BUSINESS NEWS

Stable Kwacha cheers manufacturers

THE recent stability of the Kwacha in the exchange rate is boosting the performance of the manufacturing sector, says Zambia Association of Manufacturers (ZAM) president Rosetta Chabala

Ms Chabala said the Kwacha had been stable since January which had put the manufacturing industry on a good note with predictability of their products.

“We have seen a little bit of stability, we were affected with the fluctuation of the currency; we saw the Kwacha depreciating by more than 90 percent and it is difficult to plan, but now we have seen  some stability in that area from January.

“The Kwacha has been stable and so this gives us breathing space and predictability and that is what we need in the market. So I think 2016 has started on a good note,” he said.

She said most manufacturers had tried to work around the power schedule given by Zesco with others opting to produce in the night or purchase power agreements with Zesco.

In an interview, Ms Chabala said ZAM hoped that 2016 would remain stable and continue to be favourable to the manufacturing sector.

“Most manufacturers have tried to work around the schedule given by ZESCO; some of the manufacturers have gone to produce in the night or buy power agreements with Zesco for those that require a lot of energy.

“We are hopeful that 2016 stays stable and we can see a little bit of growth in terms of what we did in 2015, which was not an easy year; it was a difficult year to settle in. We are hopeful that it continues like this,” he said.

Meanwhile, Ms Chabala said there was need to work on energy policy framework to attract investment in the sector.

“We need all forms of energy right now, the problem is that we have concentrated much on hydro, and yet there is great opportunity for wind and solar – we need a combined energy source not only in Zambia but also in the region.

“We just need to work hard in the policy framework; the ministry is still struggling to put in feed-in tariffs. I think those are the things that should work before we can see investments,” she said.

Ms Chabala said investors needed predictable policies which guaranteed them a profit.

“Everybody is interested in investing in the sector but if you cannot sort out your predictability on how you are going to feed into the main grid or sell your products to the sector then it becomes difficult,” she said.

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Mansa Grocery Owners Disappointed

Mansa grocery owners are disappointed at the snail’s pace the Mansa District Hospital is being constructed as it has deprived them of a livelihood because workers are not paid their salaries most whom are their customers.

Jonathan Kunda, a grocery owner, lamented that there were no industries in Mansa and they depended on construction workers to buy from them as the local people had no money.

He charged that the suspension of construction at the district hospital which has resulted in the workers not being paid had hit them below the belt.

Now the traders were unable to pay their children’s school fees, medical bills and meet their daily needs.

“In order for businesses to exist and grow they require money and in the absence of money there could be  no businesses  and I call upon the Government to release the money to the hospital project for workers to be paid who are our customers for us to survive and improve our businesses,”  Kunda said..

And Minister of Finance Alexander Chikwanda, who was in the area to officially open a Finance Bank branch in Mansa, confirmed the erratic release of funds to the project when he toured the almost deserted building in the company of the deputy minister of Health Chitalu Chilufya.

“Yes, there is a funding problem and this project is an on-going one and when funds become available they will be released for the project to continue,” said Mr Chikwanda .

Dr Chilufya said the hospital once completed would cost K11.2 million and  supplement the services of the Mansa General Hospital which had been overwhelmed by the large population..

Meanwhile, the workers claimed that they had not been paid their salaries for some time because the project had stalled and they called on  Government to release funds for the project to save them from starvation.

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Kwacha poised to appreciate further

THE Kwacha is likely to appreciate further should the dollar supply increase, coupled with the tight liquidity in the money markets.

According to Cavmont Bank Zambia daily market report, the Kwacha appreciated further on Friday, consolidating its gains this week owing to increased dollar inflows on the Interbank and from corporate sellers.

The bank reported that the local currency continued to show strength against the greenback and touched an intra-day high of K11.3200 / K11.3400 during noon trading from the day’s opening level of K11.360 / K11.380.  Due to such activities, the local unit was likely to appreciate further should supply increase, coupled with the tight liquidity in the money markets.

The Kwacha later closed at K11.320 / K11.340, K0.030 stronger than Thursday’s closing rate. On the money market, commercial banks’ aggregate current account balance increased by K57.66 million to K600.16 million while the overnight borrowing and lending rate decreased by 0.05 percent to 27.20 percent.

Total funds traded on Interbank were K495.50 million. Meanwhile, Thursday’s Treasury bill auction was over-subscribed 12.1 percent, with K453.86 million being bid for out of K405 million which was being offered.

Yield rates were largely unchanged on most tenors except the 273 days which rose to 28 percent from 27.25 percent.

The report also showed that commodity prices on the international scene had continued to increase.

A tonne of copper was currently trading at $5,080; this was after recording an upward adjustment of $28.00. The price for Brent crude oil also recorded an increase of     $0.26 facilitating for a barrel of the commodity to trade at $41.41. On the other hand, an ounce of gold was trading at $1,258.95 after its price registered a decline of   US$7.16.

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PSDA supports IMF programme for Zambia

THE International Monetary Fund (IMF) programme for Zambia is helpful because Government will be tasked to develop financial discipline by contracting sustainable debt, says Private Sector Development Association (PSDA) chairperson Yusuf Dodia.

Mr Dodia said in an interview that the programme much as it had some other holistic measures, would restrain Government from contracting debts it could not manage to pay back.

“The only positive thing about this programme is that it forces the Government to become disciplined in mending the economy as can be seen.

“Zambia has been contracting debt every year for the past two or three years, insurance of international and private sector and domestic,” he said.

Mr Dodia said unplanned and lack of Government financial discipline led to Zambia contracting unsustainable debt leading to a budget deficit.

“This has led to unsustainable debt both in foreign and local currency and this cannot go on and I think the IMF measures will at least stop Government from getting the debt that they cannot pay back,” he said.

He however observed that the IMF programme came with holistic conditions such as hiking electricity tariffs and wage freezes.

“This is not a very good situation for Zambia because the IMF programmes…..usually require some hostility measures.

Mr Dodia said as a result of increasing electricity tariffs, many industries was negatively impacted.

“And as a result, lots of industries are negatively affected. These programmes are definitely going to cause certain private sector investors and foreign as a well as domestic to rethink on how they are doing their businesses in Zambia.

“It also means that Zambians will have to tighten their belts because salaries are not likely to go up but prices are expected to,” he said.

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Sri Lankan business delegation heads to Zambia

 

A BUSINESS delegation from Sri Lanka arrives in Zambia soon to look at various investment opportunities, according to the Zambia Chamber of Commerce and Industry (ZACCI).

The Sri Lankans will jet into Lusaka on April 1 for a meeting with Zambian industry leaders on the same day in areas such as energy, construction, manufacturing and information and communications technology (ICT).   Among some companies expected from Sri Lanka is Jinasena PVT Limited which has six factories producing water pumps and electric motors and the other for agricultural machinery. Its products are manufactured in line with the customer requirements and market opportunities such as Zambia.Also coming are executives of Associated Motorways Limited

which specializes in products and service development, while offering world renowned automotive and related products and services brands to its customers. Its core business sectors were tyre retreading, automotive sales and after-sales service, lubricants, batteries and financial services. Others coming include representatives from Kaleni Cables Plc, Macksons Paints Industries and Hayleys Plc. ZACCI advised Zambian business community to attend the event which would allow them to network with international investors.

 

Govt to maintain sound trade, economic policies

GOVERNMENT will ensure that trade and economic policies intended to create a strong industrial base are maintained, says Ministry of Commerce, Trade and Industry domestic trade director Sunday Chikoti.

Mr Chikoti said in an interview that maintaining trade and economic policies would create an industrial-based economy and encourage exports.

He observed that Zambia which had undergone fundamental changes in trade and economic policy since the early 90s needed permanent policies for local industries.

“This has resulted into policy shift from State-regulated enterprise to a more liberal market regime that introduces competition reforms of the economy,” he said.

Mr Chikoti said Government was aware that policy shift impacted negatively on the industrial base of the country and that was one reason it would ensure policies were maintained.

He said his ministry in close collaboration with stakeholders would continue to uphold positive policies.

He also said promoting competition reforms was among the key responsibilities of the ministry.

“Despite competition reforms being a new phenomenon, industries have appreciated the challenges. The reforms have dropped and have managed to grab the opportunity to expand and operate at a larger or better scale as a result of reforms.

“The concept of competition however remains new to most policy makers and important to understand that competition is part of basic fabric of policy makers and sectors of the economy,” he said.

Mr Chikoti advised stakeholders to come up initiatives which would complement Government efforts in driving economic reforms.

“The ministry would be happy to collaborate with organisations that should come up with ideas to complement Government efforts in driving economic reforms,” he said.

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