AfriLabs: The Annual Gathering Bringing Innovation to Zambia
As the Government of Zambia strives to transform Zambia’s digital and technological space, AfriLabs seeks to connect remarkable businesses in Zambia to an extraordinary network of supportive innovators across the continent.
AfriLabs is a networking organisation that have been supporting innovation on the continent since 2011. AfriLabs’ 2022 Annual Gathering was held this year in Zambia’s capital, Lusaka from in October. This year they celebrated “Intra-African Connectivity, Collaboration and Innovation” during an event billed as the largest convention of African innovation leaders on the continent.
400 visitors from 52 foreign nations, in addition to 3000 virtual participants, came together to celebrate technological innovation in Zambia and Africa.
One AfriLabs member in particular is targeting digital transformation in Zambia. Ehub Zambia act as a technological centre who aim to improve digital competence for people from marginalised communities. Specifically, they aim to teach coding for those in peri-urban and rural communities up to a job entry level ability.
Ehub Zambia believe this technology competence is important not just for the youth’s future, but for the country as a whole. Improving digital skills facilitates the increased integration of Zambia into global financial markets, while increased access to the internet allows SMEs to operate take advantage of international export opportunities. By upskilling these peri-urban and rural communities Ehub Zambia hope to diversify the job opportunities available to those in often marginalised communities.
The new Ministry of Technology and Science is dedicated to transforming the digital economy. They work closely with private sector partners to improve access to and utilisation of digital technologies.
For example, at the end of November the ministry celebrated the establishment of the first 5G network in the country. Felix Mutati, the minister for technology and science, emphasised this as a crucial step in the country’s digital transformation agenda.
Speaking at the network’s launch, the Minister also told the press that the Hichilema administration is also working on a new start-up bill to improve access to funding for new enterprises. This will be welcome news for Madica – another impressive attendee of this year’s Lusaka AfriLabs gathering.
Madica, short for “Made in Africa”, is a young pre-seed investment programme aiming to support under-funded African entrepreneurs through both direct financial investment and, in partnership with companies such as Ehub Zambia and the government of Zambia, is hoping to upskill and increase the network of poorly connected African entrepreneurs
Over the next three years Madica seek to support 25 to 30 African entrepreneurs with up to $200,000 in funding and significant programmatic support. They aim to support bright ideas with little infrastructural support. This is why $6 million dollars of their funding is being held back for programmatic support. Through hands-on support from their team of mentors, plus connections to continent-wide networks through AfriLabs, their goal is to see African start-ups flourish.
Emmanuel Adeboye, head of Madica, explains that although he believes “Africans have an unmatched entrepreneurial spirit”, they’re disadvantaged in the start-up space. African CEOs raise on average 28% less funding than their foreign educated counterparts, whilst funding in Africa is disproportionately swayed towards male CEOs.
“We hope that Madica can help change the narrative around African start-ups – lower the perception of risk, attract more capital, inspire more founders, and garner more media attention”, commented one Madica executive.
Since 2021, Zambia has received an extraordinary amount of investment in order to stimulate its economy. For example, in Q3 of this year, Zambia received $1.1 billion in future investment pledges expected to create over 8,000 jobs. However, much of this funding has come from abroad.
Madica wish to foster the “innate ability of Africa to build Africa” through supportive pan-African networks and investment programmes. Speaking ahead of the conference, Mutatu expressed his excitement at the opportunity “for Zambia to show more of its potential as a leader in entrepreneurship and innovation in the Southern African region.” He spoke in agreement with the directors of AfriLabs and Madica in saying that “if we are to make progress as an African continent, the doors must be open to each other.”
With the government of Zambia seeking to foster partnerships with the private sector in order to accelerate the nation’s digital transformation, and organisations such as AfriLabs actively enhancing connectivity and engendering rapid sector growth, now is a decisive and opportune time to invest in the nation’s potential.
First Quantum to pay ZCCM-IH in revenue royalty following Zambia tax change
FIRST Quantum Minerals has agreed to convert dividends from its Zambian copper mine Kansanshi to a revenue royalty, the Canadian firm said today.
The agreement follows fiscal changes implemented by Zambian president Hakainde Hichilema shortly after his election in 2021 in which royalties were made tax deductible.
In terms of the agreement, Zambia’s government-controlled ZCCM-IH will receive 3.1% in a revenue royalty from the mine which is forecast to produce between 140,000 and 150,000 tons for the financial year ended December 31.
First Quantum said ZCCM-IH would continue to be represented on the Kansanshi Mining board to “ensure full visibility and transparency in respect to KMP’s future operations”.
“We are pleased to enter into this new arrangement for the benefits flowing from the Kansanshi mine,” said Tristan Pascall, CEO of First Quantum in a statement today.
The royalty-for-dividends agreement comes ahead of the proposed $1.25bn expansion of Solwezi section, known as the S3 project, at Kansanshi. This was announced in May when a total of $1.35bn in projects for Zambia were unveiled including the final $100m installment on its $250m Enterprise nickel project in Kalumbila.
“We look forward to continuing the collaborative relationship with ZCCM-IH as we advance KMP,” said Pascall.
The agreement with the ZCCM-IH is further evidence of a thawing of relations between First Quantum and the Zambian government following Hichilema’s election. Two months after his election he reformed the country’s tax regulations in its national budget.
The S3 project will extend the life of Kansanshi until the 2040s, and increase copper and gold production by around 25%. The project will also add approximately 800 permanent jobs, and a further 1,800 during the construction phase.
“Crucially, it also safeguards the futures of the 8,500 people already employed at Kansanshi,” First Quantum said earlier this year.
The Enterprise mine will produce some 10,000 tons of nickel concentrate a year. According to First Quantum it will make Zambia a “pre-eminent nickel producer” supplying manufacturers of batteries for electric vehicles. The mine is expected to be operational within 12 months’ time and employ about 700 full time staff.
This article originally appeared in Miningmx
Celebrating 25 Years of Chinese Banking in Zambia
Last Friday (November 25), the Bank of China celebrated 25 years of banking in Zambia. At a special event held in the country’s capital, Lusaka, the bank’s Managing Director, Wang Qi, the Chinese Ambassador to Zambia, Du Xiaohui, the Bank of Zambia’s Deputy Governor, Francis Chipomo, and the Minister of Finance and National Planning, Situmbeko Musokotwane came together to celebrate the continuing partnership between the two countries.
Mr Qi expressed his pride at the Bank’s long service to the people of Zambia and went on to pledge the Bank’s ardent support to the country’s economic development.
“The fact that a Chinese financial institution has taken root, grown and thrived in Zambia shows that the Chinese government and Chinese financial institutions have been bullish on Zambia’s good business environment and broad development opportunities,” commented the Chinese Ambassador, Du Xiaohui.
The Bank of China estimate they have provided $3 billion in economic development stimulus and contributed $44 million in tax revenue to Zambia.
Partnerships between the two countries continue to grow. More than 60 Zambian companies have established connections with Chinese partners since the arrival of the Bank of Zambia. To foster these ties, more than 40 Zambian companies participated in this year’s China International Import Exposition.
The exposition, which is held yearly in Shanghai, is estimated 150,000 domestic and foreign professional purchasers attend the event. As of 2018, bilateral trade between the two countries topped $5 billion, 80% of which is Zambian exports to China. Much of this trade is focused on the country’s copper production. Despite already being the second largest copper producer in Africa, President Hichilema has committed to growing the industry further, doubling production between 2026 and 2032 to 3 million metric tonnes.
The two countries are also cooperating in the technology sector. Last week, it was announced telecommunications firm MTN, in partnership with Chinese company Huawei, would be launching a 5G network in Zambia. The network is hoped to service 65% of the populations of Lusaka, Kitwe and Ndola in addition to parts of Chingola, Solwezi and Kalumbila. The government is hoping to reach 100% internet connectivity by 2024.
Mr Qi praised the Bank of China as a bridge that facilitates exchanges between the two countries. Zambia was, in fact, the first African nation the Bank of China established itself in and since then the nation has become China’s second largest trade partner on the continent.
Musokotwane, Minister of Finance and National Planning, spoke at the celebration and praised the Bank for its role in support economic development on the continent. He added that the New Dawn administration hopes to do everything in its power to strengthen its relationship with China.
The government is attempting a rapid economic transformation to become a middle income country by 2030, just a decade after former president Lungu’s mismanagement sent the country into default. Noting China’s economic explosion in the late 20th century, Musokotwane commented that he could learn many lessons from China’s rapid development.
Speaking on Wednesday, Musokotwane confirmed the two countries were in “active engagement” over the restructuring of Zambia’s debts to Chinese creditors. Renegotiations are ongoing, but with the Bank of China’s presence and the impressive foreign investment pledges recently reported by the Zambia Development Agency, it is hoped the China-Zambia relationship will grow and Zambia will take a more prominent place on the global economic stage in the years to come.
Thinking of investing in Zambia’s banking sector? Sign up for our investor briefing or get in touch at info@zambiaisback.com
Joint Statement Between Costa Rica, the Netherlands, the Republic of Korea, the Republic of Zambia, and the United States on the Announcement of the Second Summit for Democracy
The White House Press Office, November 30, 2022
Today, we the governments of Costa Rica, the Netherlands, the Republic of Korea, the Republic of Zambia, and the United States are pleased to announce that our leaders will co-host the second Summit for Democracy on March 29-30, 2023.
Building on the first Summit for Democracy held in December 2021, this gathering will demonstrate how democracies deliver for their citizens and are best equipped to address the world’s most pressing challenges.
We are living through an era defined by challenges to accountable and transparent governance. From wars of aggression to changes in climate, societal mistrust and technological transformation, it could not be clearer that all around the world, democracy needs champions at all levels. Together with other invitees to the second Summit, we look forward to taking up this call, and demonstrating how transparent, accountable governance remains the best way to deliver lasting prosperity, peace, and justice.
The second Summit for Democracy will assemble world leaders in a virtual, plenary format, followed by hybrid gatherings in each of our countries with representatives from government, civil society, and the private sector. Together, we will showcase progress made by Summit partners on commitments during the Year of Action, and will reaffirm the vitality of the democratic model and collective action to meet the unprecedented challenges of our time.
We look forward to another successful Summit, and accelerating concrete action toward democratic renewal.
USAID Launch Business and Trade Development Projects in Zambia
The Zambian Minister of Finance and the U.S. Ambassador to Zambia have announced the launch of two economic development projects known as the USAID Business Enabling Project and the USAID Trade Boost.
The $24 million dollar (K233 million) Business Enabling Project is being funded by the U.S. government. According to a statement by USAID, “the project will support the development of an enabling environment that incentivises investments in trade, agriculture, energy, eco-tourism, and sustainable natural resource management.” USAID wish to make small improvements to business owners’ perceptions of the regulatory and investment environment in the country. The programme also hopes to strengthen policy-making alongside the Zambian government through linkages with select civil society organisations in order to promote economically viable and gender-balanced rural enterprises.
This project will work alongside existing government projects to strengthen smallholder farmers. In September, the government confirmed the reform of their agricultural support into the new Comprehensive Agricultural Support Programme. From 2023 the Zambian government is aiming to increase the number of extension support officers, extend the reach of irrigation channels, and facilitate greater access to finance. The Business Enabling Project will support these efforts.
The USAID Trade Boost is set to invest $30 million dollars (K500 million) through the Prosper Africa ‘Africa Trade and Investment Programme’. The aim of the programme is to boost trade and investment through climate-friendly economic approaches. Prosper Africa is a U.S. Government initiative to bring U.S. companies into African markets – the Boost will prioritise co-investment with the private sector to produce inclusive growth. Through the Public-Private Dialogue Forum, the Zambian government hope to encourage structured, participatory, and inclusive public-private sector cooperation in order to stimulate the Zambian economy with the goal of reaching middle-income status by 2030.
U.S. Ambassador Michael Gonzales told attendees at the launch event that by making it easier to do business in Zambia “these projects will help Zambian businesses to produce more, create jobs, and provide a broader variety of healthy food options in markets.”
Zambia is actively seeking cooperative partnerships with international organisations and civil society groups. Indeed, this week a delegation from Zambia met with representatives in Berlin to discuss the future of development cooperation between Zambia and Germany. The German delegation spoke positively about President Hichilema’s attempts to improve accountability and transparency in the country, two vital aspects of a strong investor climate.
It is hoped the U.S.-led projects will boost agricultural production and exports within Zambia in order to both alleviate the food crises in neighbouring countries, brought about by Russia’s invasion of Ukraine, and stimulate Zambia’s economy as President Hichilema and his administration continue to strive to meet the goals of the Eighth National Development Plan. USAID is hoping for the projects, in conjunction with existing programmes, to create an economic environment in Zambia capable of addressing problems and generating growth across agriculture, clean energy, and eco-tourism whilst creating equitable opportunities for women and youth through increased access to capital.
Zambia Economic Growth Forum 2022
International Growth Centre, November 28, 2022
The International Growth Centre (IGC) hosts the Zambia Economic Growth Forum 2022 (EGF) in partnership with the Government of Zambia by convening senior political and departmental leadership, researchers, and development partners to discuss the barriers to economic growth, identify opportunities for reform, and encourage research-policy collaboration.
His Excellency President Hakainde Hichilema delivers the keynote. IGC also invites ministers, senior departmental leadership, diplomats, and members of civil society to join the conversation. Partners from outside of Zambia, including Ethiopia and Kenya, also join to share cross-country experiences in key areas.
The EGF also aligns with the re-establishment of IGC’s resident country program in Zambia.
Please download the programme here for more information.
Zambia Attracts 1.1 bln USD Investment Pledges in Q3
Xinhua, November 1, 2022
LUSAKA, Oct. 31 (Xinhua) -- Zambia recorded 1.1 billion U.S. dollars worth of investment pledges in the third quarter of 2022 on account of a stable macroeconomic environment, its investment agency said on Monday.
The Zambia Development Agency (ZDA) said the pledges recorded were an increase compared to 631 million dollars worth of investment recorded during the same period last year.
The investments were expected to create about 8,307 jobs.
Albert Halwampa, the acting director-general of the ZDA, told reporters during a briefing that the manufacturing sector had the highest investment pledges recorded of 396 million dollars, while other pledged investments were in energy, construction, transport and services, among others.
"We are at a stage where investor confidence is at its highest level because of macroeconomic stability. Zambia has become stable in terms of macroeconomic fundamentals," he said.
‘ZAMBIA IS BACK’ INVESTMENT PROMOTION CAMPAIGN LAUNCHES
The new initiative seeks to promote and facilitate additional investment into Zambia, which has introduced a raft of pro-business measures and incentives since the election of President Hakainde Hichilema in August 2021.
Lusaka, 31 October 2022 - The ‘Zambia is Back’ campaign has officially launched in support of Government efforts to market the country to investors. The campaign aims to attract businesses interested in priority sectors, which are expected to drive economic growth and job creation under the New Dawn Administration.
Through a combination of digital platforms, in-person engagements and investor briefings the campaign seeks to inform investors about recent changes in Zambia’s business environment and champion its unique advantages.
Among the industries to be prioritised are agriculture, manufacturing, mining, ICT and energy.
Speaking on the launch ‘Zambia is Back’ spokesperson Choolwe Chibomba said, “We all know that Zambia has a lot to offer in terms of natural resources; a young, driven workforce; political stability and preferential trade ties. Through the Zambia is Back campaign, we will work to showcase the best of what our country has to offer, as well as provide practical insights and directions on how to invest in the country.”
The ‘Zambia is Back’ campaign is the latest initiative from the New Dawn government to drive economic growth within the country. Commenting on the launch of the campaign, Trade Minister Chipoka Mulenga said the government was delighted with efforts to promote investment in Zambia.
“This campaign is a key pillar in our efforts to restore Zambia’s economic reputation and channel investment into productive sectors that can deliver mutual benefits for businesses and citizens. Ensuring that Zambia has an attractive and competitive environment for business is essential for delivering on our potential as a nation and ensuring that citizens have job opportunities and better living standards.”
Recent pro-investment measures introduced by the government include revisions to the mining royalty rate regime, reform of support to the agriculture sector and targeted tax concessions in manufacturing, as well as waived visa fees from various countries.
More information on the campaign is available at zambiaisback.com. You can follow the campaign on social media: Twitter (@ZambiaIsBack), Facebook (@zambiaisback), and Instagram (zambia_isback).
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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