Business News

Tue, 21 Mar 2017 06:33:29 +0000

Economy surging forward, says Stanbic

 By BUUMBA CHIMBULU

THE current economic path shows that Zambia is effectively dealing with the economic shocks it suffered for most of 2015 and 2016 that caused economic uncertainty, says Stanbic Bank’s head of global markets, Victor Chileshe.

Mr Chileshe said shocks which included power deficits, low copper prices and weak exchange rates that caused economic uncertainty were stabilising.

He was addressing the media at the conclusion of Stanbic’s Mining and Economic Roadshows held recently in North-Western, Copperbelt and Lusaka provinces.

“The economy is projected to grow by 4.2 percent this year, and key to this is what happens in the mining sector,” he said.

Mr Chileshe said the bank’s view was strengthened by happenings in the global economy, with an expected growth in refined copper production in China, the world’s largest consumer of copper.

Mr Chileshe said the bank projected copper prices to breach US$6,500 later in 2017, having held firmly above US$5,500 per metric tonne after dipping below US$4,500 around June 2016.

He said the bank also expected the local currency to be fairly stable this year on the back of a stable mining industry.

“We’ll see a bit of depreciation here and there but those will be sideward movements. We don’t see definite up and down movements. This will help businesses plan better,” he said.

And the bank’s head of corporate and investment banking, Helen Lubamba, said the Zambian economy had come stronger out of the recent external shocks it suffered.

Ms Lubamba said Government bonds and Treasury bills were steadily declining as a result of the stability, inflation, interest rates as well as yields on.

“We are seeing some green shoots that play a key role in informing our optimism for 2017. Copper prices are higher and more stable; the currency has also strengthened and is more stable.

“We should all be looking at the positive side of where we are going rather than being dejected by a few signs of negativity,” she said.

Ms Lubamba said Zambia needed to improvement its local manufacturing and rump up its exports to earn more foreign exchange in order to leverage its current economic position.

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Lafarge in K77mprofit despite challenges 

By Sheila Sakupwanya

LAFARGE Zambia has recorded K889 million revenues and a profit after tax of K77 million for the year 2016, representing earnings per share of K0.39, despite the competitive pressure, a prolonged tight liquidity on the money market as well as high interest rates.

According to a statement released to the Daily Nation, the restricted expenditure resulted in the domestic market contraction of about 21 percent compared to 2015.

Lafarge Zambia chief executive officer Vincent Boukaert said he was convinced that 2017 would be a positive year for the economy and the company due to rising copper prices, promising maize harvest, and a 1.5 percent reduction in monetary policy rate that would result in improved construction activities in the country.

“The innovative products and solutions that the company continues to pursue will drive growth in 2017 and the growth in the mining activity due to the rising copper price, good maize harvest. The lowering of Government’s monetary policy rate from 15.5 per cent to 14.0 percent will lead to improved liquidity, likely to enhance performance of the construction sector,” Mr Boukaert said.

He said Lafarge’s sales revenue for the year was K889 million compared to K1,269 million in 2015, resulting in a profit before tax of K127 million, a drop from K483 million recorded in the previous year.

“The company sustained its strict cost management policy although power supply challenges adversely impacted production costs at both Chilanga and Ndola plants,” said Mr Boukaert.

He said although domestic sales volumes were down by 42 percent compared to 2015, cement and clinker exports rose by 53 percent compared to 2015 with clinker sales reaching record high.

“The company had zero long term debt as at 31st December, 2016, and the company’s financial structure remains solid,” he said.

Lafarge is supplying the large construction projects in the country such as the Kafue Gorge Lower and Kenneth Kaunda International Airport (KKIA).

And the distribution channel management known as Kumanga retail franchise is beginning to accelerate with a focus on promoting entrepreneurship while the company is still committed to growing the export market.

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Soya beans production up by 41,000 MT

By BUUMBA CHIMBULU

SOYA beans production in 2016 increased by 41,167 metric tonnes, meeting both the domestic demand and surplus for export.

According to the Indaba Agriculture Policy Institute (IAPRI), the production of the commodity increased to 267,490 metric tonnes in 2016 from 226,323 tonnes recorded in 2015.

IAPRI said the crop forecast report for 2016 indicated that stocks of soya beans in Zambia was 248,491 tonnes, out of the required 230,000 tonnes.

This indicated that Zambia had sufficient stocks of the commodity to meet the domestic demand and surplus for export.

“The production of soya beans and associated yields have been fluctuating due to weather patterns because the area under soy beans has been trending upwards since 2012,” the report said. IAPRI in its 2016 agriculture status report explained that soy production and processing sectors had matured in Zambia.

The institute said the argument lodged by the Zambia National Framers Union (ZNFU) is that cheap oil imports were hampering the development of the soya beans sector and thus driving down incentives to invest in soybeans production and processing.

“We have started to see trade restrictions being imported on the soya beans sector, a situation  that needs to be closely monitored  in order not to promote inefficient producers or foster the development of an uncompetitive market for soybeans and its product,” read the report.

The report observed the need to develop the soya beans industry in such a way that citizens begun to add value to the produce.

It further stated that the soya beans reaching milling companies and processors had mostly been used for stock feed formulation.

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Social protection critical to economic growth-PS

BY MAILESI BANDA

DOMESTIC financing for social protection is productive as it supports local demand and facilitates structural transformation of the economy, Ministry of Finance permanent secretary Mukula Chikuba has said.

Speaking during the launch of a series of public lectures at the University of Zambia, Mr Chikuba said social protection played a critical role in reducing poverty.

He said social protection was critical in the promotion of inclusive economic growth.

“Social protection plays a critical role in reducing poverty, inequality and promote inclusive growth which carries every citizen along in the development of the country,’’ he said.

He said for Zambia to attain the maximum potential of the country’s economic growth, there was need for citizens to be part of the activities that promote economic growth.

He stated that a country’s economic growth needed to grow with the citizen’s individual economic growth, adding that Government’s intention was to reduce poverty among the citizens.

“Government’s key strategy is to support economic growth, reduce poverty and promote equity with the fulfilment of investment of social protection,’’ he said.

He said the rural population had the potential to contribute to the economic growth of the country if they were involved in economic activities.

Mr Chikuba said rural areas had the potential to grow the economy through the various traditional practices like agriculture which, with value addition to farm produce, could contribute to economic growth.

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Farmers hail Govt ban on potato imports

 BY MAILESI BANDA

GOVERNMENT needs to support potato farmers in increasing their productivity to meet the demand that has been created by the ban on potato imports, Buya Bemba managing director Anthony Barker has advised.

Mr. Barker said Zambian farmers had the potential to meet the country’s potato needs.

Speaking in an interview with the Daily Nation, he said there was plenty of land and natural water bodies which when properly utilized would lead to an increase in potato production that would meet the local demand.

He said the farming community needed Government support to increase their production, saying the ban on the importation of potatoes and other vegetables was a positive move.

He said the importation of potatoes on to the Zambian market had been a challenge to local farmers and potato traders who found it hard to compete with the foreign market.

“The capacity to grow potatoes in Zambia is there and for it to be attained there is need for support from Government,’’ he said.

He lamented that while foreigners had been allowed to sell potatoes on the Zambian market exporting local potatoes was a challenge.

He explained that most countries that found a market for potatoes in Zambia had a strict ban on importing vegetables.

He said the ban by the Zambian Government has provided a level playing field in the region.

Mr. Barker said a shortage in the supply of potatoes would be good as it would encourage local farmers to produce more due to increased demand.

“There will be a potato shortage as we start but this will encourage farmers to grow more to meet the demand,’’ he said.