Debt Restructuring Deal Puts Zambia Back in the Champions League
After months of build-up and years of waiting, Zambia has arranged a historic deal to restructure more than $6 billion in debts owed to foreign creditors.
The deal, which will rearrange the structure of the money lent bilaterally to Zambia by nations including China, marks the first major debt relief assigned to a developing country within the Group of 20 (G20)’s Common Framework. Public sector creditors have agreed to reschedule $6.3 billion of debt, $.1.3 billion of which were accrued arrears.
The news was announced by a French official, and later confirmed by Zambia’s finance ministry, ahead of the Globate Climate Finance conference being held in Paris. The summit’s aims include combatting poverty, fighting climate change and reaching “climate solidarity” between developed and developing nations. The same official disclosed that the Memorandum of Understanding contains a clause “requiring comparability of treatment for Zambia’s commercial debts”, guaranteeing that private sector creditors will follow the G20 Common Framework and restructure the $6.8 billion they are owed, meaning that a total of $13.1 billion in debt is to be repackaged.
Presidents Macron and Hichilema greet each other outside the conference. (Hakainde Hichilema / Facebook)
Details are expected to emerge in the coming days once Zambia has formally accepted the debt relief, but an anonymous member of the Paris Club confirmed that China and India had agreed to terms with traditional creditor nations of the Club. It is further understood that the creditors have unilaterally agreed to extend the repayment deadlines for loans by 20 years, with an initial three-year grace period also among the terms.
The memorandum that will be signed will be historic for a number of reasons. The relief will address the debt Zambia incurred when it became the first African nation to default on COVID pandemic-era national debt; the arrangement is the first significant restructuring agreed within the G20 Common Framework; and the deal is likely to lead the way for other struggling nations, including Ghana, Sri Lanka and Ethiopia, whose talks with major creditors have all recently stalled in similar fashion to those of Zambia in the spring.
Janet Yellen, the U.S. Treasury Secretary, mentioned that debt relief was an urgent priority for Ghana and Sri Lanka upon arriving in Paris on Wednesday, when she hinted at Zambia’s debt deal being “very close”. Yellen has been a central figure in the revitalisation of multinational discussions on Zambian debt resolution, and drew attention to the urgent need for round-table talks during her visit to the nation as part of her January 2023 tour of Africa.
Secretary Yellen with President Hichilema during her tour of Africa in January 2023 (Saul Leob / Getty Images)
The deal has yet to be signed; its announcement, nonetheless, has had an immediate and profound impact. Zambia’s currency has rallied 12% this month, making the kwacha the fastest-growing of the 150 currencies monitored by Bloomberg. The 12% increase is the greatest growth the kwacha has enjoyed in more than 7 years. Zambia’s eurobonds, meanwhile, have returned 10.1%, a figure bested only by El Salvador and Argentina.
In October, Zambia’s treasury secretary, Felix Nkulukusa, said that the country was seeking to restructure 12.8 billion in external debt. Nkulukusa also explained that reducing foreign holdings of domestic debt would release funds for other creditors such as China. It is suspected that a significant portion of this initial $6.3 billion package will be committed to servicing debt holdings.
The Paris Club official also disclosed that the $4.1 billion owed to the national Export-Import Bank of China formed the majority of the $6.3 billion package, which is publicly known to have been funds owed to government bodies. They added that Beijing was wary to be seen holding up debt relief for Zambia at a summit attended by 40 world leaders designed to ease debt burdens for developing nations and free up finances for climate initiatives. President Macron’s meetings with Chinese authorities in Beijing in April are understood to have had a significant impact on yesterday’s final talks.
Presidents Macron and Xi in April. (Eliot Blondet / Sipa USA)
Eswar Prasad, professor of economics at Cornell University, said that China’s “endgame seems to be a resolution that limits its financial losses while spreading more broadly the blame for the distressing and untenable situation that many highly indebted economies find themselves in”. The International Monetary Fund has estimated that 70 of the lowest-income nations are burdened by a collective $326 billion in debt; more than half of those same nations are in, or reaching, debt distress.
Ghana and Ethiopia have been locked in talks with creditors for months, their debts dominated by loans from China. It is hoped a solution to their plight will be agreed by the conference’s conclusion.
The scale of Zambia’s debt had been a cause of concern for major Zambian creditors and potential investors, compounding its repercussions. Financing assurances were provided by Zambia’s biggest creditors in July 2022; reports in January 2023 expected restructuring to take place in March. In May, two months after debt relief was supposed to have been arranged, Zambia’s central bank was forced to raise inflation by 25 basis points to 9.5%. Growth in 2022 reached 4.7%, despite Zambia’s distressed status, but forecasts expected a drop to 3.6% in 2023. The IMF guaranteed a $188 million financing disbursement in April 2023, to be released once debt was restructured; Zambia has been waiting patiently for this immediate boost to their economy ever since.
Finance Minister Musokotwane during July 2022 negotiations. (Zinyange Auntony / Getty Images).
Kristalina Georgieva, managing director of the IMF and another vocal supporter of Zambia, issued a statement on Thursday, which read, “Today we will talk about Zambia, which I think is a great case of celebration because it makes debt restructuring agile and effective”. Visiting Lusaka in January 2023, Georgieva committed to assisting “Zambia on its journey towards a more resilient and inclusive future”. She said that she was “hugely impressed by Zambia’s enormous potential given its rich endowment of natural resources, and a dynamic and entrepreneurial youth population”. She praised Zambia’s “efforts to improve the use of public resources by reallocating resources from poorly targeted and inefficient spending and redirecting them to much-needed spending on education and health”, and asked creditors for “swift resolution of its debt situation to complement these reform efforts and preserve the positive growth momentum”.
In April, Georgieva accompanied a trip of IMF staff to Zambia, and told reporters that “The ball is truly in the court of the creditors”. Georgieva and the IMF’s unrelenting support for Zambia has been critical in adding much-needed optimism to the discussion of Zambia’s debt relief and highlighting the role that China and private creditors could play in Zambia’s return to economic good health.
IMF Managing Director Georgieva in Chongwe, Zambia. (Kim Haughton / IMF)
This morning, Hakainde Hichilema, President of Zambia, spoke before delegates at the New Global Financing Pact at Palais Brongniart, Paris. He thanked Presidents Macron and Xi, along with other major creditors. Hichilema concluded his speech with a familiar refrain: “Zambia is back in the Champions League”.
Four firms shortlisted in race to buy Zambia's Mopani Copper Mines - sources
June 19 (Reuters) - China's Zijin Mining (601899.SS) and Norinco Group, South Africa's Sibanye Stillwater (SSWJ.J) and an investment vehicle owned by ex-Glencore officials have been shortlisted in the race to buy Zambia's Mopani Copper Mines, two sources with knowledge of the matter told Reuters.
Zambia's mines minister Paul Kabuswe said in February there were 10 suitors for the mine and smelter complex that is owned by state firm ZCCM-IH.
Rothschild & Co, hired last year to find investors for Mopani, has whittled down the list to four, the sources said.
Switzerland-based commodities giant Glencore (GLEN.L) sold a 73% stake in Mopani to ZCCM-IH in 2021 for $1.5 billion in a deal funded by debt, but retained offtake rights of Mopani's copper production until the debt had been repaid in full.
One of the sources said the investors, who conducted due diligence and submitted non-binding offers in May, are now completing all the work required before making binding offers, with Sibanye, Zijin and Norinco the three strong contenders.
The source added that an investor is expected to be selected before the end of July, and that separate proposals have also been made to Glencore, which is still owed money.
Glencore also made further loan advances to Mopani in 2022.
Reuters was not able to establish the value of the deal.
A spokesperson for Glencore declined to comment. Zijin also declined to comment, while Norinco and ZCCM-IH did not immediately respond to emailed questions.
Sibanye CEO Neal Froneman, who is seeking to expand in copper as part of the company's push into green metals, confirmed the company had submitted a proposal to acquire Mopani.
"We are willing to invest, we are willing to be there for the long term," Froneman told Reuters in an interview.
Froneman said the copper mine, which could potentially produce about 225,000 tonnes of copper annually, required considerable investment, but that the available deposits made Mopani a good asset to own.
"It's a wonderful orebody, and a good mine starts with a good orebody and good people," Froneman said.
Zambia's President Hakainde Hichilema is seeking to attract new investors in Africa's second-largest copper producer, and wants to triple output of the metal that is key to products from power lines and industrial machinery to electric vehicles.
Zambia’s Creditors Close to Debt Restructuring Deal, IMF Says
Zambia’s creditors are close to agreeing to a long-awaited debt restructuring deal that will allow the International Monetary Fund to disburse $188 million to the distressed African nation.
“We’ve had initial agreements to provide financing assurances so the IMF can proceed with providing financing with Zambia,” Abebe Aemro Selassie, the fund’s director of the African Department, said during a panel at the Bloomberg New Economy Gateway Africa forum in Marrakesh, Morocco, on Tuesday.
Zambia’s official creditors committee met earlier this month to discuss proposals for a “specific debt treatment” after the country’s Finance Minister Situmbeko Musokotwane appealed to creditors for urgent debt relief.
The fund and Zambia are having “very very active discussions and we are very hopeful that something will come through in the next few weeks,” he said.
This article originally appeared on Bloomberg
Zambia Investor Briefing: May 2023
OVERVIEW
President Hakainde Hichilema travelled to the UK to attend the coronation of King Charles III and meet with delegates and investors. There, the president attended the Zambia Investor Forum and the Africa Debate in London, both hosted by Invest Africa. President Hichilema gave the keynote address at the Investor Forum, where he announced that Zambia is ready for business. There, Zambian Ministers met with key players in the agriculture, tourism, mining, infrastructure and energy sectors, negotiating investment opportunities. The president also gave a keynote speech at the Africa Debate alongside Andrew Mitchell, UK Minister of State for Development and Africa.
Over the course of the week he spent in England, Scotland, and France, Hichilema took part in 20 meetings with heads of state, delegates, and investors, where he discussed the country’s investment potential. These included meetings with Emmanuel Macron, President of France; Scotland’s First Minister, Humza Yousef; Han Duck-Soo, Prime Minister of South Korea; and James Cleverly, UK Foreign Secretary.
Whilst in attendance at the Africa Debate, Albert Halwampa, Director General of the ZDA, signed a Memorandum of Understanding (MoU) with Invest Africa’s Chairman (and former Africa Minister) Mark Simmonds. The purpose of the MoU is to promote foreign direct investment from the UK into Zambia. Other meetings at the sidelines of the Africa Debate and the Zambia Investment Forum yielded deals with a total of 162 companies.
President Hichilema met with officials from British International Investment (BII), including its CEO Nick O’Donohoe. The development finance institution has invested over $100 million in the Zambian economy, its main areas of interest being the country’s agricultural, energy, and financial sectors. According to Hichilema, the meeting was a means of demonstrating his government’s commitment to “providing an enabling environment for private sector to thrive”.
US President Joe Biden announced his country’s support for the development of the Lobito Rail Corridor, which would connect Zambia and the DRC to global markets through Angola. The US International Development Finance Corporation is currently performing due diligence for a potential financing package of $250 million. Biden stressed the effects of this investment on strengthening Zambia's trade, employment, supply chains, and food security. He made the announcement at the Partnership for Global Infrastructure and Investment (PGII) Meeting, held in Hiroshima, Japan.
Wasoko, a Kenyan retail-tech startup, has expanded into Zambia with a US$1 million investment for its first year of operations. The company leverages innovative technology to provide same-day delivery of essential goods and financing to informal retail stores across Africa. In March 2022 it banked a US$125 million Series B round. Zambia is its first expansion into Southern Africa, with its central hub based in Lusaka. Wasoko’s operations in the city will enable small retailers to access an affordable range of products for same-day delivery and working capital financing solely, accessed purely through a mobile app.
A Zambian delegation, led by Finance Minister Dr Situmbeko Musokotwane, attended the Annual Meetings of the African Development Bank (AfDB) in Sharm El Sheikh, Egypt. Among the bilateral talks held by the delegation were meetings with Dr Akinwumi Adesina, President of the AfDB, and Kevin Kariuki, AfDB’s VP for Energy, Climate, and Green Growth.
Zambia Investment Forum and The Africa Debate, London
President Hichilema travelled to the UK to attend the coronation of King Charles III and meet with delegates and investors. There, the president attended the Zambia Investor Forum and the Africa Debate in London, both hosted by Invest Africa.
Hichilema gave the keynote address at the Zambia Investment Forum, where he announced that Zambia is ready for business. He reiterated that his government was “committed to reforms – after all, we were elected on a ticket of change, to improve the lives and livelihoods of our people [...] through the economy”.
At the forum, Zambian Ministers – including Finance Minister, Situmbeko Musokotwane; Commerce, Trade, and Industry Minister, Chipoka Mulenga; and Foreign Affairs Minister, Stanley Kakubo - met with key players in the agriculture, tourism, mining, infrastructure and energy sectors to negotiate investment opportunities.
The president also gave a keynote speech at the Africa Debate alongside Andrew Mitchell, UK Minister of State for Development and Africa.
Hichilema’s Meetings in England, Scotland, and France
Over the course of the week he spent in England, Scotland, and France, Hichilema took part in 20 meetings with heads of state, delegates and investors, where he discussed the country’s investment potential.
Hichilema met with France’s president, Emmanuel Macron. The primary focus of the bilateral was Zambia’s debt restructuring programme. During Hichilema’s meeting with Scotland’s First Minister, Humza Yousaf, the latter confirmed Scotland’s investment of £1 million to a vaccine research laboratory in Zambia.
During his trip, president also met with Han Duck-Soo, Prime Minister of South Korea and James Cleverly, UK Foreign Secretary, and spoke at the UK Parliament’s Critical Minerals Association.
Currency
1 USD = 19.51 ZMW 30-day average = 18.510 Volatility (last 30 days) = 0.54%
OTHER NEWS
IMF chief ‘won’t let Zambia down’ as creditors hold up payment’, 05.05.23, Bloomberg
Zambia’s debt crisis is not easy to solve, 15.05.23, Mail & Guardian
Zambia raises key rate to three-year high on inflation pressures, 17.05.34, Bloomberg
China says it will work for better solution of Zambia’s debt issues, 19.05.23, Reuters
Muscle Maker acquires Zambia farmland for $8.5 million, 22.05.23, Yahoo Finance
Studious invests stand to benefit from opportunities in Africa, 25.05.23, Financial Times
Zambia urges official creditors to advance debt restructuring at next meeting, 30.05.23, Reuters
UPCOMING EVENTS
05-06.06.23 Africa CEO Summit Annual Forum ,Abidjan, Côte d’Ivoire
CONTACT US
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Zambia’s Energy Sector Attractive to Private Investors – Finance Minister
Finance Minister, Dr Situmbeko Musokotwane, has described the country’s energy sector as being attractive for private investment as a result of the ready regional industrial market.
The announcement came at the 58th Annual Meetings of the African Development Bank (AfDB) in Sharm El Sheikh, Egypt.
The event also saw the Zambian delegation in an engagement with Kevin Kariuki, VP for Energy, Climate, and Green Growth at the AfDB.
The minister said, “We discussed energy sector investments and prospects for renewable energy projects. It is gratifying that we have convergent views on Zambia’s energy sector being an attractive proposition for private investment due to the ready regional industrial market.
“We look forward to the Bank playing a more substantive role in regional infrastructure projects, especially in infrastructure development”.
The AfDB has deep roots in Zambia: since 1971 it has committed more than US$1 billion in support of infrastructure, water and sanitation, energy, health, education, transport, and private sector development.
While at the event in Sharm El Sheikh, Dr Musokotwane and his delegation have also met with the Director-General in charge of African affairs at Germany’s Federal Ministry of Economic Cooperation and Development, Birgit Picke.
Picke stressed Germany’s commitment to “continue working with Zambia and helping the country to revive and sustain a robust economy”.
The annual meetings of the AfDB began on Wednesday and end today.
Photo: Lusaka Times
Muscle Maker Inc. Announces Agreement to Purchase Developed Farmland in Zambia for $8.5 Million USD
Muscle Maker, Inc. (NASDAQ:GRIL) ("MMI" or the "Company"), a global agricultural-commodity supply chain and emerging growth stage restaurant company, today announced that its wholly-owned subsidiary, Sadot LLC ("Sadot"), has executed an agreement to purchase approximately 4,942 acres (2000 hectares) of producing agricultural land along with buildings and related assets located within the Mkushi Farm Block of Zambia's Region II agricultural zone (the "Farm"), the country's most productive farmlands, for $8.5 million USD.
Purchase of the Farm is expected to accrue multiple benefits to Sadot as it expands its position as an international agri-foods company. The Farm encompasses developed land that can produce wheat, soy and corn, which are Sadot's main target commodities, along with other high-value tree crops such as Avocado and Mango. In the initial stages, these products will be sold to local African markets with the goal of later integrating into Sadot's international trade, launching a new business vertical in the food supply chain strategy.
"Upon closing of the purchase of the Mkushi Farm, it is expected to continue to diversify MMI's holdings within the world's food and feed supply chain," stated Michael Roper, CEO of MMI. "We view Africa in general and specifically Zambia, as a region that presents numerous opportunities and we expect the purchase to help accelerate Sadot's growth within the agri-commodity space. The addition of Sadot to the MMI portfolio has been the key driver behind our recent growth. We have taken several successful steps in our shift to diversify our U.S.-centric restaurant business towards a more globally focused food organization. The Farm acquisition when closed is expected to further accelerate our growth as a related diversified holding company and to provide MMI shareholders exposure to our enhanced and expanding portfolio."
Sadot entered into a Joint Venture Shareholders Agreement pursuant to which the parties agreed to form a new entity to serve as a joint venture with respect to the operation of the Farm. The joint venture is expected to be named Sadot Enterprises Limited ("Sadot Zambia") with Sadot holding 70% of the equity and other joint venture partners holding 30% of the equity while continuing to operate the Farm.
The purchase is expected to improve access to global credit facilities allowing for larger agri-commodity trades and expanded margin. Previously, Sadot had made a $5 million USD deposit on undeveloped farmland in Africa. That deposit has been applied to this purchase agreement as part of the all-cash transaction. The completion of the acquisition is contingent upon final Zambian governmental approval.
About Muscle Maker, Inc. (MMI)
In late 2022, MMI began its evolution from a consumer-focused, U.S. restaurant business into a global, food-focused organization with two distinct business units:
Sadot LLC
MMI’s largest operating unit is its newly-created subsidiary, Sadot LLC. Sadot is an international agri-foods company engaged in trading and shipping food (and feed) commodities such as soybean meal, wheat and corn. Sadot was formed in partnership with Aggia LLC FZ, a Dubai based, international consulting firm that provides services to companies operating in the global food supply chain.
MMI Restaurant Group
MMI's legacy business is our limited collection of 50+ restaurants, including Pokémoto Hawaiian Poké & Boba Tea and Muscle Maker Grill, and our subscription, fresh-prep meal service, Superfit Foods, with 30+ points of distribution plus in-home and national delivery. All three concepts compete in the growing healthier-for-you segment. National franchise development of the Pokémoto concept is the key growth driver with more than 45 franchise units already in the pipeline.
Forward-Looking Statements
This press release may include "forward-looking statements" pursuant to the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. To the extent that the information presented in this press release discusses financial projections, information, or expectations about our business plans, results of operations, products, or markets, or otherwise makes statements about future events, such statements are forward-looking. Such forward-looking statements can be identified by the use of words such as "should", "may," "intends," "anticipates," "believes," "estimates," "projects," "forecasts," "expects," "plans," and "proposes." Although we believe that the expectations reflected in these forward-looking statements are based on reasonable assumptions, there are a number of risks and uncertainties that could cause actual results to differ materially from such forward-looking statements. You are urged to carefully review and consider any cautionary statements and other disclosures, including the statements made under the heading "Risk Factors" and elsewhere in documents that we file from time to time with the SEC. Forward-looking statements speak only as of the date of the document in which they are contained, and Muscle Maker, Inc., does not undertake any duty to update any forward-looking statements except as may be required by law.
Investor Relations:
Frank Pogubila
SVP
Integrous Communications
W - 951.946.5288
E - IR@musclemakergrill.com
SOURCE: Muscle Maker, Inc.
The World Is Coming To Zambia
By Albert Halwampa, Director General of the Zambia Development Agency
May has been a milestone month for the Zambia Development Agency.
On May 1, President Hakainde Hichilema officiated at the ground-breaking ceremony for the construction of the United Capital fertiliser plant, a project worth $600 million that was facilitated by the Zambia Development Agency (ZDA). Fittingly, the ceremony took place on International Labour Day. The urea and ammonium plant is just the latest in a series of high-value infrastructure investment partnerships specifically designed to boost the Zambian economy whilst guaranteeing long-term sector sustainability, infrastructural enrichment and stable local employment.
The signing of a memorandum of understanding between the ZDA and Invest Africa on the sidelines of the Africa Debate in London.
On May 4, as Director General of the ZDA, I was delighted to announce a record high projected investment for Q1 of 2023, with investment ventures worth $8.57 billion secured. This represents a nearly 3,500% increase compared to the same period last year. All in all, 81 investment ventures were undertaken in Q1 of 2023, compared to 74 in Q1 of 2022. Not only, therefore, have the overall volume of investments grown but the average financial commitment of each investment has also reached new heights.
As a direct result of these investments, 13,435 new jobs will be sustained. Furthermore, the $8 billion worth of investments earmarked for the energy sector will help fulfil our commitment to Zambia’s energy security and empower Zambians to fulfil their potential in every segment of the economy.
In line with the New Dawn government’s pledge to make Zambia a regional and continental economic powerhouse, we were also pleased to announce that the ZDA has facilitated market access for 20 exporters to potential buyers, and has audited 101 exporters in the Copperbelt, Lusaka and Eastern Provinces.
Further afield, this month I had the pleasure of attending the Africa Debate at the Guildhall in London. With me, alongside a number of other Zambian businesspeople and ministers, was President Hichilema, who in his keynote speech reminded investors that Zambia is “looking for mutually beneficial partnerships”.
President Hichilema at the Zambia Investment Forum, hosted by Invest Africa.
This conference was not only a chance to showcase how far Zambia has come but also an opportunity to further advance our fortunes as a nation. Meetings at the side-lines of the Africa Debate and the Invest Africa Zambia Investment Forum have so far yielded deals with some 162 companies, including a memorandum of understanding with Invest Africa itself to promote foreign direct investment from the UK into Zambia.
I was proud to sign this MoU myself, together with IA chairman and former Africa Minister the Rt Hon. Mark Simmonds. The agreement is yet another indicator of the strong bonds between the ZDA and Invest Africa, as well as Zambia’s longstanding partnership with the UK, and I look forward to welcoming the businesses and financiers that come to Zambia as a result of this close cooperation.
Also agreed within the MoU were provisions to mobilise investments from Europe, the United States of America, the Middle East and Africa, and to continue to hold promotional activities in Zambia and the UK on a reciprocal basis. The sectors likely to benefit the most from our continued partnership with Invest Africa are Agriculture, Energy, Mining and Tourism – all of which are critical to Zambian employment and localised economic enrichment.
Delegates at the business forum in Lusaka, co-hosted by the ZDA and Etion.
On May 18, the ZDA hosted a business forum in partnership with Etion, a business delegation from Belgium in Lusaka. A business-to-business (B2B) meeting was held, along with a networking session, to encourage business linkages and joint ventures between Zambian and Belgian enterprises. So many European investors are excited to deepen ties with Zambian business and industry and I have no doubt that investment summits such as this will continue to enjoy enormous success.
It is a very exciting time to be at the helm of the ZDA, a fantastic moment to be investing in our country, and a proud moment to be Zambian. We look forward to the results of Q2, continue to plan more investment summits, and eagerly anticipate forging new business ties and solidifying those we have already established.
Kenyan retail-tech startup Wasoko expands to Zambia
Kenyan retail-tech startup Wasoko, which leverages innovative technology to transform the informal retail supply chain, has expanded into Zambia, the company’s first location in Southern Africa.
Launched in 2016 as Sokowatch, Wasoko provides free same-day delivery of essential goods and financing to informal retail stores across Africa. The platform enables retailers to order products at any time via SMS or mobile app and receive delivery through its proprietary logistics network to their store.
The startup has delivered over 2.5 million orders to over 50,000 informal retailers across Kenya, Tanzania, Rwanda, Uganda, Ivory Coast, and Senegal, and in March of last year banked a US$125 million Series B round for further expansion.
It has now announced its expansion into Zambia, its first location in Southern Africa. Wasoko will invest over US$1 million in its first year of operations to support local Zambian businesses and communities to get more essential goods for less through the power of e-commerce.
Launching its central hub in Lusaka, Wasoko’s operations will enable small retailers across the city to access an affordable range of products for same-day delivery and working capital financing solely through the convenience of a mobile app. The formation of Lusaka as a central hub is also part of Wasoko’s company-wide pivot to a hub and spoke logistics network to drive stronger operational efficiency and significantly boost its capacity for faster regional expansions.
“As we drive ahead with the next phase of our growth journey, it’s vital that the operating environments of our future markets are conducive to our ambitions and Zambia provides exactly this. With high smartphone usage and a pro-business government administration keen on expanding the country’s digital economy, Zambia is an ideal environment to launch our model and strongly aligns with our current core markets, both in terms of similar regulatory practices and a supplier base which is intertwined with East Africa,” said Daniel Yu, founder and global CEO at Wasoko.
“With this in mind, we’re confident that our new launch will not only play a huge role in accelerating our existing progress across the continent, but also significantly strengthen the purchasing power of everyday citizens in Zambia and enhance their livelihoods in the process.”
In addition to its latest expansion, Wasoko will also be doubling its service radius across all of its existing locations in Kenya, Tanzania, Rwanda and Uganda, where it has amassed a network of over 200,000 informal retailers and delivered more than 5 million orders to date.
Zambia Airways Launches New Direct Flights from Lusaka to Johannesburg
Zambia Airways has announced the launch of new direct flights from Lusaka to Johannesburg, providing passengers with a convenient and reliable way to travel between the two cities. The service will commence operations on 1st June 2023 and will be operated with a modern and comfortable B737-700 aircraft, offering both Business class and Economy class.
The flight schedule has been designed to suit the needs of both business and leisure travelers, with a convenient early morning departure of 07:00hrs from Kenneth Kaunda International Airport in Lusaka. Zambia Airways is committed to providing its passengers with a safe and comfortable flying experience, with all flights operated in accordance with the highest safety standards. The airline’s experienced and friendly cabin crew will provide exceptional service to passengers on board.
“We are delighted to launch our new direct flights from Lusaka to Johannesburg,” said Abiy Asrat Jiru, CEO of Zambia Airways. “This is an exciting development for our airline and demonstrates our commitment to expanding our network and providing our passengers with more travel options within the region.”
With the launch of this new service, Zambia Airways will connect two of the region’s major cities and provide passengers with a convenient and affordable way to travel. The airline is committed to enhancing tourism, attracting investments, and creating job opportunities as the national carrier of Zambia.
Passengers can now book their flights on the Zambia Airways website or contact their local travel agent for more information.
Zambia is Ready for Business, Assures President Hichilema
Last week was a busy week for Zambia’s President Hakainde Hichilema and one that is already being considered a significant milestone in the country’s return to economic stability and prosperity. The President accepted an invitation to attend the coronation of King Charles III on Saturday 6th May and made the most of his trip by pursuing a week of business talks with delegates and investors across the UK and France.
President Hichilema announced on Friday evening that “After a week of over 20 successful meeting and engagements in England, Scotland and France, we have departed from London and are heading back home. We are positive that these engagements will yield positive growth and development for the Zambian people”.
President Hichilema, spotted at Heathrow airport on his way back to Lusaka.
On Tuesday, 9th May, President Hichilema met with the CEO of the UK government’s finance institution, British International Investment (BII), Nick O’Donohue. BII has to date invested more than $100 million in the Zambian economy, especially in the agricultural, energy and economic sectors. President Hichilema assured Mr O’Donohue that the BII’s “investments are safe”, and that Zambia was “looking for mutually beneficial partnerships based on common values and interests for the people of Zambia and the UK”.
On Wednesday, 10th May, President Hichilema held a meeting with Scotland’s First Minister, Humza Yousaf, to strengthen bilateral ties between the nations; HH was delighted to announce that Scotland had committed £1 million to the construction and maintenance of an academic economic research facility in Zambia.
That afternoon, Mr. Hichilema met with Emmanuel Macron, President of France, who sits on the board of the Paris Club of Creditors and the G20 intergovernmental forum. Also present at the meeting were Zambia’s Ministers of Foreign Affairs and International Cooperation, Stanley Kakubo, and of Finance and National Planning, Situmbeko Musokotwane, and some have speculated that some significant trade agreements were tabled at the meeting. All President Hichilema was willing to tell the press was that state debt relief and investment were discussed, and that the meeting was successful.
Presidents Macron and Hichilema before their meeting.
After a number of days of meeting with world leaders, CEOs of global financial institutions and economic experts, President Hichilema headed to the Zambia Investor Forum and Africa Debate in London on Wednesday and Thursday, both organised by Invest Africa, to speak with prospective investors. Mr Hichilema began his keynote speech on Wednesday by reiterating that his government was “committed to reforms – after all, we were elected on a ticket of change, to improve the lives and livelihoods of our people […] through the economy”.
President Hichilema delivering his keynote speech.
President Hichilema said that his government would pursue private sector partnerships to improve the economy and, therefore, the wellbeing of Zambia and its people. He said that the New Dawn government had shown “clear intent” in its meetings with the International Monetary Fund, a major U.S. financial agency and institution which has been pushing for creditors to agree to a framework for Zambia’s debt relief.
Finance Minister Situmbeko Musokotwane urged major investors and economic gurus present at the event to “push for this debt relief to take place”, as Zambia had met all requirements set out in the framework submitted by creditors. Zambian and Western financial figures alike have been frustrated by an apparent reluctance from Chinese creditors to agree to debt relief, though the state visit of President Hichilema and Ministers Musokotwane and Kukubo may prove to be what is needed to move talks forward.
Commerce, Trade and Industry Minister Mulenga announced that the government had set aside 800,000 hectares of land for agricultural development. Zambia enjoyed a record maize harvest last year and will be hoping to shatter that record after receiving assistance from a multi-partner group led by USAID (the United States Agency for International Development) that has put in place the necessary infrastructure to fight against transport issues that have historically contributed to 30% of Zambia’s post-harvest losses. Seven Smart Integrated District Aggregation Centres (SIDAC) have been built to process and store 100,000 metric tons of maize and other grains that would otherwise go to waste. National and international initiatives have also successfully raised awareness about crop diversity in the country, ensuring agricultural stability, sustainability and soil re-enrichment.
Minister Mulenga at the Zambia Investment Forum.
Foreign Affairs Minister Kakubo also reminded investors that Zambia’s vast quantities of minerals “are in the ground, and most of them are not yet explored”. The exploration that has been done shows that Zambia has 6% of the world’s copper reserves and huge deposits of cobalt: two metals that will continue to grow in value as the world transitions to green energy and electrically-powered vehicles.
Zambia is also known for its rich deposits of gold, iron, nickel, manganese and emeralds. The country is the world’s seventh-largest producer of copper, the sixth-largest producer of cobalt, and boasts the largest emerald ever mined. The New Dawn government has recognised the potential for its mineral reserves to transform the nation’s fortunes, making mining one of the primary sectors driving economic growth and benefitting people across the country. Kakubo stressed that he and other senior figures in the mining industry were looking for partnerships to aid exploration into mineral deposits and expansion of the country’s mines. In May 2022, First Quantum Minerals approved plans for a $1.25 billion expansion of the Kansanshi copper mine after “renewed confidence” in Zambia’s economic climate, and other major deals have followed since.
On Thursday, President Hichilema attended Invest Africa’s Africa Debate, an investment summit focused on the African continent whose themes included “the future of African trade, discussing and debating the continent’s trade profile”. Mr. Hichilema gave a keynote speech alongside Andrew Mitchell, the UK Minister of State in the Foreign, Commonwealth & Development Office (FCDO). With a touch of humour, Mr. Hichilema spoke of the importance of education, saying that without the education he had received, instead of being President of Zambia he would “be in the village with 8 or 10 wives”. He reminded the audience that waning diplomacy, the decline of democracy and insufficient protection of human rights were not good for business, highlighting the importance of “peace, security, stability”. He said it was the responsibility of those in power to create a landscape that invited investment and economic growth.
President Hichilema deep in conversation at the Africa Debate.
Karen Taylor, CEO of Invest Africa, who hosted the Investor Forum event, said that “since President Hichilema took office in August ’21, Zambia has undergone a significant shift, change and focus in its economic policies and its approach”. She said that Invest Africa would continue to market Zambia as an investment destination, and that the steps taken by the government had been a significant factor in many organisations’ decision to invest in Zambia. Ms. Taylor applauded the economic reforms the UPND government had made, insisting that this had created an “enabling environment” for foreign direct investment. Mr. Hichilema said after the event that he was “humbled by the huge interest” in Zambia’s economy, and the attendance of “hundreds of key business players from various economic sectors”.
During the Zambia Investor Forum, Zambian Ministers “held a series of meeting with key players in the agriculture, tourism, mining, infrastructure, and energy sectors”, negotiating “investment in our country that will create opportunities and jobs for our citizens,” said Mr. Hichilema. After the event, Mr. Hichilema met with UK Foreign Secretary, James Cleverly, who “expressed how impressed the UK is with Zambia’s development trajectory”, and “reaffirmed the UK government’s support for Africa to have a bigger voice at the G20”. President Hichilema said the meeting was productive, and promised that the government would “continue to encourage joint ventures to ensure that these investments benefit as many of our people as possible”.
President Hichilema with Minister Cleverly at their meeting.
Zambia Investor Briefing: April 2023
OVERVIEW
Mozambique’s President Nyusi played host to his Zambian counterpart Hakainde Hichilema for an official state visit. The aim of the trip was to further cement relations “through increased trade and investment flows” between the two countries, and included a visit to the Port of Beira. A Memorandum of Understanding (MoU) was signed between the neighbours aimed at bolstering collaboration in the area of press standards and freedoms. Issues of peace and security were also central to discussions.
Hichilema travelled to Victoria Falls, Zimbabwe, to take part in the ‘Transform Africa Summit’. The summit brought regional and global leaders together with international organisations from more than 100 countries under the theme ‘Connect, Innovate, Transform’, to collaborate on new ways of shaping, accelerating and sustaining Africa’s on-going digital revolution. Others in attendance included Rwanda’s Paul Kagame, Togo’s Faure Gnassingbé, Malawi’s Lazarus Chakwera and Secretary General of the AfCFTA Wamkele Mene.
A recently published report from Chatham House praised the New Dawn government’s “positive neutrality”, a delicate balancing act which, the report reads, has allowed it to secure investment “from a diverse mix of partners, including Brazil, India, Japan, Saudi Arabia, South Africa, Türkiye and the United Arab Emirates”. It also points to the fact that “Hichilema has resuscitated relations with Western partners, especially the US and UK, and maintained Zambia’s important relationships with China and the African continent”.
Mfikeyi Makayi was appointed CEO of KoBold Metals Zambia. The first female head of a major mining company in Zambia, she will oversee the development of the Mingomba mine in the Copperbelt. Formerly of First Quantum Minerals, Makayi underscored the sector’s importance to Zambia, saying it “is something that will drive our economy into the future”.
A groundbreaking ceremony took place for the construction of a new fertiliser and ammonia plant at the United Capital Fertiliser Zambia Company in Lusaka’s Chilanga district. The USD 600 million project will help bolster the country’s food security, and has come about, according to Hichilema, owing to the “enabling policy and business environment we wanted”.
President Hichilema hosted the Zambian-American business community at the Presidential Luncheon in Lusaka. The event was held under the banner of ‘Zambia’s Economic Revitalisation and Investment Opportunities’, and saw local banks and businesses looking for new investment opportunities in the country.
A statement released by President Hichilema confirmed that the Zambian government were working with “global tech companies” to secure digital literacy training for 10,000 teachers. “Education is the best investment we can make”, he reiterated.
Mozambique State Visit
President Hichilema undertook a three-day official state visit to neighbouring Mozambique, during which a number of important agreements were reached. One such commitment saw the Mozambican government announce plans to resume its supply of electricity to Zambia which, President Nyusi said, was now possible following upgrades to local infrastructure. Zambian Energy Minister Peter Kapala also spoke about plans for new gas and petroleum pipelines running from Mozambique to Zambia.
There were further calls from the Zambian delegation for more cross-border business, particularly in the mining, agriculture and tourism sectors, something President Hichilema was especially keen to see.
On the final day of the visit, the two heads-of-state undertook a visit to the Port of Beira, located in Mozambique’s commercial capital. Whilst there, they attended the Mozambique-Zambia Business Forum, which hosted an event titled “Accelerating Trade and Investment Between Mozambique and Zambia”. The forum was attended by 250 exhibitors representing various sectors from across the business community.
Transform Africa IT Summit
Six presidents were in attendance at the three-day summit, which took place in Victoria Falls, Zimbabwe, and saw the launch of the African Development and Smart Africa Alliance. The USD 1.5 million agreement is designed to enhance digital trade and e-commerce ecosystems across Africa.
The alliance will streamline e-payment policies across ten countries - Côte d’Ivoire, Benin, Ghana, Uganda, South Sudan, Zimbabwe, Republic of Congo, DR Congo, and Sao Tomé and Principe.
Hichilema gave an address at the summit, in which he implored nations to embrace new technologies “with the aim of increasing productivity and creating more jobs, particularly for our young people [on] the continent”.
“Harmonising our legislation and technological platforms in Africa is also crucial to facilitate market sharing and the movement of people and goods, while maintaining security”, he wrote in a statement. “Harmonised digital platforms will also make it easier for joint public-private ventures among our citizens to do business”.
Currency
1 USD = 17.86 ZMW 30 day average = 19.171 Volatility (last 30 days) = 1.3%
OTHER NEWS
Zambia reaps rewards of positive neutrality and economic diplomacy while others flounder, 02.04.23, Daily Maverick
China's loans to Africa worry World Bank President David Malpass, 02.04.23, BBC New
Zambia mining sector gets first female chief executive, 06.04.23, BBC News
Yellen to push for ‘speedy’ action on Zambia, Ghana debt relief, 11.04.23, Al Jazeera
Zambia sees scope for $12.8 billion debt-revamp deal next week, 12.04.23, Bloomberg
Zambia: UN experts concerned over delay in the country’s debt restructuring, 17.04.23, United Nations
Moxico provincial government to boost cooperation with Zambia, Angop, 24.04.23
Zambia has sent debt restructuring proposal to official creditors, Reuters, 24.04.23
UPCOMING EVENTS
10.05.23
London, UK
11.05.23
The Africa Debate: Catalysing the Continent’s Trade Potential
London,UK
14.05.23 - 16.05.23
Africa Trade and Investment Global Summit
Dubai, UAE
CONTACT US
If you would like to find out more or receive tailored briefings on specific sectors get in touch via info@zambiaisback.com. To stay up to date follow us on social media:
Facebook: @zambiaisback
Twitter: @ZambiaIsBack
Instagram: zambia_isback
Zambia’s GDP to Grow by 4.2% in 2023
Secretary to the Treasury, Felix Nkulukusa, announced yesterday that Zambia’s economy is projected to expand by 4.2% in 2023.
This will be a slight dip compared to last year’s growth of 4.7%, which is to be expected following the months of wrangling over the country’s debt restructuring. However, the Secretary was optimistic about the news, as GDP forecasts 4.8% and 4.7% growth in 2024 and 2025 respectively.
This is very welcome news. Zambia was the first major country to default on its $18 billion foreign debt during the Covid pandemic in 2020. The following years has seen issues with its creditors, who had for some time struggled to make headway with debt restructuring plans.
Zambia’s external debt is split roughly three ways: one third is owed to Chinese lenders, another to private creditors, and the rest to other governments and multilateral lenders, such the World Bank and International Monetary Fund (IMF).
Nkulukusa said central government external debt had increased by 1% to $14.09 billion as of end of this March from $13.96 billion at the end of 2022, making Zambian public debt a total of $25.4 billion.
He said in his announcement, “the increase in debt stock was largely on account of disbursements received from multilateral creditors for budget support and project loans”.
Photo: @CUTS_Lusaka / Twitter
President Hichilema to Speak at The Africa Debate, London
President Hakainde Hichilema is due to deliver a speech at The Africa Debate, London’s leading investment summit focused on Africa. The event – this year being its ninth iteration – will be held on 11 May at the Guildhall under the theme “Catalysing the Continent’s Trade Potential”.
Attendees at this year’s Africa Debate will span continents and industries. Among the guest list are representatives of investment firms, heads of global businesses, and policy and change makers from across the globe, including Africa, Europe, North America, and the Middle East.
The President is set to be the focus of the “Country Spotlight” event, where he will be interviewed about Zambia’s growing trade potential. Other events in the programme include interviews with Wamkele Mene, Secretary General of the African Continental Free Trade Area, and Samaila Zubairu, President and CEO of the Africa Finance Corporation, as well as speeches from British politicians Mark Simmonds and Andrew Mitchell.
Delegates at The Africa Debate, 2022. Photo: Fiona Hanson
There will also be various debates held throughout the day. A panel will discuss “Building a Comprehensive Digital Trade Strategy for Africa”, which will explore innovation in digital strategy and e-commerce across the continent. Other topics set to be explored through debates and panel discussions include: boosting the industrialisation of African countries; ESG regulatory initiatives in African trade; leveraging the continent’s critical minerals supply; and strengthening Africa’s finance sector.
The Africa Debate is organised and hosted by Invest Africa, the UK’s leading trade and investment platform for African markets. Invest Africa describes the continent’s trade outlook as “at a crossroads”. On the one hand, it is suffering from global supply chain disruptions following the Covid pandemic and the Russian invasion of Ukraine which “paint[s] a gloomy picture” of the future of Africa’s trade, as well as the threat of debt risks. But on the other hand, African trade and investment is aligning under the recently established African Continental Free Trade Area (AfCFTA), which aims to strengthen and protect it.
It is hoped that The Africa Debate in May will provide a forum for leaders in industry to discuss, and prepare for, the future of African trade. There is still time to register for a place at the summit.
Minister: Northern Province Embracing Digital Innovation
Northern Province will welcome investment in digital technology in order to unlock the social and economic potential of the region, Northern Province Minister Leonard Mbao has said. The announcement came during a business forum he was officiating in Kasama, organised by MTN Zambia, the country’s leading telecommunications provider. It is hoped such a move will innovate the region’s tourism sector and mining industry.
Mbao told the business forum, “This government is committed to delivering inclusive and equitable development to the citizens. Therefore, digitalisation is a catalyst in the provision of inclusive development and as a government we welcome MTN’s innovation in coming up with digitalised services and products for its clientele. The government is convinced that this kind of digital innovation and forum is the sure way of unlocking the development potential of the province.”
The government’s Constituency Development Fund (CDF), originally introduced in 1995 as a means of encouraging local development in communities across the country, is important in the development of these digital services. The CDF, along with the government’s decentralisation of local policy, can enable local governments to partner with service providers in developing connection and innovation in the region.
The Minister noted the growth of mobile network and digital financial services in Zambia. This was emphasised by MTN’s General Manager North, Elias Chembe, who revealed the company has built 82 4G towers in the region and has plans for the erection of many more, of which 11 will be in the Northern Province.
Chembe said, “In line with the government’s decentralised policy where each constituency is given its share of the national cake, market loans given to our marketers, social cash transfer given to the intended beneficiaries, MTN mobile money services provide the needed support that the government needs to execute its mandate in these areas.”
He stressed MTN’s aim for more regional investment and collaboration with local government, traditional leaders, and Zambian businesses.
Huawei Hosts Zambia’s First Telecom Congress
Zambia’s first ever Telecom Congress took place over the course of two days last week. The event was hosted by Chinese information and communications technology (ICT) company, Huawei, at the Lusaka International Convention Centre (LICC). Huawei, as a global provider of ICT infrastructure and smart devices, has been operating in Zambia for the last 18 years.
The inaugural congress was themed ‘Lighting up ICT for Zambia Digital Life’, and brought together government officials and heads of industry to discuss the present state of the nation’s ICT sector and ideas for its future. Its aim was to explore the various opportunities among government and private corporations to support Zambia in meeting its growing technological demands.
It was at this congress that the Technology and Science Minister, Felix Mutati has announced there has been a 300% growth in mobile money transactions in Zambia in the period from 2021 to 2022. Mutati’s disclosure that K300 billion was transacted via mobile networks last year is the latest in a series of welcome developments concerning progress made in the country’s financial technology sector.
Mutati, in his comments about the recent growth of mobile money transactions, pointed to the work done by new technologies – such as 5G – in increasing ICT usage in Zambia. But he stressed that the country cannot go digital without good connectivity. To this end, the government are planning to erect an additional 300 phone towers in an effort to increase accessible and affordable networks – even in rural areas.
The minister did note, however, that “the old model of erecting towers must be revisited”. He pointed towards technology providers being responsible for providing cheaper options, saying, “we also need appropriate financing to make connectivity faster”.
Huawei’s leading representative at the Congress, its Vice President for Carrier Business Chen Li, reiterated the company’s commitment to aiding Zambia achieve this technologically connected future. Its ability to provide 2G, 3G, 4G, and 5G services means there are cost effective solutions to provided connectivity in rural areas. Doing so, according to Li, would mean “enabling more people to connect to the world.”
Minister Announces Plans to Finish Cryptocurrency Tests by June
Science and technology minister, Felix Mutati, has announced the government’s plans to finish the tests necessary to approve cryptocurrency usage in the country by the end of June.
According to the minister, such tests – which started on 19th February – include the central bank and securities regulator simulating using cryptocurrency in the real world.
In an interview with Reuters, Mutati said that the government’s main goal is “to strike a balance between innovation in terms of digital payments […] against citizens’ safety, particularly given that cryptocurrency is very volatile.”
These concerns have been echoed by other African nations and reflected in their approach to the use of cryptocurrency: Nigeria banned banks from handling the currency in February 2021.
However, the Central African Republic swung the other way, becoming the first African state to make bitcoin legal tender and even launching its own cryptocurrency token, the Sango Coin. It also announced a regulatory framework for the country’s use of the digital currency.
Before Zambia can follow suit, work needs to be done to prepare the country’s digital infrastructure, including creating digital identities.
Once the regulatory tests are completed, Mutati hopes that the use of cryptocurrency in the country “will be a driver for financial inclusion and a change maker for Zambia’s economy.”
This announcement is part of a series of developments that signal an exciting economic future for the nation. The science and technology minister noted this, reflecting on the “increased appetite to invest in Zambia.”
Kamala Harris Celebrates Innovative Panuka Farm
Kamala Harris, during her successful trip to Zambia last week, visited a farm that is successfully experimenting with innovative agricultural techniques.
Panuka Farm lies outside of Lusaka. Founded in 2017 by its Managing Director, Bruno Mweemba, it focuses on bulk production and supply of high-value crops. The farm’s most popular products are English cucumber, sweet peppers, and iceberg lettuce.
Harris’s visit to Zambia was one stop on her weeklong trip to Africa, which also included visits to Ghana and Tanzania. High on the agenda was concerns about food insecurity as a result of climate change – a topic especially pertinent to Zambia and its agricultural economy. In visiting Panuka Farm, Harris therefore had an opportunity to explore what the future of innovative food production across Africa could look like.
Bruno Mweeba and Kamala Harris at Panuka Farm (Panuka Farm Facebook)
Mweemba, as well as being the founder and Managing Director of Panuka Farm, is an environmental finance expert who has worked previously in biodiversity conservation and climate change finance. He described Panuka as his “laboratory” in which to test and showcase the practical side of conservation and climate-smart agricultural theory. Mweemba is well-placed to be at the forefront of this work, having also been working over the past three years as an advisor for the United Nation’s Development Programme’s Biodiversity Finance Initiative (UNDP-BIOFIN).
It is abundantly clear how Mweemba’s vision has played out in the operations of Panuka Farm. The farm is innovative in its green energy use, agricultural technology, and community links in three major ways.
Firstly, Panuka has been completely solar powered ever since its conception in 2017. As well as providing an active response to the climate crisis, being completely off-grid means the farm is not susceptible to the fluctuations of Zambia’s (mostly hydro-reliant) energy supply, which has been in some distress in recent months.
Furthermore, the farm is very careful about its water usage. Mweemba and his employees have been experimenting with new techniques and technologies, including drip irrigation, harnessing the power of gravity, and an ongoing project of rainwater harvesting. At Panuka, water use is at its most efficient.
As well as being a pioneer in green energy and innovative agricultural technology, the farm also has a strong social conscience. This is reflected in its deep ties to the local community: 95% of its workforce comes from surrounding villages. Panuka also runs a successful graduate traineeship. Over the course of six months, graduates from agricultural colleges and universities are trained in farm management at Panuka. It is hoped this scheme will train and inspire the next generation of forward-looking agricultural leaders.
Harris described Panuka’s techniques as “an example of what can be done around the world”. In a speech she made at the farm, the Vice President stressed the US’s commitment to such work. Significantly, she announced a $7 billion commitment to promote “climate resilience, adaptation, and mitigation” across Africa – part of which will be dedicated to promoting food security. She particularly highlighted the role climate-smart agriculture, like the kind practiced at Panuka, would play in this commitment.
Workers on Panuka Farm (Kent Nishimura / Los Angeles Times)
The Vice President’s remarks are extremely timely, and mirror some of the steps taken by the Millennium Challenge Corporation (MCC) which entered into a compact with Zambia in 2013-18. The MCC is an independent US foreign aid agency which forms partnerships and provides grants to developing countries in order to aid in economic growth and reduce poverty. Through its partnership with Zambia, a grant of $322 million was invested in water supply, drainage and sewage networks, resulting in greatly increased access to clean water and consequently improved sanitation and hygiene.
Three years after the completion of the compact, in December 2021 the MCC selected Zambia as eligible to develop a second compact. A primary area that has been identified by the MCC in hindering Zambia’s economic growth is the country’s current agricultural methods and policies. In October 2022, Mr Panuka met with the MCC team to discuss the second compact. He “provided some insights on how the MCC Compact could be better designed especially on access to finance for smallholding farms”.
According to the farm, Panuka is a Tonga word meaning “clear, innovative, and open to new ideas”. It is clear that it truly lives up to the meaning of its name in its commitment to innovative agricultural techniques, green energy solutions, and commercial prosperity.
Zambia Investor Briefing: March 2023
OVERVIEW
Invest Africa, a leading business and investment platform, led a delegation to Zambia formed of 9 companies across a multitude of sectors, from energy and mining to infrastructure and logistics. The team held a roundtable discussion with President Hichilema in State House, Lusaka, to better explore ways to invest in the Zambian economy. The mission also held meetings with Bank of Zambia Governor Denny Kalyalya and Albert Halwampa, Director of the Zambia Development Agency (ZDA).
A consortium of investors from the energy and mining sectors presented to President Hichilema on their intention to develop a new wind and solar project. UK-based Chariot Transitional Energy, in partnership with French giant Total, has agreed to fund and construct a USD 500 million renewable energy project to supply power to Canadian mining company First Quantum Minerals (FQM), which support FQM’s Zambian operations.
President Hichilema travelled to Qatar this month to participate in the LDC5 Conference in Doha. Over a period of five days, the conference convened world leaders, representatives from the private sector, civil society, parliamentarians and the youth to advance new ideas, raise pledges of support and accelerate sustainable development in areas where international assistance is needed most.
Lusaka played host to the inaugural EU-Zambia Pharmaceutical Forum, under the banner ‘Strengthening Healthcare through Local Pharmaceutical Manufacturing’. The goal of the forum was to encourage and promote the manufacture of pharmaceutical products in Zambia. President Hichilema, who addressed the forum, said local pharmaceutical companies must be willing to “collaborate and partner with well-established foreign pharmaceutical companies” to build greater capacity and experience.
Direct flights between Turkey and Zambia have resumed following a two-year hiatus owing to the Covid-19 pandemic. The route will be operated by Turkish Airlines, connecting Istanbul with Lusaka. “This is a positive development for both Turkey and Zambia as the direct flights between Istanbul and Lusaka will facilitate business trips, travel and tourism”, Turkey’s ambassador to Zambia, Istem Cırcıroğlu told Anadolu Agency.
South African financial services group, ABSA, opened the ABSA Bank House in Lusaka, Zambia. President Hichilema led proceedings at the official unveiling of the new building. The president spoke of the importance of the private sector in bringing about greater development.
Investor and Trade Mission
Invest Africa led a three-day mission to the Zambian capital, facilitating dialogue between foreign investors and government. Global law form DLA Piper, German technology giant Siemens, South African financial services group ABSA, and logistics firm DHL, were among those that joined the mission.
The trip, which connected international businesses looking for investment opportunities, formed part of the New Dawn government’s efforts to attract multinationals to invest.
Projects showcased included the Mulembo-Lelya Hydroelectric Project, which is looking to raise USD 285 million and will generate 118 MW of electricity once completed, and the Shangombo Sugar Project, which requires USD 522 million through an FDI majority stake. The project is located at a greenfield site in Western Province.
Mining and Energy Developments
A consortium of investors from the mining and energy sectors presented a renewable energy project to President Hichilema at State House in Lusaka. Mphepo Power, Total Eren, Chariot and First Quantum spoke of their intended projects to develop 770 MW of wind and solar that would greatly contribute to Zambia’s grid resilience.
The Kafue Gorge Lower Hydropower Station, located in Southern Province, was commissioned by President Hichilema, adding a total of 750 MW to Zambia’s national grid. The dam, which was built in collaboration with ZESCO and Chinese company Sinohydro Corporation Ltd, will help not only Zambia’s energy resilience, but also the country’s wider economy, according to the president.
President Hichilema was present to open the Mimbula Mine in Chingola. During the ceremony, he told the press that funds had been secured to reopen the copper mine at Mopani, operated by Konkola Copper Mines (KCM). In a written statement, the president said his government would “continue providing an enabling environment for business to thrive because our people need jobs and business opportunities”.
5th UN Conference on Least Developed Countries
President Hichilema held a number of meetings on the sidelines of the LDC Conference in Doha, Qatar, including with Chrysoula Zacharopoulou, the French Minister of State for Development, Francophonie and International Partnership. Discussions centred on France’s role as co-chair of the G20 Creditor Committee for Zambia. Endorsed by the Paris Club, the committee is tasked with seeking resolutions to Zambia’s debt issue.
The president further met with Qatar’s Deputy Prime Minister and Minister of Foreign Affairs, Sheikh Mohammed bin Abdulrahman Al-Thani. “[W]e encouraged Qatari investment in Zambia as we push for more jobs through a thriving private sector”, Hichilema remarked. Zambia is soon to open an embassy in the Qatari capital.
The UK’s Minister for Development and Africa, Andrew Mitchell, pledged to support Zambia’s debt restructuring under the Common Framework, while emphasising the UK’s continued commitment to invest in Zambia through British International Investment (BII), the UK government’s development finance institution.
Democracy Summit
Zambia co-hosted the second iteration of the Summit for Democracy, a two-day, virtual event, alongside international partners the US, South Korea, Costa Rica and the Netherlands. The theme of the event, organised by the US, was ‘Free, Fair and Transparent Elections, as the Foundation of Democratic Government’.
During his keynote address, President Hichilema underscored the need for strong leadership and institutions of governance around the world to cement democracy. “We should ask ourselves: what is it that we need? Strong leaders or strong institutions? Or both?" he said, adding that electoral conflicts were a deterrent to the democratic gains made by states post-colonial rule.
Currency:
1 USD = 21.23 ZMW 30 day average = 21.326 Volatility (last 30 days) = 0.48%
OTHER NEWS
Skilled miners critical to meeting production targets, 01.03.23, Times of Zambia
Zambia’s developing international relations, 07.03.23, Chatham House
Statement by Press Secretary Kirsten Allen on Vice President Harris’s Travel to Ghana, Tanzania, and Zambia, 13.03.21, The White House
Malawi turns to Zambia Defence Force for cyclone rescue mission, 16.03.23, Nasa Times
Zambia’s President: ‘You cannot eat democracy’, 28.03.23, The Washington Post
US Vice-President Harris’ visit to Zambia raises excitement, 29.03.23, Voice of America
Zambia Airways resumes flights to Zimbabwe after 27 years, 29.03.23, Simple Flying
UPCOMING EVENTS
04.04.23
Select Zambia Investment Forum 2023
Lusaka, Zambia
26.04.23 - 27.04.23
Zambia Institutional Investors Forum
Lusaka, Zambia
CONTACT US
If you would like to find out more or receive tailored briefings on specific sectors get in touch via info@zambiaisback.com. To stay up to date follow us on social media:
Facebook: @zambiaisback
Twitter: @ZambiaIsBack
Instagram: zambia_isback
$2 Billion Solar Power Deal Struck with UAE Energy Company
The Abu Dhabi renewable energy company, Masdar, has struck a deal with the Zambian government to develop 2GW of solar energy – estimated to be worth $2 billion – in the country. The joint venture, made in January, has been made with ZESCO, Zambia’s state-owned and largest power company.
President Hakainde Hichilema announced the joint development agreement in a statement on his Facebook page, describing the agreement as “not a loan but a capital injection in which the Zambian people, through ZESCO, will be partners in shareholding”.
The development of these large-scale solar farms will be rolled out in phases of 500MW at a time, and is expected to start in the immediate future.
This is only one of many direct foreign investment deals struck with the Zambian government in recent months. Following just a month after news of the UAE-Zambia deal, it was announced that the UK energy sector would also invest $2 billion in a green energy join ventures agreement. Then, just days ago, ZESCO signed a deal with China’s Integrated Clean Energy Power Company (CiEG) for renewable energy production worth $3.5 billion.
These foreign direct investments are an extremely welcome boost to Zambia’s current energy capacity. An estimated 30% of the population has access to energy. Not only will these investments widen that figure, it will also improve the quality of energy supply experiences by those who are connected.
Zambian and UAE energy delegates at the signing of the Masdar-ZESCO agreement (@HHichilema)
Zambia’s previous reliance on hydropower (estimated to be roughly 80% of Zambia’s energy output) has left the grid struggling following periods of disrupted rainfall and extreme weather. Especially damaging were the critically low water levels in the Kariba Dam some months ago, a resource that is central to the country’s hydropower generation.
It is therefore hard to overstate the importance of President Hichilema welcoming investment from Masdar, CiEG, and others. It shows that the government is looking to diversify its energy supply within the realm of renewables. This diversification will increase its resilience to climate fluctuations which can affect the production of hydropower. By doing so, it is looking forward, not only to a greener future, but also to a more economically prosperous one.
Zambia needs significantly more energy in order to develop its economic potential. Drastically increasing the country’s power is necessary for improving and mechanising the agricultural industry, which is currently rooted in small-scale and traditional farming methods. More generally, closing the energy poverty gap will increase employment opportunities and bolster GDP.
President Hichilema said in a statement on Twitter in January that the Masdar-ZESCO agreement was “unprecedented” and showed “strong investor confidence” in Zambia. The energy deals struck in the months after are proof of this, and point to a bright future for the country’s energy and economy.
Zambia Airways Resumes Flights To Zimbabwe After 27 Years
Zambia Airways re-enters the regional network with three weekly flights to Harare after 27 years.
Zambia Airways (ZN) has resumed flights to Zimbabwe after 27 years. The airline was relaunched in December 2021 and has re-entered the regional network with a flight to Harare.
The inaugural flight took off on March 28 from Lusaka Kenneth Kaunda International Airport (LUN) and landed at Harare Robert Gabriel Mugabe International Airport (HRE), where a water cannon salute awaited. The flight was welcomed by government officials, news reporters, and various aviation, hospitality, and tourism stakeholders.
New regional route for the airline
Zambia Airways had been liquidated for more than 25 years but resumed operations on December 1, 2021, with the help of Ethiopian Airlines and the Zambian Industrial Development Corporation. Since then, it has been operating flights on domestic routes.
Last month, the Civil Aviation Authority of Zimbabwe (CAAZ) granted two Foreign Operator Permits (FOPs) to Eswatini Air and Zambia Airways. This gave ZN the green light to operate scheduled flights to Harare, which sees it re-enter the international network after nearly three decades.
The 55-minute flight to Harare was operated on a DHC-8-400, the only aircraft in the carrier's fleet. The airline will operate three weekly flights between Lusaka and Harare and plans to fly at least 1.9 million passengers annually by 2028.
Intra-Africa connectivity
Numerous stakeholders have been involved in the development of aviation in Africa. In line with the Single African Air Transport Market (SAATM) and the Open Skies Policy, Zambia Airways is spreading its wings and promoting intra-Africa connectivity.
As the industry has almost fully recovered from the pandemic, it is the perfect time for African airlines to step up and serve the continent. About 70% of African air travel is served by international airlines. The LUN-HRE has been dominated by Qatar Airways and Emirates, which operate five and seven weekly flights.
Launching the Zambia Airways flight can significantly boost trade, tourism, and business opportunities between the two neighboring countries. At an event following the airline's touchdown, Zimbabwe's Transport and Infrastructural Development Deputy Minister said to NewsDay: “Indeed, our two countries are Siamese twins who share a lot in common. Let us bear in mind that the opportunity offered by Zambia Airways creates copious room for scaling up our further co-operation in areas of aviation and deepening the people-to-people relations, as these are a catalyst for stronger relations between our two countries. To attain the desired middle-income status and fully modernize our countries, it is imperative that we develop reliable, adequate and appropriate aviation linkages.”
Zambia Airways expansion in the near future
The airline is delighted to have launched its first regional route since its restructuring. The route is expected to have a high demand; hence, the airline plans to launch a frequent flyer program in the near future. The program will be known as Zambezi Miles, allowing travelers to earn and spend rewards on Zambia Airways flights.
The Zambian government is eyeing a collaboration with other airlines operating the LUN-HRE route and fifth freedom flights to South Africa. Speaking at the welcoming event, acting Permanent Secretary for the Transport and Logistics Ministry of Zambia, Stephen Mbewe, said: “We are very grateful for our two airport cooperation, in the collaboration we have been doing for so many years, we've seen this during the time British Airways used to fly here, Kenya Airways, and now we see it with Qatar and Emirates. We hope the collaboration will go on with several other airlines, but we also have a plea honorable minister. We would like a fifth freedom to do the Lusaka-Harare-Johannesburg route.”
The two states are active members of the Southern African Development Community (SADC), founded in Lusaka, Zambia. SADC countries have substantial travel and trade partnerships, which the airline can leverage to enhance its regional connectivity.
This article was published by Simple Flying.