Business News

Tue, 13 Jun 2017 13:42:44 +0000

AfDB ploughs $1.09bn in Zambia’s economy

By BUUMBA CHIMBULU

PROJECT portfolio for Zambia from the African Development Bank (AfDB) as at December 2016 stood at US$1.09 billion which has since been invested in 23 on-going and approved operations in different sectors of the economy.
According to the bank, two out of the 23 on-going projects are multinational.
The portfolio was distributed across seven sectors, namely transport allocated 32 percent, water supply and sanitation 22 percent.
Other sectors were the agriculture 17 percent, energy 12 percent, finance 7 percent, social 6 percent and environment 4 percent.
This is according to an AfDB 2016 annual report for Zambia.
The report indicated that AfDB was one of the largest providers of development finance to Zambia, with current total commitments of more than US$1 billion distributed in the seven economic sectors.
“As at December 2016, the average age of the operations was 2.5 years with disbursements at 17 percent, inclusive of operations approved but not effective for disbursement,” reads the report.
AfDB said the Zambian portfolio continued to witness significant improvements in terms of performance.
It said the percentage of loans and grants rated satisfactory improved to 70 percent in December 2016 from 43 percent in January the same year.
In the report, AfDB said technical launch was undertaken for new operations approved in 2016.
“Key portfolio improvement measures implemented during 2016 included technical launch, quarterly portfolio review and field supervision.
“The technical launch is a capacity building programme to assist staff of project implementation units familiarise with the project appraisal report, loan agreements, procurement and procedures,” reads the report.
The report also indicated that following Zambia’s achievement of a Blend Status, allowing it to borrow from the AfDB window, more than 65 percent of financing had come from the source.

High interest rates crippling SMEs – church
By AARON CHIYANZO

HIGH lending rates by banks operating in Zambia are hindering young entrepreneurs in the country to access proper financing to venture into profitable businesses, the Bishops Council of Zambia (BCZ) has observed.
According to the Financial Statistics in Zambia, the current average commercial bank lending interest rate was about 40 percent.
The difference between the policy rate and what commercial banks are charging customers is 24.5 percent which is 15.8 percent above the Central Bank policy rate of 15.5 percent.
BCZ spokesperson Fred Chingole says there was no doubt that the high interest rates were constraining economic activities and improved business confidence in the country.
Mr Chingole said that the exorbitant lending rates by banks operating in Zambia were hindering young entrepreneurs to access proper financing to venture into reasonable businesses.
“The lending rates by our banks are too high for an ordinary Zambian and it is the reason why people cannot venture into reasonable businesses. There is no doubt that the high interest rates are constraining economic activity and improved business confidence,” he said.
Mr Chingole warned that the call for value addition to local products would remain a mere dream as long as commercial banks continued charging unjustifiable and exorbitant interest rates.
He observed that the Zambian government was rightly concerned and trying hard to come up with measures which ensured that lending rates were affordable
Mr Chingole pointed out that that was the reason why the Government had reduced the policy rate so that banks could reciprocate and reduce their rates.
He said that there was need for banks to compliment Government’s efforts in recovering the economy of the country by making interest rates affordable
Meanwhile, former financial Advisor to Botswana Confederation of Commerce, Industry and Manpower (BOCCIM) under the USAID, Mwansa Chalwe, indicates in his research that the average commercial bank interest rates in Botswana was 7.5 percent.

Zambia Sugar turns to new sources of energy
By MAILESI BANDA

ZAMBIA Sugar PLC will maximize the use of alternative energy sources to cushion the impact of the increased electricity tariffs by ZESCO, managing director Rebecca Katowa has said.
The managing director said the company would use the alternative energy sources to avoid burdening the sugar production costs on the consumer.
Speaking in an interview with the Daily Nation, she however said that would not mean the price of sugar would not increase as the 75 percent electricity tariff increment still had an impact on sugar production.
“The company is working at supplementing energy sources to avoid placing the production costs on the consumer.
“We are working towards increasing our own energy source production, but we cannot run away from the fact that the 75 percent power increase will trickle down to the consumer,” she said.
She observed that the impact of the increase in the electricity tariffs would have an impact on the economy and the production costs as well,’’ she said.
Ms Katowa lamented that illegal sugar imports had affected the company’s profit margins and appealed to the authority’s to regulate the sector.
She was however hopeful that the company was positioned to withstand economic and weather challenges.

$12m credit to boost mining SMEs
By MAILESI BANDA

THE African Guarantee Fund for Small and Medium sized Enterprises (AGF) will make available US$12 million in credit guarantee facilities to the development of small minerals in Cameroon, Guinea, Nigeria, Uganda and Zambia.
The loans are expected to develop the small minerals sector in these countries and would also result in up to US$24 million in finance as guarantees to underpin 50 percent of each loan.
Speaking during the signing ceremony of the loan facility in Brussels recently, the United Nations and UNDP director Barbra Monterio said SMEs were key players in economic growth.
Ms Monterio said SMEs created more than 90 percent of jobs in developing countries and were already a major backers of poverty reduction and development at the local level, noting that the challenge the sector faced was lack of finance.
“SMEs often tell us that they need more finance to thrive, especially those in neglected sectors such as ‘development minerals’. Together with AGF, we are stepping in to fill this gap,” she said.
She said the loans were for small businesses that quarry, manufacture and trade gravel, clay, granite, gypsum and other local materials critical for development in five African countries.
‘The financing is expected to boost the livelihoods of approximately 25,000 people and their dependants across some of Africa’s communities,’’ Ms Monterio said.
The loan scheme targets 5,000 micro, small and medium scale ‘development minerals’ operators who will now have access to more affordable finance as a result of a partnership between the African Guarantee Fund for Small and Medium-sized Enterprises Ltd (AGF), the African Caribbean and Pacific Group of States, the European Union and the United Nations Development Programme.

Zamtel honours K10.7m tax obligation

By BUUMBA CHIMBULU

AS the Zambia Revenue Authority (ZRA) intensifies measures in collecting domestic revenue, Zamtel has responded by remitting its tax obligation totalling K10.7 million.
This is part of the Zamtel’s outstanding tax obligations to ZRA.
Announcing the development, Zamtel acting chief executive officer, Sydney Mupeta, said the telecommunication company remained committed to settling all its outstanding statutory and other obligations within the shortest possible time.
Mr Mupeta said such a development was as a result of support from the company shareholders such as the Industrial Development Corporation (IDC).
“We therefore wish to take this opportunity to recognise the wonderful and unwavering support we have continued to receive from the Government through the line ministry, Ministry of Transport and Communications as well as the Ministry of Finance,
“It is because of this support we have found the positive energy that is fuelling this growth phenomenon that is driving us to the desired position,” he said.
Mr Mupeta also announced that Zamtel was aggressively pursuing the 2,000,000th customer before the end of 2017.
“To further appreciate our customers and heed their clarion call for an end to prohibitive calling rates across networks, we have turned the popular All Network Promotion into a permanent tariff.
“This promotion, in addition to the great effort and dedication from our employees, led to the unprecedented growth in the number of customers and traffic volume – over 1.8 million customers achieved over a very short space of time,” he said.
Mr Mupeta explained that the All Networks tariff was a launch pad which would take Zamtel to the envisioned position of being the leading telecommunications provider of choice in the country.