Connect with:
Wednesday / May 21.
HomeStandard Blog Whole Post (Page 43)

Following the official statement released that the transaction for the take over of Atlas Mara by Access Bank has been completed, it has emerged that some operational and legal obstacles may still stand in the way.

A check by the Zambian Business Times – ZBT revealed that critical actions such as the timelines for the rebranding of Atlas Mara branches and facilities to Access bank have not yet been finalized or communicated, a notable gap in change in control best practice procedures.

Further, a legal case was in November 2023 initiated by prominent Zambian businessman and founder of Finance bank – Rajan Mahtani against Atlas Mara accusing the bank of failing to pay off what they owed him. It’s not clear if this London high court case will not affect the change in control processes.

While the acquisition was announced to have been completed and all necessary regulatory approvals obtained, sources suggest that the there are still some obstacles in the way.

In an exclusive interview with the Zambian Business Times – ZBT, inside sources revealed that the acquisition process has not yet been completed and that the two banks will continue to operate independently until further notice.

Despite Access Bank assurances that both banks will continue to operate independently, the further delay in the change over and full integration process may lead to loss of market share and clients by both entities.

Following the official statement released that the

Following a successful takeover of African Banking Corporation Zambia Limited, trading as Atlas Mara Zambia by Access bank Zambia limited, the Union of Financial Institutions and Allied Workers (ZUFIAW) has emphasized on the need for Atlas Mara employees to be paid their separation packages or be given an option to choose whether to continue with the new employer or not.


Recently, Access Bank Zambia Limited announced the completion of the acquisition of African Banking Corporation Zambia Limited, trading as Atlas Mara Zambia after obtaining all requisite regulatory approvals which means that Atlas Mara is now a wholly owned subsidiary of Access Bank Zambia.


Speaking in an exclusive interview with the Zambian Business Times -ZBT, ZUFIAW Union Secretary General Kasapo Sundrea Kabende said that the union is committed to ensuring that employees of Atlas Mara bank are not disadvantaged.

Kabende revealed that the union is already doing background consultations to ensure that the take over process is followed in line with the provisions of the labor laws.

“Our position remains that our members at Atlas Mara should be paid their separation packages and obviously be given an option to choose whether they would want to continue with the new employer or they would want to separate. We will ensure that our members are not disadvantaged. The law has to be protected during this process of legal take over and we are already doing consultations in the background with our social partners to ensure that the process is followed to the latter in line with the provisions of the labor laws of this country,” he said.

“As a union we are alive to the fact that we have labor laws in our country that govern how an employee should be treated once the company has been taken over. We have members at Atlas Mara and we are well positioned to make sure that our members are treated in accordance with what the law provides,” said Kabende.

Following a successful takeover of African Banking

The continuous depreciation of the Kwacha, the official currency of Zambia, is having a significant impact on various sectors of the country’s economy. One of the most affected sectors is the vehicle industry, which has witnessed a significant rise in the prices of motor vehicles due to unstable exchange rates. The steady fall of the Kwacha against the United States dollar has led to high inflation, making even the cost of living in Zambia more expensive.

According to the monthly inflation report released by the Zambia Statistics Agency (ZAMSTATS), the price of Toyota Hilux motor vehicles has risen sharply from about K900,000 to around 1 million 3 hundred kwacha annually, representing an increase of about 45 percent year-on-year from November 2022 to November 2023. On a monthly basis, the price increased from about 1.2 million in October 2023 to about 1.3 million in November 2023, indicating a 9 percent increase.

Similarly, Toyota Corollas have witnessed an annual increase of 48 percent from 742, 000 to 1.1 million between November 2022 and November 2023. On a monthly basis, these vehicles increased from 972, 000 to 974,000, representing a 12 percent increase for the month of November.

commenting on this development Kelvin Kameta, spokesperson for car dealers, told the Zambian Business Times – ZBT, in an exclusive interview that the increase in prices was mainly due to the appreciation of the dollar against the Kwacha, which has also caused business sales to depreciate.

Kameta remarked that the cost of doing business is increasing, and the exchange rate is forcing them to increase motor vehicle prices. He noted that the dollar has been fluctuating upwards and has not been stable for quite some time.

He further explained that the landing cost of motor vehicles is going up, forcing prices up, thereby affecting customers. He highlighted that they do not order these vehicles in Kwacha but in dollars. Therefore, whenever the dollar goes up, they are hit by the increase in the vehicle industry.

Kameta said the business has been tough in the last quarter of 2023 as compared to the previous three quarters calling on the Zambian government to work towards stabilizing the exchange rate to ensure proper planning and good business in the industry.

He explained that the current situation makes it difficult to plan, and customers wait for the dollar to go down before buying vehicles.

  

The continuous depreciation of the Kwacha, the

Development Analyst Charity Musamba says that Zambia’s education sector has been messed up due to the hazardous educational reforms that have been taking place post-independence and has called for more investment in critical thinking in the country’s education system.

In an exclusive interview with the Zambian Business Times –ZBT, Musamba said the education curriculum has changed over time, but that it was messed up after 1990 when the country began undertaking education reforms. She said it was started by promoting basic education which meant that primary education was more concentrated at the expense of secondary and tertiary which is where skills are built. “We had a lot of people learning English, writing, literacy skills, but not critical thinking and putting in practice what they are learning,” said Musamba.   

She said that between 1964 and 1990 Zambia had very educated intellectuals who had both the theory and practice at hand. “The post-independence intelligencer and academic groupings were very practical,” said Musamba.

Musamba said that Zambia has messed up its educational processes due to the hazardous educational reforms that have been taking place since 1990. “These reforms were basically in my view trials by both domestic and external education experts. Because they were funded by donors, we had very little to say in terms of assessing the appropriateness of these reforms.”

She further noted that the global economy is moving towards service economies, but noted that developing countries are still at production level.

Musamba said Zambia is part of the globalized village noting that globalization has left no one behind, but has incorporated everyone. She said considering the model of development that has evolved, most of the advanced countries which include the first and the middle world have invested heavily in technology and services because they have passed the primary commodity production phase of development.

She said most of the productivity activities are informed by technological advances and service provision. “If you look at access to education, and health, a lot of these services are now based on technology. Meaning that more and more we are eliminating the physical human participation in the productivity processes” said Musamba. She said those in advanced economies are in a safe zone because they can still access incomes, but developing countries such as Zambia still need to depend on human labor for people to survive.

She said there is a need to invest more in critical thinking to think critically about changing the environment.

Musamba added that the agriculture sector is heavily populated by labor (intensive activities). She however mentioned that there is a need to start investing in some form of technology to help serve on time.

Musamba further mentioned that during the first republic, Zambia was known to provide one of the best education services in the developing world. “That is why if we look at our first politicians, they sent their children to ordinary schools where everyone was going. The government invested adequately and built confidence that if we use these services we will improve our lives” said Musamba.

She said that what has changed now apart from being part of the globalized world is that the country’s political and policy leads acknowledge they are not doing well when it comes to policy and financing hence award themselves privileges to send their children to good schools.

“This is what is defining the social class because when people finish school, those who went to good schools will get good jobs, those who went to bad schools will remain jobless, and so the cycle of poverty continues that way,” said Musamba. Zambians should be alert and start demanding that all should have access to the same opportunities as it defines everyone’s future and livelihood.

Musamba noted that most governments are now investing in vocational-orientated education systems. She said this means that from the early stages of education, the skills and talents of the learners should be identified and concentrated on that line. She said that as learners are being taught, attention must be paid to what they will do after school. She said it is one of the biggest discouraging points to have a mass of people who completed school but are at home for years which is not the whole purpose of going to school. “We should be matching our education system with industrial and productive activities, meaning that the government should invest in job creation, industrialization, and manufacturing,” said Musamba.

She said other educational reforms were undertaken that are now trying to push for vocational skills building such as tailoring and agriculture among others.

Development Analyst Charity Musamba says that Zambia’s

Boudot Cement is on record for failing to submit quarterly cement production returns to the Ministry of Mines and Minerals Development leading to a loss of revenue for the local authorities.

Despite the Company confirming that they have been producing and that their cement is available on the market, the Company’s mineral production returns since April are missing in the consolidated mineral productions report.   

Boudot Cement has failed to submit production returns for since April 2023 a situation which has also seen a decrease in the country’s official recorded cement productions.

According to official reports obtained by the Zambian Business Times – ZBT, Cement production at Baudot Cement has decreased in the first 3 quarters from 21, 667.40 metric tons in 2022 to about 7,350.15 metric tons within the same period in 2023.

Sources from the Ministry of Mines however say the Company has not been producing as there have been some issues affecting production. “They have been loading with stock, the reason why the number is 0 was because they were installing the dedusting system (Bag house filters) which was a huge project at the time. Initially, they were using a water scrubber system”

Meanwhile, Boudot Cement has denied any wrongdoing and has alleged that the Company is up to date with mineral production returns.

Company Manager Patrick confirmed to the Zambian Business Times they are currently producing Cement and alleged that they have been submitting the returns to the Ministry.

He however Refused to avail the production report stating that they had already submitted the report to the ministry and there was no need to submit another one.  

“All the reports are there with the Ministry of Mines we can’t give you that report but we have it. So if you want that report tell the Ministry of Mines they will give you that report.

There have been also unconfirmed allegations that Boudot Cement may be involved in tax evasion, while others speculate that the company may be hiding something more sinister.

Boudot Cement is on record for failing

Vedanta Resources Limited’s financial struggles in India have sparked concerns over the fate of Konkola Copper Mines (KCM), Zambia’s largest copper mining company.

As a result, KCM’s future has been thrown into doubt, with some industry experts speculating that Vedanta may divest from the company pledges. This would be another major blow to the Zambian economy, which relies heavily on copper exports, with KCM’s potential to account for nearly 40% of the country’s copper production.

The uncertainty surrounding KCM’s future has also raised concerns among stakeholders, who fear that employees may lose their jobs if the company is sold or shut down. KCM employs over 13,000 people, making it one of the largest employers in the country.

According to recent statements by sources close to the matter, Vedanta, who had previously returned as an investor at KCM, is facing financial difficulties in India. The issue has raised concerns over whether they will be able to honor their investment in KCM.

Vedanta had previously owned a majority stake in KCM before being forced out by the Zambian government due to alleged environmental and social violations. The company subsequently reacquired a stake in KCM. However, the current financial difficulties faced by Vedanta in India have cast a shadow over their ability to support KCM.

Economist Yusuf Dodia has said with the coming on board of new investors for both Konkola Copper Mine –KCM- and Mopani Copper Mines –MCM-, it is important for the government to get investment commitments to ensure the investors do not exploit the country by failing to meet their commitments.

Recently the Zambia Consolidated Copper Mines Limited -ZCCM-IH also announced the Dubai-based United Arab Emirates’ International Resources Holdings –UAE’s IRH- as the new strategic equity partner in –MCM-.

Speaking in an exclusive interview with the Zambian Business Times –ZBT, Dodia said there must be an investment plan with investment commitments not only agreed upon but documented on paper.

Dodia said –MCM- and –KCM- both have new investors and that both give a reason for concern. He reiterated that Vedanta who have been returned as investors at KCM are facing financial constraints in India noting that they have a lot of credit and it is in doubt of whether they will honor the investment in KCM.

He further noted that 85 percent of Mopani Copper Mines was owned by Glencore who sold their shares to ZCCM-IH at about 1.5 billion dollars. He said the Shares may have to be sold to the new equity partner who will then begin to run the mine. “Those people must be able to commit to paying the 2 billion, they must be able to commit putting another 1 or 2 billion dollars into the mining operations so that they make it a mine which is productive,” said Dodia. He said all commitments need to be on paper starting from how much money will be brought in, when it will be brought, and what they will achieve, as well as the benchmarks and milestones.

He said if this is done, Zambia will be in a position to monitor the investors and ensure that the country has a serious investor. “If that happens then clearly both Konkola and Mopani Copper Mine become productive mines, they produce copper and start exports,” said Dodia.

Dodia further mentioned that whether Zambia will benefit from the increased mining operation is a big question because companies are not compelled to bring their mining export earnings into the country, but keep their money outside. He said this is the reason the kwacha is depreciating.

He however noted that the initiative of the export proceeds tracking framework by the Ministry of Finance and National Planning will compel all exporters to bring their foreign exchange earnings into Zambian Bank Accounts.

He said with this initiative, it will be reassured that exports from -MCM- and KCM will add to the prosperity of the Zambian economy.     

Vedanta Resources Limited's financial struggles in India

The Zambia Cotton Ginners Association (ZCGA) has disclosed that the cotton industry is currently facing a significant crisis as several factories remain idle due to a severe shortage of raw materials.

The cotton industry has been a critical part of the global economy for centuries, providing vital raw materials for clothing, textiles, and other essential products. However, the current situation has made many factories be forced to remain idle leading to significant financial losses for businesses and a decrease in employment opportunities.

The impact of this shortage is not limited to the cotton industry alone, as it has also potential to affect other industries that rely on cotton products.

The Zambia Cotton Ginners Association (ZCGA) has revealed that cotton ginneries have become idle due to insufficient production of cotton.

Speaking in an exclusive interview with the Zambian Business Times – ZBT, ZCGA Executive Secretary Chabala Maliyangu disclosed that several companies own multiple ginneries but are unable to utilize them all due to an insufficient supply of cotton.

Maliyangu noted that Zambia has the potential to produce cotton of up to 2.5 metric tons but is only achieving a portion of the potential production capacity.

He said that although the production of cotton has increased this year from 25,000 metric tons produced last year to 45, 000 metric tons produced this year, the production capacity is still far from reaching the ginning capacity that cotton companies have which is over 400, 000 metric tons.

He therefore attributed the increase in cotton production this year to the high cost of growing other crops which prompted farmers to go back to growing cotton.

“A lot of our cotton factories or ginneries are idle because there is insufficient production of cotton to feed these ginneries. In terms of ginning capacity, there is more than enough capacity to gin cotton. Some companies own multiple ginneries but they only use one because of an insufficient supply of cotton I think Zambia’s cotton yield is probably one of the lowest in the world our yield per kg of cotton is quite low compared to West Africa where they produce about a minim of a ton but for us, our production per kg is between 300 – 400 kilograms of cotton which is unfortunate because cotton varieties here in Zambia are quite good and they can go up to 2.5 metric tons which is the potential target but we are only achieving a faction of that potential,’’ he said.

“The production for cotton has almost doubled this year, last year we produced 25, 000 metric tons of cotton produced while this year we have around 45, 000 metric tons but this production is far from the ginning capacity that we have. We can gin 400, 000 metric tons of cotton so 45,000 metric tons produced this year is a drop in the ocean. There is still a very large gap. The increase in production can be attributed to several factors but the prices of other crops that were high played a part because farmers went back to cotton which has better prices than other crops. Then I think because cotton does well in certain regions where rain is a problem. It’s a very resilient crop, especially in the valley areas of Southern Province and Eastern Province,’’ said Maliyangu.

The Zambia Cotton Ginners Association (ZCGA) has disclosed

Luano Honey has revealed that Zambia’s honey production has increased to 10,000 metric tons this year from the 5,000 metric tons produced last year leading to bee keepers running out of local markets to sell their honey.

Recently, the Ministry of Fisheries and Livestock secured the European Union as an export market for organic honey, following the certification of Zambia’s residue control plan adding that this achievement will open up opportunities for citizens to participate in the production of honey and other bee-hive products as the market is readily available.

Speaking in an exclusive interview with the Zambian Business Times – ZBT, Luano Honey CEO
Miit Pandoliker said that one of the major challenges local bee keepers are faced with is the lack of markets to sell their honey, lack of bee keeping tools such as bee hives, bee foods and the knowledge in bee keeping.

Pandoliker expressed optimism that Once local bee keepers are equipped with bee keeping knowledge, given the right tools and the right market, the honey Industry in Zambia will thrive.

He revealed that South Africa currently has a huge trade barrier for honey exports adding that if the Zambian government can dialogue with the South African government to remove the trade barrier it would become easier for the honey Industry in Zambia to thrive.

“In terms of Zambia’s production capacity its about 10, 000 tons this year of which last year the production might have been half of this years production. In terms of local production there is more than enough honey. There is too much honey that farmers do not have a market for their honey.
Lack of market is the biggest challenge local honey farmers are currently experiencing and lack of inputs such as the beehives, bee foods, the tools and the knowledge in bee keeping. Once educated and given the right tools and the right market, the honey Industry in Zambia can thrive,” he said.

“In South Africa there is a very big trade barrier of honey exports to South Africa but if the Zambian government can talk to the South African government to remove the trade barrier it will be easier for us to survive,” said Pandoliker.

Pandoliker therefore emphasized on the need for the Zambian government to support honey companies to participate in international trade especially with countries where honey is scarce so as to increase the international market for the Zambian honey.

“We need more people participating in international trade shows and if companies can get support to go to markets where honey is very scarce , appreciated and valuable like the middle east where there is very little honey production and the United kingdom where the value for honey is high or basically countries that import honey, it can increase the Zambian honey market,” emphasized Pandoliker.

Luano Honey has revealed that Zambia's honey

Govt’s silence on Chambeshi metals reopening worrying – Mining Expert

A prominent Mining expert Edward Simukonda has raised concerns over the government’s delay in reopening Chambeshi Metals, the only plant in Zambia that used to produce cobalt metal and had the potential to be one of the largest cobalt metal producers in the world.

Simukonda said it is unfortunate that the government has remained mute on Chambeshi Metals reopening which has a lot of facilities to help improve the Zambian economy.

In an interview, Simukonda expressed his disappointment with the government’s lack of communication on the matter, stating that Chambeshi Metals has the potential to be one of the biggest mines operating on the Copperbelt. “We don’t know why the delay has been for Chambeshi Metals,” said Simukonda.

” You know Zambia was smelting Cobalt which was mined within Zambia and also mining on behalf of the DRC and Chambeshi Metals could have been very active today but we don’t know where the delay is and we don’t know what is happening there.”

This has come at a time when the mining industry in Zambia is facing numerous challenges, including a decline in copper, Cement & gold production and a shortage of foreign investment.

Chambeshi Metals’ closure has also had a significant impact on the local economy, with many workers losing their jobs and businesses that relied on the mine struggling to stay afloat.

The delay in reopening Chambeshi Metals has raised questions about the government’s commitment to the mining industry and the country’s economic growth.

With the potential to be one of the biggest mines on the Copperbelt, Chambeshi Metals could provide a significant boost to the Zambian economy and create much-needed jobs for local communities.

It remains unclear why the government has delayed reopening the mine, but Simukonda believes that the lack of communication on the matter is worrying. “It’s hard to tell why the government has delayed to open Chambeshi Metals,” he said.

“We need transparency and clarity on this issue, the delay in reopening Chambeshi Metals has significant implications for the Zambian mining industry and the local economy.”

He said the reopening of Chambeshi Metals could provide a much-needed boost to the industry and the broader economy, and it is imperative that the government takes action to address the delays.

Govt’s silence on Chambeshi metals reopening worrying

Economist Emmanuel Zulu says the move by the Bank of Zambia –BOZ- to change the structure in which bonds are issued is vital in helping government manage its domestic debt.

Recently BOZ announced that effective January 2024, government bonds will be issued at par in the primary market for all new insurances. This means that government bonds will be sold at their face value, meaning the cash amount to be invested will be the same as
the face value amount.

BOZ explained that issuance at par entails that the coupon rate for each instrument will be determined during the auction and advised that the coupon rate for each instrument on auction will be the respective highest accepted yield rate. it was stated that re-issuances of any existing bonds and secondary trading of any bonds may be done at discount, par or premium depending on market conditions. The change has been made to streamline Government debt metrics and debt service in general.

Speaking in an exclusive interview with the Zambian Business Times –ZBT, Zulu said Zambia is having an issue with debt servicing and that the government does not want to overburden itself with debt service hence the resolve to change the structure in which the bonds are issued. He said the discount that was being given to investors needed government money to be paid. “So the government was incurring costs on the coupon itself as well as on the discount that was given to the investors” said Zulu.

He further added that the country already has a crisis and is uncertain of the direction that the external debt restructuring deal will lead. He said with this issue, it is difficult for the government to have enough fiscal space to even afford discounts. “We will actually see a different situation this time around were people pay the actual amount of the bond and the government can plan from how much it has realized and how much it will pay over a certain period of time” said Zulu.     

Zulu explained that bonds were initially sold at a discount and that government was paying the difference when the bond matures. “What use to happen was that the government would issue a bond of maybe 300 million kwacha and sell it for 250 million kwacha, but upon maturity the government had to pay the difference which was 50 million kwacha. So that was a huge cost on government” said Zulu. He said what government is lining to, is that at whatever price the bond is issued at, that is what will be obtained at maturity. This means one has to pay for the actual price that the bond has been issued at.

Zulu said this also makes an adjustment as the coupon payments may not be known prior. “The coupon payment will be known after the auction has been done which makes them to plan properly” Zulu. He said the Bank of Zambia has been struggling to plan properly because they do not know how much exactly will be realized from the bond sell. He said once BOZ knows the bond sell, it will be able to determine the coupon payments which makes it easier to for government to manage debt payment.

He added that the aspect of discounts was not working well for government in managing debt because the difference becomes a debt to the investor. “So investors were opting for that because they knew that even if they invest a million, they will buy the bond at maybe 800 and get the 200 as increase in capital” said Zulu. He said now that they will be no discounts; BOZ will be compelled to raise the coupon rates so in order to attract investment in the bonds. “Probably we will see coupon payments that are more aligned to the prevailing interest rates because what use to happen initially was that coupon payment were less than the prevailing interest rates, so that cannot be maintained because the government still needs money so they still need to issue bonds” said Zulu.

He said to make the bonds attractive with this arrangement, the government will have to raise the coupon payments and align them to the prevailing interest rates at that particular time. He said investors will still benefit from higher yields despite them not taking discounts.

Zulu however noted that as good as it is in trying to streamline and manage debt on the aspect of government, investors may be skeptical to go for longer term bonds. He explained that this is because of the uncertainty of the environment were interest rates are projected to go higher. He said the coupon rate is given, it cannot change during the tenure of the bond hence most investors will tend to go for shorter term bonds so that they can be assessing the market. He said this may affect the 20 year bond that the government intends to introduce next year as people would look at the time value of money as opposed to locking money for a longer period in an environment that has uncertainty with regards interest rates and a projected rise in the future.

Zulu however said that the move is in line with the debt strategy government wants to adopt of minimizing domestic debt going forward. “I think this is the way it should be, and it is not a new practice, it is practiced even in other countries that are also trying to manage debt”

Economist Emmanuel Zulu says the move by