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Government has awarded Alpha Commodities a Fertiliser

Mining

Urgent govt attention needed as Mopani contractors go 6 months without pay

There is urgent need for the government which is now the majority owner through ZCCM IH to resolve the recapitalization and financing needs of Mopani Copper Mines, the major anchor company supporting the economies of both Kitwe and Mufulira on the Copperbelt.

The Mine Union of Zambia-MUZ- are asking for the government to find an urgent solution to the issues surrounding Mopani Copper Mine which had indicated that it needed financing of about $300 million to continue with its operations after credit and financing lines secured under former owner Glencore were dropped.

Speaking in an exclusive interview with the Zambian Business Times – ZBT, MUZ President Joseph Chewe urged President Hakainde Hichilema’s administration to look at the issues surrounding the Mopani Copper Mine as they require urgent solutions.

Chewe explained most workers in some contracting companies have not been paid for six months now, a situation he said it brings serious concerns and confusions to the union and its members. The MUZ President told ZBT that most of the Union members have families to look after, hence the need to look at this matter as urgent.

He said urgent attention to the issues surrounding Mopani will also help the general business environment on the Copperbelt as the two mines, Mopani and KCM are the key Companies which several communities depend on for their survival.

Chewe said MUZ main interest is to safeguard the mine and saving jobs, adding that what was needed was is to see which model Mopani would take since departure of Glencore. “After Glencore decided to abandon the mine at a difficult time, we wanted first to safe guard the mine and the jobs. Had it not been for that, the mine could have been closed by now and there was going to be no Mopani to talk about today.” He said.

Due to the continued delay in finding lasting solutions for both Mopani and KCM, the liquidity situation on the Copperbelt has continued to deteriorate, with most businesses and people complaining of no money in circulation.

Zambia had relied on the Copperbelt from time of independence until the mines in the North Western Province came on stream about a decade ago. The Copperbelt has a size-able population, boasting of housing key towns and cities of Zambia such as Kitwe and Ndola. The region remains a key mining and industrial hub of Zambia which needs urgent and special attention from government. Efforts to get a comment from ZCCM IH proved futile by time of publishing.

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There is urgent need for the government

Lifestyle

Lusaka Youth entrepreneur develops own shoe brand

For Zambia to develop, its greatest assets are its people who need to venture into business, develop products and brands, grab a share of the local market and eventually start exporting. With the youths making up the majority of the adult population, youth entrepreneurship is therefore cardinal to leveraging this demographic dividend.

One such example is a 31 year old Lusaka based youthful entrepreneur has developed his own shoe brand with the Zambian touch label called “Yama Mfumu Che” which is currently creating waves and selling in Lusaka.

Raphael Phiri, an Environmental Engineering graduate from the Copperbelt University – CBU who started his university education in 2011 and completed in 2017 told the Zambian Business Times – ZBT that he started his business while at CBU, adding that everything running now was birthed from his government meal allowances (commonly called BC) and other little funds he could raise from his family that were meant for sustainability.

He said the dream and goal behind the shoe brand was to create something that has the Zambian culture in it from the brand name and quality identity. The youthful entrepreneur stated that he has managed to create employment of up to ten (10) people with both the clothing store and the shoe store.

Thr “Yama Mfumu Che” shoe brand has been able to to sale up to 30 pairs of shoes from the first 100 samples that were open for sale last week going at K980 per pair. This is a competitive price when one looks at the quality of the show and how it compares with its imported peers.

He told ZBT that he is looking forward to growing his brand. Currently, his shoe brand revenue potential is developing and he is able to post revenues of up to K20,000 per day on a good day. With more support from Zambians, he plans to grow the brand and employ more fellow youths in the business.

On the challenges encountered, Raphael said, the challenge on the Zambian market is finding accessories with regards to the sowing materials, adding that in Zambia there are no available proper needles and accessories to fix the heal and the inside part of a shoe, which brings in a challenge because most suppliers are so much into smart shoes with limited supply for smart casual shoes.

“For me, my business is build off my passion. I love what I do, it’s easy for me to work late and work up in the wee hours of the morning, it goes beyond the money. You know what they say, find what you love and you don’t have to pay for it. I am enjoying it and getting paid for it”, he added.

The Yama Mfumu Che founder has since encouraged other Zambian young entrepreneurs to continue pushing to make Zambia a great nation through investing in different crafts and passions. Zambia can only be developed by Zambians.

PS – If you are a youth nurturing a business or you know a youth entreprenuer who needs their story to be shared, ZBT has now opened a segment that it will showcase the selected youth entrepreneur at at its cost to support youth entrepreneurship as a solution to Zambia’s economic growth. Send your suggested story to editor@zambianbusinesstimes.com or info@zambianbusinesstimes.com

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For Zambia to develop, its greatest assets

Politics

HH reaffirms need for investing in Human development

President Hakainde Hichilema – HH has reiterated that investing in Human development through Education, Health and Nutrition is of paramount importance to the African region.

Speaking when he delivered his maiden address to the 42^nd ordinary summit of the Southern Africa Development Community – SADC Head of state which was held DR Congo monitored by the Zambian Business Times-ZBT, President HH said Zambia is striving to optimise on the available trade and investment opportunities in the region and beyond to uplift the lives of its people.

He said Zambia has moved in its first budget to implementing free education to allow school going children from primary to tertiary education to attend school without having challenges.

President Hichilema underscored the importance of investing in human development and revealed how Zambia has taken the bold step in education and health sectors by implementing free education policy from primary to secondary school and hiring of over 40k teachers and health workers in 2022.

HH said Investing in education, health and nutrition is not only valuable to the African region but to other parts of the world as well. He also urged other African leaders to look after their people before looking anywhere else to ensure that their people welfare are secured.

“We have a unique opportunity to reposition our mission to be part of the production, processing value addition to be a major contributor to the global economic development.” He stated.

The Zambian President also mentioned that the transitioning towards renewable energy and particularly electric vehicles in the revolution is vital and important as the value is huge and called for the countries to work together in achieving this goal.

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President Hakainde Hichilema - HH has reiterated

Markets

Kwacha appreciation results in Cement prices dropping by 11%

Chilanga Cement, a subsidiary of Chinese global cement giant company Huanxin Cement has revealed that the price of cement has progressively reduced by an average of 11% over the past 10 months following the continued appreciation of the kwacha, which has also resulted in a better business environment.

Company Corporate Affairs Manager Gift Danga said if the kwacha continues to appreciate against major foreign currencies, the cost of production is expected to further go down and this will eventually lead to lower prices for customers.

In an interview with the Zambian Business Times – ZBT, Danga explained that the appreciation of the local currency against foreign currencies leads to a lower cost of doing business as the importation of raw materials and pricing of other inputs becomes cheaper.

Danga added that the appreciation of the kwacha leads to a lower cost of doing business, which ultimately results in prices that are more competitive for end users. He noted that as regards fuel prices, a downward movement in fuel price leads to low transport costs, which in turn contributes to the low cost of doing business, thereby resulting in better prices for end users.

“In addition to the cost of production, other factors that affect cement price include the following; quality of the product, legal, regulatory, and environmental scenario, market dynamics and demand, cost of raw materials, gypsum, fuel and electricity. These are not limiting factors, but are usually the major factors”, he said.

Danga said a key challenge that the company is facing now is the reduction in demand relative to the increased number of players in the industry and the contraction of the market.

He revealed that the company had challenges accessing gypsum at some point but the situation has improved compared to last year and earlier this year, however the company is still facing challenges accessing high quality natural gypsum locally therefore, currently this is still being imported from within the region.

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Chilanga Cement, a subsidiary of Chinese global

Markets

Foreign OMCs ignore law to give 50% transport business to local companies

Local businesses and traders are consistently indicating that there is lack of liquidity in the Zambian economy despite macro economic indicators that have been showing a positive trajectory. One reason behind this scenario is the fact that most business transactions are done between multinational with limited to no involvement of local citizen owned companies.

One such sector is the lucrative fuel sub-sector, which is majority dominated and owned by foreign players. These players seem not to appreciate that to make their businesses sustainable, they need to involve local businesses so that the local economy also retains some of the profits that are made. This sector is supported by the less profitable petroleum transportation sector, a sector that is also flagging that local companies are also getting a raw deal.

As a result, the Petroleum Transporters Association of Zambia (PTAZ) had accused Oil Marketing Companies (OMCs) and bulk fuel importers of fuel which are majority foreign owned of failure to adhere to the rule of law as they have continued to ignore the law that states that local Zambian transporters must transport 50% of the imported fuel.

According to Statutory Instrument – SI No.35 of 2021 – Citizens’ Economic Empowerment (Transportation of Heavy and Bulk Commodities by Road) which is in place, Zambian citizens or citizen controlled companies must transport atleast 50% volume of all the imported fuel.

Association General Secretary Benson Tembo said local transporters are only transporting about 8% of all fuel imports despite the SI clearly stating that they should transport 50%, adding that it is unfortunate that there is no one to enforce the law despite citizen owned companies being protected by the law.

Speaking in an interview with the Zambian Business Times – ZBT, Tembo said government did its part as it clearly prescribed in the import waiver letters given to all Oil Marketing Companies and suppliers of fuel the condition that Zambian citizen owned companies transport 50% of the volume allocated to OMCs or suppliers.

“Most of the people in government don’t understand the SI because for them if they load a Zambian registered truck, they think they have complied with the law when in fact not. Most of the trucks registered in Zambian numbers are not owned by the prescribed Zambian citizens in the law, they are owned by foreigners registered in Zambia but those don’t qualify under that SI”, he said.

Tembo said the association is looking forward to engaging President Hakainde Hichilema because policy makers and technocrats have failed to address the matter adding that it is unfortunate that the association has to involve the Head of State in such matters when the law is clear.

“When you speak too much, people start thinking you are becoming political, there is nothing political about asking for what belongs to citizens. All those technocrats cannot pretend that they do not know this law, in the fuel transport subsector there is too much money, so people are blindfolded by money hence they even forget the citizens who were queuing up to vote, they have already forgotten”, he said.

He noted that once enforced, transporters and the local economy would generate more money, citizen owned transport companies will grow their capacity and create more local job opportunities. But all this is simply not being enforced.

Citizen owned companies in the petroleum sector continue to face serious challenges to scale due to failure by successive governments in Zambia to enforce already existing laws as well as facilitate for affordable financing. As a result, the majority of talented Zambians in the sector remain as employees, with some locals who venture into this sector contending with fighting for minority share in the lower margin fuel transport sector.

August 18, 2022

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Local businesses and traders are consistently indicating

Mining

Lubambe mine owing about K4m in unpaid council dues

The challenges facing decentralization in Zambia are deep, with stakeholders revealing that political interference of operations of city and municipal councils being one of the major items that need urgent attention and hamper efforts by councils to become viable.

One of the most glaring irregularities is where you find district councils that house large scale mines that take up huge tracks of land are found to be financially limping as efforts to collect due levies are a challenge as most of these companies appeal to higher offices who then prevail on the councils, ending up with uncollected dues.

The Zambian Business Times – ZBT can reveal that most municipalities housing large scale mines are struggling to collect levies with most large scale mines being either behind, over-negotiated with backing of senior politicians or simply facing a situation of neglected payment attitudes of the dues.

One such council if the Chililabombwe Municipal Council, which houses two large scale mined in Konkola Copper Mines – KCM and Lubambe Copper Mines. In an interview with ZBT, the Chililabombwe Municipal Council disclosed that Lubambe Copper Mine is owing about K3.8m I’m overdue land rates

The local authority said the Chililabombe based Lubambe copper mine has only paid up to May this year, hence owing the local authority about K4 million. KCM with its problems even owns much more to the council.

Speaking in an exclusive interview with ZBT, the Executive officer in charge of debt and administration for the council, George Mulenga revealed that the Mine has the said unpaid balance which is supposed to be paid to the council.

And Chililabombwe Council director of finance Gabriel Lui confirmed that the mine is truly owing the local authority as they have not been paying since May 2022. Lui explained that the Chililabombwe based Lubambe copper Mine pays an annual amount of about K6.6 million and a monthly amount of K550k.

Lui said the mine has only paid up to may the sum of K2.7 million out of the annual K6.6 million Mulenga reaffirmed that Lubambe Mine has not paid anything since May 2022, hence accumulating to the said amount of money owed to the local authority.

The Chililabombwe based copper mine had earlier in July cut about 200 jobs which the company undertook by asking its employees to apply for voluntarily separations. Insiders said some jobs and individuals were targeted and that there it was more of retrenchment than voluntary separations.

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The challenges facing decentralization in Zambia are

Companies

Lusaka-Ndola dual carriageway construction negotiations underway – Milupi

With concerns mounting on the deplorable state of the road between Lusaka and Ndola, which is one of Zambia’s busiest highways and the need for a timely solution to make the road safe before the rainy season sets in, government has confirmed that the specific timelines for resuming the construction of a dual carriage way are not yet set.

Minister of Infrastructure Charles Milupi who had initially set mid year 2022 as the target date of resumption of construction works under Public Private Partnership after continued reports that the road has become a death trap has revealed that the process between government and the private party negotiating team is underway and not yet concluded.

Milupi whose ministry’s budget received the some of the biggest cuts for 2022 said the country will be informed as soon as the process is completed with regards to the Lusaka-Ndola Dual Carriageway. He said there is need to give both the concessionaires and the government team enough time to conclude the negotiations before anything is announced to the nation.

When asked to confirm which private company the Ministry is currently negotiating with [after the initial shortlisting] and when works will resume due to increasing safety concerns and accidents, he stated that it cannot be pre-determined on how negotiations are going to go hence the need to give both teams time. He could however not give any specific time range.

In an exclusive Interview with the Zambian Business Times – ZBT, the Infrastructure Minister said that the ministry cannot disclosed the private party government is currently negotiating with adding that there are other private companies who are also interested in undertaking the project.

“Let’s wait for the process to be finished and we might have finalized by then, we are at a stage where there are other people interested and if you mention one, then you are giving the impression that that stipulated company has acquired the contract”, he said.

The Lusaka-Ndola dual carriageway road construction contract is among the loan agreements listed to have been cancelled by government in its bid to address the debt challenges the country faces and seen as a prelude to obtaining debt restructuring process and getting an IMF extended credit facility for $1.4 billion.

Analysts have however expressed concern on the feasibility of using the PPP model siting the lack of success across the African region of this model. The risk is that either the road tolls may be pegged too high for the majority of road users to afford or that government may be forced to issue out a longer tenure of the concession which may become political and economically untenable.

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With concerns mounting on the deplorable state

Markets

BOZ maintains lending rates

The Bank of Zambia (BOZ) has maintained the cost of lending at 9% for the third consecutive time this year.

BOZ Governor Dr. Denny Kalyalya said the decision to hold the rates was due to the sharp deceleration in inflation in the second quarter of the year and a further projected decline into the 6-8% target range during the first quarter of 2024.

Dr. Kalyalya said the Monetary Policy Committee was also mindful of the lingering vulnerabilities in the financial sector relatively tight domestic liquidity conditions and weak domestic growth.

Speaking during the Monetary Policy Committee Announcement and Press Briefing monitored by the Zambian Business Times-ZBT, Dr. Kalyalya noted that in the first half of 2024, inflation is expected to average 7.0%.

He explained that over the forecast horizon, inflation is projected to decline to averages of 11.4% and 8.4% in 2022 and 2023 respectively from the outturn of 22.1% in 2021 and these projections are underpinned mainly by sustained implementation of fiscal consolidation and structural reform measures as well as the benefits associated with securing an IMF Extended Credit Facility (ECF).

The Central Bank Governor said sustained implementation of fiscal consolidation and structural reform measures supported by the Extended Credit Facility from the International Monetary Fund are among the key factors expected to contribute to lower inflation.

Dr. Kalyalya said the committee however noted that upside risks to the inflation outlook include persistently elevated energy and food prices due to the prolonged Russia-Ukraine conflict and higher than expected domestic maize prices due to the short supply of the staple grain in some neighbouring countries.

He added that other risks include adverse weather conditions, tighter global financial conditions, weakening global growth amid higher global inflation and weak demand as well as supply chain disruptions that could stem from COVID-19 containment measures.

Dr.Kalyalya mentioned that in June, domestic credit growth slowed to 6.8%, year-on-year, compared to 11.5% in March. This was largely attributed to the reduction in lending to government and contraction in private sector credit.

The Governor added that gross international reserves marginally increased to US$3.0 billion (3.7 months of import cover; US9.8 billion of imports) at end-June, 2022 from US$2.9 billion (3.6 months import cover; US$9.4 billion of imports) at end-March.

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The Bank of Zambia (BOZ) has maintained

Agribusiness

Suspension of potatoes and onion imports saving the country forex

The Zambian Fruit and Vegetable Traders Association has disclosed that the country has so far saved atleast US$9, 920, 000 due to the suspension of imports of onions and potatoes.

Association President Bernard Sikunyongana said the association used to bring in onion imports from January to July before the suspension came into effect in February this year.

Speaking in an interview with the Zambian Business Times-ZBT, Sikunyongana explained that the association used to bring in 20 trucks of onion weekly for a period of 7 months every year adding that brining a truckload of onion into the country costed $15, 000.

He noted that the $15, 000 was inclusive of the price of the commodity as well as all the other expenses needed to bring the onion into the country adding that the association used to spend over $8, 400, 000 every year on onion imports.

Sikunyongana mentioned that potatoes were more expensive to bring into the country compared to onions as a truckload of potatoes was costing $19, 000 but the association was only allowed to bring in imports for two months in a year.

The Association President said the association used to bring in 10 trucks of potatoes on a weekly basis as the local production used to meet the rest of the demand adding that this translated into a total of $1, 520, 000 being spent on the importation of potatoes.

He said the past 5 years, the association used to import potatoes for 7 months every year but due to increased local production, they would only be allowed to import for two months before the suspension of imports.

Sikunyongana noted that the two commodities are currently available on the local market and the association has not brought in any imports since the suspension of imports came into effect in February this year.