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Markets

The country has recorded a consecutive five months year on year inflation increment which has mainly been attributed to the increase in the price of different commodities that form part of an essential bucket of goods and services that are monitored month on month.

And the Kwacha depreciation has been sighted as the main contributor to the 5 consecutive months continued raise in the national inflation number, which has breached the target range of 6 to 8% for Zambia. The depreciation of the local unit has a pervasive effect on the economy in that transport costs shoot up as the fuel import bill grows as well as non- food items which are mostly imported such as motor vehicles.

The month of June recorded a 0.5% inflation rate increase triggering the year on year inflation as measured by the all item index (CPI) for the month of June to raise to 8.6% from 8.1% recorded in May 2019. This means that on average, prices of goods and services increased by 8.6% between June 2018 and June 2019.

Central Statistics Office (CSO) Acting Director for Census and Statistics Goodson Siyenga announced during the Trade Fair in Ndola that the increase in the annual food inflation rate was mainly attributed to price movements of food items such as fresh & dried bream fish, buka buka fish, fresh & dried kapenta and cooking oil. The increase in the non-food annual inflation rate was also attributed to price movements of non-food items such as purchase price of motor vehicle.

The annual rate of inflation increased for non-food and Non-alcoholic beverages; Furnishing Household Equipment and Household Maintenance; Health; Transport; Communication; Recreation and culture; Education and Miscellaneous Goods and Services. Transport had the highest increase in inflation from 14.5% in May 2019 to 21.4% in June 2019.

The annual rate of inflation reduced for Clothing and Footwear; Housing water and electricity Gas and other Fuels; and restaurant. Of the total 8.6% annual inflation rate recorded in June 2019, Food and Non-alcoholic beverages accounted for 4.9 percentage points while Non-food items accounted for a total of 3.7 percentage points. Of the 3.7 percentage points, Transport contributed the highest at 1.3 percentage points followed by Housing, water, electricity, gas and other fuels that contributed 0.8 percentage points.

An analysis of the increase in both food and non-food inflation shows that the depreciation of the Kwacha is one of the major causes of the continue raise in cost of goods and services accross Zambia. The Kwacha depreciation affects the transport sector from increased imported fuel bill which feeds into the cost of final food products distribution cost to markets which is passed on to the final consumer.

For non-food inflation, most of the items in the basket of goods are imported such as furniture, motor vehicles etc which are also directly affected by depreciation of the Kwacha. With Zambia having a limited base for local manufacturing, imported inflation hits Zambia hard whenever the Kwacha depreciates.

Other tangible reasons for the increase in food items prices include the low rainfall patterns in mostly Southern, Western and parts of Lusaka Province which was experienced in the 2018/2019 farming season led to low production affecting the production and supply of Agro foods.

The Bank of Zambia, the central bank whose headline role is financial and monetary systems price stability has not been able to successfully curb the depreciation of the Kwacha as well as maintain a target band trading rate for the Kwacha to say the US dollar pointing to its adoption and practicing of a free market policy regime. The stability of the Kwacha remains the single most biggest economic variable that has been subject to consistent depreciation over the years.

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The country has recorded a consecutive five

Markets

Zambia has continued to record trade surplus month on month with May recording a trade surplus of K501million (about US$40 million). This figure is however a decreased by 17% from a surplus of K603.6 million recorded in April 2019 to K501.1 million in May 2019.

This trade surplus means that the country exported more than it imported in nominal terms. Imports increased by 14.5% from K7,174.4 million in April 2019 to K8,215.4 million in May 2019, this increase is mainly attributed to the raw materials imports which increased by 36.0% in May 2019.

Exports increased by 12.1 percent from K7,778.0 million in April 2019 to K8,716.5 Million in May 2019 and the increase in the value of exports is mainly attributed to the increase in export earnings from intermediate and consumer goods by 10.3 percent and 37.7 percent respectively. Therefore, the net effect of these dynamics in trade was the reduction in the trade surplus.

Meanwhile, the year on year quarterly growth rates at constant 2010 prices shows that the economy grew by 2.6 percent in the first quarter of 2019 compared to 2.7 percent in the first quarter of 2018.

The Wholesale & Retail industry contributed the highest growth to the economy in the first quarter followed by the Information & Communication and Public Administration & Defense Industries with 0.9, 0.8 and 0.6 percentage points respectively.

The industries with the highest growth rates were Information & Communication (30%), Financial & Insurance (12%) and Public Administration & Defense (11%).

The report further showed that Zambia’s Gross Domestic Product – GDP at current prices in the first quarter of 2019 has recorded a growth and was estimated at K 69,648.7 million compared to K 60,741.9 million recorded in the same period of 2018.

A trade surplus is essential to the growth of national reserves which have recently shown a downward trend for US$ held assets by the central bank. Zambia currently practices a free market economy which has minimal to no controls for foreign currency externalization.

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Zambia has continued to record trade surplus

Agribusiness

The Zambia National Farmers Union – ZNFA has disclosed that the resent announced purchase price of white Maize by the Food Reserve Agency – FRA is nowhere near the range recommended range by stakeholders of between K130 – K140 per 50 Kilograms of white Maize based on prevailing market price indications.

ZNFU Public Relations Manager Calvin Kaleyi has told the Zambian Business Times – ZBT in a statement that the FRA price of K110 per 50Kg is far below the current maize prices being offered in the main producing areas such as Central and Eastern province.

He said the Union recognizes that the cost of production has increased and continues to escalate while the asset or capital base of farmers has been wiped out by adverse weather patterns which has been prevailing season after season since 2015 and that the price set by FRA is hostile to the farmers.

“ZNFU was invited to a consultative meeting with the Ministry of Agriculture and the announcement by FRA is nowhere near what was suggest by stakeholders in the meeting as the purchased price of white Maize was suggested to be between K130 – K140 and not the K110 that the FRA has set,” he said.

Meanwhile, the Food Reserve Agency – FRA has set the maize purchase price for the 2019 crop-marketing season at k110 for a 50 Kilogram bag and has fixed the price for a 50 Kilogram bag of soya beans at K150 and paddy rice at K70 respectively.

Addressing the media in Lusaka on July 5th 2019, FRA Board Chairperson Jeo Simachela said the Agency in consultation with government and key stakeholders undertook a process of crop price scenario analysis that included a survey of prevailing farm gate and open market prices with key market stakeholders and players in the crop marketing chain under the auspices of the Ministry of Agriculture.

He added that it is anticipated that FRA prices will not disadvantage the private sector who are expected to purchase the larger share of the projected 2,004,398 metric tonnes produced in the case of the maize crop.

Simachela further disclosed that in commitment to the promotion and development of agriculture, government has released a total amount of K74.4 million for payment to farmers on first come first serve basis and that FRA has disbursed the funds to various districts in readiness for payment to farmers.

He said there is further commitment for government to continue releasing farmer payments funds periodically and promptly to ensure FRA meets its purchase target. The FRA board chairman also announced that FRA only intends to purchase 300,000 metric tonnes of white maize, 4, 000 metric tonnes of soya beans and 1,000 metric tonnes of paddy rice.

According to the maize forecast data obtained by ZBT released by the ministry of Agriculture, 95% of Zambia’s maize is grown by small scale farmers while commercial farmers only contribute the remaining 5%. This scenario has emerged due to the heavy control of maize market prices and export bans which commercial farmers are well aware of and avoid getting entangles with.

Some Agro analyst have called on the Zambia National Service to grow the 500,000 metric tones of Maize needed for local food security and national consumption so that the private sector can concentrate on selling into the ready export market such as neighboring Democratic Republic of Congo – DRC and Angola.

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The Zambia National Farmers Union – ZNFA

Mining

Mines minister Richard Musukwa has called for prioritization of local content strategies in the mining sector to achieve economic diversification and propel growth of other Sectors such as manufacturing, trade and agriculture. This was after data showed that only 10% of the US$4 billion procurement  budget is awarded to local companies.

Musukwa said it is important for investors in the mining sector to ensure that benefits from the mining industry to locals is attained through implementation of the local content strategy, as they would be able to replace expensive imports with cheaper local products once local supply chains are fully developed.

Speaking during a stakeholder consultative meeting on local content in Lusaka on July 4th 2019 attended by the Zambian Business Times – ZBT, the Mines Minister said governemt’s focus is not only to improve the mining regimes by payment of appropriate taxes but on intergrating mining into the local economy.

He added that the country should however negotiate contracts with mining companies and stipulate local inputs for operations. The Mines Minister expressed concern that only 10% of the US$4 billion spent on procuring goods and services annually by mining firms goes to Zambian companies adding that the miss-match will not be allowed as Zambian businesses need to benefit from the country’s mineral wealth.

He said government will review policies to help improve the welfare of Zambians despite concerns by some investors that it is inconsistent with policies. Musukwa commended the African Development Bank – AfDB for supporting the ministry’s efforts to develop a local content strategy for the mining sector.

At the same event, AfDB Country Manager Mary Monyau also expressed concern that most goods and services imported in the country are given to foreign companies which affects local firms. She said many African countries are not able to utilize mineral resources to enhance the country’s development adding that some minerals are exported without any form of value added which hinders job creation and industrial growth in the countries were the mining take place.

The copper mining industry which accounts for over 70% of Zambia’s export earnings is mostly foreign owned after the privatization of the sector post 1991. The new investors have however opted to source their supplies through mostly foreign owned entities leaving locally owned companies disadvantaged due to poorly negotiated mine development agreements.

This has led to the country’s failure to attract copper processing and finished goods manufacturers into Zambia due to the current mine owners preference to export raw materials, in the process exporting jobs and denying the country further diversification within the copper value chain.
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Mines minister Richard Musukwa has called for

Lifestyle

Chief Government spokesperson Dora Siliya has disputed claims by some members of the public and the some opposition parties stating that government is only distributing relief foods to the ruling Patriotic Front – PF candidates and strong holds.

Siliya explained that it is not true that government is not distributing relief foods to places where the PF has no support as its concentration is centered to areas affected with hunger.

Addressing the media in Lusaka on July 4th, 2019 attended by the Zambian Business Times – ZBT, the information Minister said the Disaster Management ad Mitigation Unity – DMMU is distributing foods to areas that were affected with hunger due to the dry spells and floods experienced in the 2018/2019 farming season.

She said Kazungula, which is an opposition strong hold, recently received relief foods hence statements arising from the public domain are misleading as government is committed to distributing foods to all needy Zambians after the DMMU makes assessments.

Siliya further said, the office of the Vice president is on the course of responding to disasters faced by Zambians national wide and has since called on the public to support government’s effort to better people’s livelihoods.

“It is unfortunate that members of the public especially the opposition want to politic and continue claiming that this relief is only going to areas where they are PF strong holds, this is not and I hope that we put this matter to bed” she said.

Responding to a question from a ZBT analyst on the government position on the proposal to conduct a lifestyle audit for senior government officials, Siliya said claims of conducting lifestyle audits by some sectors of society are not worth to go for as government directly conducts audits through the Zambia Revenue Authority- ZRA, Anti-Corruption Commission – ACC, Drug Enforcement Commission – DEC and other agencies hence clearly gives a review of people’s lifestyle.

She said government is aware that there are a few citizens abusing their privileges and involving themselves in corruption but that the majority of Zambians are fairly decent people, saying corruption is not only in government but in the private sectors too and that the country will remain committed to the fight against Corruption.

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Chief Government spokesperson Dora Siliya has disputed

Agribusiness

The Democratic of Congo – DRC has requested the Zambian government to facilitate the supply of maize to DRC as the country is currently facing a deficit in maize production.

DCR Katanga province governor of Haut Jacques Katwe has disclosed that out of the 7,000, 000 metric tonnes of maize to be produced every year, producers in the country are only reaching 2,000,000 metric tonnes of production indicating a deficit of about 5,000,000 tonnes of maize.

Katwe added that DRC is however counting on Zambia to provide it with food supplies through the export of maize and mealie meal to reduce the food deficit situation that the mineral rich country is grappling with.

In a statement made available to the Zambia Business Times – ZBT by Trade ministry Public Relations Officer, Katwe was speaking when he met the Acting Trade Minister Moses Mawere at the just ended Trade Fair in Ndola last week.

Mawere said government is capable of supplying 1.3 million metric tonnes of maize to DRC to help cut the maize deficit in the DRC adding that the Zambian government has begun facilitating for the sign off of a bilateral trade deal between the two countries.

He said the two countries are set to sign a Memorandum of Understanding – MOU which will facilitate for trade of agriculture products like Maize and Mealie meal and that the draft document of the MOU will be ready and shared with the DRC counterparts by July this 2019.

He revealed that the two countries signed an MOU in 2016 with an approved list of products to trade between the two countries, Zambia and Congo DR, hence it is the country’s desire to operationalize the trade agreement.

“We proposed to have an MOU to facilitate trade in certain products such as mealie meal as it is a sign that both governments attach great importance to the issues of export and import of maize and mealie meal. We however urge the officials from Congo to conclude the initial process for the bilateral agreement, which has a good number of products for trade,” Mawere said.

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The Democratic of Congo – DRC has

Tech

Former Secretary to Cabinet and current Zambia Atomic Agency Director Dr. Roland Msiska has challenged Engineers in the country to advance their profession, generate ideas through research and development and provide practical solutions to enhance  their ability to translate ideas into hardware or software products if Zambia is to develop and industrialize.

Speaking when he officially launched the Engineering Institute of Zambia – EIZ 2019 – 2023 Strategic Plan and Mentorship Programme at Lusaka’s Mulungushi International Conference Center on June 28th 2019, Dr. Msiska said Zambia is blessed with a huge endowment of materials and components needed to boost the industrial development and has since called for critical and practical training for local engineers to take part in the country’s development.

He also urged the Engineering Institute of Zambia – EIZ to advance its operations and reach as he is convinced that it is currently operating at only about 5% out of what is expected, hence the need to reflect on its agenda as it plays a critical role in the country’s development ambition.

Msiska further said Government’s plan to develop a nuclear power plant for diversified energy mix requires a fundamental shift in training of Zambian engineers and that EIZ must be at the center of nuclear energy development at either soft or hardware side.

“This is the time for EIZ to start setting standards for supporting good and services such as cement, steel and others that will be required during construction and operation of the two nuclear installations”.

“Zambia is 55 years old now and we have all the raw materials and components that we need to make a computer but we need to interrogate ourselves why are we not producing our own computers? Why we have no big local contractors in the industry to construct our own road? The only answer is advancing our abilities and translate our ideas into practical hardware or software solutions “he said.

At the same event EIZ President Sydney Matamwandi said the goal of the 2019-2023 Strategic Plan and Mentorship Programme is to prepare young engineering professionals for the industry through mentorship by experienced professionals so that they are more focused and purposeful in their studies.

He said the institution will endeavor to ensure that the objectives of the strategic plan and the mentorship programme are implemented and achieved within the stipulated period. Matamwandi is however hopeful that the programme will bring sanity to the profession and improve the standards and status of the profession in society.

Some analysts have noted that most Zambian engineering graduates have an employee mindset as opposed to a problem solving one. Most graduates from engineering and technical schools concentrate their efforts on securing jobs at institutions such as Zesco and the Copper mines forgetting that they are the ones that the nation expects to come up with practical solutions to solve Zambia’s industrialization puzzle.

Import substitution for instance calls for reverse engineering of currently imported products and services with the aim of producing locally at a reduced cost, but this area of innovation is still lagging behind. Zambia currently imports simple products such as tooth picks and sewing needles due to some dysfunction related to the practice of local innovation and engineering.

There is need to enhance the teaching of maths and science in schools in Zambia so that universities and colleges can focus on producing technically competent and problem solving graduates as opposed to the current trend we’re most tertiary institutions are producing more students in arts and business courses.

Some advanced countries education systems and strategic plans are even more elaborate to an extent of even setting quotas to meet in producing engineers, technicians and scientists in the aim of producing an adult population that is equipped with practical productive skills.

 

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Former Secretary to Cabinet and current Zambia

Lifestyle

Kitwe City Mayor Christopher Kang’ombe has disclosed that only 15 kilometers out of the 56 kilometers of road works under the Zambia Township Roads Project – ZTRP in Kitwe has been covered, a project which was earmarked for local economic development.

Barely a month after Avic International abandoned the works on the Kitwe road works due to lack of funding, the mayor has confirmed to the Zambian Business Times – ZBT in an exclusive interview that works on the site have resumed despite moving at a slower pace as the ministry of Finance has not yet finalized the financing of the project.

He added that the city has through China Hainan Construction in partnership with Nkana Water also identified a phase 2 project of supply of water and sanitation services whose idea is to present the capacity of local contractors and increase the capacity of Zambian Suppliers.

Kang’ombe stated that the council has since started building toilets in Mindolo Township and has supplied critical repairs of the sewer network in Chamboli but that the project is still lagging behind due finances. The mayor  stated that he has since appealed to the ministry of Water and Sanitation to finalize the financing of the remaining US$200 million for the project to move at a faster pace.

“We have had challenges with financing for both projects and we are hoping that by next month government will soon conclude with the agreements made on the financing of the projects and by December this year we should be able to see a lot of progress,” he said.

The Kitwe mayor further stated that the road project being implemented by Avic International has attracted over 20% of local participation in sub-contracting a move which he said is aimed at identifying the local people to benefit in business opportunities presented.

“We have as a city made sure that the level of engagement with the business community and the informal sector and various stakeholders in any business opportunities to be identified in the city is extended to the local people and that local businesses are considered for every development that comes in the city for the well-being of citizens in the country,” he said.

Kitwe is Zambia’s second largest city by population and provides an alternative business and residential option for Zambians. The city lies at the central position to most Copperbelt towns and is currently home to Zambia’s largest mixed use shopping mall and office park, the ECL mall and business park.

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Kitwe City Mayor Christopher Kang’ombe has disclosed

Agribusiness

The Aquaculture Seed Fund has through the Citizens Economic Empowerment Commission –CEEC received 23, 284 applications from citizens for business loans.

Speaking at a press briefing held in Lusaka on June 27, 2019, Ministry of Fisheries and Livestock Minister, Kampamba Mulenga-Chewe, revealed that citizens were being supported to implement aquaculture projects that will increase fish production and eliminate the deficit in national fish production over the next four years.

She said the investments citizens will be empowered to embark on will also include fish processing and marketing, which will greatly contribute to rural industrialization, economic diversification and job creation in all the ten provinces of the country.

Mulenga-Chewe disclosed that the Ministry of Fisheries and Livestock has established the Aquaculture Seed Fund with support from the African Development Bank and K440 million (Four Hundred and Forty Million Kwacha) has been set aside for business loans to benefit about 2,900 micro, small and medium size enterprises.

The Fisheries minister added that at least 50% of the supported projects will go to women, while 30% will go to youths and more than 12,000 jobs are expected to be created in the rural areas.

“This is in line with the Seventh National Development Plan were it is an objective that the annual deficit of 85,000 metric tonnes in fish production should be urgently reversed and that Zambia should instead be transformed into a net exporter of fish and fish products”, the Minister said.

And speaking at the same event, CEEC director general, Likando Mukumbuta stated that CEEC would, following the extraordinary response from citizens, evaluate the applications and undertake necessary site visits as expeditiously as possible so that disbursement of business loans could start by September 2019.

The Aquaculture Seed Fund is a component of the Zambia Aquaculture Enterprise Development Project being implemented by the Ministry of fisheries and Livestock in partnership with CEEC as Fund Manager.

There is an appeal from cross sections of society that the award of the loans should be made on merit if this project is to realize any tangible benefits for the country. Zambia today is self sufficient in poultry production not because of establishing a poultry fund, but because of a combination of suitable market conditions, import controls and a regulatory regime that allow for citizens to engage in profitable poultry farming.

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The Aquaculture Seed Fund has through the

Lifestyle

Zambia has been ranked among the least child-friendly countries in Africa (48 out of 52 African countries surveyed) according to the 2018 African Report on Child Well-being entitled “How Child–Friendly are African Governments”. This report highlighted some of the failures the country as the plight of street children remains unattended to.

A review of the report showed that the top five most child friendly African governments ranked from the best had the number one country being the island of Mauritius, in second and third position was North Africans Algeria, Tunisia, while the fourth and fifth were South Africa and Cabo de Verde.

Zambia was however ranked among the list five government included countries such as Cameroon , Chad, Central African Republic and South Sudan. Other countries afflicted with sanctions and civil strife such as Zimbabwe and Congo DR were all far ahead of Zambia.

Commenting on the report in an interview with the Zambian Business Times – ZBT, National Child Rights Forum (NCRF) Board member Judith Mulenga said failure by the Zambian government to enact the Children Code Bill may be responsible for such a low ranking.

She told ZBT that failure to enact the Children Code Bill into Law May be construed as a sign that the Zambian parliamentarian and government does not prioritise the rights of children in the country and has since urge government to present the Children Code Bill at the current National Assembly session that opened on 18th June 2019.

She said that government has put more priority on dealing with issues that will help them win election neglecting the wellbeing of children simply because they do not vote and influence policy decision making, which should not be the case.

Mulenga added that a total of 51 bills have so far been enacted by parliament since 2017 but that the process of the children code bill started as early as 2006 and nothing has been done even up todate.

“The inertia that has characterised the inaction by Government to enact the Children Code Bill keenly exemplifies Zambia’s ranking among the least child-friendly Governments in Africa. It is our collective conviction that since childhood is a short period which children pass through to adulthood, the delayed enactment of the Children Code Bill has denied many Zambian children who would have benefited from the progressive provisions of the Children Code Bill in the last 13 years since the comprehensive review of all child related legislations begun?” she said.

The further analysis of the report by ZBT analysts suggested that national income is not necessarily the primary factor in determining a government’s child friendliness. The report stated that “there are several African countries at the bottom of the economic ladder in term of Gross Domestic Product – GDP which nevertheless performed relatively well in the Child Friendly Index – CFI”.

”Lesotho and Togo, for example, have relatively low GDP per capita but enjoy higher scores and rankings in the 2018 CFI, demonstrating that child-friendliness is not necessarily linked to national income”.

Conversely, a country like Equatorial Guinea performs poorly in the CFI despite its very high GDP per capita, reinforcing the argument that child-friendliness is not just about resources but about putting in legal provisions, directing and using national available resources effectively for the benefit of children.

The report further acknowledged that Africa in general had recorded significant advance. It stated that despite these advances, two areas of concern remain. Firstly, some countries have dropped significantly down the CFI over the last ten years – Zambia, for example, has fallen to 48th out of 52 African countries surveyed place due to its reduced commitment to children’s basic needs, services and wellbeing,” the report indicated.

Mulenga said government must seriously allocate more resources to things that benefit children such as allocating not less than 20 percent of the nation budget to the education sector as well as 15 percent to the health sector while social security should also be given a fair budget allocation so that children’s wellbeing can be safeguarded.

Zambia has struggled to deal with the issue of street children which is one of the biggest indictment for the society, parliament and government leaders. Some of the key cities and towns in Zambia has children that can be sited begging on the streets, with no clear policy or regulation to safeguard these innocent children.

There had been suggestions of engaging the national service, expanding public support to orphanages and coming up with national solutions that would insure that no child in Zambia fails to find an alternative home but all these have not been fully implemented. Analyst have warned that the issue of street kids is a ticking time bomb as the country have already recorded the emergence of youth gangs in both Lusaka and Kitwe, Zambia two largest cities by population.

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Zambia has been ranked among the least