Consequently, out of the thirty (30) State-Owned Enterprises (SOEs) in which the IDC holds 62.28 to 100 percent shareholding, only five (5) declared dividends amounting to K61,334,600 and K62,012,587 in 2021 and 2022 respectively. See another table below.
Consequently, out of the thirty (30) State-Owned
Zambia is currently facing a major economic crisis as inflation rates continue to soar, causing financial strain on families and businesses.
According to the latest statistics obtained by the Zambian Business Times, the annual inflation rate has hit an alarming 13.5 percent in February 2024, up from 13.2 percent in the preceding month.
This means that on average, prices of goods and services increased by 13.5 percent between February 2023 and February 2024. This development has been mainly attributed to price movements of selected food and non-food items.
The continued rise in inflation is a major concern for families who are already struggling to make ends meet.
According to the official statistics obtained by the Zambian Business Times – ZBT, from the government’s statistics Agency Zamstat, of the overall 13.5 percent annual inflation, Lusaka province contributed the highest at 3.9 percentage points followed by Copperbelt which contributed 2.7 percentage points. Central and Southern Provinces contributed 1.7 and 1.4 percentage points respectively while Northwestern province had the lowest contribution of 0.5 percentage points.
Meanwhile, the overall monthly inflation for February 2024 was recorded at 2.2 percent from 2.1 percent recorded in the previous month. This outturn was mainly attributed to price movements in selected food and non-food items.
The Zambian government has since been urged to take immediate action to control inflation and ensure that the people of the country are not burdened with rising prices. Failure to do so could result in a further deterioration of the economy and an increase in poverty levels.
Zambia is currently facing a major economic
The proposed Export Proceeds Tracking Framework by the Central Bank of Zambia – BoZ, has been met with mixed reactions from various stakeholders.
While some have praised the initiative as a step towards promoting transparency and accountability in the country’s export sector, others have raised concerns over its implementation with a possible negative impact on the economy if the directive is to fail.
Economist Yusuf Dodia has warned that the Export Proceeds Tracking Framework may face opposition from multi-national companies operating in Zambia. In a recent interview, Dodia expressed his concerns that some of these companies may resist the framework in order to protect their profits and avoid scrutiny.
Dodia noted that the Export Proceeds Tracking Framework requires exporters to repatriate their export proceeds back to Zambia within 90 days of shipment, in order to promote transparency and prevent capital flight adding that this may not sit well with multi-national companies who may prefer to keep their profits offshore.
Dodia emphasized the importance of the Export Proceeds Tracking Framework in promoting transparency and accountability in Zambia’s export sector. He called on the Central Bank to engage with all stakeholders and address their concerns in order to ensure the successful implementation of the framework.
Dodia explained that the successful implementation of the framework will see the local currency gain resilience in the second quarter of the year after the country realizes more forex income through the Export Proceeds Tracking Framework.
Speaking in an exclusive interview with the Zambian Business Times –ZBT-, Dodia said what is being seen now is a very strange phenomenon noting that the kwacha is very strong in the period of November and December. He said this is because all the country’s big investors such as the mining sector and large multinational companies bring in a lot of money during that period as they have to pay a lot of bills, year-end taxes, renewal of contracts, and renew insurance policies among others. “One expects that November to December is when the kwacha becomes stronger because there is abundance of foreign currency, but we did not see it last year.” said Dodia.
He said this may be because the government had earlier announced that it was to implement the Export Proceeds Tracking Framework which is a regulation demanding that all exporters bring their export earnings into Zambian banks.
“Since Zambia’s economy is heavily dominated by the large exporters comprising of the mining sector, cement producers, sugar producers, and other commercial farmers, it appears that because these large institutions, these large producers, these multinational companies were unhappy about the introduction of this new framework that they decided to hold back on bringing in money to the Zambian economy,” said Dodia. He said this may have contributed to the deterioration of the Kwacha right into January.
He said companies do not want to be monitored as closely as the government would like and do not want to show how much money they are making, but rather keep their money abroad. He however noted that for the interest of the nation, the framework tries to recapitalize the Zambian economy so that it can grow. “If this speculation holds any water, it means as a nation we are being held to ransom by the large multinational companies. They are holding us by the throat, they are forcing us to abandon this Export Proceedings Tracking Framework” said Dodia.
He likened this to the experience in 2013 when the statutory instrument number 15 of 2013 known as the Balance of Payments Monitoring System which had a similar effect was put in place and only implemented for three months before it was revoked by the minister of finance. He said it might be the same story playing out by large exporters trying to squeeze the government to withdraw the framework in order to continue taking advantage of an economy where monitoring and transparency are at a minimum.
Dodia said it is important that the government is steadfast and stays the course without losing focus. He said if the framework is strictly implemented, there will be positive change in the next few months. “But whether the government has the strength and the resilience to stay the course is the issue which might be difficult,” said Dodia.
The proposed Export Proceeds Tracking Framework by
A close relative to the late Prominent Namwala biggest cattle rancher of Southern Province Teddy Namainga has revealed that the late Namainga has left behind over 4000 herds of cattle worth over K50 million and 28 children.
Teddy Namainga, fondly known Mukamaangwe, Namainga aged 84, died on 25th February, 2024, in Lusaka, after an illness.
Speaking in an exclusive with the Zambian Business Times-ZBT, Auster Chikwaye one of the close neighbors to the late Namainga also revealed that the late Namainga has also left behind 28 children and 35 dependents.
Chikwaye expressed sadness to Namainga’s demise adding that his death has come as a shock to his children, his dependents and the entire Southern Province.
Chikwaye said that Namainga’s death will really affect those he has left behind especially those he sponsored in school.
He said that the late Namainga loved upcoming farmers and was a role model to every young man in Namwala district.
He noted that the late Namainga was also a pillar not only at family level but at shimunenga ceremony adding that without him the ceremony will never be the same.
“In total the cattle he’s left behind are about 4000 herds of cattle. He had a lot of dependents who helped him to keep those animals. The average price of those animals is about K12,000 per cattle although some of the cattle even go up to K20,000 and K25,000 of which the cheapest can go up to k5,000. Mr Namainga has left behind 28 children and 35 dependants,” he said.
“The death of Mr. Namainga is really a sad thing that has affected his children and his dependents and the entire district because he was a motivation to every young man and he’s one person who loved upcoming farmers. People could learn from him, he was like a role model to especially young people.”
“His death will really affect those he sponsored in school because some might even drop out of school. He was a pillar even at our ceremony called shimunenga ceremony and without him and his animals the ceremony was more less like there was no ceremony. He was our pride,” said Chikwaye.
Meanwhile Chikwaye revealed that Namainga will be put to rest on Friday, 1st March, 2024.
A close relative to the late Prominent
Barrick’s Lumwana mine, the second largest copper miner in Zambia has confirmed that they are fully compliant with the the Bank of Zambia – BOZ Export Proceeds Tracking Framework Directives issued in December 2023 as they do not export copper.
The BOZ export tracking framework requires that all exporters in Zambia open bank accounts with a bank or financial institution domiciled in Zambia and deposit all export proceeds to that account within a period of 90 days.
Speaking in an exclusive interview with the Zambian Business Times – ZBT, Lumwana Mine Country Manager Anthony Malenga stated that the mine does not export copper but trades locally through other players that have smelters.
Malenga stated that “Lumwana is in full compliance as we do not export. We produce concentrate sold to smelters locally”. Being the second largest copper producer, Lumwana mine has attracted the attention of analysts as copper exports alone account for over 70% of Zambia’s total annual exports.
The BOZ export proceeds tracking framework directive has brought renewed hope, with analysts and economists projecting that, if well implemented, the Kwacha may post further gains as this balance of payments monitoring tool is expected to bring more transparency and result in more export forex inflows into the country.
The BOZ export tracking framework among other things requires exporters to open and maintain a bank account with a bank or financial institution
domiciled in Zambia and that an exporter shall deposit all proceeds of exports of goods and/or services into this account within ninety (90) days from the date of export.
All exporters in Zambia are required to complete and submit to Zambia Revenue Authority (ZRA), the customs export declaration.
And the banks or financial institutions that receive these export proceeds are required to make a return or report to BOZ through submission of money receipts and remittances report on the electronic Balance of payment (e-BoP) Monitoring System.
The directive has also prescribed adequate penalties for exporters or banks or financial institutions that fail to comply, which include revocation of their tax clearance certificate and TPIN.
By time of publication, ZBT was still actively confirming with companies that run smelters if they are complying with this directive. More details to follow.
For comments, contribution or whistleblowing email: editor@zambianbusinesstimes.com
See insights and ads
All reactions:
6262
Barrick's Lumwana mine, the second largest copper
First Quantum Minerals – FQM, the largest copper miner in Zambia with mines at Kansanshi – Solwezi and Trident – Kalumbila has failed to categorically confirm if they are complaint or will proceed to comply with the export proceed framework directive.
FQM’s Public Relations Manager Mirriam Hammond in response to a Zambian Business Times – ZBT enquiry stated that the “reporting [on the export proceeds tracking framework directive] will only be availed at the end of the quarter given the 1st of January implementation date and the 90 days reporting period”.
Hammond further disclosed that “It is still in the early stages and there has been a number of meetings between FQM, banks and BOZ to discuss/clarify details, systems [and] concerns”. Efforts to get direct confirmation from the country manager Dr. Godwin Beene proved futile by press time.
But analysts say, with merely about one month remaining to the end of Q1, FQM may be looking for ways or loopholes to get extensions for compliance as the period remaining is too short.
The BOZ export tracking framework requires that all exporters in Zambia open bank accounts with a bank or financial institution domiciled in Zambia and deposit all export proceeds to that account within a period of 90 days.
FQM being the largest copper producer in Zambia remains key to the success of this export proceeds tracking framework as copper exports alone account for over 70% of Zambia’s total annual exports.
The BOZ export proceeds tracking framework directive has brought renewed hope, with analysts and economists projecting that, if well implemented, the Kwacha may post further gains as this balance of payments monitoring tool is expected to bring more transparency and result in more export forex inflows into the country.
The BOZ export tracking framework among other things requires exporters to open and maintain a bank account with a bank or financial institution
domiciled in Zambia and that an exporter shall deposit all proceeds of exports of goods and/or services into this account within ninety (90) days from the date of export.
All exporters in Zambia are required to complete and submit to Zambia Revenue Authority (ZRA), the customs export declaration.
And the banks or financial institutions that receive these export proceeds are required to make a return or report to BOZ through submission of money receipts and remittances report on the electronic Balance of payment (e-BoP) Monitoring System.
The directive has also prescribed adequate penalties for exporters or banks or financial institutions that fail to comply, which include revocation of their tax clearance certificate and TPIN.
For comments, contribution or whistleblowing email: editor@zambianbusinesstimes.com
First Quantum Minerals - FQM, the largest
Airtel Networks Zambia Plc has announced the appointment of Hussam Baday as its new Managing Director – MD, following his successful stint as Interim MD.
Baday was appointed Interim MD last September and prior to that appointment, Hussam was the Chief Commercial Officer in Airtel Zambia since December 2021. He also served as the Company’s Marketing Director since July 2018.
Baday takes over from Manu Sood who decided to pursue other personal interests outside Airtel.
In a statement issued and signed by the board chairperson of Airtel Zambia, Katebe Monica Musonda and made available to the Zambian Business Times – by Airtel Head of Corporate Communications, Yuyo Nachali-Kambikambi, Hussam holds a Master of Business Administration from the University of Leicester (UK) and BSc holder in Electronics and Communications Engineering. He also holds a Professional Diploma from The Chartered Institute of Marketing (UK) and a professional certificate in “Behavioral Economics” From Harvard Business School (HBS). He has attended an executive education in Leading with Results from INSEAD (France).
According to the statement, Prior to Airtel Networks Zambia PLC appointment, he was Chief Marketing Officer at Sudatel Telecom Group (STG), also he worked in Ericsson and Huawei.
“Hussam has a rich background in successful Commercial strategies, business development, and proper execution that turned around commercial performance. He also serves as an advisory board member at CMO- council Africa. We welcome Hussam wholeheartedly.” Remarked board chairperson of Airtel Zambia, Musonda.
Airtel Networks Zambia Plc has announced the
About thirteen (13) Industrial Development Corporation – IDC, subsidiary companies are reported to have incurred losses amounting to over K2.6 billion (K2, 600,986,817) between the economic year 2021 and 2022.
The auditor general report for the financial year ended 31st December 2022, has revealed that the thirteen (13) companies incurred losses amounting to K746,084,000 and K1,854,902,817 in 2021 and 2022 respectively together totaling about K2.6 billion.
Of the 13 subsidiary Companies, included, the Zambia Consolidated Copper Mines -ZCCM Investments Holdings, Zambia Railways, Infratel, Times Printpak, ZESCO, Zamtel, and Zambia Airways Limited.
Others include, Indeni Petroleum Limited, Superior Milling Company, Zamplam Limited, Mulungushi Village Complex Limited, Mukuba Hotel Limited and NIEC Business School Trust.
The report further revealed that consequently, out of the thirty (30) State-Owned Enterprises (SOEs) in which the IDC holds 62.28 to 100 percent shareholding, only five (5) declared dividends amounting to K61,334,600 and K62,012,587 in 2021 and 2022 respectively.
“During the period under review, IDC issued ten (10) loans amounting to K170,222,517 to six (6) of its subsidiaries. The repayment periods ranged from fifteen (15) to sixty (60) months. However, a total of K196,421,914 including interest remained outstanding as of 31st December 2022.”
Meanwhile, an examination of financial and other records maintained at the IDC for the financial years ended 31st December 2021 and 2022 revealed as of 30th September 2023, the IDC had not produced audited Consolidated Financial Statements for the years ended 31st December 2018 to 2022 and no sanctions were meted out on subsidiaries that had not prepared their financial statements.
In addition, eight (8) State Owned Enterprises had not produced audited financial statements for the financial years ended 31st December 2020, 2021, and 2022 as of 30th September 2023.
Corporate governance structures of the subsidiaries have also been hit hard, with six SOEs operating without Boards of Directors for periods ranging from six to eleven months as of 30th September 2023. This situation could have hurt the provision of policy and strategic direction to the subsidiaries.
Further, the report adds that the Approved Board Composition of the Committees – Investment and Portfolio Committee, which provides for seven members, including three co-opted members namely; an Investment specialist/Development Economist, a Senior Banker, and an eminent business person, has not been followed. “A review of the actual composition of the committee revealed that all the members were Directors of the Board, and none was a co-opted member.”
The IDC’s discouraging performance and lack of accountability have raised serious concerns about its ability to manage and regulate the SOEs effectively.
With billions of Kwacha lost and no clear plan to turn things around, it remains to be seen how the government will address this issue and prevent it from spiraling out of control.
About thirteen (13) Industrial Development Corporation –
Pork prices are likely to go up after about a 30 percent increase in pig feed prices effective 19th February 2024. Pig feed prices have gone up by a significant K210 from K750 to K960, a situation which is likely to affect the cost of doing business for pig farmers.
According to a pricelist seen by the Zambian Business Times – ZBT, the retail price for a 50 kg bag of complete Premium Pig Creep Pellets has gone up by 28%, while the retail price for a 50 kg bag of complete Premium Pig Weaner Pellets has increased by 18%. Standard pig feeds have also seen a significant increase in prices. For instance, the price of a 50 kg bag of Pig Grower Pellets has gone up by K22, while Pig Grower Mash has increased by K75.
The increase in pig feed prices is expected to have a considerable impact on pig farmers in Zambia as the cost of doing business for pig farmers is likely to go up, and this may lead to an increase in the price of pork. This increase in pork prices may have a ripple effect on consumers, who may have to dig deeper into their pockets to purchase pork products.
The increase in pig feed prices comes at a time when the cost of living in Zambia is already high, with many families struggling to make ends meet.
For complete standard pig feeds, the price of a 50 kg bag of Pig Grower Pellets has also gone up by K22 from K415 to k437 while Pig Grower Mash has gone up by K75 from K365 to k440. Pig Finisher Pellets and Pig Finisher Mash feed prices have also gone up to K415 for finisher pellets and K425 from K375 for pig finisher mash respectively.
Meanwhile, Standard concentrates for pig weaner, grower, and finisher concentrates have gone up from K580 to K650, K445 to K491, and K425 to K485 while pig sow and boar and pig lactating concentrates have gone up from K430 to K475 and K515 to K555 respectively.
For value concentrates, value pig grower and finisher feed prices for a 50 kg bag size have gone up from K420 to K455, K380 to K425 while the value sow and boar and the value lactating sow have gone up from K395 to K470 and K475 to K555 respectively.
Pork prices are likely to go up
The auditor general’s report for the financial years ended 31st December 2021 and 2022 has revealed that Mpulungu Harbour Corporation Limited (MHCL) Company’s profit reduced by 93% from over K4 million in 2021 to about K363 thousand in 2022.
Mpulungu Harbour Corporation Limited (MHCL), is a company wholly owned by the Industrial Development Corporation (IDC) operates Zambia’s only water-based Port. The Port opens up the country to a regional market made up of Eastern Democratic Republic of Congo, Burundi and Western Tanzania, extending further to Rwanda and South Sudan.
MHCL is in the business of facilitating cargo movement that is imported or exported through the Lake Tanganyika Transport Corridor. Various cargo such as cement, sugar, coal, other construction materials and frozen foods like chicken or fish transit through the Port.
According to the audit findings seen by the Zambian Business Times – ZBT, the reduction in profit was mainly attributable to a reduction in cargo volume passing through the Port from 231,000 metric tons in 2021 to 185,000 metric tons in 2022.
The auditor general’s reports also revealed that, MHCL failed to meet its targeted revenue in 2021 by over 1 million representing 2%.
The report further revealed that in 2022 the company’s situation worsened as the company failed to meet its budgeted targets by over 17 million representing 28%
“The company’s Profit reduced by 93% from K4, 935,431 in 2021 to K363, 419 in 2022. The reduction in profit was mainly attributable to reduction in cargo volume passing through the Port from 231,000 metric tons in 2021 to 185,000 metric tons in 2022,” the report revealed.
“MHCL projected to raise amounts totalling K68, 134,567 in 2021 and K62, 617,563 in 2022 through provision of various harbour and port facility services. However, a scrutiny of the financial statements and other financial documentation revealed that the company failed to meet its targeted revenue in 2021 by K1, 218,778 representing 2%. In 2022 the situation worsened as the company failed to meet its budgeted targets by K17, 483,326 representing 28%,” revealed the report.
The auditor general’s report findings also revealed that during the period from 1st January 2021 to 31st December 2022, MHCL also failed to meet its income budget of over 11 million.
The report further revealed that MHCL revenue decreased from K66.9 million in 2021 to K45.1 million in 2022.
“During the period from 1st January 2021 to 31st December 2022, the Corporation had a total income budget of K130, 752,130 out of which amounts totaling K119, 188,585 were realized resulting in a negative variance of K11, 563,545. Revenue decreased from K66.9 million in 2021 to K45.1 million in 2022; whereas other income increased from K3.2 million in 2021 to K3.8 million in 2022,” revealed the report.
The audit finding’s also revealed that MHCL’s turnover ratio declined from 1.6 in 2021 to 1.1 in 2022, indicating a reduced asset efficiency.
A company’s asset turnover ratio measures how profitably a company uses its assets to produce revenue. A higher ratio denotes an efficient use of assets while a lower ratio indicates poor efficiency.
“The asset turnover ratio declined from 1.6 in 2021 to 1.1 in 2022, indicating a reduced asset efficiency,” revealed the report.
The auditor general’s report for the financial
