ZAMBIA’S TRADE DEFICITS ACCERATES AS INFLATIONS RATE SLOWS DOWN.

ZAMBIA’s imports have continued to exceed exports as the country recorded an increased trade deficit of K473.9 million in July 2016, from 355.4 million recorded in June 2016 representing a 33.3 percent increase in the trade deficit.

The increase means that the country imported more in July 2016 than it exported in nominal terms.

And Central Statistical Office (CSO) has revealed that traditional exports still take up a larger proportion of Zambia’s exports at 71.3 per cent compared to non-traditional exports (NTEs) valued at 28.7 per cent.

According to CSO Director of Census and Statistics John Kalumbi, Zambia recorded an increased trade deficit of K473.9 million in July, up from K355.4 million recorded in June, representing a 33 per cent increase.

A trade deficit represents an outflow of domestic currency to foreign markets.

Market analysts have noted that high trade deficits could have a bearing on the country’s economic recovery prospects.

Mr. Kalumbi further disclosed that the consumer and capital goods still constitute the largest proportion, collectively accounting for over 65 per cent of imports into the country above raw materials and intermediate goods.

He further revealed that the major import products by category in July 2016 were capital goods, accounting for a share of 37.7 per cent. The consumer goods category was second with 27.5 per cent, followed by intermediate goods and raw materials, accounting for 18.7 and 16.1 per cent respectively,” it stated.

And Mr. Kalumbi further indicated that as at July 2016, traditional exports still took up a larger proportion of Zambia’s exports at 71.3 per cent compared to NTEs valued at 28.7 per cent, which indicate that the economy remains heavily-based on metal exports for foreign exchange earnings.

Meanwhile Mr. Kalumbi says a decrease of 4.9 percent in the total value of metal exports from K4, 171.0 million in June to 3,965.0 million in July.

The overall contribution of metals and their products to the total export earning in July and June 2016 average 71.1 percent whilst Traditional exports decreased by 7.1 percent from 1, 721.3 million in June to K1, 599.1 million in July 2016.

And the annual inflation rate for August 2016 has decreased to 19.6 percent from 20.2 percent recorded in July 2016.

Central Statistics office director John Kalumbi said the decrease in the annual inflation rate was mainly attributed to decrease in food prices.

Mr. Kalumbi said of the 19.6 percent inflation rate recorded in August, food and non-alcoholic beverages products accounted for 12.4 percent points while non-food products accounted for 7.2 percentage points.

He also said that the monthly inflation rate for August 2016 was recorded at 0.4 percent compared to 0.1 percent recorded in July 2016.

CEC RECORDS LOSS IN THE FIRST HALF 2016 AS LIQUID TELECOM WAREHOUSE YARD GUTTED

Fire on Sunday swept through the Copperbelt Energy Corporation (CEC) Liquid Telecom’s warehouse yard in Lusaka’s Leopards Hill Road.

And COPPERBELT Energy Corporation has posted net losses of over K1.6 billion for the half-year period ending June 30, mainly driven by exchange rate losses and reduced power sales, its group results reveal.

The property belongs to CEC and houses its telecoms subsidiary, CEC Liquid Telecom’s warehouse.

CEC Liquid last year secured debt facilities of USD16m to undertake the construction of a fibre optic network within the main commercial centres in Zambia. It also provides two international links through Zimbabwe to South Africa which connects into international fibre cables linking to other African countries and other continents.

 The fire was contained outside where it completely burnt ducting used for the company’s Gigabit-capable Passive Optical Networks (GPON) project stored in the yard. The fire did not penetrate the warehouse.

Investigations to determine the cause of the fire which started before noon, are on-going.

At this stage, the value of the lost property remains unknown, the assessment of the loss is still being made and the damage is yet to be quantified.

The property was insured and services being provided by CEC Liquid Telecom will not be affected.

Combined forces of the Lusaka City Council fire brigade and the Zambia Air Force managed to put out the fire around 14:00hrs.

Meanwhile COPPERBELT Energy Corporation has posted net losses of over K1.6 billion for the half-year period ending June 30, mainly driven by exchange rate losses and reduced power sales, its group results reveal.

According to the group’s consolidated unaudited financial results for the half-year period ending June 30, CEC Plc posted increased losses of K1.6 billion during the period under review, up from K570.6 million in the prior period, mainly driven by exchange rate losses arising from the devaluation of the Nigerian Naira, among other factors.

CEC Plc acquired an interest in the Abuja Electricity Distribution Company (AEDC Plc) of Nigeria through KANN Utility in August 2013, with takeover of operations on November 1, 2013.

“Revenue at half-year increased by 40 per cent from K2.252 million to K3.776 million. This is mainly on account of increased power sales to the DRC mines and increased sales at the telecoms unit. Net loss of K1.669 million compared to a net loss of K571 million the previous period,” CEC stated.

“Net loss is mainly attributed to an exchange loss of K1.140 million (US $107 million) arising from the devaluation of the Naira on USD borrowing and bad debt provision of K516 million (US $52 million).”

CEC, however, recorded profits of K275 million from its Zambian business compared to K225 million posted in the prior period last year.

“The Zambian businesses on a consolidated basis posted a profit of K275 million (US $25.9 million) compared to K225 million for the previous period. The increase in profitability is mainly attributed to increased power sales to the DRC mines and increased sales at the telecoms unit,” it stated.

CEC also stated that low copper prices on the international market had affected Zambian mining companies’ operations, which in-turn negatively impacted power sales.

“The challenges relating to low commodity prices on the global market have led to some of our customers scaling back on their operations with the effect that our power sales are down by about 16 per cent,” stated CEC.

“We expect higher demand to return mid to end 2017 when projects that a number of our customers have been implementing begin to draw power. Further, loss of sales on the Zambian market during this period has been more than made up for through our power sales to the DRC market.”

35 MILLION DOLLARS KGM IN KAPIRI TO BE COMMISSIONED IN OCTOBER 2016.

The 35 million United States Dollar Kapiri Glass Manufacturing Plant (KGM) in Kapiri Mponshi is set for commissioning by the end of October following the successful installation of the New modern glass manufacturing equipment by the Glass Service of Italy.

Once commissioned the factory will create 200 direct jobs and double the number in the value chain with a projected production of 95 tons of glass equivalent to 200, 000 Castle or Mosi beers bottle.

Newly Installed Equipment at KGM

The Kapiri Glass Manufacturing Company limited formerly Kapiri Glass products limited as a parastatal was shut down in 1998 following the privatization in 1995 due to the weak market for glass bottles at the time.

And Government says the revamping of the factory by the local investors is clearly the Patriotic Front testimony of developing the country through industrialization of the economy.

Speaking during the tour of the plant to access the progress made by Chimsoro Group of Companies which aquired the company in 2008, Finance Minister Alexander Chikwanda said the commissioning of the factory in October will contribute positively to the economy as it will save the reserves through reduced imports.

Mr. Chikwanda said the factory will also light up Kapiri Mposhi town which has been treated as a ghost town due lack of serious economic activities in the area.

Martin Akende Business Journalist.

"It is gratifying to see indigenous people take up such big and very important manufacturing projects, this we help save our reserves because the country will cut on the import of glass and bottles." said Mr. Chikwanda.

The minister is optimistic that the market for glass will increase both local and international market.

He has however expressed concern that the indigenous people are not taking an active role in the economy of the country.

Mr. Chikwanda further added that government will practice an open door policy to ensure the company and other players in the private sector thrive.

The Kapiri Glass Manufacturing company limited was financed with acquisition of a 16 million united states dollars loan from the PTA and Development Bank of Zambia for the installation of new equipment that includes New Glass Forming Machines, rehabilitation of sand plant, Batch Plant, Furnace, Forehearth and forming lines.

Other revamped areas in plant include annealing layers, forming lines, packaging and inspection machines to be installed by Butcher Enhart.

And KGM Director Muna Hantuba said the company has rekindled a new Era of glass container manufacturing in zambia and will be largest industry earmarked to cover a wider market within and outside the COMESA region.

Mr. Hantuba said the market demand for glass products has increased several folds in the last two decades evident not only in Zambia but beyond borders due to pressure in the market for the reduction in use of plastics which an environmental nuisance.

And the group chairperson Costen Chilala appealed to government to consider offering incentive and concessions such as high costs of energy and other raw material required for the continuous run of the factory.

Mr. Chilala also said government through Zambia Revenue Authority should provide exemptions in order to give competitive prices on the market.

Zambia has been a dependent on importation of raw material and finished goods on the market which resulted in the serious fractuation of the currency to major world convertible currencies.

SHOPRITE HOLDINGS EMPLOYEES DOWN TOOLS.

Shoprite Holdings which runs Shoprite supermarket, Hungry Lion takeaways and an OK Furniture the country single largest chain store employees across the country have downed tools demanding a salary increment.

A check at Manda Hill the capital city first class shopping Centre, workers at Shoprite, OK furnishers and Hungry Lion found workers outside the store singing and chanting slogans against management demanding an increment on their salaries.

The workers talked to said they want Shoprite management to hike their salaries.

They complained that despite Shoprite expanding and making massive profits management has continued to pay them low salaries.

The workers have since vowed not to return to work until management addresses the grievances.

And National Union of Commercial and Industrial Workers general secretary George Kanyanta has urged the workers to remain patient as the union and management address their grievances.

Meanwhile, management staff at the store refused to respond to any queries saying they were sorting out the problem.

Shoprite opened it first store in Zambia on Cairo Road in Lusaka on the 26th October 1995.

ZAMBEEF RAISE 23 MILLION DOLLARS CASH TO BUY-BACK OF SHARES FROM RCL FOODS A SOUTH AFRICAN FIRM.

ZAMBEEF Products is set to restore its Zamhatch and Zam Chick businesses to full Zambian ownership through a US$23 million cash buy-back of shares from a South African joint venture partner.

Zambeef Products Plc is one of the largest integrated food companies in Zambia and the region, the group is principally involved in the production, processing, distribution and retailing of beef, chicken, pork, milk, dairy products, eggs, stockfeed and flour.

The nation’s largest food processor and retailer has raised US$65 million in new capital in order to take full ownership of the subsidiaries, as well as further reduce its debt levels and fund capital investment plans.

The transaction will also lessen Zambeef’s exposure to exchange rate fluctuations.

The Zamhatch hatchery and Zam Chick broiler divisions were set up as joint ventures between Zambeef and RCL Foods in 2013, with Zambeef holding 49 percent of Zamhatch and 51 percent of Zam Chick.

Under the agreement, RCL of South Africa had an option to sell its shares back to Zambeef for cash or Zambeef shares equivalent to US$14.25 for RCL’s stake in Zam Chick and US$9.126 million for Zamhatch. The ‘put’ option is exercisable on or before September 23, 2016.

ZAMCHICKS 

Subject to shareholder approval, Zambeef has opted to pay for the Zamhatch shares in cash, which has been raised through the issue of new ordinary shares and convertible preference shares to the world’s oldest development finance institution, the Commonwealth Development Corporation (CDC).

Under the transaction CDC is investing US$65 million in Zambeef: US$9.5 million in return for 52.6 million ordinary shares and US$55.5 million for 100 million convertible redeemable preference shares. The investment gives the institution a 17.5 percent stake in Zambeef, which is listed on the Lusaka and London stock exchanges.

“It is a measure of CDC’s confidence in Zambeef, its management and business model that one of the world’s most well-respected and prudent investment houses has opted to invest in the company,” said Zambeef chairman Dr Jacob Mwanza.

“The transaction will enable the group to reduce its debt, lessen exposure to exchange rate fluctuations and accelerate the company’s plans to paying dividends,” he added.

The move is also in line with the strategic objectives set out in the company’s annual report to reduce gearing and focus on its core business of cold chain food processing and retailing, and will allow it to continue to roll out expansion of its distribution and retailing platform in Zambia and the region.

The National Pension Scheme Authority (NAPSA) – to which every employee and employer in the country contributes – is the single largest Zambian shareholder in Zambeef, owning some 25 million shares amounting to 10 percent of the company.

AGRICULTURE SHOW SOCIETY, AFRICAST LAUNCH SMARTSHOW APP.

AFRICAST Events Technology and the Agriculture and Commercial Society of Zambia developed a Mobile Application on Google play store duped “Smartshow event technology” a tool aimed at creating easier navigation for show goers at the 90th Agriculture and Commercial Show.

The app which is made its debut at this year’s edition will enable show goers view all exhibitors’ stands, view daily events programs as well as see a list of awards and participants.

The smart mobile application tool is an invention of Africast Conference and exhibition managers the company which has investment in Botswana Zimbabwe and South Africa, designed the mobile application to assist, visitors to navigate displays, without hindrances.

The home grown, mobile application has challenged the global status quo which has over the years witnessed dominance of software development business led by Indian and South African ICT firms, who in addition to manufacturing their own ranges, also produce on behalf of international firms.

And AFRICAST, Social Media Communication specialist Ketiwe Zulu Millennium radio Business News that the unique electronic invention, shares pertinent data with the users such as real time programs and speaker among other features, during the event.

Ms. Zulu said an event planning company, Africast developed the application to help show goers save time during planning and get users more independent and organize their schedule.

 “It reduces the element of over reliance on local experts for directions, this is a very important tool in a media personnel’s tool kit, it allows for easy planning and time saving during busy moments during the events, especially for journalist who are bound to beat deadlines,” Ms. Zulu said.

Khetiwe Zulu

Ms. Zulu said the development came at the a right time when the Show theme is Managing Environment for Growth because it will help the show society in innovation and technology.

She said the show society can only succeed in managing environment for growth they invest in technology.

 “Smartshow is about good planning, it cuts out that manual work, such as writing and wasting both ink and paper. It is just an environmental friendly product offering electronic services that provides easy communication on time, with provision of maps, events program and speakers among other factors,” said Ms. Zulu.

However, the mobile application is a buildup on the other complimenting events management provision but said it was facing challenges such as unliable internet provision.

And show goers expressed excitement at the new innovation between Africast and show society which is designed to assist, visitors to navigate displays, without hindrances.

The Agricultural and Commercial Society of Zambia has in the last 90 years created a platform for both service providers and consumers to interact and exchange ideas.

The Show provides a forum for exchange in agriculture, agribusiness, trade information and commercial as well as creating opportunities to show case emerging farming technologies, product innovation and value addition

AFRICAN EXPORT-IMPORT BANK RECORDS 25 PERCENT GROWTH.

The African Export-Import Bank (Afreximbank) President Benedict Oramah has announced the achieved a record of 25 per cent rise in its net income from 2014 to 2015, taking in $134 million in 2015 compared to $107 million in 2014.

In his report to the 23rd Annual General Meeting of Shareholders (AGM) of the Bank today, Dr. Oramah said that the stellar performance by the Bank could be attributed to a solid loans growth, which saw a 40 per cent rise from December 2014 to reach a total of $6.1 billion in December 2015.

He told the shareholders that Afreximbank’s assets and sources of income had been well diversified and that they key financial ratios were in line with plans.

Dr. Oramah gave other key 2015 performance figures to include: return on equity and net interest margin at 11.5 per cent and 3.6 per cent respectively, largely on account of larger proportion of lower-priced cash-collateralized loans; improvement in asset quality with non-performing loans ratio down to 2.8 per cent from 3.8 per cent in 2014; operational efficiency at historical levels with cost to income ratio averaging 21 per cent; and liquidity coverage ratio that was above the Basle minimum of 100 per cent, and, in fact, averaged more than 200 per cent.

“On the strength of improved capitalization and financial performance, Moody’s and Fitch Ratings revised the Bank’s ratings outlook from negative to stable in 2015,” continued the President, who added that, during the year, the Bank made what was perhaps the largest syndicated loan issue by an African commercial bank, raising in excess of $1 billion.

He said that the Bank had succeeded in markedly diversifying the sources of its liability by deepening relationship with African central banks, such that African sources now account for more than 40 percent of its total non-equity liabilities.

Dr. Oramah announced that through the Countercyclical Trade Liquidity Facility, approved by the Board of Directors in December 2015 to assist member countries adjust in an orderly manner to the commodity price and terrorism-induced shocks threatening to cause economic dislocation, the Bank had disbursed $6.2 billion as at June 2016, with another $3 billion of requests in the pipeline.

Afreximbank was living its vision of being the trade finance bank for Africa, the President argued, citing estimates that its financings in the past few months accounted for close to 30 per cent of the trade finance flows to its member countries.

Earlier, Danny Faure, Vice President of Seychelles, said that Afreximbank had emerged as one of the main instruments of structural transformation in Africa.

“It has already proven its role as a catalyst for enhancing growth and for improving wealth creation across our continent,” said Vice President Faure, who went on to describe the Bank as a leader in innovation and in exploring new frontiers.

“For too long we have been beholden to a model of economic growth that has attempted to divorce economic sustainability from environmental sustainability. At this AGM, let us celebrate the conviction that investments in sustainable finance are also investments in a sustainable economy situated within a sustainable environment,” he said. “Through Afreximbank, we can create the tools that will empower local ownership of these sustainable growth models, and also generate future opportunities for re-investment.”

Also speaking, Dr. Denny Kalyalya, Governor of the Bank of Zambia and Chairman of the General Meeting, urged African countries that had not yet joined the Bank to do so in order to become part of the community of African nations that were keen to see the development of trade on the continent for the benefit of the people.

Dr. Kalyalya welcomed the resounding success achieved in the equity raising programme that sought to bring additional $500 million of capital into the Bank by the end of the 2016 in order to ensure that capital was not a constraint its growth and its capacity to underwrite business in response to the continent’s needs.

 

Dr. Kalyalya speaking to journalists.

In the subsequent deliberations, Jean-Paul Adams, Minister of Finance, Trade and the Blue Economy, of Seychelles, was elected Chairman of the General Meeting and an offer by Rwanda to host the next Afreximbank AGM was approved.

Activities marking the 23rd Afreximbank AGM, which was organised in collaboration with the Central Bank of Seychelles, began on 20 July with two days of seminars and a one-day meeting of the Bank’s Advisory Group on Trade Finance and Export Development in Africa. On 21 July, a trade exhibition and an investment forum, focused on investment opportunities in Seychelles, was held.