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The Economic Intelligent Unit (EIU) report has indicated that Zambia will continue to deepen its relations with its main bilateral creditor China, and in exchange, Chinese state-owned lenders will probably agree to a debt restructuring preventing a sovereign default.

However, the EIU projects that the restructuring will be on the proviso that the government borrows more (albeit at a lower rate) for a string of Chinese-contracted infrastructure projects and potentially allows debt-for-equity swaps on state-owned enterprises.

As a consequence, the government’s dependence on China will be a double-edged sword providing some financial relief in the short term, but compromising relations with Western donors and investors as well as jeopardizing long-term debt sustainability.

The EIU report further stated that an IMF loan deal is not expected to be reached in the medium term given planned public borrowing by government slowing down economic growth in the country.

The report states that economic policy will remain erratic with sudden changes to the regulatory environment as the government attempts to meet its spending needs. Without external support, policy will be erratic.

The IMF has warned that unless there is a slowdown in new borrowing, debt management will become difficult and has since recommended that government avoid contracting any new non-concessional debt and has proposed stepping up the raising of revenue and halting the build-up of new arrears as well as aligning the pace of spending on well-targeted public investment projects.

The IMF is not expected to agree a deal with Zambia within the forecast period and traditional donors will also stay away amid concerns about corruption, authoritarianism and uncontrolled borrowing.

Meanwhile, the country’s economic growth in 2019 is projected to be at 3.0% with monetary conditions expected to be tight and a combination of factors hampering agriculture and mining.

The Agricultural output has been struck by drought and a below-average harvest causing the government to ban food exports while dry weather has likewise affected power generation at the Kariba hydroelectric dam raising the prospect of power supply gaps affecting industry.

President Lungu is on record to have asked Zambia’s bilateral and multilateral partners to allow the country chose its own friends. Zambia has had a history of being non aligned. Zambia attends both the US-Africa and China-Africa summits to network and maintain relations with the the two world’s largest economies.

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The Economic Intelligent Unit (EIU) report has

Mining

The Center for Trade Policy and Development – CTPD has noted the need by government to create a policy framework and conducive environment for small scale miners and energy sector players to thrive as they play a critical role in contributing to the overall national economic development.

CTPD Executive Director Isaac Mwaipopo says small scale miners play a critical role to the country’s development hence the need to help revamp their businesses in the mining sector by creating strong linkages.

Speaking at the close of the Zambia International Mining and Energy Forum – ZIMEF in Lusaka on June 14th, 2019, Mwaipopo said most of the challenges that the country is facing including the creation of jobs and widening of the tax base can be realized through effective linkages and the contribution of [local businesses such as] small scale miners, suppliers and contractors.

He revealed that through surveys undertaken by the center, small scale miners are lacking information on how the sector operates and take advantage of existing support hence the need to improve the flow of information to enable them benefit from already existing financial support.

Speaking at the same event, an expert in oil and gas T Chikwanda also noted the need to strengthen the bond between bigger mining players and small scale miners. Chikwanda said there is a weak linkage between the bigger and multinational mining players and local SME’s hence the need create capacity development and skill transfer.

And Ministry of Trade Director for Industry John Mulongoti said the local businesses which is the majority of SME sector is important in contributing to the country’s economy as it has the majority of entrepreneurs. He said government has invested in SME’s by forming corporatives to support them in services delivery, trainings and skill enhancement and in improving their businesses.

‘Government has been working with SME’s by improving their business and work culture and through the trainings that they undergo, some of them have started getting contracts from the mining houses’ he said. He however did not name the ones that had gotten contracts.

Zambia’s Mining, oil and gas sectors are dominated by big multinational players with no clear policy on local companies and SME’s linkages to ensure that some values and skills transfers are attained. This remains a challenge as there is no regulatory requirements for local content or even guidance for say x% of the procurement to be done by local Zambian businesses.

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The Center for Trade Policy and Development

Companies

The National Road Fund Agency – NRFA has confirmed the release of k136 million from the Ministry of Finance and has since commenced the payment process of the Kazungula bridge project and small-scale contractors across the country.

On June 11, 2019 Ministry of Finance released k136 million to NRFA to settle arrears related to road projects and other related activities.

Confirming the development to the Zambian Business Times – ZBT in an interview, NRFA Public Relations Manager Alphonsus Hamachila said K28 million from the released funds has been set aside for ongoing works at the Kazungula bridge.

Hamachila added that the Agency has paid 300 local routine maintenance contractors involved in small scale roadworks with over 15,000 employment workforces across the country.

He further said the Agency is expected to complete the payment process within a week and that main sub-contractors and road consultants will be funded in the next trench to soon be released by government.

“We have been given specific instructions to pay route maintenance contractors in respect to controlling road marking, drainages, pot hoe punching and the Ministry of Finance has assured us that it will release another trench in due course which will now cater for big projects such as the Kafue Mazabuka road” he said.

He explained that Agency has since cleared outstanding invoices for road contractors and that the process will be undertaken in sequence.

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The National Road Fund Agency – NRFA

Politics

Minister of Information and broadcasting Dora Siliya MP has dispelled rumors that there is a solar power grand call for proposals by government through the ministry of energy.

The government spokesperson stated in a statement made available to the Zambia Business Times (ZBT) that government would like to dispel rumors circulating via email and on social media platforms that the Ministry of Energy together with the World Bank and USAID are awarding Grants under a call for proposals.

Siliya said the call for proposals ref: moe/sp/16452/19 Solar Power Grant programme is using the Honorable Minister of Energys name Mathews Nkowa MP which is misleading the general public.
“The General Public is being advised that there is no such Programme being implemented by the ministry of energy or minister’s office.

Government has not issued any communication concerning the alleged Solar Power Grant Programme. The General Public should also note that the email address mathewnkhuwa1@gmail.com being used is a counterfeit and is not honourable Nkhuwa’s official address” the statement reads.

The minister has said that this is fabrication by fraudsters is aiming at swindling unsuspecting solar dealers and as such, any communication originating from the above email address should be ignored.
She says government is investigating people behind this cybercrime and that action will be taken as soon as the culprits are caught.

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Minister of Information and broadcasting Dora Siliya

Companies

The Zambia Association of Manufactures has challenged local producers in the country to take advantage of Zambia’s bilateral agreements with other countries to trade at regional and international levels.

ZAM President Roseta Chabala says there is need for local manufactures to begin to compete at regional levels as government’s agreements with other countries has made it easier for local producers to access internal and regional markets.

In an exclusive interview with the Zambian Business Times – ZBT Chabala said Zambian manufactures should also take keen interest in producing products that can be exported to other markets to improve the manufacturing industry in the country.

She further noted the need by manufactures to improve the quality of products, packaging and pricing stating them as challenges commonly faced with suppliers hence the need to address these factors if Zambia’s products are to meet regional and international standards.

Chabala further revealed to ZBT that a good number of manufactures are performing well and have gained notable market share outside the country such as Zambeef and Trade kings and has since called on other companies and entrepreneurs to come on board and grow the export industry.

“For those that are joining the industry, I encourage you to be patient, innovative and keep reinvesting as growth in the manufacturing industry does not come easily, so you need to focus and put much efforts and you will definitely grow with time,” she said.

The ZAM president has however appealed to existing and upcoming producers to be efficient and effective in service delivery in order to grow their businesses and gain a larger market share.

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The Zambia Association of Manufactures has challenged

Lifestyle

Financial Sector Deepening Zambia – FSDZ Chief Executive Officer Betty Wilkinson said the creative arts industry has potential to be a significant driver of economy. She said this at the 2019 Arts Business Forum which is being commemorated under the theme “Unlocking the Opportunities in the Creative Industries”

At the same function, Arts and Tourism Minister Dr. Charles Banda has called on Zambians to take up arts as a business venture and develop talents into careers as a way of creating jobs in the country.

Speaking when he officiated at the Arts Business Forum at Lusaka’s Government Complex on June 12th 2019, Dr. Banda said the ministry is aware of the changing dynamics that undermine the works of creative entrepreneurs to transform their talents into viable business venture and that it is for this reason that government is working at creating an enabling environment through policies and legislation.

He said the ministry believes that tourism and arts business offer the country a unique competitive advantage, potential to drive increased tourist arrival, lengthen their stay and increase the amount of money spent in the country hence the need to grow the sector.

The minister further noted that initiatives such as the Arts Business Forum should be utilized for engagements on ways to improve the business environment and has urged artists in the country to seize opportunities offered through the potential of arts.

“Our focus is to improve the business environment of the creative sector in Zambia and though these platforms, it is important to strengthen the capacity of our sector and link other business services providers and investment opportunities to the creative sector,” he said.

Speaking at the same, National Arts Council of Zambia Chairperson Patrick Samwimbila said this year’s theme reflects the urgent need by all players to join in identifying the focus areas if the country’s creative industry is to move forward.

Samwimbila further noted the need by artists to create sustainable and viable art businesses in order to enhance the power of arts in Zambia. He said the council will dedicate its efforts to find ways of supporting creative and arts organizations to transform and grow.

“We want to strengthen the link between creative products and services to the rest of the economy such as tourism, manufacturing, services and many more,” he said.

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Financial Sector Deepening Zambia - FSDZ Chief

Lifestyle

The Zambia Land Alliance – ZLA, a non governmental organisation has called for the further review of the draft national land policy which does not appear to have a clear goals or clear overall objectives and what they feed into.

ZLA Executive Director Patrick Musole told the Zambian Business Times – ZBT in an exclusive interview that it is not clear from most objectives which entities are expected to play which role in the objectives realization hence, the situation analysis chapter should to be streamlined and be combined with some sections for a clear identification of issues which form the basis of the policy.

Musole also highlighted the need to enhance customary land tenure security stating that it does not have tenure security as there is no documentation linked to it hence, some registration form of customary land right should be considered.

He added that customary land owners should be provided with documentation recognized by government, traditional leaders and other stakeholder such as financial institutions to enhance land tenure security in the country.

“We are also aware of other organisations that are offering land certificates in certain chiefdoms on a pilot basis but these documents are currently not recognized by government, they are not legal documents and so, they are not official, therefore government through the ministry of lands should enhance customary land tenure security,” he said.

He has disclosed that the Alliance has made submissions on what should be reviewed in the draft national land policy and it is glad to report that the current draft has provisions for the certificate excerpt it does not clearly state who is to be responsible for issuing customary land certificate.

The ZLA Executive Director further called on government to maintain the dual land tenure system but added that the current system needs to be enhanced so that it provides a conversion of customary land to state and also to reverse the process to enable land owners convert back to their original status if the intended purpose is not archived.

Some development analysts have blamed the higher levels of rural poverty and under development in rural parts of Zambia to the lack of a secure land tenure system needed in a modern economy to support long term investments. Most rural folks depend on the generosity of their chiefs for their current assigned prices of land which some few unscrupulous traditional leaders have auctioned to city and foreign investors leaving the rightful owners in the cold.

The current system needs to be timely negotiated to balance the powers of the traditional leaders and the rights of their subjects to have a legal or documented claim on their assigned land if this injustice is to be stopped. It’s recognized that the traditional land system works well when the chief or leader is genuine but as leaders change, there has been cases were some few uncaring leaders have displaced and sold off arable land in the name of attracting investments but a great costs to the original long standing rural inhabitants.

 

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The Zambia Land Alliance – ZLA, a

Companies

Mansa Sugar Limited has projected a deficit in Zambians’ Sugar production by 2030 due to the growth in population and the increase of living standards for most Zambians which is leading to growth in demand for the commodity.

Mansa Sugar Head of Projects and Corporate Affairs Bhupender Rathore says Zambia being a surplus country in sugar production expects a good growth rate in production but that currently, sugar productivity in the country has slowed down.

Speaking in an exclusive interview with the Zambian Business Times – ZBT, Rathore said that the estimated and projected deficit of sugar production on the Zambian market is due to the continued improvement in the living standards that Zambians are currently experiencing adding that sugar consumption is mainly dependent on the people’s income generation abilities.

He further stated that Zambia has huge potential to become a hub of sugar production to neighboring countries and that the opportunity can only be seized if the country further improves the sector. He pledged Mansa Sugars’ commitment to continue contributing to the development of the country through job creation and improved forex earnings.

Rathore disclosed that Mansa Sugar Limited currently has over 1,000 local employees and that the company is the largest formal employment contributor in Luapula province. “Being the one of the major economic contributor in Luapula and Chembe district, we have managed to generate employment in Chembe district, a palace which was thought of as being a remote area and literally had no formal employment, however the company has helped improve people’s living standards in the area and the province at large,” he said.

He has however urged locals in the province to seize the developmental opportunities that the province is receiving and that youths should acquire skills to be able to participate in projects being undertaken to avoid being left out giving jobs to other nationals.

Zambia has enjoyed considerable levels of self sufficiency in sugar production and is currently the net exporter of of the sweet commodity. The coming on stream of Mansa Sugar has further boosted the country’s sugar export prospects.

Other major producers in Zambia are Mazabuka’s based and Illovo owned Zambia Sugar, Consolidated Farming Limited and Kasama Sugar.

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Mansa Sugar Limited has projected a deficit

Companies

The just published 2018 Tax Transparency and Contributions to Government Report for First Quantum Minerals (FQM) has revealed that the mine paid more than US$533 million (K5.6 billion) in taxes to the Zambian government in 2018 with an additional US$10 million spent on community and social infrastructure projects.

During the year, the mine reports that it paid US$144 million in income tax to the Zambian Revenue Authority – ZRA, US$197 million in mineral royalties, US$73 million in PAYE, US$8 million in withholding tax and US$90 million in consumption and import taxes.

“The 2018 Tax Transparency and Contributions to Government Report highlights First Quantum’s contributions to the Zambian host Government, which helps to illustrate the positive impact FQM strives to create everywhere they do business. FQM strongly supports the various transparency initiatives which provide all stakeholders with clear information of the contributions which First Quantum makes to its host governments,” the report said.

The company’s Kansanshi Mine in Solwezi accounted for US$315 million of the payments – 58% of the total payments to Zambia, while its Trident project including Sentinel Mine at Kalumbila accounted for 28 percent or US$150 million, a figure that reflected that the mine only began commercial operation in 2016 and has yet to turn a profit.

FQM’s tax payments in Zambia during the year represented 14 percent of the country’s total budgeted tax revenue of K41 billion (US$3.9 billion) for 2018. The calculations are based on the average exchange rate for the year of K10.4781/US dollar.

“At First Quantum, we know that our success is dependent on the wellbeing of the economies and communities where our businesses operate. We also believe that transparency can help stakeholders to understand the economic benefits generated by our activities and how those benefits are distributed for local, regional and national economic and social development. Therefore, we strive to ensure that our disclosures are transparent, consistent, accessible and presented in a way that is easily understood,” FQM Chief Financial Officer Hannes Meyer said.

“In taking this transparent and responsible approach, we provide communities with the opportunity to understand the revenue contributions we make to their governments and how these contributions ultimately assist in the development of local communities and the overall economic and broader positive wellbeing of those communities and countries.”

Meye adds that First Quantum’s approach to tax and royalty payments reflects its underlying core values which focuses on building open and transparent relationships with the tax authorities in those countries.

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The just published 2018 Tax Transparency and

Tech

Vice President Inonge Wina has assured Civil Society Organizations – CSO’s and African Union – AU organs of government’s support to create a conducive environment to operate effectively in the country.

Wina has cited AU organs and CSO’s as equal partners in contributing to national development hence the need to participate in the integration and development agenda of the African continent.

Speaking when she officiated at the 3rd general assembly of the economic, social and cultural council – ECOSOCC of the African union, the Vice President pledged government’s commitment to providing a peaceful, stable and enabling environment conducive for the establishment of a critical African union institution such as the ECOSOCC.

The Veep said it is an honor that Zambia is now host of the key organ of the union which has moved from Ethiopia to Lusaka and that government will look forward to the establishment of the secretariat in Lusaka by the end of the second quarter, this year.

She has however urged the African union commission to hasten the completion of the recruitment process for ECOSOCC secretariat adding that lots of work is required in steering the organ into a more concise and effective mechanism of operation.

“ I am therefore, confident that once the secretariat is fully established in Lusaka, the African union will through ECOSOCC, soar to greater heights as strong partnerships are forged between governments and all segments of civil society, in particular, women, the youth, children, the diaspora, organised labour, the churches, the private sector and other professional groups,” she said.

Speaking at the same event ECOSOCC presiding offer Abozer Almana has urged members of ECOSOCC and CSO partners to take advantage of the political stability in the country and lobby for development for the vulnerable.

Almana also thanked government for giving CSO’s an opportunity to be integrated in the developmental agenda of the country.

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Vice President Inonge Wina has assured Civil