regime hence possibly fix its administrative challenges which could have at one point found their way in the implementation of Sales tax.

H said there is need to deal the with the frauds and lubricating that surrounded VAT which has proved to be the best and most exercised system across the globe adding that shunning from its problems wouldn’t have had made a different if the country moved to Sales tax.

He has since pledged government’s commitment in collaboration with the Zambia Revenue Authority – ZRA to ensure administrative measures are put in place to stop the VAT scums that was taking place.
During the Minister’s 2020 budget presentation, he heighted some measures to be in place which include, making it mandatory to use Electronic Fiscal Devices – EFD for VAT and other tax types and facilitate accreditation and Virtual EFD software suppliers and vendors.

Some stakeholders have however lamented the drop of sales tax saying that the mining houses are too powerful and rebuff VAT audits which reduce the incidences of huge refunds. Sales tax was suggested because the mining houses have been claiming huge VAT refunds and ZRA has over the years failed to stem these refunds.

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Finance Minister Dr Bwalya Ng’andu has justified

Companies

The Zambian government plans to spend K106 billion (about US$8.2 billion) for the National Budget representing 32.4 perscent of Gross Domestic Product – GDP indicating an increase from the 2019 budget of K86.8 billion which was 28.9 percent GDP.

Presenting the 2020 National Budget at Manda Hill, Zambia’s legislative house in Lusaka on 27 September,2019, Finance Minister Dr. Bwalya Nga’ndu explained that government intends to increase domestic revenue mobilization to at least 22.0 percent of GDP, a stretch for the Zambia Revenue Authority – ZRA, Governments Agency responsible for tax revenue.

The Finance Minister has further increased allocation towards dismantling of arrreas to K2.3 billion in 2020 from K437 million in 2019 and has proposed to reduced borrowing from the domestic market to 1.1 percent of GDP from 1.4 percent of GDP in 2019. This moves is aimed at shoring up the domestic liquidity conditions and support mostly local suppliers who are now given preferential treatment with the newly introduced procurement guidelines.

Meanwhile, government aims to grow GDP to a modest 3%, the fiscal deficit is projected to reduce to 5.5 percent of GDP in 2020 from 6.5 percent projected for the financial year 2019, a demonstration of governments resolve to restore fiscal health and stabilize the economy. The Finance Minister also announced that Zambia will maintain the 2019 target inflation range between 6 to 8% into 2020.

Dr. Ngandu, has also allocated a total of K44.1 billion for General Public Services and that notable expenditure under this category include K33.7 billion for servicing debt obligations and K2.3 billion for dismantling of arrreas to unlock the much needed liquidity in the market. K636.0 million has also been allocated towards redemption of the Eurobonds.

“In order to finance expenditure spelled out for the 2020 Budget, government expects to raise a total of K106.0 billion for the 2020 Budget. K53.8 million will be raised from taxes, K18.2 billion will come from non-tax revenues, and K3.1 billion will comes as project support grants from our cooperating partners, ” he said.

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The Zambian government plans to spend K106

Markets

Studies by the United Nations Economic Commission for Africa – UNECA have reviewed that successful implementation of the African Continental Free Trade Area – AfCFTA by African countries will enable Africa’s manufacturing sector double in size, with annual output increasing from $500 billion in 2015 to $1trillion by 2025, and contributing additional 14 million stable well-paid jobs.

On 21st March 2018 in Kigali, Rwanda, over 40 African Countries gathered to launch and sign the AfCFTA agreement and on 30th May 2019, the AfCFTA went into effect after securing the required number of 22 ratifications by member states. Currently, 54 countries have signed the AfCFTA and 27 Countries have ratified, however Zambia is still in the consultation process with various stakeholders before it ratifies the treaty.

And UNECA Director for Southern Africa Said Adejumobi has explained that the rectification of AfCFTA by Zambia will complete government’s efforts towards diversifying the country’s economy, promote manufacturing and will boost Zambia’s agricultural production with increased and expanded market.

Speaking during a media sensitization workshop on the AfCFTA in Lusaka on 24 September 2019, Adejumobi disclosed that the AfCFTA is set to create the biggest free trade area in the World with a market of more than 1.29 billion people and a combined GDP of more than US$2.5 trillion.

He added that the AfCFTA will further seek to promote inclusive and sustainable economic growth, accelerated economic development and integration in Africa hence a win-win situation for the regional and global commitment of Zambia.

“The AfCFTA is the biggest ticket item on the Continent today because it expresses our collective pan-African dream of transforming our economies and the Continent, as envisaged by the founding fathers/mothers of post-colonial Africa. However, it has to be backed up by increased productive capacity, enhanced regional value chains, and removing internal obstacles to the growth of SMEs so that African countries can compete well in the liberalized regional market,” he said.

He has since challenged participating media panels from across the country to development interest in the AfCTA to enable them educate the masses on its important.

Concerns however loom as different African countries are at different stages of economic development, raising risks that some countries may merely become dumping grounds and markets. Others concerns are that non tariff barriers may still continue leading to some more sophisticated economies taking advantage of the more open and embracing countries.

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Studies by the United Nations Economic Commission

Markets

The year on year Inflation as measured by the all items Consumer Price Index – CPI for the month of September 2019 has increased to 10.5 percent from 9.3 percent recorded in August 2019, indicating an increase of 1.2 percentage points.

The Central Statistical Office – CSO has attributed the increase in the annual rate of inflation to food items price movement and the price increase in Maize products.

Speaking at a Media briefing in Lusaka on September 26, 2019, CSO Interim Statistical General Mulenga Musepa said the increase in inflation is an indication that price of goods and services increased by 10.5 percent between September 2018 to September 2019.H

He further announced that the annual food inflation rate for September 2019 was recorded at 12.4 percent compared to 10.3 percent recorded in August 2019, adding that the increase was mainly due to price movements of food items such as Breakfast mealie meal, Roller mealie meal, Maize grain, Samp and Rice imported.

Meanwhile, the non-food Inflation rate for September 2019 was recorded at 8.3 percent same as August 2019 which means that an average price of non-food items increased by 8.3 percent between September 2018 and September 2019

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The year on year Inflation as measured

Markets

A Lusaka based Financial Analyst Maambo Haamaundu says as the country awaits the presentation of the National budget by Minister of finance Dr. Bwalya Ng’andu, it is prudent that a substantial portion of money is taken to debt servicing.

Hamaunda said Zambia has in recent past been hardly hit with economic challenges of which debt is a big contributor, hence the need for  particular attention if the country’s economy is to recover. The exchange rate also depreciated and we expect to hear on measures to stabilize the local unit.

He has told the Zambian Business Times – ZBT in an exclusive interview that members of the public should not expect much to be fixed, stating that aside the current power deficit and agricultural challenges, more funds are likely to be consumed or directed towards debt servicing and salary payments of public workers.

He has since called on government to consider cutting down on unnecessary expenditure by government officials which he said has heavily affected the country’s treasury, adding that, there is need to also exercise commitment by sticking to plans set to improve the situation.

Hamaundu added that government needs to focus on servicing domestic arrears stating that the domestic economy need assimilation as it has potential to undermine the growth of the country if not paid attention to.

“There is likely to be very little or no money available for economic activities, which is also a worry, but we only hope that having had government announce that it will put in place austerity measures by reduction of expenditure, we hope to get a report on how much has been saved and how much has been directed to clear domestic arrears,” he said.

He noted the need by government wings to put in place economic decisions and critical evaluations before implementation of any projects in the country to ensure it is financially supportive in the present or near future. The board to scrutinize the projects and an effective evaluation process needs to be put in place.

The 2020 National Budget is expected to be presented on the 27th September 2019 by the Minister of finance. The president’s state of nation – SONA address indicated the desire for the government to do more with less. So innovative ideas on how to get more with less are what is expected from this budget.

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A Lusaka based Financial Analyst Maambo Haamaundu

Politics

The Zambia Congress of Trade Union – ZCTU has expressed concern over the Constitutional Amendment Bill Number 10 of 2019 which will lead to the worsening of the current fiscal position of government if enacted.

ZCTU noted that the bill intends to introduce the position of Deputy Ministers and elevate provincial Ministers into full cabinet minister, further proposing an additional number of members to parliament, which will add pressure to the national treasury.

Speaking during a media briefing held on 17 September, 2019 at ZCTU offices in Lusaka, ZCTU Secretary General Cosmas Mukuka said with the current fiscal challenges in the country, it is only right that resources are directed towards the Constitutional consultative process to ensure that the new constitution allows for wide stakeholder consultations.

Mukuka said the bill also left out the contentious issue of the Bill of Rights that led to a failed referendum in 2016 saying it is essential to further include economic rights and rights to basic social protection.

“The reason why ZCTU is not supporting the Constitutional bill No. 10 of 2019 is that is seeks to take away retirees pension security which will lead to increased poverty, homelessness as many retirees will not be able to build their own home and children will stop going to school,” he said,

ZCTU has since stated that the bill has failed to inspire workers as non of the proposed amendments in bill are progressive to its members.

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The Zambia Congress of Trade Union -

Tech

The Consumer Unity and Trust Society – CUTS has expressed concern with the negative impacts that this fuel price hikes will have on consumers, particularly low-income consumers, calling on the government to think innovatively and explore other options available.

CUTS Centre Coordinator Chenai Mukumba has explained in a statement made available to ZBT by CUTS Communications Officer Njavwa Simukoko stated that the majority of consumers in Zambia will be negatively affected by the rise in fuel pump prices through pass on effects like resulted higher bus or taxi fares, hence it can be expected that public transport providers will soon increase their prices as they shift the burden of the higher pump prices to consumers.

The CUTs coordinator said to cushion the effects of increased costs emanating from the fuel price hike on the poor, there is need to allocate more resources towards well-targeted social safety nets that have high coverage of poor households and little leakage to non-poor households particularly the current Social Cash Transfer Schemes and Food Security Packs.

“Consumers are already feeling the brunt of the country’s economic situation and this price hike will indeed only worsen the current situation. With inflation at 9.3%, the price of goods and services are increasing at a rate that is increasingly becoming untenable for consumers.

Combined with the expected price of electricity tariffs this will likely only increase the country’s inflation rate,” She said.

She has since noted the need by Government to improve on initiative studies that determine the efficiency and cost effectiveness of fuel procurement in Zambia compared to other countries in the region like Malawi, Zimbabwe and Botswana to see how it can reduce the costs associated with procuring fuel and ensure a lower pump price.

An energy expert Johnston Chikwanda has described the current revision in fuel prices by the Energy Regulatory Board – ERB a reasonable and foreseen move as it is in line with the removal of subsidies government policy on energy products.

In a statement released on 23 September 2019 by the Energy Regulation Board – ERB has indicated that it has revised the price of fuel upwards stating that it is it policy direction to migrate to cost reflection pricing of energy products and services.

Chikwanda has told the Zambian Business Times – ZBT in an exclusive interview that with the current hike in crude oil prices on the global market, it is only reasonable that fuel prices needed to be adjusted as seen from the current economic challenges.

He has added other factors include the underperformance of the Zambian currency against the dollar and other currencies which has in the recent past affected business on the market, inflation and high cost of living by many Zambians.

“In a Scenario where we do not have subsidies, this can happen and there are limited alternatives to be put in place, yes the state of the economy is bad but if government cannot find short term solutions to the challenges then the only way is to revise prices,” he said.

Chikwanda has since encouraged consumers not to exasperate but adjust to the situation as the country tries to put in place long term measures adding that there is also need to cut down on unnecessary movement which may not be legitimate reasons.

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The Consumer Unity and Trust Society –

Companies

Mt Meru has donated K100, 000 (about US$8,000) towards the hosting the the Southern Africa Inter-Municipal Sports Association – SAIMSA games slated for 22nd to 27th September, 2019 in Lusaka.

The company presented a dummy cheque to Zambia Local Authorities Sports Association – ZALASA president, Christopher Shakafuswa on 20th September 2019 at Lusaka City Council – LCC Offices.

In a statement made available to the Zambian Busines Times – ZBT by LCC Public Relationa Manager George Sichimba, Mt Maru Group Safety, Health, Environment and Quality – SHEQ Coordinator, John Banda, said his company is delighted to partner with ZALASA in hosting the 16th SAIMSA games.Banda noted that his company’s intention is to be a good corporate citizen and contribute to communities in which they operate.

He said his company will always participate in activities that foster development and the wellness of workers in society as a way of contributing to the Make Zambia Clean, Green and Healthy campaign.
“Our intention is to respond to activities that foster development and wellness of employees in Local authorities and the society in general,” he said.

And in receiving the donation, ZALASA president, Christopher Shakafuswa commended Mt Meru for demonstrating that the company is indeed a good corporate citizen by donating to the organization.
Shakafuswa, who is also Lusaka Deputy Mayor, assured Mt Meru that the donated funds will be used for the intended purpose adding that the money donated will be put to good use.

Shakafuswa has since appealed to other corporate entities to emulate what Mt Meru has done.
“Earlier this week, Zambia National Building Society donated Fifty K50,000 (about US4,000) towards the hosting of the same event, he said.

Shakafuswa further reiterated his call to Lusaka residents in particular and Zambians in general to demonstrate love and peace to all foreign participats before, during and after the games. He observed that Zambian are known as peaceful and loving people and that foreign participants are looking forward to have a nice time in Zambia and that security wings are doing everything possible within their mandate to ensure that security of all participants is guaranteed but that it is important for residents to complement their effort.

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Mt Meru has donated K100, 000 (about

Lifestyle

Topstar Zambia has partnered with talented local producer Owas Mwape production with a call to uplift local content production in the industry.This was after Topstar sponsored Owas Mwape’s launch event of his latest movie at the red carpet screening which took place at Lusaka’s Arcades Shopping Mall.

Topstar Vice President Cliff Sichone told the Zambian Business Times – ZBT in an interview that what is of significance to the company is to ensure it supports local production of television content which appeals to the bulk of its subscribers on both Digital Terrestrial Transmission – DTT and Direct to Home – DTH platforms.

He said Topstar is committed to ensuring it supports local TV stations and that the support is not only about carrying them on the platform but also provide its viewers with quality content.

“It is important to have internal content but we believe it’s extremely important to have local content being shown on the screens as you know digital migration should not only be about showcasing content from other countries but it should about uplifting local producers and ensuring that the content reaches the right target who are the Zambian viewers,” he said.

The company has however pledged to continue working with local producers and give support where necessary in order to grow the industry. Sichone has since appealed to local producers to put in the best efforts into their works and look forward to creating a rapport with Topstar as it is ready to help in improving local content.

Topstar has been in operation in the country for over 2 years now and in the years that the company has been in operation, it has formed a joint venture with the Zambia National Broadcasting Corporation – ZNBC and Start Times China. The company is to date carrying over 25 local channels on the platform.

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Topstar Zambia has partnered with talented local

Lifestyle

As preparations for the much anticipated 2019 Stanbic Music Festival get into the home stretch, the steady stream of prominent sponsors for the show piece is picking up momentum with building material giant Lafarge Zambia pouring K100,000 into the successful hosting of the event.

Stanbic and Lafarge have jointly announced their co-sponsorship of this year’s event, which will be headlined by American Grammy Award-winner Brandy and Afrobeats Nigerian sensation Davido.

Speaking during the cheque handover at Lafarge Offices in Lusaka on September 18, 2019, Lafarge Zambia Director of Marketing and Strategy Giovanni Murialdo said the cement manufacturer was happy to be part of the event as it tied in well with Lafarge’s commercial sponsorships policy.

He said, by co-sponsoring the Stanbic Music Festival, it confirms how keen the company is to participate in community activities that are bent on uplifting the welfare of the Zambian people through art and social development.

“We are confident that the sponsorship of K100,000 will help promote our local artists who will also be sharing the stage with the international head liners.”

In a statement made available to the Zambian Business Times – ZBT, Mr Murialdo added that Lafarge is proud to see the likes of Mampi, who will be the only local female artist during this year’s event saying that Lafarge Zambia carries a strong belief in female empowerment.

And, Stanbic Bank Zambia Director of Corporate and Investment Banking Helen Lubamba said Lafarge’s support would go a long way in making the event a success. She said aside being the country’s leading company in the construction sector, Lafarge has a long history of promoting and supporting arts in Zambia.

“We are happy to have Lafarge on board in sponsoring this prestigious event. Your support will go a long way in ensuring we keep our promise of making this year’s event bigger and better than last year’s,” She said.

Similarly, the Music Festival is one of the many ways Stanbic gives back to the community and assist with the development of the arts and music in Zambia. Since its inception six years ago, the Stanbic Music festival has been graced by several international icons including, Boyz II Men, UB40, Hugh Masekela and Oliver M’tukudzi music legends gone too soon. Mi Casa, Earl Klugh and Zonke as well as a host of top local artistes including gospel RnB sensation Abel Chungu Musuka, contemporary RnB singer K’millian, singer, writer and guitarist James Sakala, Zambia’s hottest Hip Hop sensation Chef 187, the legendary Izrael and electric violinist Caitlin DeVille among several others.

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As preparations for the much anticipated 2019