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Agribusiness

Tobacco Board of Zambia – TBZ has projected this year’s (2019) tobacco production to grow by 16% and hit 36 million Kilograms (Kg’s) compared to 31 million Kg’s in 2018.

TBZ Chief Executive Officer James Kasongo has confirmed that this year’s marketing season for the tobacco industry has improved compared to previous years attributing the improvement to the new information system introduced by the board and the active participation by stakeholders in the industry.

Kasongo told the Zambian Business Times – ZBT in an exclusive interview that the introduction of the new system has enabled most farmers get registered hence making it easy to monitor the production.

When asked by ZBT on who the top Tobacco producers and out-growers in Zambia are for the 2019 season, Kasongo disclosed that the key contributors in the industry include Tombwe processing, Alliance One, Japan Tobacco International – JTI leaf, Pemba leaf and Copper leaf, who he said have greatly contributed to the growth of the industry and the country’s production at large.

The TBZ CEO commended the improvements in Zambia’s production to enhancements of the country’s marketing and pricing system of tobacco, which has increased in the past 6 years from US$2.39 per Kg to the current US$2.80 per Kg ,while barley ranged from US$1.20 per Kg to US$1.80 per Kg hence becoming competitive on the regional market.

He is however confident that Zambia will by the end of its production season in September close with a high production in tobacco as Zimbabwe had for the 2019 marketing season closed with an average of US$2.3 per Kg, Malawi at US$1.36 per Kg while Zambia is to date standing at US$2.16 per Kg.

He added that the industry has received support from government and players in the industry have also been very supportive as among the factors that have led to a good and conducive marketing season in 2019.

“In terms of production last year, we had 31 million Kg’s of tobacco while this year’s projection before the end of the marketing season is about 36 million Kg’s of tobacco. This is an indication that production is increasing. In previous years, we would have people waiting for 3 to 4 days just to have their tobacco bought but now we have quite a number of buyers in the industry,” he said.

Kasongo has further noted the need to stabilize, support and grow the small scale farmers in the tobacco industry as they constitute 90% of tobacco production in the country, hence its prudent that small scale farmers are organized into cooperatives where irrigation schemes can be delivered.

In addition, Kasongo has called for participation of stakeholders in the industry on the legislation saying there is need to recognize it and bring it to the level where it can be competitive in the region as other countries tend to have more players and volumes compared to Zambia.

TBZ has opened registration of growers of tobacco till 31st October 2019 and has called on small, medium and large scale tobacco growers to get registered as the board has already given licenses to buyers who have provided an opportunity for farmers to invest in the industry.

The set up of local tobacco processing plants by BAT and the planned expansion by Roland Imperial tobacco are now providing a ready market for local produce. Zambia has the suitable soils and weather conditions in some identified tobacco producing areas.

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Tobacco Board of Zambia – TBZ has

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ActionAid Zambia has welcomed the decision by the President Edgar  Lungu, in revoking the recent appointment of the Financial Intelligence Centre – FIC Board Chairperson George Siame, but questions have arisen on who conducted the security checks and cleared Siame for appointment.

The Minister of Finance had on September 10th , 2019 announced the appointment of the new FIC management board to be chaired by George Siame. President Edgar Lungu has since revoked the appointment of Chilengwe as FIC board chairperson  as he is believed to be under a court ruling for a case of Gender based violence.

It is a routine but important process that security and vital statistics checks are conducted on all proposed appointees but how did this one go through? Someone or a committee made this decision to clear the name but there has been no feedback and accountability for such blunders, which are embarrassing for the finance minister, the state and the office of the president.

In a statement made available to the Zambian Business Time – ZBT, Action Aid Country Director Nalucha Ziba has commended the act by government saying it shows the President’s commitment to protect the integrity of the institution as well as upholding the gains registered in the fight against Gender Based Violence.

“By revoking the appointment of a man who was reported to have assaulted a female Human Resource Manager whilst he served as a Senior Commissioner at Zambia Revenue Authority in 2009. The President’s decision is timely, amidst the rising number of reported GBV cases.” She saidt

She added that it is ActionAid Zambia’s sincere hope that the President continues on the same path adding that consideration should  be given to capable women when appointing the next FIC Board Chairperson as the country seeks to put more women in decision making positions.

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ActionAid Zambia has welcomed the decision by

Tech

The Zambia Airports Corporation Limited – ZACL has successfully managed to dodge the list of unprofitable list of state owned enterprises – SOEs and presented a dividend cheque to government worth K5 million ( US$385, 000) dividend.

ZACL has for the third time in four years presented dividend to government aiming at illustrating it’s commitment towards the growth of the country. Presenting the cheque to Minister of finance Dr. Bwalya Ngandu at the Ministry on September 11, 2019, ZACL Board Chairperson Milingo Lungu disclosed that the Corporation had for the period ending December made a profit of K80.4 million and paid taxes to government in an amount of K3.2 million.

Milingo added that on the infrastructure perspective, the Corporation has continued to upgrade projects with the Greenfield airport in Ndola currently standing at 48 percent of work done and the upgrade works at Kaunda international Airport currently at 85 percent.

“The cooperation kindly requests the shareholders to consider the extension of the Economic Tax Free status given to the Airport Multi – Facility Economic Zone to include Kenneth Kaunda International Airport as this will help in ensuring that the airport is positioned to become the next regional air transport hub in Africa.

And Dr. Ngandu said despite being in the midst of the economic challenges ZACL continues to strive in delivering world class airport and air navigation services which has seen the coming of new airlines hence a positive sign of governments investments being put to good use.

He has since commended the cooperation for the gesture of hard work and consistency in ensuring there is a proper management and utilisation of resources. The Minister added that government is however focused on constructing and upgrading airport infrastructure in all provinces to provide modern facilities that will enable the country handle higher volumes of traffic and give airline’s better services. The Finance Minister is also confident that enhancing the aviation industry will not only yield economic results but attract tourism.

Analysts at the Zambian Business Times have urged ZACL to now look at enhancing returns especially following the huge investments that have gone into the various airports. The board and management should now look at delivering tens of millions of dollars commensurate with the level of investments put in. Posting US$385 million is a good start but needs to be scaled up as return on capital injected needs to be above the interest rate applied on the loans obtained.

Zambia has aggressively invested over US$1 billion in Airport Infrastructure with Lusaka’s Kenneth Kaunda International Airport – KKIA and Copperbelt’s Simon Mwansa Kapwepwe International Airport under construction. The tourist capitals Harry Mwaanga Nkumbula Airport upgrade is completed while women regional and provincial airports had also received terminal and runway upgrades.

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The Zambia Airports Corporation Limited - ZACL

Mining

The Zambia Chamber of Mines – ZCM has disclosed exclusively to the Zambian Business Times – ZBT that the mining industry prefers the Value Added Tax – VAT system as opposed to the proposed Goods and Services Tax – GST also referred to as simply sales tax, stating that the copper mines through ZCM have collectively proposed measures to shore up VAT revenues for the government.

Speaking to ZBT following the chambers announcement on the projected drop of Zambia’s copper production by 100, 000 tonnes in 2019,  Chief Executive Officer Sokwani Chilembo stated that the mines have proposed to reduce the limit of VAT claims on fuel and electricity to 90%.

When asked by ZBT if the mining industry is ready for sales tax in 2019, Chilembo stated that “ No, the mining industry prefers to remain with Value Added Tax – VAT to Sales Tax, we have made proposals on how we can help to shore up VAT regime, the mines have proposed to  limit the claim-ability of VAT on fuel and electricity to 90%”.

He stated further that “ this 90% claim-ability is a reasonable amount and if it’s reduced too far, it’s going to escalate the production costs for the mines with the effect resulting in reduced production and eventually reduce the intended tax revenues”.

When further pressed to confirm some allegations that the timing of  chambers statement that the drop of 100,000 tones of copper production is meant to influence the 2020 national budget which is due to be announced in the next few week, Chilembo stated that the statement is meant to get government to consider the facts as the situation is very dire, and that we have seen how production is dropping and if we don’t make changes, these figures [of reduced copper production] will continue to slide next year and we will see more mines and smelters going into care and maintenance.

The ZCM CEO further stated that “we are now at a point where we have to do something to stop the industry from further decline and distress”.

On attributing the projected drop of 100,000 tones of Zambia annual copper production to the take over and liquidation of KCM, Chilembo admitted that KCM has operational challenges of its smelter but he was quick to mention that the chamber speaks about issues across the mining sector issues and that business stress is one of the realities.

The Chamber of Mines told ZBT that if sales tax is effected, it’s going to wipe out a substantial amount of jobs in the mines supply sector (mine suppliers). Sales tax if implemented is estimated to escalates costs in the mining industry by about 35 to 40%. The implications is that mines will stop buying locally and buy directly from multinational suppliers, cutting off the local offices, jobs will eventually at risk.

A further check by ZBT on Zambia largest mining company, First Quantum Minerals – FQM shows that its Zambian mine, Kalumbila Sentinel Q2 2019 copper production was comparable with Q2 2018 producing 54,977 tonnes of copper while its solwezi based Kansanshi copper mine production was reported to have been impacted by the lower grades in the oxide ore circuit and lower recoveries in the oxide and mixed ore circuits slightly offset by higher throughput in all circuits.  Kansanshi Copper production totaled 58,634 tonnes for Q2. 

The Zambian fiscal authorities have proposed to implement sales tax in 2020, after its implementation was postponed three times in 2019. The 2020 national budget due for announcement in last week of September or first week of October 2019 is expected to shade more light on weather this law will be implemented or shelved. VAT refunds have been reported to be a heavy drain on the treasury and this regulation is meant to plug that hole boost domestic resource mobilization to finance the ambitious infrastructure projects that the government has embarked on.

However, experts have called for a measured approach to ensure that the sales tax measures do not result in disruption of the copper mining industry which accounts for over 70% of the country export earnings and forex inflows.

 

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The Zambia Chamber of Mines – ZCM

Companies

A new board for the Financial Intelligence Centre – FIC has been unveiled with a reminder that its operations are 100% funded by government. The new board effectively terminates the contract of its controversial former board chair – John Kasanga.

The board appointment is in accordance with section 6 of the FIC Act number 46, of 2010. The new board is to be chaired by George Siame is expected to monitor and review the administrative performance of the centre in carrying out its functions under the act and approve the proposed budget of the centre.

Announcing the change at Ministry of Finance in Lusaka on September 10, 2019, the Ministry’s Minister Dr. Bwalya Ng’andu said other members include Hon. Justice Prisca Nyambe, Pelagia Kalunga, Mike B. Goma and Regina Mulenga who are further expected to approve policy guidance for the proper administration and management of the centre and review the implementation of cooperation agreements between the centre and domestic or foreign designated authorities.

Dr. Ngándu said the appointment comes at the back of the end of tenure of the previous board in January 2019. He has since commended members of the previous board for their tireless efforts in furtherance of the objective of the FIC and has also thanked Dr. John Kasanga for his contribution as interim board chair.

“I have no doubt that with your diversity and experience; you will be equal to the task and continue to make the financial intelligence centre the leading institution in the anti-money laundering and countering the financing of terrorism regime,” he said.

The Financial Intelligence Centre – FIC is a statutory body established under the financial intelligence centre act no 46 of 2010 (as amended by act no. 4 of 2016). It is an independent and autonomous government institution under the Ministry of finance.

The core function of the FIC is to receive and analyse financial transactions reports bordering on suspected money laundering terrorist financing and proliferation submitted to it by accountable institutions. The FIC is 100% funded by the ministry of finance.

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A new board for the Financial Intelligence

Companies

The Business Confidence Index – BCI for the second quarter (Q2) of 2019 has shown a further decline from the first quarter (Q1) of 2019  mainly due to the depreciation of the local unit, the Kwacha, leading to negative sentiment among the business community.

According to the Zambia Chamber of Commerce and Industry – ZACCI business confidence survey conducted on over 300 members of ZACCI across all sectors, the recorded BCI of 51.3 points is lower by 100 points hence signifies negative sentiments about the business climate in quarter 2 of 2019.

Addressing the Media in Lusaka on September 6 2019, ZACCI president Chabuka Kawesha explained that recorded negative sentiments we’re mainly due to the depreciation of the Kwacha, low sales due to reduced demend, delayed payments by Government, Poor liquidity, increased competition from foreign goods, policy uncertainities, uncertainities around the introduction of sales tax and the initiated liquidation process of Konkola Copper Mines – KCM on the Copperbelt.

The survey further revealed that the performance of business did not record an improvement in Q2 of 2019 compared to Q1 of 2019 due to the cited reasons and that most businesses experienced decreased demand for their products in the period.

“Additionally, the survey reveals that the general cost of doing business increased in Q2 of 2019. Further, that businesses expect the overall performance of the economy not to grow from the current level,” he said.

ZACCI has however called on government to quickly address the uncertainty surrounding sales tax and maize adding that there is need for new investments in the energy sector both for off-grid and on- grid clean or renewable energy. Meanwhile, the ZACCI president recognized and applauded government on the promotion of the fish farming and processing industry and the increased interest nationally.

Zambian authorities have struggled to manage the Kwacha to US dollar exchange rate pair due to lack of a clear policy and accountability among the various government wings on who should take leading responsibility.

The devaluation of the Kwacha is so pervasive that it seeps into the core of the economy, not only wiping out value for Kwacha savings but driving imported inflation. The Central Bank who the public defaults to think are the custodians of the value of Kwacha value and savings preaches that it practices a free market economic policy, leaving no clear accountability on who is responsible and accountable.

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The Business Confidence Index - BCI for

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The Competition and Consumer Protection Commission – CCPC is as of 1 st September 2019, running a six-month Amnesty Programme up to the 28th of February, 2020 aimed at raising awareness and compliance with CCPC Act No 24 of 2010.

The Act avails persons or enterprises engaged in cartel conduct and restrictive business practices (RBPs) an opportunity to desist from further abrogating the Act in exchange for a waiver of fines as well as immunity from possible prosecution.

CCPC Director Legal and Corporate Affairs Maureen Mwanza has told the Zambian Business Times – ZBT in a statement that the programme focuses on all subsectors of the economy and covers agreements deemed as anti-competitive or restrictive of competition under the Act.

“The Commission through this programme and in line with Section 79 of the Act encourages persons and enterprises to come forward to the Commission with information that helps to demonstrate the existence of a prohibited agreement. The said information should be of such quality and degree of detail that it increases the chances of proving the existence of the prohibited agreement which the Commission would ideally have not been privy or have access to at all without investigation,” She said.

The Commission has further offered an opportunity to persons or enterprises to apply for amnesty and subsequently become good corporate citizens by complying with the Act. Mwanza added that persons or enterprises who may not be sure whether their conduct or agreement is in breach of the Act are free to engage the Commission in person or through their legal representatives anonymously or otherwise.

She further explained that the Amnesty Programme is restricted to Part Ill of the Act, and will therefore not extend to Mergers or Unfair Trading covered under Parts IV and VII of the Act respectively.

There are sectors in the economy that are dominated by a few related firms or firms acting in cohort which prevent competition and entry of new players, thereby sustaining higher prices at the expense of local consumers. The Zambian Business community and persons are now free to report all suspected anti-competitive business practices to the CCPC.

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The Competition and Consumer Protection Commission –

Tech

Ministry of Transport and communications has disclosed that plans of re-launching the National Airline are on course and that the project is on stage three of its certification process and awaits certification process from the Civil Aviation Authority before completion.

The Transport Ministry’s Permanent Secretary Misheck Lungu has told the Zambian Business Times – ZBT in an exclusive interview that the ministry has already issued the air operators service permit and is yet to complete with the air certification process from the Civil Aviation Authority – CAA.

He added that the board has so far completed stage one and two of the process but that the third stage is stiff, as it requires more hence need guidance from stakeholders. He has mentioned that the ministry is a complaint state and will not use its office to push the launch without proper procedures and national regulations hence has no influence of making a quick decision as when the National Airline should start.

Lungu explained that the National Airline will make its first flight to Johannesburg in South Africa adding that the focus is also on domestic and regional flights hence will identify cities and towns with bigger markets.

“The ministry can’t say much at the moment because we are still in the process of certification and our role is to coordinate and give regulations, so we don’t want to use our power to issue the certificate hence will follow procedures of having it from the Civil Aviation Authority because it will help us tighten up, moreover aviation is about service and security”, he said.

The PS has further disclosed that Zambia will maintain its partnership with Ethiopia, as it owns 45% shares in the National Airline project while Zambia owns 55% hence returns of investments are to be made from both sides.

Meanwhile, in an open letter, which was obtained by the Zambian Business – ZBT last month, the Center for Trade and Policy Development – CTPD advised government to hold on the re-launch of the National Airline till Zambia is a better macroeconomic position.

CTPD researcher Bright Chizonde said a research conducted by the center indicated that relaunching the National Airline carrier was not prudent due to Zambia’s current financial and macroeconomic situation.

“Zambia has a vibrant domestic aviation industry which is dominated by private players hence the relaunching of the Zambia airways using proposed business models would crowd out the local  private sector since Zambia Airways is envisaged to have domestic, regional and intercontinental flights, therefore, Government should instead be seeking to support the private sector players rather than interfering with the market through pursuing investments which could be taken on by the private sector,” he said

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Ministry of Transport and communications has disclosed

Mining

Gemfields owned Kagem Mine in Lufwanyama district of Zambia’s mineral rich Copperbelt Province has been commended for realizing emeralds revenue of about $18.6 million in one auction saying the move shows an act of transparency. The number and spread of buyers for Zambian emerald is increasing with Chinese clients joining the list.

Kagem Mining is the world’s single largest emerald mine which is 75% owned by Gemfields and 25% by the Zambian government.Then Mines Ministry’s Permanent Secretary Paul Chanda confirmed to the Zambian Business Times – ZBT an exclusive interview that the actual numbers by Kagem mining was confirmed by government, which he said, is a positive gesture to the mining industry and has since encouraged other emerald mining companies to conduct public local auctions.

He added that it is important to conduct auctions within the country as it shows transparency in accounting for the sales done in the sector, drive business tourism arrivals and puts Zambia on the world map. Buyers are encouraged to include Zambia as a destination for their supply chain activities and that where necessary, the auctions can be done outside the country.

“The auction which was conducted by Kagem is impressive and among the offered parcels, we had only two which went back to the mine while the rest were sold, so they met the price which was targeted by the company, we also witnessed the increase in terms of customers and clients who came to buy, initially we had no customers in china but this time we have a lot participating which is a good move,” he said.

Chanda indicated that aside Kagem the country also has other notable mines producing emeralds like Grizzly Mining, which is second from Kagem, but is 100% privately owned. Other producers are Gemcanton and small producers like Miku mining also found in Lufwanyama district whose owner is Zambian who has partnered with Chinese investors with an idea of increasing production and scale up their operations.

He further mentioned that Grizzly mining has also been auctioning publically since 2017 both in the country and outside the country and he has confirmed that the company is equally performing well adding that small producers have also shown growth in the sector hence will soon compete with the bigger mines on the market.

The Mines PS said that government has in this regard promoted an initiative of working with banks to extend loan to local miners in emeralds to enable them produce large quantities, stating that government has noted a lot of potential in Zambian citizens to but that are lacking capital. He said banks and other financial institutions are encouraged to extend credit to miners, but the demand for collateral cover draws back local potential investors into emerald mining.

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Gemfields owned Kagem Mine in Lufwanyama district

Companies

Business at South African stores dominated East Park Mall and Manda Hill in Lusaka was today interrupted and later closed after a group of the University of Zambia – UNZA students protested and blocked shoppers at mostly South African stores, following the ongoing xenophobic attacks in South Africa on fellow Africans including Zambians.

Some UNZA students peacefully protested to show their anger and displeasure against the attacks and killing of foreign nationals in South Africa hence targeted some South African stores which include Pick n Pay and Shoprite.

A ZBT analyst who rushed to perhaps the highest traffic malls in Zambia at both East Park and Manda Hill found all shops closed after the students descended on some shops damaging property while customers in Pick n Pay at East pack where locked inside in fear of having protesters break into the shop.

At East Park shopping mall, some shops were partially damaged and employees were seen turning back from their workplaces while the mall remained closed until further notice.And some shop owners talked to have stated that while they do not support the xenophobic attacks going on in South Africa, they are saddened with the protest which has resulted into the closure and loss of business.

“Am totally not in support of what is happening in South Africa but that doesn’t mean Zambia should equally do the same thing because this has an effect on not only South African business but Zambians as well,”.

The students later marched to the South African Embassy in Kubulonga were they demanded to be addressed by the South African high commissioner to Zambia. However their March to the embassy did not yield any positive results as students become unruly and demanded that they South Africa flag is brought down while the Southern African signage post was set on fire.

And some UNZA students talked to under conditions of anonymity have stated that their protect is an indications that Zambians are not happy with the happenings in South Africa and have condemned the act of not allowing the commissioner to show up adding that all they wanted was a peaceful dialogue with the commissioner.

“All we are doing is to make sure that Zambians are okay in South Africa, we are not happy that our people are being threatened and killed every single day, how many South Africans do we have living and doing business in Zambia?, So why should they kill our citizens for doing business there,”?

Meanwhile, Manda Hill Management has disclosed in a statement that the mall has been closed until further notice following the protests that occurred by some groups of UNZA students this morning.
The management has said that the protest was peaceful and that Manda Hill security team along with Center Management rapidly resolved the situation had has since called on its customers to remain calm while the team is still observing the situation.

Zambia was a key ally in the fight against the white apartheid government in South Africa. The country was home to exiled freedom fighters and has remained a home for some todate. The happenings in South Africa is widely condemned with Zambia’s foreign affairs Minister Joe Malanji falling on South African authorities to urgently stem the Xenophobic attacks on innocent foreign workers and residents.

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Business at South African stores dominated East