Zambia’s dept position a cause for worry- Prof Saasa

Prominent Lusaka based economist Professor Oliver Saasa is concerned with the speed at which Zambia is contracting debt saying it is likely to harm the country’s economy.

Last week, Minister of Finance Margret Mwanakatwe announced during the update on economic development that the country’s external debt stock for the first quarter of 2019 marginally increased to US$ 10.178 billion from US$ 10.05 billion at end of 2018 while the domestic debt stock at end of March 2019 was K58.21 billion down from K58.26 billion recorded at end of 2018.

Prof Saasa told the Zambian Business Times – ZBT in an interview that the slight increase in external debt is an indication that the economy is slowly being chocked and that if the situation is not taken care of, the economy will completely flop.

He said the country’s external debt commitments are very high and likely to affect the cost of production and investment in many sectors hence result in the increase in the cost of living for many Zambians.

“We need to understand that when there is crisis in an economy, the cost of living goes up due to insufficient funds , people that are supposed to receive payments or salaries are delayed and the cost of doing business on the market goes up because of the changes in prices of goods and services and inflation is the worst enemy to any economic growth prospects,” he said.

He added that the country’s reserves at the central bank are dwindling and can not last the country for more than two months import cover adding that, Zambia would not survive if a crisis emanated in the economy hence the need to quickly attend to this matter without looking forward to contracting more debt.

Meanwhile, the finance minister also announced that the country’s reserves position at end of February 2019 was US$ 1. 43 billion, down from US$ 1.56 million at end of December 2018.

Prof Saasa has however urged government to reduce on expenditure and cut down on contracting new debt under the current situation and has noted the need to cut down expenditure at some departments at the various ministries that are a financial threat or not adding value at this point in time.

He has further emphasized on need of growing the economy and facilitating private sector growth if the country is to develop.

Prominent Lusaka based economist Professor Oliver Saasa

Bank of China pledges to promote Zambia as preferred investment destination

The Bank of China Zambia Limited says it is renewing its commitment to the Zambia Development Agency – ZDA to help promote Zambia as the ideal investment destination as bilateral trade between the two countries continues to increase.

Bank of China Managing Director Qi Wang says his bank chose Zambia as the first growth destination in Africa because of the stable political environment, great weather and the great hospitality of the Zambian people.

Wang notes that the bank has an international network in over 60 countries in the world, including China, where Zambian businesses can access funds for investment. He noted that the improved infrastructure development in transport and communication is creating an attractive environment for foreign direct investments – FDI.

The Managing Director reiterated that the bank of China has renewed its commitment to help promote Zambia as the ideal investment destination through programmes such as Forum on China-Africa Cooperation – FOCAC as the trade volumes between the two countries continues to increase.

Wang was speaking when his team paid a courtesy call on the Zambia Development Agency, in response to the call to work with the ZDA Chinese Desk for Joint Venture partnerships and trade.

“As both countries are agricultural nations, the Bank of China is committed to providing technological transfer in agriculture and manufacturing to reduce poverty in Zambia. We need to encourage Zambians to be more aggressive in promoting strategic products such as honey and services such as tourism to China during events such as the upcoming China International Import Expo” said Bank of China MD.

Meanwhile the Zambia Development Agency Acting Director General Matongo Matamwandi thanked the bank of China for paying a courtesy call on the Agency and for their support and commitment to Investment promotion in the country.

Matamwandi explained that he sees the Bank as an extended team of the Investment promotions of the ZDA. “We need the support of the bank in our follow-ups to actualise pledged investments through targeted pitches as a new strategic approach for the Agency,” explained the Acting Director General.

He revealed that ZDA is looking for Green Investments and Pioneer Industries such as investment into Nuclear Energy which can be exported into the region and earn Zambia the much needed Forex. The acting Director General pledged intercultural training for new Chinese Investors to help bridge the cultural differences and to also help Zambians learn international business cultural etiquette.

The Bank of China Zambia Limited says

Kwacha depreciation weighing down small scale cross boarder traders

Cross Boarder Traders Associations President Jacob Makobwe says the depreciation of the currency and steep exchange rates that is now becoming frequent has negatively impacted small scale cross traders, especially importers who trade with other countries in the region.

Makobwe says small scales traders have been finding it difficult to conduct trade with other countries because the kwacha keeps depreciating making it difficult for cross border traders to purchase commodities in other countries. He says the volatility of the currency has caused transportation costs to go high making it difficult for cross border traders to afford these expenses.

“The country’s economy has experienced a lot of changes such as the depreciation of the kwacha that has negatively affected trade for cross border traders. We have also witnessed harsh environmental impacts such as cyclones that hit neighboring countries. These disasters have greatly affected trade for small scale trades that or finding it difficult to locate where to purchase their commodities who used the effected routes.

Makobwe has also disclosed that his association is working on launching a sensitization campaign that will aim to inform its members crossing the borders on the simplification of trade through bilateral agreements that Zambia has signed with other countries and the impact of continental free trade area on cross border trade.

He says it is important for people to understand the requirements of different borders that they are crossing so they cannot be exploited and venture in bad vices such as corruption when crossing the borders.

He however says poor infrastructure at the borders has greatly affects trade in the country. He says some border areas stop operations at specific hours which become life treating for people who arrive at the borders late as they are not allowed to cross into the country but rather spend their night at a place without proper accommodation and sanitation.

He stated that there is need for government to consider investing in infrastructures at border posts so as to make trading easy for small scale traders.

Cross Boarder Traders Associations President Jacob Makobwe

Ethiopia economic boom driven by locals impresses Zambian Ambassador

Newly appointed Zambia’s Ambassador to Ethiopia, Emmanuel Mwamba has announced that a standing business Forum between Zambia and Ethiopia will be formed. In a statement made available to the Zambian Business Times – ZBT by press secretary Inutu Mwanza, Mwamba stated that he was impressed that the Ethiopian economy was booming and driven by local people and local investors.

Mwamba said Ethiopia with a population of 105 million was the fastest growing economy in Africa in the last five years and it was imperative that private sector links between Zambia and Ethiopia were formalized.

He said he would collaborate with Chambers of Commerce in Zambia and Ethiopia to appoint a board that should drive the private sector trade and business between the two countries. He has since called for a meeting with chambers of commerce to action the formation of the Business Forum.

Mwamba further said government had shifted priority from political diplomacy to economic, business and tourism diplomacy to help fast track the economic development of the country. “We will also market tourism products to the Ethiopian tourists to sample the heritage and tourism sites in Zambia,” he said.

Mwamba who is also accredited to the African Union as Permanent Representative, said Zambia’s role at the African Union would be to champion calls that promote regional trade and integration of local Afro-economies.

He said it was unacceptable that Africa currently trades with the rest of the world up-to 88% and only trades with itself to a paltry 12%. He added that by this action Africa was inadvertantly exporting jobs, opportunities and raw materials thereby stifling prospects of implementing industrialization program and losing benefits of upwards linkages.

African countries have despite attaining political independence continued with trade and economic ties with former colonial powers who account for the largest trade volumes. You will find neighboring countries in Africa not trading through shared land borders but importing the very products available from former colonial powers who are thousands of miles away.

Non tarriff barriers as well as corrupt bureaucrats who have connived with agents of colonial interests to frustrate the provision  of  legal frameworks for the local small and medium size exporters and importers between neighboring countries is still the order of the day.

The local importing and  exporting small businesses are labeled as smugglers and treated with disdain when all that is needed is a regulatory framework to formalize small scale importing and exporting businesses who can in time grow to become large companies.

In Zambia, the belief is more skilled to attracting foreign direct investments at the expense of supporting and developing local small and medium size businesses to grow, an attitude that needs a complete mindset shift for the country to develop.

Newly appointed Zambia's Ambassador to Ethiopia, Emmanuel