Business News

Tue, 18 Apr 2017 10:31:16 +0000

Find cheaper sources of energy, producers told

By MAILESI BANDA

GOVERNMENT has advised manufacturers to embrace alternative energy sources to complement the hydro power supplied by the Zambia Electricity Supply Corporation (ZESCO).

Minister of Energy David Mabumba said the dependence on energy from ZESCO would lead to low productivity in the manufacturing sector.

Speaking during a Zambia Association of Manufacturers (ZAM) meeting with the Government themed ‘‘Affordable access to electricity for industrial growth’’, the minister said there was need for a rational approach to the proposed increase in electricity tariffs.

He appealed to manufacturers to reason with the Government on the increase in the electricity tariffs.

“As much as it is regrettable to propose an increase in the electricity tariffs, it is important that the manufacturers choose from the options the electricity supply company is offering which provide for different tariff rates for different times of operations,“ he said.

He said the increments would make ZESCO financially and operationally stable as the company would be able to meet its financial obligations and offer a better service to the manufacturers.

He advised manufacturers to invest in flexible operation management by moving production to off-peak hours when the rate for electricity would be lower.

And ZAM president Rosetta Chabala called for a phased increment process of the proposed electricity tariffs.

Ms. Chabala said the increment would make it difficult for the manufacturing sector to adapt, adding that manufacturers made the 2017 budget based on the current electricity tariffs.

She lamented that even with the proposed increment in tariffs the supply of electricity to industry was not adequate.

She said the move was not good for the development of the manufacturing sector as it would hinder competitiveness.

“The increase in electricity tariffs will make it difficult for the sector to adapt and this will make the products expensive to compete with other products in the region,“ he said.

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Mine supports local communities to thrive

By BUUMBA CHIMBULU

KANSANSHI Mining Plc will initiate and support livelihood projects to increase economic and social well-being of the communities around the mine, its general manager, Rudi Badenhorst, has said.

He said to support these activities, the mine introduced the 2010-2015 Local Business Development Activity for Kansanshi mining, a subsidiary of First Quantum Minerals (FQM).

Mr Badenhorst explained that the mine continued to support local livelihood initiatives including vegetable growing, poultry rearing, fish farming, conservation farming and community banking.

“Despite Kansanshi making a significant contribution to the Zambian economy through direct taxes, royalties, local taxes, other duties and levies and employment, we have recognised that by having a proactive local business development plan, the mine can have a further significant influence on the economy of both Zambia and the North-Western Province, which will enhance the living standards of the population,” he said.

Mr Badenhorst noted that these projects would be supported if they were successful and dropped if unproductive.

He also said the mine had been organising one-day local business development workshops since 2010 to build capacity among the micro, small and medium enterprises in the province.

“These workshops were primarily aimed at micro enterprises and included topics such as business choices, writing business plans, managing money and customer relations. These are run by a Solwezi based contractor and the majority of the courses are in Kikaonde,” he said.

The overall objective of the mine’s socio-economic development programmes was to improve the quality of life for its employees, their families and the surrounding communities.

The mine had also decided to support local suppliers and contractors provided they were competitive in terms of price, quality and delivery.

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CUTS wants ZESCO tariff hike spread over 3-5 years

By BUUMBA CHIMBULU

GOVERNMENT should consider introducing a ZESCO cost reflective tariff to be implemented over a period of 3 to 5 years, Consumer Unit Trust (CUTS) International has suggested.

ZESCO has applied to the Energy Regulation Board (ERB) to hike electricity tariffs by up to 75 percent across various consumer categories, with an initial 50 percent increment to be effected on May 1 this year and an additional 25 percent on September 1 this year.

CUTS International coordinator Chenai Mukumba explained that such a scheme had worked in other countries and was used as a mode of adjusting tariffs in a gradual manner without hurting the industries and vulnerable people.

Ms Mukumba said in an interview recently that the implementation of cost reflective tariffs should be done in a much more gradual process as the hike of 50 percent in May and another 25 per cent in September was too quick.

“We encourage all sectors to start moving towards cost reflective tariffs but our biggest concern is that the largest users of electricity are the mining companies and they benefit from purchasing power agreements (PPAs) and as a result they continue to benefit from subsidised electricity.

“We are of the view that those agreements should be revised and made much more transparent because all sectors should carry a cost that the entire country should benefit from,” she said.

Ms Makumba also urged Government to undertake a cost of service study before implementing the cost reflective tariffs.

She said CUTS was of the view that the cost of service study should be done first before implementing the cost reflective tariffs in order for Government to make a more informed decision.

“As CUTS we are of the view that the country should be moving towards cost reflective tariffs; we acknowledge that our Treasury does not have enough resources to continue subsiding electricity.

“However, there are a few issues that need to be taken into consideration. Government is starting to take a cost of service study and what the study does is to look at what the true cost of producing electricity is,” she said.

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Legalise Mukula timber business, Govt urged

By BUUMBA CHIMBULU

GOVERNMENT should set up a processing industry for the Mukula tree as a way of promoting value addition than seizing logs when there is no local market for raw Mukula timber, Centre for Trade and Policy Development (CTPD) has suggested.

The Mukula tree is currently on high demand outside the country and this has fuelled the illegal export of the commodity.

The illegal exportation of the logs has resulted in hundreds of trucks laden with Mukula raw timber impounded by the Zambia Revenue Authority (ZRA) and the police.

CTPD acting executive director, Isaac Mwaipopo, said legalising and setting up a processing industry for Mukula tree would help Government collect revenue from the commodity.

“For how long will we close our borders against the export of Mukula logs? If we realise this is something that can deliver development for the country, there will be need for us to understand the usage for this tree and then set up an industry locally that can begin the actual processing and export of value added products,” he said.

He said Government should use such opportunities to utilise natural resources other than copper to grow the economy by generating more revenue.

Mr Mwaipopo explained that setting up a Mukula timber industry would create job opportunities for the local people.

“We have seen in the recent past that when it comes to opportunities that might lie within our sectors, we do not seem to have a well worked out plan as a country in terms of how some sectors can be organised and how we can take advantage of them.

“There seems to be only a few people, more especially from the informal sector, that have seen an opportunity in the Mukula tree, hence going behind doors exporting this illegally,” he said.

Mr Mwaipopo noted that CTPD was concerned in the manner certain critical areas with potential to contribute towards revenue generation and economic growth were being handled.