Invest Africa Set For Zambia Mission
By Hannock Kasama
London based leading business and investment platform, Invest Africa, is set to undertake its fourth investor mission to Zambia in March next year.
The company which also operates in Johannesburg, New York, Dubai and Geneva provide its members with unique information and exposure to business opportunities.
Invest Africa Company Chief Executive Officer Karen Taylor says Zambia is ripe for investments especially with the favorable conditions provided by President Hakainde Hichilema.
Ms. Taylor called on the private sector to give Zambia their maximum support as President Hichilema has provided them with the reforms they have been waiting for.
She made the announcement during a panel discussion in London on the topic ‘Industrialisation in Africa: Seizing Opportunities in Global Value Chains.’
This is according to a statement released to ZNBC News in Luska by First Secretary at Zambia’s Embassy in London, Speedwel Mupuchi.
This article originally appeared in ZNBC
Ethereum Founder Energised by Zambian FinTech Take-Off
Vitalik Buterin, co-founder of Ethereum, is backing a bright future for cryptocurrencies and FinTech in Zambia. Having engaged with President Hichilema via virtual meetings, the founder of the world’s second largest cryptocurrency has expressed his support for Zambia’s digital transformation.
Speaking after a visit to the country in 2019 Buterin appeared excited by the future prospects for the country. “I was impressed by everyone’s willingness to go and do big things,” he said.
Start-up founders from Zambia and around the world have been consulting with the government since February. The aim is to improve the national regulatory and business environment, in conjunction with the private sector, to attract more tech firms and capital.
Mwiya Musokotwane, Founder and CEO of Thebe Investment Management and the son of Zambia’s Finance Minister, is one of those driving the project and insists policy must “live up to people’s expectations” or risk driving away investment.
It is not just Buterin who is excited by the Zambian market. Nigerian payments firm Flutterwave Inc., valued at more than $3 billion dollars, have indicated its interest in Zambia as a potential regional tech hub. Zimbabwean tech investor Perseus Mlambo got in at the ground floor of the Zambian market, launching the payments platform Zazu Africa Limited in 2015. Zazu seeks to improve transparency and accessibility across online financial services through its platform.
At present 75% of Zambia’s export earnings come from copper sales. Although the mining industry is a crucial driver for Zambia’s present economic growth, attempts are being made to dramatically diversify the country’s economy.
One of President Hichilema’s first acts in office was to set up the newly minted Ministry of Technology and Science. The creation of this ministry is intended to signal the future importance of the sector and coordinate a favourable policy environment. The ministry’s founding came just before the launch of the National Skills Youth Empowerment Programme. Digital competence is viewed as a vital part of upskilling the country’s youth to best prepare them to engage in the global economy and in Zambia’s economic future.
This year also saw the launch of the government’s National Digital Transformation Strategy. Big Four accounting firm PwC praised the strategy and concurrent investment as a “key enabler” for economic transformation and job creation.
On Wednesday, speaking at the Innovation Africa Summit, hosted in Lusaka, President Hichilema emphasised the importance of technology to education. In a subsequent tweet the president emphasised: “As we invest in education, we must leverage on technology to make our jobs easier and help us achieve more with our resources. Resources can be stretched with the use of technology.”
The Zambian government is heeding Mlambo’s warning not to “miss the proverbial boat” by under-investing in the FinTech boom. Mlambo is encouraging the Zambian government to use the power of technology to aid its development plans. He has emphasised that “tech uplifts multitudes of people and the barrier to entry is very, very low.”
Indeed, the growth of digital financial services has been revelatory in many sub-Saharan African countries. Person to Person (P2P) digital payments systems facilitate the integration of those without formal bank accounts but with internet access. Despite turbulence in the cryptocurrency markets this year, small retail transfers of $1000 or less have actually increased on the continent. This is indicative of the high grassroots level uptake of the technology in Africa.
Rather than cryptocurrencies being bought as speculative investments - as is most common in Europe and North America - or funds being dominated by large firms, Africa’s crypto boom is being driven by a high proportion of grassroots adoption. The technology facilitates quicker and cheaper transfers than traditional systems. Further, while not a prime driver in Zambia owing to the kwacha’s strong international performance, crypto assets can provide an independent means of access to foreign exchanges and can serve as a hedge against currency volatility. In Zimbabwe, for example, where inflation is at 90%, cryptocurrencies have proved particularly useful for buying everyday goods.
This year Zambia held its first-ever Internal ICT Expo and Fintech Festival. With the African cryptocurrency market having grown 1200% between 2020 and 2021, and Zambia’s digital finance market set to reach 7.25 million users by 2027, this is an important time to unmask the power of technology.
Zambia’s Central Bank announced this year that the possibility of a Central Bank Digital Currency is being explored. With this and more in the future, it is no surprise that Ethereum sees a bright future for digital finance in Zambia.
Image: Vitalik Buterin via Chet Strange/Bloomberg
Thinking of investing in Zambia’s technology industry? Sign up for our investor briefing or get in touch at info@zambiaisback.com
Zambian Breweries: Bottling Success For Zambia
Since its founding in 1963 Zambian Breweries has been at the heart of the country’s beverage industry. The company is famous for its clear beers such as Mosi Lager, Castle, Carling Black Label, Eagle, Flying Fish and Castle Lite.
The brewery’s recent take-over by Belgian drinks giant AB InBev has allowed production to continue to grow. Combined with the New Dawn government’s pro-business stance, this allows Zambian Breweries to invest in supporting local businesses through backward-linking supply chains.
Zambian Breweries was originally formed in 1963 via a partnership between South African Breweries and Labatt Breweries of Canada. Following this, the company was nationalised in 1968, during which time it operated out of two production facilities in Lusaka and Ndola.
Later, during the privatisation programme initiated by the government in the 1990s, the brewery was once again privatised with its assets and liabilities split into two newly incorporated companies: Lusaka Breweries Limited and Northern Breweries. Lusaka Breweries then went on to become Zambian Breweries.
Photo: Zambian Breweries
Fast forward to 2016 and the company was bought by AB Inbev, becoming part of the company’s global initiative to “bring people together for a better world through our products, brands, and investment in our communities.”
AB Inbev is the world’s largest beer brewer by both volume and revenue. It operates more than 600 beer brands in 150 countries and employs more than 170,000 people throughout its operations. The company made $54.3 billion last year, having seen profits grow even during the pandemic. The company owns household names such as Stella Artois, Corona and Budweiser.
Earlier this year Zambian Breweries announced an $80 million capital investment to expand its Lusaka factory and create 5,000 jobs. The investment is set to target the supply side of the business: improving technical services, brewing and enhancement of their cellars.
Additionally, the investment will unlock further innovation opportunities in the industry. At the moment, 90% of the investment will be in high-tech equipment to make operations more sustainable. Specifically, the investment will include enlargements of the company’s agriculture out-grower schemes and offer procurement opportunities to local suppliers.
Further, it will also see the Mungwi Road factory double its production capacity over the next year, creating jobs and improving productivity to meet the company’s growing demand. Other upgrades include replacing the factory’s clean-in-place (CIP) equipment; installation of a more efficient boiler; and establishing a new milling plant.
Photo: Zambian Breweries
Michelle Kilplin, Zambia Country Director for AB InBev, praised the investment as a triple win for the community, government and company. She said, “This investment has been enabled by the pro-business and pro-investment climate being promoted by the government. We are encouraged by what we have seen so far and we as a business intend to be a big part of the economic recovery and growth of the Zambian market.”
Additionally, Albert Malunga, Lusaka plant manager, said the government had helped the company make the investment decision through its emphasis on sustainable business. He specified that the creation of the Ministry of Green Economy will help businesses to meet their green goals.
“Our response as a business is to prepare ourselves for the future by investing in new technologies which will be environmentally friendly and will help us care for the environment by reducing carbon emissions,” he said.
Zambian Breweries’ expansion is expected to have multiple positive knock-on effects for supply chains; benefiting retailers, transporters and suppliers. Moreover, government support packages - such as the 50% suspension of excise duty on clear beer and the decrease in excise duty on locally produced clear beer from 10% to 5% - has meant that more companies can now get involved in this growing industry.
Thinking of investing in Zambia’s agriculture industry? Sign up for our investor briefing or get in touch at info@zambiaisback.com
Yango: The Taxi Company Hailing Growth in Zambia
Yango, the ride-hailing service initially launched in Israel, has grown exponentially since its founding in December 2018. Operating in 600 cities across 17 countries, Yango launched in Zambia in early 2022.
Zambia is the fifth country in Africa, and the first in southern Africa, that Yango has launched in, with the company already present in Côte D’Ivoire, Ghana, Cameroon and Senegal. Upon its launch, General Manager for Yango in Africa Adeniyi Adebayo noted Zambia’s status as a “growing, actively developing economy”. With a 4% annual growth rate, and over half the country’s population under the age of 18, there is the potential for Yango’s market, and profits, to grow enormously in Zambia in the years to come.
In addition to offering a taxi service, Yango offers parcel delivery, rapid grocery delivery, and car-sharing options. What sets them aside from global competitors such as Uber is their collaborative approach, which includes partnering with local taxi companies.
By using AI-based navigation and request services, journey times are reduced for passengers; drivers waste less time between rides; and overall costs fall. Such technology can help the growth of small and medium -sized business throughout the city. Less time is wasted on a worker’s commute; taxi companies can schedule more business per day; and local food and parcel services see their products delivered more efficiently. The number of internet users in Zambia grew by 5.4% across 2021, and the government is attempting to accelerate this further through the National Digital Transformation Strategy. As online demand increases in Zambia, such efficiency driving technology may give Yango a crucial advantage over regional competitors.
Speaking to Business Insider, Adebayo explained how their service aims to co-operate with their partner firms holistically: “to replace their old-fashioned ways of doing business, which sometimes is at best Excel spreadsheets, we offer digital accounting and fleet management technology to improve the transparency and efficiency of operations.” This is also why the company offers more than 50 driver support specialists per city.
Government officials have welcomed the competition and innovation that Yango have brought to the market, with Minister of Transport Frank Tayali stating, “we see that its presence on the market benefits the creation of new job opportunities with local transport operators which partner with Yango.” Echoing the sentiments of Adebayo, the Minister spoke of the opportunities Yango provides to small and medium-sized businesses to grow and modernise.
The Minster concluded by assuring businesses that “the new regulation will not limit these opportunities.” Indeed, through the newly founded Public-Private Development Forum, the government is actively seeking to foster public-private cooperation in order to overcome critical sector specific constraints. Further, the administration is actively seeking to encourage foreign investment by hosting business summits and cutting taxes in an effort to stimulate the Zambian economy and reach middle-income status by 2030.
Yango has experienced enormous growth in Africa since its introduction to Côte D’Ivoire in 2018. The company has increased the number of riders in Africa seven times annually. The African market now represents 60% of the company’s Gross Merchandise Value (GMV). GMV is a measure of the total value of sales. Such a large share is indicative of the sheer demand for affordable, digitised ride-hailing technologies on the continent.
The company have introduced a number of additional features since they first launched in order to make the service more convenient and attractive to its customers. For example, ride-sharing has been introduced to allow for reduced prices with minimal additional time added to journeys. Passengers are also able to utilise safety features to let select contacts know they’re getting home safe or track their progress along a journey. In Cameroon, Yango have introduced driver safety figures including using AI algorithms to warn drivers about particularly dangerous areas of road, manoeuvres, and possible incidents on their journey.
Yango’s approach includes a focus on Corporate Social Responsibility. For example, during the height of the COVID pandemic, Yango provided free rides for doctors to visit patients and for people traveling to vaccination centers. The company has also recently spoken about its plans to support education with a focus on IT in the region.
Thinking of investing in Zambia’s technology industry? Sign up for our investor briefing or get in touch at info@zambiaisback.com
HH Holds Meeting With a Team From the Commonwealth
Lusaka Times, November 9, 2022
President HAKAINDE HICHILEMA has held a series of meetings during the ongoing COP27 in Sharm El Sheikh, Egypt. This morning, President HICHILEMA met with a team from the commonwealth to discuss matters of mutual interest.
Some of the key issues discussed include investment in renewable energy in order to create a viable energy mix for Zambia.
And Commonwealth Assistant Secretary General for Governance and Peace, Professor LUIS FRANCESCHI said Zambia is ripe for investments due to its peace and political stability.
President HICHILEMA later met officials from the International Finance Corporation- IFC, a wing of the World Bank group, where potential areas of investment were discussed among them Agriculture, manufacturing and mining.
The President emphasized Zambia’s strategic location saying the Country is well positioned to enhance trade and provide various goods and services for the region.
And IFC Managing Director MARKHTAR DIOP said following the fruitful conversation with President HICHILEMA, the group would undertake a feasibility assessment tour to Zambia soon with a view to explore more investment opportunities.
MEANWHILE, the International Chamber of Commerce -ICC- has awarded President HICHILEMA for playing a key role in Zambia meeting its Nationally Determined Contributions -NDCs.
President HICHILEMA received the Presidential Transport Champion Award of the year at an event presided over by Africa investor Chairman Awards Adjudication panel Chief Executive Officer HUBERT DANSO.
The President who received the award this afternoon at the ongoing cop27 conference in Sharm El sheikh, said the award came at the right time when the world was shifting to electric vehicle usage for transportation in order to protect the environment.
President HICHILEMA stressed that Zambia working with the Democratic Republic of Congo was ready to take part in the manufacturing of the electric vehicle batteries and that the headquarters of this Joint venture would be in NDOLA.
The President also took time this afternoon to visit the Zambian Pavilion at the ongoing Cop27 conference in Sharm El sheikh Egypt.
President HICHILEMA encouraged the Zambian delegates to not only participate in meetings but extract value, in order for Zambia to benefit from the ongoing negotiations.
The President also called on financial institutions attending the conference to create a favorable environment for potential investors in the green, clean and sustainable projects sectors to increase the number of players.
Global Entrepreneurship Week: Zambians Urged To Unleash Business Potential
Global Entrepreneurship Week (GEW) is due to take place next month between 5th and 11th of December.
Global Entrepreneurship Week (GEW) is due to take place next month between 5th and 11th of December.
The theme of this year’s GEW is ‘Transforming Zambia’s Natural, Mineral, and Cultural Resources Into Economic Growth and Wealth Creation For All Citizens.”
Earlier this week, Elias Mubanga, Minister of Small and Medium Enterprise Development, spoke at the event’s press briefing in Lusaka, where he urged entrepreneurs to unleash their business potential.
He stated that the new platform will support new business leaders to grow their businesses.
Further, the minister outlined that the week will aim to inspire people and communities to collaborate and share their knowledge and networks.
The week aims to offer plentiful opportunities and platforms for businesses and government exchanges, which include the encouragement of open conversations on entrepreneurship.
He said, “This event will provide opportunities for businesses and institutions involved in private sector development to freely interact with SMEs and their customers, and also showcase their goods, and services.”
Additionally, Edwin Zulu, the Managing Director of the Global Entrepreneurship Network, said that the week will draw focus to innovators and entrepreneurs allowing them to unleash their potential.
He specified that the event will be particularly useful to young entrepreneurs, helping them gain key skills.
He said, “We will have entrepreneurs from across the globe impart knowledge on entrepreneurship development in the minds of our Zambian young entrepreneurs on how they can actualise the economic potential that our mineral, agriculture sectors have.”
Barrick Gold Digs Deeper With Government Support
Mining giant Barrick Gold Corporation has recently announced record yields from its Lumwana copper mine thanks to a combination of the New Dawn government’s favourable business policies and strategic reinvestments made by the company to improve infrastructure at the mine, which is located 100 km west of Solwezi in the heart of Zambia’s Copperbelt.
Barrick Gold’s Lumwana Copper Mine. Source: Bloomberg.
Barrick Gold is now one of Zambia’s largest copper producers, employing more than 4,400 people, 99.3% of whom are Zambian nationals.
The company, which has invested more than $8.2 billion into the Zambian economy in the form royalties, taxes and local employment since 2011, has said it is looking to continue growing its Zambian operations.
Earlier this year CEO Mark Bristow described the mine as a “real success”; demonstrated last month when the company announced that copper production had climbed to roughly 334,000 tonnes since the start of the year - more than double the amount it produced in 2010.
The Lumwana mine was initially purchased in 2011, although Barrick considered selling it following a merger with Randgold Resources in 2019. Discussions fell through, however, and the mine was kept in the hands of the company.
Following the election of President Hakainde Hichilema and the New Dawn government, new business-friendly policies meant that the mine was able to ramp up production and now contributes 20% of Barrick Gold’s annual earnings.
Such policies include those which were announced in the 2023 Budget. Specifically, Mr Bristow expressed his contentment with the new mineral royalty tax regime, which is set to come into effect in January 2023.
The new mineral royalty tax regime, which is based on the price of copper, has been restructured to tax only the incremental value in price at different thresholds, as opposed to the aggregate value. The government will also allow miners to deduct royalties from income taxes which will resolve the issue of miners being taxed twice. This had previously been an issue as miners were taxed both on their incomes and through the royalty regime. Additionally, these changes will also smooth out the impact of price fluctuations in the market.
This economic stability in tax will ensure confidence in the market as well as encourage more cash flow back into the economy through reinvestments, something Barrick Gold have said will prove vital as they scale up production.
Workers at the Lumwana Copper Mine. Source: Barrick Gold.
Mr Bristow explained that the changes in mineral royalty tax will unlock more cash flow for the company that could be used as reinvestments into the mine.
Additionally, the New Dawn administration has reduced the property tax transfer on exploration rights. The tax has been reduced to 7.5% - 2.5% lower than the previous rate.
Earlier this month, during a media briefing at the mine, Mr Bristow described how Lumwana is more profitable than ever and is generating even higher yields, making it one of Zambia’s largest copper producers.
He also outlined plans to expand the mine by creating a ‘super pit’, stating that, “Promising drill results at the Lubwe satellite target are increasing our confidence that we will be able to develop a super pit and still keep producing at today’s rates and more.”
Further, he said, “Should the super pit prove viable, it will substantially extend the mine’s life with a two-year pre-feasibility study scheduled to commence in 2023.”
The new pit’s potential profitability has led to reports that Barrick could extend its operations at Lumwana from 2042 to 2060.
Aside from the high yields, Mr Bristow outlined that favorable business policies have also encouraged the firm to invest in Zambia. The CEO has repeatedly said that stable governance and pro-investment policies have been some of the key aspects that persuaded Barrick Gold to continue its operations in Zambia and to reinvest their earnings.
Mr Bristow stated that the New Dawn government is like, “a breath of fresh air.”
Zambia is set to become a hub for global mining investment. It is the 7th largest copper producer in the world, producing roughly 88,000 metric tonnes of the metal a year. It is also home to some of the highest grade copper mines in the world, making it a particularly attractive area for exploration and investment. On top of this, the country is home to substantial nickel, cobalt, and manganese deposits. Outside of metals the country also produces 20% of the world’s emeralds.
Thinking of investing in Zambia’s mining industry? Sign up for our investor briefing or get in touch at info@zambiaisback.com
Hakainde Hichilema Innovation Fund Launched
A partnership has been launched by the government of Zambia and Huawei has been launched with the goal of improving innovation in the country.
The fund, to be known as the Hakainde Hichilema Innovation Fund, will see 50 young Zambians receive scholarships from the Chinese telecommunications company to innovate in the ICT sector. It will be available to undergraduates on ICT or STEM courses.
The National Technology Business Centre will become a new innovation hub on government property in the nation’s capital. Each of the selected 50 must have a “viable idea ready for incubation” and at that point will receive $1,000 dollars to help them actualise their vision, explained Phil Li, Huawei Technologies Vice President for Southern Region. “We hope this will go a long way to help them work through their ideas and actual them for national ICT solutions,” he said.
Felix Mutati, Minister of Technology and Science, emphasised the agenda is part of the government’s aim to see a digital transformation in the country, as a subset of the broader goal of modernising the Zambian economy and reaching middle income status by 2030.
Minister for Education, Elijah Muchima, emphasised the country had a long way to go when it came to digital skills but that through technology development can be brought to all corners of Zambia.
“My ministry believes that through technology and digital systems we can take the learning resources to all parts of this country, including in areas where these resources are needed most, so that every learner in Zambia has the digital skills to unlock their potential,” he said.
President Hichilema Opens New Zambian-Owned Mine In Luapula
Yesterday, President Hakainde Hichilema opened the Luongo Musamu Manganese mine in Mutipula chiefdom of Chipili District in Luapula Province.
During the opening, President Hichilema said the mine represented another key investment into Zambia and had full government support.
The new mine houses over 40 million tonnes of manganese ore with production at the mine set to last the next 20 years.
The mine is Zambian owned and represents a key investment in the Zambian mining economy.
Musamu Resources developed the mine under the leadership of Sixtus Mulenga, the executive chairman of the company.
One of the key uses for manganese is in car batteries, something the New Dawn government has been supporting since it identified it as a key sector for development earlier this year.
Dr Mulenga also said that the company would continue to invest $20 million in the mine to meet its production target of 1 million tonnes of manganese annually.
He also stated that the mine will offer ample employment opportunities, having already employed 250 people, the mine will increase this to 1000 when it reaches its full capacity in five years’ time.
Paul Kabuswe, Mines and Minerals Development Minister, also praised the President stating that through his pro-investment stance he has unlocked more potential in the private sector.
Zambia’s Target to Increase Copper Production to 3 Million Tonnes in the Next Ten Years is Attainable
Lusaka Times, November 2, 2022
President Hakainde Hichilema has said Zambia’s ambitious target to increase copper production from the current 830,000 metric tonnes to 3,000,000 in the next ten years is attainable.
In a speech read for him by Mines and Minerals Development Minister Paul Kabuswe during the opening of the 10th Zambia International Mining, Energy Conference and Exhibition (ZIMEC) at Garden Court Hotel in Kitwe on Tuesday morning, President Hichilema said Government is committed to meeting the ambitious yet achievable target.
The Head of State said the New Dawn government is creating an attractive and competitive investment climate built on transparency, consistency, predictability and fairness while acting against corruption.
Mr Hichilema said the government has put in place favorable and predictable policies for investors to thrive and bring stability in the mining sector.
He charged that the mining sector was stagnant in the previous years because of what he termed as fights between the past government and the investors.
President Hichilema said time is right for Zambia to continue mining and ensure a win-win situation for the treasury, the investors and the community.
“I wish to reiterate our government commitment to reviving the Zambian economy anchored significantly by a robust mining sector that is amply supported by a vigilante energy sector. In marking over a year in office, our government continues to pursue a bold vision to usher in a new dawn for Zambia’s mining sector and indeed the rest of the economy including the essential energy sector. We are determined to deliver on our country’s mining and energy potential through a harmonised approach that optimally serves all stakeholders, Zambians and investors included. Premised on tenets of resilience and stability, will foster industrial development, create employment and grow national fiscal inflows for the equitable benefit of all,” Mr. Hichilema said.
“As a leading player in the global copper mining industry, we are striving to grow mineral output through new mines and expansion of existing ones in order to meet current as well as projected future demand growth. In this effort, I wish to implore all of you and emphasise our steadfast commitment to meeting the ambitious yet achievable goal of raising annual copper production levels from the current 830 metric tonnes to 3,000,000 metric tonnes in the next decade.We are creating an attractive and competitive investment climate built on transparency, consistency, predictability and fairness while acting against corruption in all its forms,” he said.
President Hichilema further appealed to investors to support local suppliers and contractors and work towards improving the communities hosting mining operations.
“Let me categorically state that investors in Zambia are assured of the rule of law guaranteeing security of tenure and investments. To this effect for example, good governance in the administration of mineral rights is being strengthened. A moratorium on the issuance of mining rights was affected while a systems audit was undertaken. We will soon launch the online payment portal that will enhance efficiency and integrity in the administration of the mining rights. We espouse collaboration and partnership as opposed to reducing nationalism. In this regard, Zambia welcomes investment that promotes local economic empowerment by allowing our people to participate meaningfully across the value chain. This reinforces the stability of your investments and fosters wide spread acceptance among our people. In the spirit of strategic engagement and partnership, Zambia recently signed a memorandum of understanding with the government of the Democratic Republic of Congo that will see two countries work closely to develop electric batteries and clean energy value chains,” he said.
Meanwhile Kitwe and District Chamber of Commerce President Emmanuel Mbambiko appealed to the government to bring sanity at Mopani Copper Mines and Konkola Copper Mines.
Mr. Mbambiko, a UPND official, said the business community in Kitwe district is affected by the dormant mine operations at KCM and Mopani.
Zambia Chamber of Mines of Zambia President Godwin Beene said the three-day conference which has attracted 300 delegates will entice investors to invest in the mining sector and help improve infrastructure, promote skills and develop communities.
Ministry of Energy Director in charge of Electricity Michael Mulasikwanda highlighted some of the plans the ministry is undertaking to grow the Energy Sector.
The 10th Zambia International Mining, Energy Conference and Exhibition (ZIMEC) that will run up to 3rd November 2022 is being held under the theme: ”The Synergy between Mining and Energy, Developing sufficient sustainable energy to satisfy Zambia’s mineral production goals.”
Zambia Investor Briefing - October 2022
ZAMBIA INVESTOR BRIEFING
October 2022
OVERVIEW
Following the presentation of the 2023 budget by Minister of Finance Hon Dr Situmbeko Musokotwane, the New Dawn government continues its focus on stimulating private sector development by introducing new measures and incentives across sectors including mining, agriculture, manufacturing, tourism, telecommunications, insurance and gaming.
Government continued to pursue its debt management plans setting out its expectation that it hopes to agree debt relief terms with creditors by the end of 2022 or early 2023 during a presentation to Eurobond holders. Meanwhile, the World Bank approved a loan of US$270 million for economic relief.
The inaugural US Zambia business summit to boost trade and investment was convened in Lusaka.
President Hichilema travelled to Namibia to enhance trade ties between the two countries, following an agreement to develop a 2,000km oil and gas pipeline earlier in the month.
A trade mission to Lubumbashi in the Democratic Republic of Congo generated export deals for Zambian firms worth US$24.5 million, including for the supply of mealie meal, chicks, meat products and maize seeds.
VAT and excise duty on petrol and diesel was re-instated effective October 1st.
2023 Budget
On 30 September 2022 Minister of Finance Hon Dr Situmbeko Musokotwane presented the 2023 budget. Titled ‘Stimulating Economic Growth for Improved Livelihoods’ it is the second budget by the New Dawn government and contains additional measures and incentives to stimulate private sector development, as well as commitments to increase social spending. These will be financed in part by the K9 billion (approx US$560 million) in additional funds the government expects to have available in 2023 after announcing an end to fuel subsidies and the reintroduction of VAT and excise duty on fuel and other commodities. Measures to improve public financial management were also announced.
In the mining sector the royalty rate regime was restructured to tax only incremental value in price at various thresholds and property transfer tax for transfer of exploration rights was cut from 10% to 7.5%. Read more at ZambiaIsBack.com.
In the agriculture sector reform of the Fertiliser Input Subsidy Programme (FISP) was announced, with the new Comprehensive Agriculture Support Programme to include extension service support, irrigation development and access to finance. In addition, 256 extension officers and supporting equipment will target an extra 1.5 million smallholder farmers, while 16 new dams will support irrigation and new farming blocks are to be established.
In the manufacturing sector the government announced tax concessions geared at stimulating investments in corn starch production and a 50% suspension on excise duty on clear beer made with cassava or malt at certain levels of production.
For tourism there is a continued suspension of customs duty on selected capital equipment and waived visa fees from certain countries including EU member states, the United Kingdom, the United States, and China.
In telecommunications a single corporate income rate of 35% will replace the pre-existing two-tier system.
In the insurance sector government announced the removal of the 15% withholding tax on investment income on life insurance.
For betting and gaming the withholding tax on winnings reduced by 5% and presumptive tax on land-based betting companies reduced from 25% to 15%.
Other notable measures include a change in the basic rate PAYE threshold from K54,000 (approx US$3,343) to K57,600 (approx US$3,566), a reduction of the tax on income received by special purpose vehicles under Public Private Partnerships during a set period, and the announcement that timber exchanges are to be set up across the country to improve transparency in the sector.
Debt Management
During a presentation to three of Zambia’s Eurobond holders the government indicated that it hopes to agree debt relief terms with creditors by the end of 2022 or in Q1 2023. A net-present value reduction of US$6.3 billion is required in line with IMF targets, equivalent to 49% of the face value. The government is currently preparing for its third official creditors committee meeting, which it hopes will take place in the coming weeks
US Zambia Business Summit
The inaugural US-Zambia Business Summit was held in Lusaka on October 12th and 13th. US companies and investors from sectors ranging from mining to technology attended alongside representatives from the US International Development Finance Corporation, the US International Trade Administration, the US Trade and Development Agency and the Office of the US Trade Representative. During the event Ambassador Gonzales stated, “Working with the Zambian government to improve Zambia’s business enabling environment is my top objective”.
Zambia and Namibia Strengthen Trade Ties
President Hichilema travelled to Namibia as a guest of President of Namibia Hage Geingob at the Swakopmund International Trade Expo. Earlier in the month the two nations signed an agreement on the Cooperation in Facilitating Private-Sector Development and Implementation of an Oil Products and Natural Gas Pipeline project. The two governments have committed to working together with private partners to assess the cost and viability of the 2,000km pipeline which could supply 100,000 to 120,000 barrels per day and help reduce the cost of delivering petroleum products, with the ambition to also supply other countries in the SADC region.
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OTHER NEWS
Sibanye-Stillwater interested in Zambia's Mopani Copper Mines -CEO, 06.10.22, Reuters
Zambia-Namibia sign MoU on gas, petroleum pipeline, 07.10.22, Lusaka Times
Zambia aims to agree debt relief with official creditors soon, 08.10.22, Reuters
Ghana and Zambia race to secure IMF bailouts, 21.10.22, DW
First Quantum bets on Zambia to address global copper, nickel shortage, 24.10.22, Africa Report
Barrick CEO says Zambia's Lumwana mine life could be extended to 2060, 26.10.22, Reuters
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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