Today's business news

Wed, 14 Jun 2017 10:59:03 +0000

Power tariff reforms will lure investors – Mabumba

By BUUMBA CHIMBULU

ZAMBIA is poised to become an investment destination in the Sub-Saharan Africa following the implementation of long-term measures in the energy sector, says Minister of Energy David Mabumba.

Mr Mabumba said Government was in the process, although not yet approved by Cabinet, of undertaking long-term measures in the electricity sector to ensure Zambia became a destination for investment.

“I foresee Zambia becoming a destination for investors; the tariff reforms in the long-term measures will address weaknesses in the sector. Current tariffs in Zambia are uneconomical and it makes it difficult to attract investment,” he said.

He was speaking during the launch of the Policy Monitoring and Research Centre (PMRC) report on electricity tariff reform and the impact on poor households and Small and Medium Enterprises (SMEs) on Monday this week.

Mr Mabumba said Government was undertaking such long-term measures because Zambia’s energy sector had over the years remained stagnant due to low and unattractive electricity tariffs.

And PMRC board chairperson, Margaret Mwanakatwe, observed the need to further exploit the unique potential in the energy sector offered by the sub-Saharan region.

Ms Mwanakatwe observed that lack of reliable electricity supply in Zambia posed immense challenges for the economy and consumers as well as Zambia’s economic development agenda.

“Electricity in Zambia remains a valuable input in the production of goods and services, and any increases affects consumers directly and indirectly.

“The sub-Saharan Africa is starved for electricity and that Zambia’s pursuit of a self-sustaining energy sector presents an opportunity following the removal of subsidies,” she said.

Meanwhile, PMRC executive director, Bernadette Deka, said the slow translation of research into practice had often plagued and slowed the development agenda. Ms Deka said well conducted research was important to the success of Zambia’s development goals.

Among the findings in the research was that more than 70 percent of subsidies were channelled to the rich, hence the need to re-evaluate the lifeline base band.

Asycuda speeds up border clearance of imports

By MAILESI BANDA

THERE is evidence that using the Automated System for Custom Data (ASYCUDA) is more efficient than the old method of general goods consignment inspections at the country’s major points of entry.

As an example 3,456 goods were inspected and cleared at Chirundu border using the Asycuda compared to 1,239 inspections carried out at Nakonde border in the first quarter of 2017.

Zambia Bureau of Standards (ZABS) chief executive officer Manuel Mutale said the statistics was evidence that Chirundu border which has the Asycuda World connectivity had recorded higher volumes of inspections than the Nakonde border which was not yet connected.

Speaking when he toured the ZABS offices in Nakonde, Mr Mutale said they foresaw an increase in the number of import inspections as a result of the connectivity of Government agencies to the Asycuda World.

 “The Government of the Republic of Zambia is rolling out a programme to electronically connect all agencies operating at the borders to the Asycuda World system in order to facilitate quick and easier clearance of goods at border entry points,“ he said.

Mr. Mutale said the border points that were not yet connected to the Asycuda World were experiencing difficulties in capturing all imports that entered the country, resulting in significant revenue losses.

He said the Asycuda World connectivity made it easier and faster for Government agencies such as ZABS and others to monitor and capture all the imports that were entering the country through the border points. 

He explained that the absence of the Asycuda connectivity at Nakonde border meant that not every import was captured and this became a challenge to ZABS when it came to checking compliance of standards on imported products.

 “Once other borders such as Nakonde are connected, I am confident that the volumes of goods that will be inspected will increase in terms of the numbers and surveillances,“ he said.

He explained that the Asycuda World system enabled the Zambia Revenue Authority and other Government agencies manning the border points to have online access of entries for goods imported into the country.

He said this helped not only to make the job easier and faster in the clearing of goods but also in verifying whether or not the products being imported have all the necessary documentation.

‘Diversification hedge against price shocks’

By MAILESI BANDA

THE agriculture sector has been maturing as shown by the above-average production of major crops such as wheat, soybeans and maize but diversification would ensure a hedge against price shocks, Stanbic Bank head of agribusiness Leon Kotze has advised.

Mr. Kotze said agricultural diversification was the key to sustainable production.

“It is important that farmers also look at their cash flows and gauge the right time to invest in the diversification of their businesses and to ensure that their crops don’t suffer,” he said.

He emphasized the need for farmers to measure and monitor the life cycles of their commodities and the various strategies they could apply to ensure their businesses remained sustainable in the face of external shocks.

He explained that farmers needed to consider several things as they diversified their production, including making informed decisions using production data and records as well as maximizing their management capability.

He noted that in the last few years Zambia’s agriculture belt had shifted northwards to the Copperbelt’s rural towns such as Mpongwe, as well as parts of North-Western Province that are enjoying appreciable amounts of rain, adding that the Southern and Eastern province belts had suffered lower production due to lower rainfall patterns.

He explained that statistics showed that from 2007 to 2009, non-performing loans in the agriculture sector were quite high at above 30 percent for all bank funding to the agricultural sector, but that between  2010 and 2013 the sector rebounded, leading to  non-performing loans coming down to levels of 10 percent.

“We take a long-term view of investments that our customers make in the agriculture sector and there has been maturing evidence by the above-average production of major crops,“ he said.   

Fish farming key to Luapula growth

By MAILESI BANDA

THERE is need for the people of Luapula Province to engage in fish farming since the fish in the rivers and lakes are slowly depleting, provincial minister Nickson Chilangwa has said.

The minister said the province was known to depend on fish for their livelihoods, adding that once the fish was depleted the people in the province would be victims of poverty, leading to reduced economic growth. Speaking in an interview with the Daily Nation, Mr Chilangwa said engaging in fish farming would improve the livelihoods of the people and would lead to improved economic development. Mr. Chilangwa called for investment in aquaculture to help improve the livelihoods of the local people.“There is potential in the aquaculture sub-sector in the province and aside from the assessment that were carried out on Lake Bangweulu and Lake Mweru that are earmarked for development, the local people could complement the efforts by  engaging in fish farming to cushion the demand for fish,“ he said.

He said the water temperature in Luapula was conducive for the investment into aquaculture.

Mr Chilangwa said among the exhibits to show potential investment sectors during the Luapula exposition next month would be the aquaculture sub-sector.

The Luapula Expo is a five-day economic and investment tour of Luapula Province which will take place from the 26th to 31st of July 2017 in the province.

The expo will be held under the theme, “Linking investors to Luapula Province to unlock the economic potential”.

 The expo intends to market the province with reference to the seven thematic investment areas which include agriculture, tourism, mining, aquaculture, energy, livestock and forestry.

The aim of the expo is to connect local and foreign investors to the investment opportunities in the province.

NTEs decline defies logic, says Govt

By BUUMBA CHIMBULU

ZAMBIA in 2016 recorded a decline of 2 percent in Non-Traditional Exports (NTEs) despite the stable exchange rate and the low inflation rate.

Minister of Commerce, Trade and Industry, Margaret Mwanakatwe, announced that Zambia’s NTEs declined to US$1.85 billion in 2016 from US $1.88 billion recorded in 2015, representing a decline of 1.87 percent.

Ms Mwanakatwe however said Government was working on completing the national export strategy, the national policy and the trade policy which would promote the NTEs.

“Government has implemented a number of measures aimed at improving the NTEs such as operationalisation of the National Electronic Single Window which is a tool that allows cross-border traders to lodge standardised information and documents at a single entry point,” she said.

She made the remarks in a speech read on her behalf by her director for cooperatives, Shadrack Mungalaba, at the 2016 exporter Audit Result Dissemination workshop in Lusaka yesterday.

The survey is an annual report undertaken by the Zambia Development Agency (ZDA).

Ms Mwanakatwe said the survey served as a monitoring tool for the growth and performance of Zambia’s NTEs, thereby critical for policy interventions in improving the business and regulatory environment.

She urged participants to familiarise themselves with the report.

And ZDA board chairperson, Mary Ncube, said preliminary data indicated that NTEs were expected to increase in the first quarter of 2017 compared to the first quarter of 2016.

“This is indeed a positive sign for our economy and shows that the various interventions put in place by Government have begun to hear fruits,” she said. Ms Ncube said the performance of NTEs in 2016 indicated that the economy had begun to show stability following a period of volatility occasioned by external shocks arising from a slowdown in the global economy.

Ms Ncube said the 2 percent decline of NTEs in 2016 was significantly lower than the 2 percent reduction recorded between 2014 and 2015.

She said in promoting NTEs, ZDA had begun the process of disbursing funds through its export development fund which was a low interest and short term credit facility aimed at supporting exporters.

She said ZDA had also prioritised market research and trade promotion activities in key regional markets to provide up to date information to exporters.

Meanwhile, Zambia Association of Manufacturers (ZAM) chief executive officer, Chipego Zulu, said the sector continued to prove its resilience in the face of adversity despite challenges faced.