The MinFin in Africa’s red metal hotspot Zambia, is rethinking the Southern African nations Production Possibility Curve (PPC) in more optimal usage of resources through scrapping off fuel subsidies. This, the fiscal head Dr. Situmbeko Musokotwane hinted at a post budget symposium in the capital Lusaka in the week beginning the November 01. Zambia has for 2 straight years, kept its petroleum pump prices tad through an ongoing subsidy spend of $21 million monthly (K360 million) despite crude price bulls on the international markets and currency bears in the domestic market, the two factors the energy regulator uses to determine…
Author: The Editor
Absa Zambia Plc continues to exude ‘Africanacity’ with greater momentum; an autopsy of a lucrative divorce from the Barclays Group. This has been evidenced through a top tier earnings performance as the Bank manifests better than estimate cost efficiencies. The red bank is making money fast and spending less as revealed by another market exceptional cost to income ratio at 47.5% in 3Q21 (YTD) versus 65.2% a year ago from 52% at 1H21. According to financial statements shared in the local press, Absa’s revenue growth velocity was 61.9% to K1.6 billion, while its non interest expenses slowed 178.9% to K776.5…
Cost efficiency continues to consecrate commercial banking performance over and above revenue generating capacity. In 3Q21 financial earnings releases in the local press, Stanbic Bank Zambia led the market after tax earnings curve by an exceptional positive jaws reflecting cost efficiency. The blue banks after tax profits scaled 102% to K729.6 million, a new profitability market watermark aided by stellar revenue generation across the various lines supported by a softer cost growth pace of 15% versus a year ago same period. FINE WINE PARADOX AS COST EFFICIENCY WIDENS MARGINS The say wine tastes better with age, Stanbic cost to income…
Business confidence in Africa’s second largest red metal producer has continued to scale up given improved macros giving manufacturing costs an ebb. According to a Markit Economics survey for October, Zambias gauge for manufacturing health headlined 51.2 from 50.3 the previous month supported by lagged effects of currency appreciation which eased input costs for most manufacturers that eventually lowered their selling prices. Readings below 50 signal contraction while those above 50 signal expansion. “Output returned to growth in October for the first time in five months. Although modest, the rate of expansion was the fastest in over three years. Anecdotal…
Financial market posture and performance for Africa’s second largest copper producer, Zambia, was ranked 2 notches higher to 7th place on the ABSA Africa Financial Market Index 2021 (AFMIndex21). This was an improvement from 9th place. The red metal producers overall performance score out of a 100 ebbed 2 points to 51 (from 53) weighed by fiscal management concerns and governance impacting access to foreign exchange, capacity of local investors and to some extent macroeconomic opportunity. Some compensating positives were nonetheless observed in the fixed income government securities market following increased investor confidence and the positive strides taken by the…
Exactly 6 days after MinFin Head Dr. Situmbeko Musokotwane presented a $10 billion (K173 billion) budget that would steer Zambia to economic rebound, Zambia’s Chief Investment Officer, the Head of State Hakainde Hichilema courted dollar bond holders in London, on the sidelines of the Glasgow COP26 climate change conference. This is yet another testament of Hichilema’s usage of foreign policy intelligently to market the copper producing nation which is currently in the labyrinth of a debt restructure whose success is linked to a bailout deal with the Washington based lender, the International Monetary Fund (IMF). ___________________________________________________________________________________________________ “We have today met…
Exactly four (4) days after delivery of a $10 billion (K173 billion) budget, Zambia’s Fiscal Head Dr. Situmbeko Musokotwane will update various stakeholders on progress on engagement with the Washington based lender, the International Monetary Fund (IMF) and deliberations with external creditors who have been kept at bay following the skipping of coupon payments and other debt service obligations that saw the Southern African nation downgraded to default status by international rating agencies. Zambia is currently in the labyrinth of a debt restructure whose key precursor for its success being concluding an IMF bailout package which the red metal producer…
As more governments acknowledge climate change risks, resilience budgeting is on the rise. For Africa’s red metal producer, Zambia a specific ministry of green and environment was established to drive the climate resilience sustainability agenda. During a 2022 budget presentation, Dr. Situmbeko Musokotwane acknowledged environmental sustainability as pivotal to the nations development agenda. “Madam Speaker, we will also promote innovative financing for climate change interventions. This will be done through mechanisms such as the use of Green Bonds, promotion of carbon trading and putting in place legislation that establishes a National Climate Change Fund,” Dr. Musokotwane. Zambia will also review…
The mining industry in Africa’s red metal producer will finally earn tax deductibility on mineral royalties for corporate tax purposes as proposed by the MinFin head Dr. Situmbeko Musokotwane in the estimates of revenues and expenditure for 2022. “Madam Speaker, to attract investment and boost production in the mining sector, I propose to re-introduce the deductibility of mineral royalty for corporate income tax assessment purposes. This measure is in line with international best practice. The revenue loss from this measure is projected at K3.2 billion,” Dr. Musokotwane said. For a long time the mining tax regime in the Southern African…
In the quest to decentralize economic activities by bringing them closer to the constituencies, Zambia’s Minister of Finance announced a wider allocation of the Constituency Development Fund (CDF) to K25.7 million from a prior K1.6 million. Dr. Situmbeko Musokotwane in his speech however did caution against abuse of the CDF fund and sternly echoed the need for accountability in usage of these funds. “I repeat, the 2022 budget will increase the constituency development fund (CDF) from K1.6 million to K25.7 million, under the new dawn government,” Dr. Musokotwane said. Zambia has for many years underfunded the constituencies and as such…