Business News

Fri, 17 Mar 2017 09:04:00 +0000

Loan defaults driven by high interest rates-Dodia

By BUUMBA CHIMBULU

THE increase in loan repayment defaults by businesses in Zambia is due to high interest rates, says Private Sector Development Association (PSDA) chairperson Yusuf Dodia.

Mr Dodia said in an interview that most businesses were defaulting on loan repayments due to high interest rates which had posed a negative effect on the business environment in the country.

“Low interest rates in Zambia today is about 30 percent. Now for any business to survive with the interest rates of 30 percent, it means the profitability of that business has to be above 50 percent because 30 percent will go towards paying back the cost of money and 20 percent represents some level of profit,” he said.

He said most businesses were collapsing as they were unable to run or pay back loans which they obtained from financial institutions.

Mr Dodia said for businesses to survive and be able to repay loans, they needed to make a profit of more than 50 percent.

“Part of the collapsing is actually defaulting on the loan payment when they cannot pay the loan, it means the bank has to move in, take whatever assets they are holding as security and that is the end of that business. For that businesses to resuscitate itself, it is almost impossible,” he said.

He observed that the high interest rates had a lot of effects on various areas of the economy.

“It is important for our country to start keeping our interest rates as low as possible because by doing so, we are ensuring the survival of small businesses and this means the ability to pay back the bank becomes almost guaranteed,” he said.

Mr Dodia added that financial institutions equally made losses when clients failed to repay loans.

“For the bank to get the value from the assets which they have, they also lose because the assets which they have when they sell the money is not equivalent to what is owed to them by the borrowers.

“So what we came to see is the liquidity in the bank beginning to get less, meaning the banks cannot lend out more money,” he said.

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Drought resilient crops key to food security – Siliya

By BUUMBA CHIMBULU

FARMERS need to focus on growing crops that are drought resilient and have an early maturity period as a way of adapting to climate change while ensuring that Zambia continues to be food secure, says Minister of Agriculture Dora Siliya.

Ms Siliya said it was important for farmers to move away from the mono cropping of growing only maize and focus on crops which would survive in difficult climatic conditions.

She was speaking at the Eastern and Southern Africa regional sustainability summit in Lusaka yesterday organised by the Indaba Agricultural Policy Research Institute (IAPRI), DST-NRF Centre of Excellence and Vuna.

“Climate change does not know boundaries, it does not know borders. We need to ensure that farmers, while mitigating climate change. still have an opportunity to get rich by growing drought resilient crops.

“For a country to be food secure, we have now to move from being a mono crop focussing on maize to other crops that are much more drought resistant or even have a short maturity period; these are the realities,” she said.

Ms Siliya said Government had taken measures to find solutions to climate change, indicating a clear importance it placed on climate change mitigation to ensure sustainability in agriculture.

She explained that Zambia had developed a key framework aimed at adapting to the changing climatic conditions in mitigating negative threats posed by changing climatic conditions.

“It is a reality that the climate is changing, we have to ensure that farmers appreciate the changing of climate change and how it impacts on crop production,” she said.

Meanwhile, IAPRI board chairperson Mick Mwala said the summit was for practitioners to share experiences they have had with regards to climate change conditions.

Dr Mwala emphasised that climate change had no boundaries, hence the need for strategic and lasting solutions.

“It is my sincere hope that strategies should be identified that can be adopted by respective countries; as such a summit is important to share experiences and find lasting solutions,” he said.

And United Kingdom Department for International Development climate change adviser, Africa region, Kelly Toole, said the organisation had committed 5.8 billion British pounds of international climate finance.

Ms Toole observed that agriculture was central to livelihoods and economics in Africa, yet vulnerable to climate shocks and trends.

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Chinese salute Govt support to investors

By MAILESI BANDA

GOVERNMENT has provided an enabling environment for Chinese business investment to flourish and grow, Zambia Chinese Association president, Zhang Jian, has said.

Mr. Zhang commended Government, saying the increased Chinese investment into the country was because of the conducive environment.

Speaking in an interview with the Daily Nation, he said the policies that the Government had put in place to attract Foreign Direct Investment (FDI) were bringing investors into the country.

He said Chinese businesses had plans of increasing trade and investment between the two countries.

“We commend the Zambian Government for providing an enabling environment for Chinese businesses to invest into the country and as an association we act as a link between China and Zambia and we hope to bring in more investment into Zambia,’’ he said.

Chinese business owners had plans of increasing trade and investment between the two countries.

He commended Government for the support to the business investments foreign companies and individuals were making to Zambia.

He urged the Chinese business community to follow the rules and regulations while conducting their business and investment in Zambia.

He said it was important that Chinese investors followed laid down labour laws for them to operate effectively.

He advised that there was need for investors to resolve disputes and other challenges they may face through dialogue with Government.

He said it was important for investors to realize that policies were not put up to frustrate investors but to benefit the nation and investors.

“We believe that Government is always there not only to protect the interests of the nation but also the investors, hence the need for co-existence and dialogue between Government and investors.

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Tourism spin-off can hit $3bn – expert

By BUUMBA CHIMBULU

LARGE investment in the tourism sector can help Zambia attract US $3 billion as foreign direct nvestment (FDI) within 5 to 10 years, says Country Hotels and Suites consultant Collins Beza.

Mr Beza observed the need to recognise the multiplier effect of tourism development in creating employment opportunities and distribution of wealth through a variety of economic activities, predominantly in the Small and Medium Enterprises (SME) sector.

This is contained in a document recently presented to the Parliamentary Committee on Tourism.

He said it was important for Government to take advantage of SMEs being able to link micro enterprises from one side and large scale corporate sector on the other side, while attracting FDI.

“Some of the key objectives to be achieved through the strategy are an increase in tourist arrivals from the current 170,743 in 2013 to 2 million by 2020/22. Attract US$3 billion as FDI to the country within 5 to 10 years.

“It can also increase the tourism-related employment which is currently negligible to more than 200,000 by 2020/22 and expand tourism-based industry and services all over the country,” he said.

Mr Beza explained that such a strategy would also increase the foreign exchange earnings from the current to US$2 billion by 2020/22, and contribute towards improving the global trade and economic linkages of Zambia.

He said it would also position Zambia as one of the world’s most treasured destinations for tourism.

“Once investment growth in the tourism industry is established, the Government should be committed to design policy strategies to integrate banking and financial institutions, construction industry and professionals and agriculture industry.

“A wide range of service-oriented stakeholders are needed to work with local/foreign investors and private authorities to exploit the full potential of backward integration in such large investments,” he said.

Mr Beza said the local economy should be promoted and the tourism sector encouraged to source its requirements such as fruits, vegetables, spices, food varieties, beverages, textiles, handicrafts and gift items from local suppliers.

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Local contractors lack capacity for huge tenders – MCA

By AARON CHIYANZO

ZAMBIAN contractors lack the capacity to bid for huge procurement tenders and major contracts although they are capable of executing works diligently if given a chance, Millennium Challenge Account (MCA) Communications and Outreach director John Kunda has observed.

Dr. Kunda said that most major procurement contracts were awarded to foreign companies because local contractors were hesitant to bid on the pretext that they did not meet the requirements of the tenders.

He said in an interview with the Daily Nation that local contractors were also sidelined because of the perception that they did not execute their works according to the expectations of the client.

Dr. Kunda, however, said that the MCA had been amply satisfied with the works executed by local contractors who were sub-contracted on all the organisation’s major projects being carried out in the country.

He assured that local contractors had the potential to execute works to the expectations of the clients and that there was need to create an atmosphere where both international and local contractors could compete favourably.

Dr. Kunda also emphasised the need to do away with the perception that local contractors were unable to handle major projects and only associated with substandard works.

“The perception that local contractors cannot handle major projects and only associate them with substandard works should be done away with.

“Let local and foreign contractors compete fairly. Otherwise, we are satisfied with the works that have been done by the local contractors who have been sub-contracted on our projects,” he said.

Meanwhile, The United States funded MCA recently signed contracts with nine private sector organisations who had been awarded grants worth about US$3 million.

Dr. Kunda explained that the grants were meant for the implementation of various innovative projects in water supply, sanitation and drainage that were aimed at improving lives of beneficiary communities.

“Six contractors are currently at various stages of construction and expansion of infrastructure in water supply, sanitation and drainage, which once completed will benefit residents in many parts of Lusaka. The grant recipients will carry out projects to complement the infrastructure,” he said.

Dr. Kunda pointed out that a good number of contractors who had benefited from the US$3 million project were Zambians.

And speaking on behalf of the grantees, GP&J Managing Director George Mwamba, whose firm had received a grant of about US$100,000 for solid waste management said that the different projects to be implemented by the different organisations across the city would collectively improve lives of several communities.

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Govt puts conditional work permits for expatriates on hold

By SHEILA SAKUPWANYA

GOVERNMENT says it is not in a position to renew the Conditional Work Permits for expatriates as they were designed to provide for skills transfer from them to local people, says Minister of Home Affairs Stephen Kampyongo.

Mr Kapyongo said some employers and expatriates had been frustrating Zambians understudying the expatriates to prevent them from taking over their jobs.

“Close analysis of the utilization of conditional work permits show that some employers and expatriates have been frustrating Zambian understudying the expatriates in order to prevent them from taking over from the expatriates,” he said.

Mr Kampyongo said this at the Chamber of Commerce and Industry (ZACCI) Chief Executives Officers breakfast meeting held at Intercontinental Hotel yesterday.

He however said that employment creation was a priority because the population of Zambia was predominantly young and that the economy ought to meet the demand for jobs.

That was more so among the youths to guarantee social stability and the realization of inclusive sustainable social and economic development,” Mr Kampyongo said.

He observed that among the many benefits of FDI was skills and technology transfer, adding that those given conditional work permits must play their role and allow the country and people realize the full benefits of welcoming and hosting FDI.

“Skills and technology transfer is essential for the country to progress and become a middle income country by 2030 as desired by Zambians,” Mr Kampyongo said.

He said the government had a duty to create a favorable climate for investment and creation of jobs and wealth.

Mr Kampyongo appealed to investors to respect the Zambian laws by adhering to the conditions of the FDI agreements.

And ZACCI president Geoffrey Sakulanda said the public private dialogue played a very important role in enhancing the business environment and opportunities for the private sector on issues that affect the business environment.

“Immigration laws play a very critical role in creating a conducive business environment for the attraction of Foreign Direct Investment (FDI) and general private sector growth.

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Military personnel to be included in economic diversification-Chama

By BENNIE MUNDANDO

The Ministry of Defence will endeavour to ensure that military personnel are not left out in the diversification of the economy from mining to agriculture, says Defence Minister Davies Chama.

Mr Chama said that was important so that they could acquire desired skills which they could use long after leaving the service.

And Mr. Chama has disclosed that Governmnet was still committed to integrate street kids into the Zambain National Service (ZNS) programme in order to impart them with life skills that would enable them live better lives as opposed to the threat they faced on the streets.

In an interview at State House yesterday, Mr. Chama said Governmnet will ensure that defence personnel played a critical role especially in the area of agriculture by imparting them with skills that would enable them produce a diversified agricultural produce to help the country expedite its diversification programme.

He said most people had become destitutes after retiring from the service due to lack of life skills, adding that it was important that those in security wings were trained in other economic ventures which will not only help the country but individual officers especially after they retired.

“You know that ZNS is doing so well in agriculture. They have been growing maize on a large scale but now we want them to diverse to all spheres of the sector. We want them to add value to the economy especially through the diversification programme where they don’t just limit themselves to growing maize but venture into other economic activities such as poultry, fish farming, beef production and many others.

He implored the defence wings to take advantage of the peaceful environment in Zambia by diverting their energies to economic activities.

And Mr. Chama has disclosed that Governmnet was still considering the integration of street kids into the ZNS programme to impart them with life skills that would enable them live better lives.

“Most of these children who are on the streets have families and we cannot just get them and take them for training. We will need to be cautious as you know that the issue of street kids is highly politicised in this country,” he said.

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State ready to embrace PPP for economic development

By MAILESI BANDA

GOVERNMENT is ready to build a country that will embrace and enhance Public Private Partnerships (PPP) in national development, Finance Minister Felix Mutati has said.

Mr Mutati said it was important that those mandated with the responsibility of facilitating the process of engaging the private sector in national development were equipped with the knowledge of procedural requirements so as to increase efficiency and professionalism.

Speaking when he officially opened a training workshop on Public Private Partnerships in Chisamba,in a speech read for him  by Secretary to the treasury Fredson Yamba, he said government supported PPPs for economic development.

Mr.Mutati said cooperation between the private and public sector would increase service delivery.

“It is government’s strategic objective to facilitate the provision of infrastructure and effective delivery of social services using POP, “he said.

He said PPPs would ensure that economic growth was attained through enhanced productivity, improved competitiveness and wealth creation.

He said government hoped that PPPs would result in an efficient and effective delivery of projects that would enable the country benefit from privately financed infrastructure and services.

He stated that Zambia could only achieve great strides if it had skilled people that were implementing the PPP.

And African Development Bank (AfDB)resident representative Damoni Kitabire says a country cannot attain much development without embracing the private sector.

He said the private sector was an important player in economic development adding that an inclusive government attained great results from partnering with the private sector.