According a risk note by Fitch solutions, Zambia’s real GDP growth will slow to 3.0% in 2019, from an estimated 3.8% in 2018. This will be attributed to the proposed tax regime to be implemented from January 2019. Fitch solutions projects this will weigh on mining sector productivity despite the positive outlook for copper prices. Challenging weather conditions will further weigh on agriculture in the short-term and rising inflationary pressures will pose severe headwinds to non-mining sector activity, weighing on headline GDP going forward. Poor implementation of key infrastructure projects will weigh on the copper producer’s construction sector to slow…
Author: The Editor
Foreign currency reserves in Africa’s copper producer Zambia have deteriorated to $1.63bn (from 1.83bn 30 Jun.). This was contained in a monetary policy committee statement released in Lusaka on 21 Nov. “Gross international reserves declined to $1.63bn as at end of September 2018 representing 1.9-months import cover, from $1.82bn (2.2 -months of import cover) at the end of June 2018. This was attributed to debt service payments. To build international reserves, the Bank of Zambia continued to purchase foreign exchange directly from the market and through the mineral royalty tax receipts. Cumulative, the purchases amounted to $345mn in the year…
Zambia central bank has decided to keep the benchmark interest rate unchanged at 9.75%. This was announced by Bank of Zambia Governor Dr. Denny Kalyalya in a press brief in Lusaka the capital. This followed two days of monetary policy meeting deliberations and consultations with stakeholders that commenced Monday 19 Nov through to 20 Nov. After weighing in the risks to growth the BOZ felt there was need for stimulus efforts to grow the economy, the committee decided to maintain current policy stance. The BOZ cited tamed inflation reflective of the recent current depreciation of the kwacha which has been…
Africa’s second largest producer of copper, Zambia, has just postponed its energy sector reforms to sometime in 2019. This was confirmed by Permanent Secretary in the Ministry of Energy Emeldah Chola in an interview in the capital Lusaka. She advised that the electricity and petroleum bills would be tabled and debated next year as parliament has prioritized the 2019 budget currently. Chairman for Energy Forum Johnstone Chikwanda has however challenged this position citing that a procrastination will delay the required reforms needed to create the efficiency lacking in the industry. Zambia announced in its 2016 fiscal budget that the state…
Gemfields, Kagems parent company successfully auctioned the recently discovered 5,625 carat emerald in the Singapore auction held from 14 – 17 November 2018. Proceeds of the auction will be fully repatriated to Kagem in Zambia, with all royalties due to the Government of the Republic of Zambia being paid on the full sales prices achieved at the auction, Gemfields carried on its website. The auction saw 40 companies participate in placing bids to generate a total revenue of $28.4million with an overall average value of $68.03 per carat. Improved liquidity in the trade customers in 74% of the offered carats…
The Bank of Zambia in August issued a Directive on the Prohibition of Unwarranted Charges and Fees to all financial service providers effective 04 September 2018. This move was perceived as one that will lean the fees and commission component of the industry’s non-interest income. According to the prudential quarterly financials published, 28% (K1.67billion) of total income (K6.03billion) was from the fees and commission line. See pie chart below for breakdown The Q1-Q3: 2018 (YTD) only have but 1-month of the autopsy of the regulatory directive on prohibition of unwarranted charges (Sept). However, it is projected that Q4: 2018 results…
Africa’s copper producer Zambia spent the Kwacha equivalent of $17million in food security initiative in the month of October, a MinFin Oct. budget release revealed. “A total of K170.3million (summing to K1.142billion in 2018) was released towards the Farmer Input Support Program [FISP] to cater for liquidation of outstanding arrears and implementation of the e-voucher programme for the forthcoming 2018/2019 farming season. The Food Security Pack which also complements the FISP, has received a total of K50million so far, and the Food Reserve Agency got K23 million (totaling to K211.6million released in 2018) for procurement of maize and other grains…
Southern Africa’s top copper producer Zambia has reported a $23million infrastructure spend for the month of October. This was confirmed in a budget release brief by the MinFin on 19 Nov. “Releases for capital expenditure totaled K233.2million of which K158.1million went to the roads sector for completion of some road projects and toll gates, K29.9million to the Rural Electrification Program for to increase electrification rates in rural arrears, and K45.1million to other capital related expenditures,” the release carried. The copper producer this month in a stakeholder fiscal performance brief revealed an increased external debt position of $9.51billion (30 Sept.) compared…
Africa’s second largest red metal producer, Zambia, is richly endowed with arable land and an expanse of water bodies. This makes realization that it has potential to be Africa’s bread basket. Zambia also has 18 commercial banks. However, commodities trading efforts have been frustrated by either lack of risk appetite for structured products altogether or poor structures to support trading. Asides the traditional bourse the Lusaka Securities Exchange – LuSE, a soft commodities exchange dubbed Zambia Commodities Exchange – ZAMACE does exist. This exchange is ideally supposed to trade maize, wheat, soya beans and other grain futures in the journey…
Currency to hold firm This week the kwacha is expected to hold firm within 11.75-11.85 trading range with support from corporate conversions to fund kwacha tax and salary obligations. Mild dollar demand from retailers will arise on specific days but will be offset by kwacha demand for tax and other local currency obligations. BOZ to hold the monetary policy rate (MPR) at 9.75% BOZ will have its rate decision meeting deliberations starting Monday 19 Nov through to Tuesday 20 Nov. with the final announcement on Wednesday 22 Nov. We forecast that the committee will keep rates unchanged at current levels.…