Inflation down to 9.7 pct in October in Zambia
Zambia Daily Mail, October 27, 2022
LUSAKA, Oct. 27 (Xinhua) -- Year-on-year inflation in Zambia stood at 9.7 percent in October, down from 9.9 percent in September, according to consumer price data released by the country's statistics agency on Thursday.
The decrease was mainly attributed to movements in prices of non-food items, the Zambia Statistics Agency said in its monthly release.
According to the release, the annual non-food inflation for October decreased to 6.5 percent from 7.2 percent the previous month due to decreases in prices of non-food items such as shoes, furniture, and motor vehicles.
On the other hand, the annual food inflation was recorded at 12.2 percent in October from 12.1 percent the previous month due to pricing movements in food items like cereals, vegetables, and dried beans.
The World Bank Has Approved a Loan of $270m to Zambia for Economic Relief
Business Insider, October 27, 2022
The World Bank approved Zambia's $270m (£232m) loan.
The bank is also determined to aid in the fight against climate change.
Africa is bearing the brunt of these complications.
The World Bank disclosed that the loan’s approval was in line with its efforts to help the southern African country recover from the devastations of the Covid-19 pandemic.
The Bank also cited economic relief from the war in Ukraine and the management of debt crises as other reasons why it lent the country the substantial sum.
In 2020, Zambia was reported as the first African country since the pandemic began to default on its debt.
One of the World Bank’s reports noted how much these factors are affecting Africa. According to the report, one in every five Africans goes to bed hungry and an estimated 140 million people in Africa face acute food insecurity.
The Bank, however, noted that some African countries including, Zambia, Angola, and Tanzania have vast potential to become an agricultural powerhouse if the sector is developed properly. As a result, they have created initiatives to aid such countries.
“The World Bank is ramping up its efforts and joining forces with partners across the food systems landscape to help these countries and others prepare and implement this critical transformation.” The report reads in part.
In August, the International Monetary Fund approved a $1.3bn loan to help Zambia - a major copper producer - restructure its debts.
The World Bank has been keen on combating the effects of climate change since the year began. Droughts and floods all across Africa have created massive food shortages, and the state of the continent’s food security has been abysmal, to say the least.
“Sub-Saharan Africa is feeling the brunt of what has been coined the perfect storm, a food, fuel, and fertilizer crisis exacerbated by the war in Ukraine, scarring effects from the COVID-19 pandemic, soaring inflation, rising debt, and extreme weather.” The bank noted.
Barrick CEO Says Zambia’s Lumwana Mine Life Could Be Extended to 2060
Mining.com, October 26, 2022
Barrick Gold Corp said promising drill results could see the life of its Zambian Lumwana copper mine extended to 2060 from 2042, its Chief Executive Officer Mark Bristow said on Wednesday.
Speaking at a media briefing at the mine, Bristow said since 2019 Lumwana’s fortunes had been turned around, making it one of Zambia’s largest copper producers.
He said a new mineral royalty tax regime, which is scheduled to come into effect in January next year, would unlock additional free cash flow for the company.
To attract investment and ensure increased production, Zambia’s government has planned to restructure the mineral royalty tax with regard to copper.
Zambia earns 70% of its export earnings from mining and has pledged to review its mining tax policy and increase exploration to boost and diversify production.
Asked if Barrick, one of southern African nation’s largest copper producers – and the world’s second-biggest gold miner – had an interest in investing in Zambia’s Mopani Copper Mines, Bristow said the miner was open to opportunities.
“We will look at all opportunities that come our way,” he said.
Zambia is looking for an outside investor to reinvigorate Mopani Copper Mines, which needs a big cash injection to ramp up production.
Mopani, a large mine and smelter complex, is looking for new investors after Glencore sold the asset to state mining investment company ZCCM-IH in January last year.
ZCCM-IH hired Rothschild in June to help find a new investor to upgrade and expand it.
Mopani, which is more than 90 years old, has the potential to produce 225,000 tonnes of copper annually, nearly three times its expected 2022 production, but it needs investment of at least $300 million to fund a complicated underground expansion.
Zambia Firms Ink Large Export Deals with DRC
English News, October 26, 2022
LUSAKA, Oct. 25 (Xinhua) -- Zambian firms clinched export deals amounting to 24.50 million U.S. dollars through the just-ended trade mission to Lubumbashi town in the neighboring Democratic Republic of the Congo (DRC), the country's investment agency said Tuesday.
The Zambia Development Agency (ZDA) said out of the total export deals, 10.82 million dollars were confirmed orders while 13.7 million dollars were export leads with some other companies still in discussion with their potential clients on possible export deals.
In a press release, the agency said the confirmed orders and deals are for the supply of mealie meal, day-old chicks, chicken sausage, fish, pork and maize seed, among others.
Albert Halwampa, the agency's acting director-general, said the results of the trade mission validated the agency's strategy and position that the DRC was Zambia's leading market for non-traditional exports.
"These results are further testimony that both large companies and small and medium enterprises can both earn foreign exchange and thereby significantly create jobs and wealth for the Zambian citizens," he said.
According to him, the agency's strategy was to facilitate market access for as many companies as possible to export products and expand the export base to the DRC in line with the government's aspiration of increasing trade and investment.
Zambian Traders Making Affordable Footwear from Used Vehicle Tires
XinhuaNet, October 26, 2022
LUSAKA, Oct. 25 (Xinhua) -- In an effort to create employment opportunities, a growing number of people in Zambia are taking up businesses that involve recycling old or used things.
Frank Mwaba, a resident of Kapiri Mposhi district, which is located in central Zambia, is among those engaged in recycling ventures to earn a living.
For the past four years, Mwaba, 34, has been making sandals from used vehicle tires, which he sells to residents of Kapiri Mposhi and surrounding areas.
"I earn an average of 2,400 Zambian Kwacha every month (about 150.50 U.S. dollars) from this business," explained Mwaba, while holding a pair of unisex sandals he had just made from an old tire.
He added that the sandals cost 40 Zambian Kwacha a pair (about 2.5 U.S. dollars), and that he makes a minimum of two pairs per day.
"I am currently working on investing in more in advanced tools so as to increase production and expand my customer base," he said, adding that the sandals are made from a specific brand of tires, which he buys from local dealers, specialized in selling used vehicle tires.
"The cost of the tires depends on the size. I spend around 80 Zambian Kwacha on one used tire from which I make three to five pairs of sandals," he said.
He also pointed out that making sandals from old vehicle tires is his mainstay, one that has enabled him to provide for his family's needs. He attributed his success to his mentor under whom he once served as an apprentice for over a year.
And one of Mwaba's customers Michael Chanda, 44, also a resident of Kapiri Mposhi district, said sandals made from used tires are not only affordable but also very durable.
"One can wear them for as long as five years. These sandals are practical footwear. They are particularly good for long distance walks and a great investment for those with very limited financial resources," Chanda said.
He further noted that businesses involved in making things from recycled materials not only support employment creation measures but also promote responsible use of natural resources.
Sandals made from used tires were once common among hawkers and wheelbarrow pushers and other population groups involved manual labor.
Unlike other kinds of footwear that easily gets damaged once exposed to water or sunlight for longer periods, sandals made from used tires only wear out after many years of use.
"It is for this reason that today, people from different sections of society are investing in this type of footwear," said Scout Phiri, a shoe repairer based in Petauke, a district located in Eastern Province of Zambia.
Phiri, 28, also explained that the growing demand for sandals made from used tires compelled him to start making them.
"Last year, I had a lot of customers asking me if I could make sandals from old tires because they were tired of having their shoes mended every now and then. That is when I decided to incorporate the making of sandals from tires into my shoe mending business," he recounted.
According to Phiri, the demand for durable and affordable footwear will continue to rise thereby presenting opportunities for small-scale traders like him.
Zambia Invited to the Africa Investments Forum and Awards to be held in Paris, France.
Lusaka Times, October 19, 2022
Leaders League, a French based international company designed to bring the world’s markets together has invited Zambia to participate at the Africa Investments Forum and Awards to be held in Paris, France.
Scheduled to take place on February 7th ,2023, the Forum will bring together business executives across Africa, Europe, decision makers and solution providers interested to do partnerships together.
Leaders League regional Manager Jean Salager says the forum will provide an opportunity for Zambia to create networks, partnerships and woo investors to establish businesses in Zambia.
“Africa Investments Forum is the place to be if you want to establish businesses and create linkages with people in Europe to work in Africa,” he said.
During a meeting with officials from the embassy of the republic of Zambia in Paris on Monday, project manager Chloe Gilles said it will be good for Zambia to attend the forum for investment opportunities as African and European leaders , together with the public and private sectors, will be present to explore areas of possible collaboration.
The forum is a good platform for Zambia to meet investors and participate in discussions centered on business development, opportunities, infrastructure, city planning and energy.
Ms Giles says the forum will also provide an opportunity for Zambia to market itself in terms of business and investment opportunities.
And Chargé D’ Affaires at the Zambian Embassy in Paris Alick Banda has commended Leaders League for extending an invitation to Zambia to participate at the forum as it will add value to solutions being implemented in order to develop the country.
Mr Banda said that Zambia will look forward to participating at the forum as the country needs such developmental activities to grow the economy for the benefit of the people.
“Our Country is on the fast lane to develop, we really want to take part in such developmental forums and take advantage of every opportunity to enable us get the development we need,” said Mr Banda.
Meanwhile First secretary for Economic and Trade Chibwe Chisala said that Zambia has put trade and investment at the centre of economic diplomacy and the invitation to attend the forum will benefit the country as it seeks to provide home grown solutions to improve the economy.
This is contained in a statement issued by Naomi Mweemba, First Secretary Press at the Zambian Embassy in Paris, France.
Kwacha v Cedi: The Best and Worst of African Currencies
BBC News, October 19, 2022
A cocktail of factors has sent the global economy into a tailspin in recent years.
Beginning with the Covid-19 crisis in 2020 that saw international trade almost grind to a halt, and the invasion of Ukraine by Russia in February this year.
For African economies, trouble had been brewing even before these global crises.
Debt obligations had been on the rise and commodity prices falling, eroding foreign-exchange earning power in some countries.
And with that, the goose for many African currencies against the US dollar had been cooked.
But most recently, the tale has been two-sided with the best-performing as well as the worst-performing currencies against the US dollar being from the continent.
Over the course of this year, the Zambian kwacha has risen to become the best-performing currency in the world against the dollar.
It has gained 15% so far in 2022 and was quoted at 15.93 to the dollar in Tuesday trading.
Experts have pegged these gains on President Hakainde Hichilema’s efforts to turn around the economy, mainly by reorganising its foreign debt to make it sustainable.
In September, the southern African country agreed a crucial deal with the International Monetary Fund for a bail-out loan amounting to $1.3bn (£1.15bn).
The amount will give a lifeline to key social economic programmes such as funding schools and hospitals as the government embarks on renegotiation of expensive debt with China and other creditors.
The move has restored foreign investors’ faith in the copper producer.
President Hichilema at the US-Zambia Trade Summit. Foreign investment has grown since Zambia’s international credit rating was upgraded in February.
This has also seen inflation cool off consistently at a time when even the most developed economies in the world are grappling with rapidly rising prices.
Zambia’s inflation has fallen from a high of 21% in October last year to 9.9% last month.
Further west in Ghana, the cedi is where the kwacha was in 2015.
On Monday, it was marked the world’s worst-performing currency, according to the Bloomberg currency tracker that watches 148 currencies.
In midday trading on Tuesday, the cedi was quoted at 11.64 to the US dollar. This indicates a 48% loss in value in the last 12 months.
The cedi’s position has been worsened by foreign investors losing confidence in the country and opting to dump Ghanaian dollar-denominated bonds from their portfolios.
According to the country’s Central Securities Depository, the amount of domestic government and corporate bonds in the hands of foreign investors fell to 12.3% in August.
This has seen Ghana fail to access cheap money from the international debt markets, and a Zambia-like deal with the IMF for $3bn in emergency funding is still in the works.
As a result, the cost of living in Ghana has been accelerating for the last 16 months with inflation hitting 37.2% in September.
On Monday, traders in Accra threatened to close down businesses for a second time in two months decrying the high cost of doing business.
Image: Getty Images
Zambia Finance Minister Eager to Renegotiate Debt, Awaits China's Team
Reuters, October 15, 2022
WASHINGTON/JOHANNESBURG, Oct 15 (Reuters) - Zambia's finance minister said on Saturday it is still unclear who will be leading talks for renegotiating its nearly $6 billion debt with China, the largest bilateral creditor of the first African sovereign default in 2020 after the COVID-19 pandemic hit.
China co-chairs a committee of official bilateral creditors with France as part of a debt restructuring that Zambia is seeking under the Group of 20's Common Framework, a platform for highly indebted countries to rework their debt with bilateral creditors.
"It is up to the Chinese authorities to choose who they want to represent them," Situmbeko Musokotwane said in an interview with Reuters on the sidelines of the International Monetary Fund and World Bank annual meetings in Washington.
"I don't know at this particular moment," he said, when asked who represents China on the official creditors committee.
Western countries this week ratcheted up their criticism of China, the world's largest bilateral creditor, as the main obstacle to moving ahead with debt restructuring agreements for the growing number of countries unable to service their debts.
At the end of 2021, China held about a third of Zambia's $17.27 billion international debt, according to Zambian government data. Since then, Zambia has cancelled $2 billion in undisbursed loans, many from Chinese lenders.
Musokotwane said negotiating with bilateral creditors including China before private creditors had "worked fairly well", but acknowledged there had been complaints from international investors who hold the country's sovereign bonds.
"It cannot be plain sailing because people approach it from different perspectives," he added.
Zambia secured a three-year $1.3 billion loan from the IMF in September. It is now seeking a present value $6.3 billion debt reduction, or 49% of the external debt being restructured. Some bondholders had previously said a 45% cut would be unacceptable.
"There is no point of pretending that there is something that is better, when doing so means that you leave Zambia still with an unsustainable debt situation," Musokotwane said.
"Because it means we will conclude today, then a month later or three months later, we default again."
Zambian grain exports could help to address shortages caused by Russia's invasion of Ukraine, Musokotwane said, adding that the government was hoping to host an overseas agriculture investors forum in the middle of 2023.
"We are making preparations for investors not just in Zambia, but from outside to take advantage of the land resources that we have, to come and produce food to export," he said.
The country is ready to open up to 100,000 hectares for this investment plan, and will start using a $300 million World Bank approved loan to improve roads, electricity and dams to attract overseas investors.
"Three or four" companies have expressed interest in acquiring Mopani copper mine, he said, including South Africa's Sibanye Stillwater, adding the interest was "what gives me the confidence that by the end of this year probably we should have a solution".
A proposal for the government to have "golden shares" in mining companies would enable it to veto any investors known to not be credible, he said.
The government is assuming an average copper price of $7,500 per tonne in 2023, with growing demand thanks to green technologies likely to support prices, Musokotwane said.
Image: Zambia's Finance Minister Situmbeko Musokotwane via Reuters
Zambian Kwacha Overtakes South African Rand
ZimEye, October 17, 2022
The Zambian kwacha is now stronger than the South African rand.
At about 09:20 am on Friday, one Zambian kwacha was worth R1,15.
At the same time, the rand traded at R18.20 to one US dollar, after it took a beating at close on the previous day, due to the greenback strengthening on the back of an expected interest rate hike as US inflation remained elevated.
South Africa’s economy has been dealt blow after blow this year, while still recovering from the Covid-19 pandemic.
The South African Reserve Bank has been on an upward trend of raising interest rates, in an attempt to curb soaring inflation all year, with oil prices see-sawing for most of the year, as well as dealing with the energy crisis and rolling blackouts imposed by the state-owned ailing power utility, Eskom, just to name a few.
Yesterday, the rand breached the R18.50 mark. The annual inflation rate in the US slowed for the third month running to 8.2% in September, the lowest in seven months, compared with 8.3% in August, but above market forecasts of 8.1%.
As the latest US inflation print came in above expectations, investors feared this might fuel further hawkish rhetoric by US Federal Reserve officials to keep up with hefty rate increases.
This saw emerging markets currencies suffering losses in the financial markets yesterday, as the fears drove risk-averse investors to safer havens, with the dollar again approaching its highest levels in 20 years.
Meanwhile, Zambia’s kwacha gained 27% against the dollar this year, driven by the election of Hakainde Hichilema.
Investors have bet heavily on the new government of that country securing a bailout deal with the International Monetary Fund.
The rand had already been dealt a blow by Wednesday’s US Federal Open Market Committee minutes, which revealed the escalation in the hawkish tone last month when members increased their interest rate hike forecasts in a firm focus on lowering inflation.
Analysts said the rand was at risk of further losses now, as the South African Reserve Bank (SARB) would take a cue from the Fed and increase interest rates significantly at its last meeting for the year next month.
To date, the US Fed has hiked rates by 300 basis points, while the SARB’s rate-hike cycle has encapsulated 275 basis points since it began in November 2021.
Zambia, US Hold Inaugural Business Summit to Boost Trade, Investment
Voice of America, October 13, 2022
Zambia is hosting a two-day business summit in Lusaka this week to try to attract American investors to the country.
Zambian officials say they want to diversify the economy and decrease dependence on extractive industries such as copper, which account for most of the country’s exports. Zambia’s Commerce Minister Chipoka Mulenga said the U.S. should be a key partner in that effort.
“But our focus right now is to see how best we can create jobs and revive our economic fortunes by value addition," said Mulenga. "We want to take advantage of the new energy system that the world is migrating to from fossil fuels into clean and green energy. And we are trying to take advantage of the minerals that we have and bring a consortium of developed players that have the technology already to see how we can develop our copper from exporting concentrates in its raw form into developing it into finished products for the green energy system that we want to go into.”
Zambia is Africa’s second-largest producer of copper – after the Democratic Republic of Congo – and an important source of other critical minerals like manganese, nickel, and cobalt.
But economists say Zambia’s dependence on minerals means it has not taken advantage of being a member in the Common Market for Eastern and Southern Africa (COMESA) or the Southern African Development Community (SADC).
“This is one of the challenges that Zambia has not really harnessed despite being in regional bodies such as COMESA and SADC," said Boyd Muleya of the think tank Zambia Trade and Policy Dialogue. "But going forward the engagement with the U.S. is very critical. We need to change the narrative because what we have seen in the past is mostly, we focus on aid that comes from the U.S., approximately about $500 million United States dollars annually.”
Government figures show Zambia-U.S. annual, bilateral trade was only $182 million in 2019.
Speaking at the business summit Wednesday, U.S. Ambassador to Zambia Michael Gonzales said he sees great potential in the country’s economy.
“The United States stands ready to partner with Zambia to ensure that this great country seizes the energy to become the Zambian renaissance and achieves that extraordinary potential," he said. "They are going to do this by leveraging on American technological know how to meet growing demand from ICT in every sector from health care all the way down.”
But economists such as Boyd Muleya with the think tank Zambia Trade and Policy Dialogue says another challenge for Zambia is attracting investment after becoming the first African country to default on its debt during the COVID era in 2020.
“One of the issues has been the uncertainty in terms of how Zambia’s debt will pan out. We have managed to get IMF executive approval in terms of a package, but we still are to conclude on the actual debt restructuring with respect to the terms put across in the comparability of treatment under the G-20 common framework.”
Zambia’s government is working on a debt restructuring deal with the International Monetary Fund that is expected to be concluded by the end of the year.
Despite the uncertainty, the two-day Zambia-U.S. Business Summit attracted hundreds of local and American investors from sectors including mining, technology, and healthcare.
Budget 2023: A Boost for Environmental Development
Environmental sustainability is one of the four pillars of the UPND’s economic transformation plan outlined in February 2022. The plan, which focuses on the period 2023-25, provides a platform from which the government aims to lay the foundation and grow towards medium-income status by 2030.
The recent budget includes a number of measures to support this goal. Tackling high levels of deforestation is a core government priority. To overcome unnecessary deforestation, the government will establish timber exchanges around the country in 2023 to improve transparency in the timber trade. The first exchange is set to be the Nangweshi in Sioma District, Western Province.
Environmental sustainability is vital to the long-term health of the Zambian economy. Rich in natural resources, it is crucial Zambia fosters sustainable investment initiatives to ensure the prosperity of future generations whilst attaining the full potential of Zambia’s resources. This is why the government have announced plans to diversify power generation to include more renewable forms of energy such as hydropower.
For example, the commission of the Kafu Gorge Lower 750MW hydropower station is expected both to foster economic growth and to provide sustainable, reliable, energy for Zambians. Remarkably, hydropower now accounts for 82% of Zambia’s electricity generation capacity. Building on this will not only foster more power, by meeting the government’s goal of universal power, but also provide employment opportunities across the sector. At present, Zambia generates 1,000 MW more energy that its peak demand. The excess generation helps Zambia export energy to Namibia and Zimbabwe under recently confirmed power supply agreements.
Furthermore, the government has signed a £1 billion green growth compact with the UK Government to further facilitate investment in the renewable energy sector. The UK Minister for Africa, Vicky Ford, emphasised that the investment would be important for “thousands of jobs and supporting green energy production.”
Nicholas Woolley, British High Commission to Zambia, commented; “This is an extremely exciting time for the partnership between the UK and Zambia. This Green Growth Compact enables us to formally build a stronger trade and investment relationship, based on sustainability, mutual prosperity and creating opportunities for businesses and communities in both our countries.”
In addition to this major investment from the UK Government, the New Dawn administration was pleased to announce that taxes on green bonds are to be removed. The current tax regime on bonds outlines that interest income earned by an investor on bonds attracts a 15% withholding tax. This move by the Minister of Finance and National Planning to exempt the 15% withholding tax on interest income earned on green bonds ensures that investors will not pay this withholding tax on their interest income. This draw to greener investments will act as an incentive for investors to act in line with Environment, Social, Governance (ESG) goals, will strengthen the environmental pillar of the UNPD’s economic transformation plan, and ultimately will aid Zambia in its commitment to meeting the UN’s Sustainable Development Goals.
Image: Diego Delso via Wiki Commons
Zambian Government Set to Boost Public Services and Social Protection
In order to build on the administration’s early progress, the 2023 budget includes a swathe of fresh funding for public services, such as health and education, as well as social protection schemes for the most vulnerable members of Zambian society.
Last month, Vice President, Mutale Nalumango, pledged to establish maternity wards at health facilities across the country. In particular, he praised the establishment of a ward at Luangwa, a district where previously mothers would have to travel 25 kilometres to the nearest maternity ward. The pledge comes as part of the New Dawn government’s desire to rectify the disparities found between well-funded urban constituencies and historically marginalised rural areas.
Nalumango did, however, emphasise that public-private partnerships would be crucial to the improvement of Zambia’s health provision. Speaking in Luangwa, he praised the Walkington family and the Luangwa Child Agency for their donations to the new maternity ward he was visiting. By combining the public and the private sectors the New Dawn government cements the importance of private entities in the provision of healthcare ensuring effective and efficient care throughout the region.
In continuance of this goal, the recent budget has allocated K1.1 billion to finance the construction and completion of 36 district hospitals, 16 mini hospitals, and 83 health posts, in order to reduce the long distances travelled to access health professionals. In addition to allocating K4.6 billion for the procurement of drugs and medical supplies, the government has also committed to the recruitment of a further 2,000 healthcare workers, having already recruited 11,000 health workers.
This is not the only major recruitment drive pledged in the 2023 budget. A commitment has also been made to the recruitment of 4,500 further teachers, on top of the 30,000 already hired. Whilst infrastructurally the government has proposed the construction of 120 new high schools and 56 early childhood learning centres with the financial investment of the World Bank. Further, they seek to complete the 115 secondary schools that were abandoned midstream since 2010.
The combination of state education and health services represents an important partnership in Zambia’s investment in the future. In conjunction with the NGO Healthy Learners, the government has re-stated its pledge to roll out the School Health Nutrition Policy (SHNP). As part of its commitment to “educating our future”, the nutrition programme is based on research that strongly correlates early nutritional outcomes with healthy brain development, adult health outcomes and higher economic output.
With Zambia’s young population – over half the population are under the age of 18 – such investment in health and education is an investment in the nation’s future growth. Upskilling the population is a crucial goal the government is fostering through public-private partnerships such as those with Huawei to train 5,000 students and with the EU and UN to invest $6.5 million USD.
The budget allocates K133.5 million to support the Keeping Girls in School Programme. The programme is thus far credited with keeping 5,000 girls in school and comes as part of the president’s desire to modernise the role of women in society. According to the charity Action Aid, nine million girls of primary school age will never start school or set foot in a classroom across the globe. This compares to just three million boys. According to the Gender Division Permanent Secretary, Mainga Kabika; “Hichilema is focused on eradicating child marriages by the year 2030… Children who were being married off early can now go back to school.”
In order to protect the most vulnerable in Zambian society, and to achieve the goal of becoming a middle-income country, the budget includes significant social protection measures. Social Cash Transfer and Food Security Pack Programmes are to increase both the number of recipients and the transfer value. The Social Cash Transfer Programme is set to be increased by 19.8%. The Food Security Pack’s allocation has been increased by K.1.2 billion. This food security programme is designed to support the vulnerable but viable farmers that represent a crucial pillar of the Zambian economy.
50% of Zambia’s land is arable but at present only 20% is farmed. As Zambia’s young population grows up, properly, but responsibly, realising the potential of this land will be vital not just to food security but also to economic growth. As part of the African Continental Free Trade Area (AfCFTA) Zambian acts as the breadbasket of southern Africa. As such, Zambia’s neighbours across its land borders represent an estimated market of 320 million people.
Image via Twitter @HHichilema
Mining and Technical Exhibitions Expo Begins in Zambia
Foreign Brief, September 26, 2022
Zambia’s Mining and Technical Exhibition (MTE) begins today.
The MTE event takes place throughout Sub-Saharan Africa with the goal of introducing innovative technologies and developments in the mining sector to Zambia’s top mining companies like Konkola Copper Mines. Zambia is home to some of the world’s largest copper deposits and has smaller but exploitable cobalt, manganese and nickel deposits. Copper accounts for 60% of Zambia’s total exports. For years, investment has been hindered by inconsistent policies and unfavorable political conditions.
Image via First Quantum Minerals
First Quantum Minerals, a Canadian mining company, recently announced a $1.2-billion-dollar investment in Zambia’s Kansanshi copper mine, the largest such mine in Africa, indicating a trend towards more investment in Africa’s “Copper Belt” between Zambia and The Democratic Republic of Congo. With copper demand expected to grow as the renewable energy revolution continues and traditional producers, such as Chile and Peru facing greater political and regulatory uncertainty Zambia may come to the forefront as a viable source of copper.
Today’s exhibition where suppliers will showcase key products and innovative technologies that will be important for ramping up Zambia’s productive capacity by reducing costs to support major increases in output to support growing demand for copper cables and wires needed for electric vehicles, solar panels and other products for a global green economy transition.
Zambia’s Kwacha is the World’s Best Performing Currency Against the Dollar
Quartz Africa, September 4, 2022
Most African countries have been unable to tame rising inflation but Zambia has managed to reduce the inflation rate from 24.4% in Aug. 2021 to 9.7% in June.
Hi Quartz Africa readers,
When I was growing up, American action movies often featured one type of super-villain: A bulky, heavily-accented gruff Russian. At that age, I was not politically aware enough to understand why the hero had to be American and the villain Russian, and I never questioned it much.
As an adult now, I see how global geopolitics comes to play even in pop-culture. In every story, there has to be a hero, a savior of humanity, and the villain has to be someone who threatens these global ideals of democracy, peace and order. It’s even worse if the villain is trying to usurp the hero by almost landing the first man on the moon or having access to even more nuclear weapons.
This past week, the last leader of the Soviet Union Mikhail Gorbachev, died. As an African, the USSR’s legacy on the continent and the fall of the Soviet Union is complicated, as it brought both advantages and disadvantages. The steps Gorbachev took in dismantling the Soviet Union laid seeds for independence in certain parts of southern Africa, including eventually leading to the end of apartheid in South Africa.
John Wessels/AFP Via Getty Images
Since the fall of the Soviet Union, new narratives have emerged in Hollywood and elsewhere. One superpower is pitted against the other, with Africans expected to pick good from evil. But expecting a clear cut division between good and evil is a fallacy and a failure to understand history and the intricacies at play in every village, town, country and region. One person’s hero is another’s villain—Gorbachev too was more revered abroad than at home.
Your hero might be behind the assassination of DRC’s Patrice Lumumba, one of Africa’s greatest post-colonial heroes. Your hero might have destabilized Mali, laying the seeds for insurgency in the Sahel. Your heroes might have illegally over-fished with giant ships leading to the rise of piracy in the horn of Africa.
African governments’ apparent hesitancy to pick sides on certain geopolitical issues is all the proof needed that things are not always so black and white. Sometimes, it’s complicated. This pseudo-neutrality should be seen as a sign of wisdom from those who know that yesterday’s foes might be tomorrow’s friends. —Ciku Kimeria, Africa editor.
Featured Image: Lukasz Radziejewski Via Unsplash
IMF Approves USD 1.3 Billion Extended Credit Facility for Zambia
Zambia Invest, September 1, 2022
The Executive Board of the International Monetary Fund (IMF) just approved a 38-month arrangement under the Extended Credit Facility (ECF) in an amount equivalent to SDR 978.2 million (around US$1.3 billion, or 100% of quota).
The program is based on the authorities’ homegrown economic reform plan that aims to restore macroeconomic stability and foster higher, more resilient, and more inclusive growth.
The IMF explains that Zambia is dealing with the legacy of years of economic mismanagement, with an especially inefficient public investment drive.
Growth has been too low to reduce rates of poverty, inequality, and malnutrition which are amongst the highest in the world.
Zambia is in debt distress and needs a deep and comprehensive debt treatment to place public debt on a sustainable path.
The ECF-supported program will help reestablish sustainability through fiscal adjustment and debt restructuring, create fiscal space for social spending to cushion the burden of adjustment, and strengthen economic governance, including by improving public financial management.
The program will also catalyze much-needed financial support from development partners.
IMF Governors Meeting in 2019, Image via Flickr
The Executive Board’s decision will enable an immediate disbursement equivalent to SDR 139.88 million (about USD 185 million).
Following the Executive Board discussion on Zambia, Ms. Kristalina Georgieva, IMF’s Managing Director, issued the following statement: “Zambia continues to face profound challenges reflected in high poverty levels and low growth. The ECF-supported program aims to restore macroeconomic stability and foster higher, more resilient, and more inclusive growth.”
“Restoring fiscal sustainability will require a sustained fiscal adjustment. The authorities’ adjustment plans appropriately focus on eliminating regressive fuel subsidies, enhancing the efficiency of the agricultural subsidy program, and reducing inefficient public investment. Domestic revenue mobilization also needs to support the medium-term adjustment. The adjustment creates fiscal space for increased social spending to cushion the burden on the most vulnerable, help reduce poverty, and invest in Zambia’s people. The ongoing expansion of the authorities’ Social Cash Transfer program and their plans to increase public spending on health and education are particularly welcome. Together with the fiscal adjustment, Zambia needs a deep and comprehensive debt treatment under the G20 Common Framework to restore debt sustainability.”
“A substantial strengthening of fiscal controls is needed to support the fiscal adjustment, as well as address governance and corruption vulnerabilities. Public investment management and procurement practices need to be strengthened to ensure transparency and the efficient use of scarce resources. It will also be important to bolster the framework for monitoring fiscal risks, particularly those related to large state-owned enterprises.”
“The Bank of Zambia should continue its efforts to reduce inflation and preserve financial stability. International reserves should be replenished as conditions allow and the exchange rate should continue to reflect market conditions. Addressing high NPL levels and ensuring adequate capital buffers will also be important.”
For this part, Zambia’s President Hakainde Hichilema wrote on his Twitter account: “We are delighted that the IMF shares our vision for a prosperous Zambia, with strong socio-economic growth at the heart of our development plans. Thanks to the people of Zambia for believing in us. There is still much more to be done.”
Zambia’s Inflation Down to 9.8% in August 2022
Zambia Invest, September 1, 2023
Zambia’s Annual inflation for August 2022 decreased to 9.8% from 9.9% recorded in July 2022. This means that on average, prices of goods and services increased by 9.8% between August 2021 and August 2022.
Annual Food and Non-Food Inflation
Annual food inflation for August 2022 was recorded at 11.3% from 12.0% in July 2022.
This development was mainly attributed to price movements in food items such as meats (brisket, mixed cut, t-bone, beef sausages, mince meat, ox-liver, chicken live); fruits (oranges, lemons, bananas, apples, watermelons, pineapples, avocadoes), rice local and eggs.
The annual non-food inflation for August 2022 was recorded at 7.8% from 7.2% in July 2022. This outturn was mainly on account of price movements in non-food items due to the base effect in Transport.
Annual Inflation Rate by CPI Main Groups
The Annual Inflation Rate in August 2022 increased for:
Transport: the CPI for the Transport main group increased by 13.6% between August 2021 and August 2022. This was higher than the 7.3% in the same month of 2021 and 4.3% recorded in July 2022.
Communication: the CPI for the Communication main group increased by 2.1% between August 2021 and August 2022. This was lower than 3.8% in the same month of 2021 but above 1.9% recorded in July 2022.
The Annual Rate of Inflation for August 2022 decreased for:
Food and Non-alcoholic Beverages: the index for the Food and Non-alcoholic beverages main group increased by 11.3% between August 2021 and August 2022. This was lower than 31.6% in the same month of 2021 as well as the 12.0% recorded in July 2022.
Alcoholic Beverages and Tobacco: the index for the Alcoholic Beverages and Tobacco main group increased by 7.0% between August 2021 and August 2022. This was lower than the 13.3% in the same month of 2021 and 8.1% recorded in July 2022.
Clothing and Footwear: the CPI for Clothing and Footwear increased by 9.1% between August 2021 and August. This was lower than 16.1% in the same month of 2021 and 11.5% recorded in July 2022.
Housing, Water, Electricity, Gas, & Other Fuels: the CPI for the Housing, Water, Electricity, Gas & Other Fuels group increased by 5.4% between August 2021 and August 2022. This was lower than the 22.7% recorded in the same month of 2021 as well as 6.2% recorded in July 2022.
Furnishing, Household Equipment and Household Maintenance: the CPI for the Furnishing, Household Equipment and Household Maintenance main group increased by 6.0% between August 2021 and August 2022. This was lower than 21.2% recorded in the same month of 2021 and below 7.1% recorded in July 2022.
Health: the index for the Health main group increased by 4.8% between August 2021 and August. This was lower than 12.3% in the same month of 2021 as well as 5.1% recorded in July 2022.
Recreation and Culture: the CPI for the Recreation and Culture main group increased by 12.3% between August 2021 and August 2022. This was lower than the 15.9% in the same month of 2021 and 13.7% recorded in July 2022.
Restaurant & Hotel: the index for the Restaurant & Hotel main group increased by 6.8% between August 2021 and August 2022. This was lower than the 14.1% in the same month of 2021 as well as the 8.0% recorded in July 2022.
Miscellaneous Goods and Services: the CPI for the Miscellaneous Goods and Services main group increased by 8.8% between August 2021 and August 2022. This was lower than 15.4% in the same month of 2021 and below the 9.9% recorded in July 2022.
The Annual Rate of Inflation for July 2022 remained the same for:
Education: the CPI for the Education main group increased by 2.3% between August 2021 and August. This was lower than 5.6% in the same month of 2021 and the same as that recorded in July 2022.
Contribution of CPI Main Groups to Overall Inflation Rate of 9.8%
Of the overall 9.8% annual inflation, Food and Non-alcoholic beverages group contributed 6.4% points, while Non-food items accounted for 3.4% points.
Of the 3.4% points, Transport contributed the highest at 0.9% points, followed by Clothing and footwear& Housing, water, electricity, gas and other fuels at 0.7% points each; Furnishing Household Clothing and footwear equipment and routine household maintenance groups contributed 0.4% points. The rest of the Non-Food group accounted for the remaining 0.7% points.
August 2022 Overall Monthly Inflation
Overall monthly inflation for August 2022 was recorded at 0.3% compared with 0.4% the previous month. This outturn was mainly attributed to price decreases in some non-food items. Monthly food inflation for August 2022 was 0.4%, an increase of 0.1% points from 0.3% in July 2022. This development was mainly attributed to the general decrease in prices of items such as Vegetables (Rape, .Sweet potato leaves, lumanda, Cabbage, Tomatoes), Dried bream. Monthly non-food inflation for August 2022 was recorded at 0.1% from 0.7% in July 2022. This outturn was mainly attributed to a slow down in price increases of non-food items such as Fuels & lubricants (Diesel, Petrol, Engine oil) and; Passenger transport by road (Minibus fare, Coach fare).
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Tanzania and Zambia Agree to Upgrade Tazara Railway
Connection between the two countries will be rebuilt to standard gauge to further economic development.
Photo Credit: Richard Stupart/Wikipedia Commons
TANZANIA and Zambia have agreed to upgrade the Tazara railway that connects the two countries as part of measures to improve bilateral ties.
The 1160km cross-border railway linking Kapiri-Mposhi in Zambia with the port of Dar es Salaam in Tanzania will now be upgraded to standard gauge through a partnership with the private sector and development partners.
Tanzania’s president, Ms Samia Suluhu Hassan, says the 1067mm gauge, single-track Tazara line does not deliver what is expected of it and an upgrade is needed to open up new business opportunities along the route.
“In today’s world, railway is standard gauge,” says Hassan. “So through a Public-Private Partnership (PPP) we have agreed to come up with a project to improve the Tazara railway to that level.”
Tanzania is also constructing a 1219km standard-gauge line from Dar es Salaam to the city of Mwanza on the southern shores of Lake Victoria.
Known as the Tanzania Standard Gauge Railway, the system is being designed to link Tanzania with Rwanda and Uganda, and continuing to Burundi and the Democratic Republic of Congo. The work is included in the East African Railway Master Plan aimed at rejuvenating the region’s railways and increasing efficiency and speed while lowering transport of freight costs and furthering economic development. The railway will use electric power and transport of goods to Uganda from Mwanza will be by lake ferries.
As of April 2022, the 300km Phase 1 from Dar es Salaam to Morogoro had been completed while work on the 426km Phase 2 Morogoro – Makutopora, 294km Phase 3 Lot 1 Makutupora – Tabora, and 341km Phase 5 Isaka - Mwanza sections was in progress. Phase 5 is being built by China Civil Engineering Construction (CCEC) and China Railway Construction Company (CRCC).
In July 2022 Tanzania Railway Corporation (TRC) signed a $US 900.1m contract with Yapi Merkezi for the construction of the 130km Phase 3 Lot 2 Tabora – Isaka section, along with its 35km of branches, the same company having previously won a $US 1.9bn contract for Phase 3 Lot 1.
TRC has also signed a contract with Korean national operator Korail to provide training In rail construction and operations following the line’s opening.
The first locomotives being used for testing of the electrified Phase 1 of the Tanzania SGR are former class 1014 locomotives purchased from Austrian Federal Railways (ÖBB).
Image: Marissa Beletti via Unsplash
Zambia, India Ink Deal For Medical Facility
ZNBC, July 20, 2022
Zanis-Zambia has clinched a deal with the Indian government for the establishment of a state of art medical facility.
The medical facility to be set up in Zambia is aimed at providing quality health care to the people who often seek specialised medical treatment abroad.
Vice President MUTALE NALUMANGO and Apollo Hospital management made the Agreement after engaging in discussions of mutual interest in New Delhi, India.
Mrs. NALUMANGO said government is prioritizing health, due to its importance to the attainment of the country’s development goals.
She noted that many patients from across the world including Zambia have benefited from the services of Apollo Hospitals.
The Vice President said the establishment of Apollo Hospital in Zambia will bring quality specialized health care services closer to the many citizens.
Mrs. NALUMANGO pointed out that due to Zambia’s unique location in the region, patients from neighbouring countries will immensely benefit from the health care services.
And Apollo Hospital Vice President for Corporate Development HARINDER SIDHU noted that his team remains committed to provide appropriate quality health care services in order to help people access improved health care services.
Dr. SIDHU said his hospital is determined to continue collaborating with countries like Zambia in the provision of health care services.
And Director of Medical Services SHANTI SAUSAL added that the hospital has a team of highly trained staff that have performed groundbreaking surgeries and helped save lives of many patients.
The Vice President later toured the medical facility’s outpatient and inpatient departments along with the high tech diagnostic equipment.
During the tour, Mrs. NALUMANGO visited and checked upon Zambians at the hospital seeking various medical care and other services.
Apollo Hospital in India has 74 hospitals under its brand with over 4,500 pharmacies, a wide range of medical schools, nursing care establishments and offers basic medical care to complex problems.
USAID Commits $60 Million Towards Addressing Zambia’s Economic Challenges
Lusaka Times, June 30, 2022
The United States government has committed to contribute over 60 million United Stated dollars to Zambia to help address some of the economic challenges the country is facing.
USAID Administrator, Samantha Power said 9 million United States Dollars will go towards addressing the immediate effects of high fuel prices and food insecurity in the country.
Ms Power noted that the 30 million United States Dollars will go towards boosting trade and investment in the country to attract foreign markets and the other 20 million United States Dollars will go towards Small and Medium Enterprise (SMEs).
She added that the other 4 million United States Dollars will go towards addressing some of the legal reforms arising from integrity and corruption among other things.
The Administrator announced this investment yesterday when she paid a courtesy call on President Hakainde Hichilema at State House yesterday.
Ms Power added that the US government is committed to supporting Zambia’s democratic advances by addressing issues of economic humanitarian and geopolitical issues.
She however commended government for the excellent reform agenda of the country adding that the US government will continue to support Zambia so that the country can be reformed to become a better country.
Ms Power said 10 months ago, Zambia was filled with things to deal with corruption and high inflation rates adding that the world can see the commitment that the new government is doing to change the picture.
And President Hakainde Hichilema has thanked the United States government for the unwavering support that they have continued to give Zambia.
Mr Hichilema noted that the United States government has supported Zambia in almost all the sectors of the economy starting from education, health and water reticulation among others.
He said the funds that the US government has committed to give Zambia will go a long way in addresses some economic challenges.
The Head of State noted that the funds will help balance the economy and in turn market Zambia internationally.
Zambia’s Implementation of Economic Program is Impressive, IMF Says
Zambia Invest, June 20, 2022
Ms. Antoinette M. Sayeh, Deputy Managing Director of the International Monetary Fund (IMF), recently visit Zambia and issued a statement at its conclusion in which she praises the authorities’ efforts in restoring macroeconomic stability.
In her statement, she thanked Zambia’s President Hichilema, the Minister of Finance and National Planning Musokotwane, and other senior officials for their hospitality, and civil society organizations, parliamentarians, and the donor community for their engagement.
“I was happy to have the opportunity to hear about recent economic developments, including the impact of rising global commodity prices, and their implications for the economic outlook. I welcomed the sustained commitment of the authorities to the reform plans outlined in the context of the December 2021 staff-level agreement on an IMF-supported program. Zambia’s implementation to date of its homegrown economic program is impressive. This is a robust program that can achieve the authorities’ goals of restoring macroeconomic stability and laying the foundations for more resilient and inclusive growth,” she noted.
She also praised the authorities’ focus on greater investment in education and health and was pleased to hear that the execution of this spending is on track.
The statement concludes: “We (the IMF) are encouraged by the news that the official creditor committee will meet today to begin deliberations on Zambia’s request for a debt treatment under the G20 Common Framework. We urge creditors to provide financing assurances as soon as possible, as they are needed before staff can put forward Zambia’s program for consideration by the IMF Executive Board. This will allow Zambia to access Fund resources, and also unlock access to critical financing from other partners, to help boost its economic recovery.”
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