Following the continued rapid depreciation of the Zambian Kwacha, which has a huge negative impact on the cost of living and devalues incomes for citizens, the Zambian Central Bank is putting up measures to discourage the use of the United States Dollar in local transactions.

This initiative is commendable and could offer significant economic benefits for the country.

The U.S. Dollar has seen substantial appreciation since the onset of the COVID-19 pandemic, when global inflation surged due to supply chain disruptions.

Read more: Building Zambia’s digital economy foundations through Digital Public Infrastructure, By P. Chinyama, E.Khisa, L.Mate and G Nhongo

This increase in living and production costs, exacerbated by rising energy prices from the Russia-Ukraine war, negatively affected global economic growth.

In response, the U.S. Federal Reserve, like many other central banks, raised interest rates to reduce money supply and consumer spending.

However, as the risk-free rate increased in the U.S., so did yields on various asset classes, including government securities.

These higher yields attracted global investors to U.S. assets, driving up demand for the Dollar and subsequently its value.

The appreciation of the Dollar, the world’s reserve currency, has posed problems for many countries, including Zambia.

The rising cost of Dollar-denominated goods and services has increased production costs and reduced the purchasing power of local currencies.

While almost all world currencies have depreciated against the Dollar, the extent of this depreciation varies due to country-specific issues.

Fortunately, there are signs that the U.S. Federal Reserve may start cutting interest rates by the end of this year, as inflation shows signs of easing.

A reduction in U.S. interest rates is likely to cause the Dollar to depreciate, making imports cheaper and potentially boosting global economic growth.

The Bank of Zambia (BOZ) is looking for ways to stem the fall of the Kwacha, recognizing that Zambia’s currency faces its own unique challenges.

One effective way to minimize the impact of these country-specific problems is to limit the use of the Dollar in local transactions.

Reducing the demand for the Dollar in Zambia would lower its value relative to the Kwacha, leading to an appreciating Kwacha.

This move by the BOZ is a step in the right direction and should be supported.

However, the central bank is facing opposition from stakeholders concerned about the disruption of existing Dollar contracts and the potential impact on tourism.

These concerns are largely unfounded. Dollar contracts can be converted to Kwacha at the current exchange rate, and tourists can convert their money to Kwacha upon arrival.

It is important to understand that many of Zambia’s economic problems are exchange rate-induced.

As Zambia imports most of its goods, a stronger Kwacha would make the national budget more valuable, reduce debt service costs, and lower the cost of importing medicines and fertilizers.

Imagine the potential benefits if the exchange rate were K15 per Dollar.

The cost of servicing national debt would decrease, the import of essential goods like medicine and fertilizer would become cheaper, and the country could potentially increase the quantity and quality of public services provided to its citizens.

Additionally, reducing reliance on the Dollar for local transactions would make the Zambian economy more resilient to external shocks.

The fluctuation of the Dollar, driven by factors beyond Zambia’s control, has a direct impact on the local economy.

By reducing the domestic use of the Dollar, Zambia can mitigate these external influences and stabilize its economy.

The BOZ’s dedollarization initiative is a crucial step towards achieving economic stability and growth.

It addresses the root causes of many of Zambia’s financial challenges and offers a sustainable solution for the future.

It is time for stakeholders to support this initiative, recognizing that a stronger Kwacha benefits everyone in the long run.

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The post Dedollarisation: Strategic move for Zambia’s economy by Naylor Kopakopa first appeared on Zambia Monitor.

I recently attended a funeral at Leopards Hill Memorial Park cemetery.

I couldn’t help but notice that 5 out of the 6 grave diggers were women! Grave digging, historically a male-dominated job, now has women working in it, and very efficiently!

This recent encounter prompted me to reflect deeply at just how much Zambian women have evolved. In business, the economy, politics, sport and indeed other sectors previously seen as the ‘preserve of men.’

I started with my own sector – Banking. At Standard Chartered, we make up 50 per cent of the Executive Management Team in Zambia.

We recently welcomed Dolika Banda, our first-ever female Board Chair – a distinguished Zambian woman! Zambia’s Banking sector has seen more appointments of female Chief Executive Officers (CEOs).

The CEOs of our major banks -ABSA, Citibank, Ecobank, FNB and ZANACO – are women.

And these banks are doing well in Zambia. In mining, I was particularly excited to learn that the much talked about new Kobold Metals – an AI-backed mineral exploration company – has a female CEO at the helm!

Read more: Building Zambia’s digital economy foundations through Digital Public Infrastructure, By P. Chinyama, E.Khisa, L.Mate and G Nhongo

Similarly, Zambian women are shining in historically male-dominated sports. Take Zambia’s most popular sport – Football. It is the national women’s football team – Shepolopolo – that is shining.

Internationally recognised names such as Barbara Banda and Racheal Kundananji, who placed Zambia firmly on the global women’s football map as the world’s most expensive female player, make us exceptionally proud.

The likes of Catherine Phiriand Esther Phiri make us tremendously proud as they, too, shine in their professional boxing careers.

In politics, since the first female Vice President was elected in 2015, having a female Vice President has become the norm in Zambia. In days gone by, women played vital roles in Zambia’s Liberation struggle.

The likes of Mama Kankasa and Julia Chikamoneka – a fierce activist and pioneer of freedom from colonial rule – amongst countless others.

Therefore, we must all recognise, applaud and celebrate theachievements of the Zambian woman – we have, indeed, arrived!

And as we commemorate this year’s International Women’s Day, particular attention must be paid to the theme – Invest in Women: Accelerate Progress.

At Standard Chartered, we are accelerating the progress of Zambian female-owned businesses through our Women in Technology (WiT) programme.

Since 2020, WiTempowers a cohort of 10 Zambian female entrepreneurs annuallyby building their business capabilities, access to finance and access to networks.

WiT also awards five of them with grants of USS10,000 each for them to scale-up their businesses using the power of technology. In 2024, we are proud to increase the number of grant winners from 5 to 6.

Whilst we celebrate the fact that ‘we have arrived,’ we must spearhead, invest and accelerate progress in those areas where the gaps remain evidently clear. Firstly, Equal Pay.

Second, we must find a solution to the domestic abuse, defilement and rape of girls and women which has become rampant in our homes and society at large. By doing this, we will, indeed, contribute significantly to accelerate our progress.

Let us continue to focus on removing barriers and implementing targeted interventions to enable opportunities for under-represented segments.

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The post The Zambian woman … has arrived!, by Christine Matambo first appeared on Zambia Monitor.

In recent years, Zambia has actively sought to foster digital inclusion and transform its ICT and innovation ecosystem, with the latest move being the signing of the Electronic Regulation Statutory Instrument (SI) No 43 of 2023 by H.E. President Hakainde Hichilema in October 2023.

The regulation which strengthens the role of the Electronic Government Division also known as Smart Zambia Institute (SZI) is in line with the government’s vision of prioritising digital transformation by leveraging technology for the enhancement of the well-being of the citizenry through enhanced public service delivery and also making it the bedrock of Zambia’s economic progress.

Among the initiatives of this digital transformative journey is the adoption of a strategy for Digital Public Infrastructure (DPI) supported by the Centre for Digital Public Infrastructure and Co-Develop.

Read more: 30th Heroes Day: A time for Rwandans to reflect, thrive on a positive trajectory, by Douglas Gakumba

2024 promises to be a significant year with the signing of an MOU in 2023 between IIIT-B’s Centre for Digital Public Infrastructure and SZI to support the Division in implementing specific DPI use-cases in Zambia to scale them country-wide.

Zambia’s commitment to leveraging technology for inclusivity is evident in SZI’s 2023 – 2026 Strategic Plan whose vision statement is to be “a leader in digital transformation and inclusiveness”.

DPI’s pillars of Digital ID and registry, digital payments, and secure data exchange are key to fostering inclusivity, especially in rural and remote areas.

This is expected to improve efficiencies within government, bring citizens into the broader digital economy, and also reduce the collective cost of digital transformation through shared infrastructure. The move towards a unified and digital framework promises to empower citizens, enhance government services, and foster economic growth, which can only bode well for Zambia’s development and economic growth.

As countries take these big steps forward in their digitisation, this also offers a new way of engaging citizens in this important transformation. Genuine engagement will help increase trust and make these systems more accessible to people.

Understanding Digital Public Infrastructure

The concept of DPI revolves around creating a reusable and foundational technology base, akin to the shared infrastructure that powered economies in the physical world such as highways, power lines, railways, or even internet infrastructure.

It serves as the backbone for a digital economy, providing the necessary layers for innovative solutions to flourish. This approach not only streamlines government operations but also encourages private-sector innovation, ultimately driving economic prosperity.

Historically, shared public infrastructure like roads, electricity, and telephony has been instrumental in powering government services and private economic activities globally. In the digital era, the emphasis shifts to creating a robust foundation that can support various technological advancements, making it a critical component for sustained growth and progress. Underpinning these foundational pieces are tenets known as DPI principles namely; interoperability based on open standards, reusable and minimalist building blocks, privacy by design, federated instead of centralised architecture, and market-driven innovation ecosystem.

Fostering inclusion and progress within Zambia

One significant use case for DPI in Zambia lies in having a national digital eKYC platform using data from a trusted federated database to offer online identity services. This service will have various uses across sectors ranging from agriculture to select eligible farmers participating in the government’s Farmers Input Support Programme (FISP).

Financial services is another sector which would largely benefit from this initiative where currently each institution is investing in its own eKYC and customers have to submit the same data to the service providers. This would be alleviated to create a more efficient, coordinated and shared and growth-oriented system.

Digital public infrastructure also plays a pivotal role in optimising social security remittances to beneficiaries. Zambia commits to enhancing its social services delivery system through DPI by ensuring efficient government-to-person (G2P) payments and reducing leakage by ensuring the correct identification of beneficiaries.

Through secure and efficient digital payment systems, beneficiaries receive their entitlements promptly, reducing delays and ensuring financial stability for vulnerable populations. Timely support will be received by the Zambians that need it most.

Delivering citizen services

Moreover, DPI acts as a catalyst in breaking down silos within government and related agencies by encouraging the creation of data registers. By creating a seamless digital ecosystem, information sharing becomes more efficient, leading to better collaboration and decision-making.

This streamlined approach not only improves public services but also enhances the overall governance structure. This also creates the foundation for government services to be digitised thus making them more accessible to Zambians in an efficient manner. With the right levels of data exchange, Zambia will deliver services across the country also ensuring inclusivity and closing the economic divide.

Zambia’s embrace of Digital Public Infrastructure signifies a forward-thinking approach to building a resilient digital economy.

The concept of shared foundational layers opens avenues for creativity, innovation, and collaboration between the government and private sector. As the nation continues its digital journey, the impact of DPI is expected to reverberate across sectors, paving the way for sustainable development.

Conclusion

In conclusion, Zambia’s commitment to digital transformation through DPI is a testament to its vision for an inclusive and technology-driven future.

By addressing key areas such as digital ID and registry, digital payments, and secure data exchange, the nation is laying the groundwork for a vibrant and connected digital economy. Zambia is well on the path to emerge as a beacon of progress in the digital landscape, ready to embrace the opportunities that lie ahead.

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The post Building Zambia’s digital economy foundations through Digital Public Infrastructure, By P. Chinyama, E.Khisa, L.Mate and G Nhongo first appeared on Zambia Monitor.

Rwandans and friends of Rwanda Thursday, February 1, 2024, marked the 30th Heroes Day celebration, a day on which the country paid tribute to its nationals who demonstrated the highest values of patriotism and sacrifice for the well-being of the country and its citizens.

Heroes Day celebrations will be observed on a national level as well as by Rwandan Diplomatic Missions across the world.

This special day for Rwandans will feature activities including discussions under the theme “Our heroism, our dignity”.

Apart from the main ceremony, Heroes Day will be celebrated at grassroots level across Rwanda, where Rwandans gathered together at the village level will also pay tribute to the heroes that shaped the future of the country.

Heroes Day is a moment in time that Rwandans of all walks of life acknowledge that the prosperous Rwanda of today is attributed to the sacrifices made by national heroes of whom the country is forever grateful for their bravery and heroism.

Heroes Day in Rwanda is typically preceded by a week-long nationwide campaign about the values of heroism, which mainly focuses on encouraging Rwandans especially Rwandan youths, to embrace a culture of heroism in their daily lives.

Young Rwandans are urged to stand in the heroes’ shoes and work hard to uphold their legacy in terms of promoting national unity, patriotism, integrity, hard work and peaceful co-existence.

Several activities held during the heroes’ week included discussions about heroic values and sports games such as football, handball, basketball, sitting volleyball and cycling.

The Chancellery for Heroes, National Orders and Decorations of Honour (CHENO) is responsible for the identification of persons or groups of persons who have distinguished themselves in performing heroic acts and in rendering exemplary service to the nation.

Rwanda’s National Heroes are therefore classified into three categories named in Kinyarwanda as Imanzi, Imena, and Ingenzi.

The Imanzi category is the highest order, featuring people who even sacrificed their own lives in the interest of the nation. This category consists of Major-General Fred Rwigema, who died on the battle field on the onset of the liberation war, and the “Unknown Soldier” representing all soldiers who lost their lives in the liberation.

The Imena category includes people with proven track record such as King Mutara Rudahigwa III, Rt. Honourable Agathe Uwilingiyimana (the female Prime Minister who was murdered by genocidal government forces within just hours of the start of the 1994 Genocide against the Tutsi) and Nyange Secondary School students who during the 1994 Genocide against the Tutsi were killed by the Interahamwe militias after refusing to divide themselves along ethnic lines.

While the last category, called Ingenzi is for living heroes who have exemplified good ideas or his/her outstanding achievements are characterized by supreme sacrifice, great importance and high example.

Thirty years after the 1994 Genocide against Tutsi, Rwanda, a country that was a synonym for a nightmare around the world continues to epitomise the value of heroism.

In lieu remaining stagnant in her unfortunate history, the East African country has remarkably rejuvenated into an exemplar on the African continent over a relatively short period where unprecedented reconciliation and industrial perseverance has prevailed under President Paul Kagame’s leadership.

Currently Rwanda’s economy is projected to grow by seven percent in 2024, up from 6.3 percent in 2023, ranking top in East Africa.

It is also projected to be the third fastest growing economy on the continent this year. Rwanda will mainly count its economic projected growth of seven percent on sectors such as tourism, services, trade and investment.

Other factors that have contributed to Rwanda’s positive trajectory in addition to the strong economic growth is the substantial improvements in living standards.

Rwanda was one of two countries in Sub-Saharan Africa that achieved all the health Millennium Development Goals (MDGs): Under-five mortality declined sharply between 2000 and 2020 and the maternal mortality ratio also dropped, as did the total fertility rate.

A strong focus on home-grown policies and initiatives in Rwanda has also contributed to significant improvement in access to services and human development indicators.

Rwanda’s journey from an extremely low base to impressive milestones thus far including reconciliation among Rwandans after the devastation of the 1994 Genocide against Tutsi remains today’s generation’s fight to keep it and even thrive above and Heroes Day offers a time for Rwandans to reflect on this journey.

The author is a Counsellor at the Rwanda High Commission in Lusaka

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The post 30th Heroes Day: A time for Rwandans to reflect, thrive on a positive trajectory, by Douglas Gakumba first appeared on Zambia Monitor.

As a doctor, it causes me much pain to see the loss of life from preventable causes such as cholera.

Us doctors know that some things you cannot do much about or you may know very little about something so your response is limited. This is not the case with Cholera.

We know so much about it that it should not kill anyone.

John Snow in 1854, made a major contribution to fighting cholera when he was able to demonstrate a link between cholera and the contaminated drinking water through his pioneering studies in London.

Read more: ‘Situation on ground not good,’ Health Minister says another 27 dead from cholera in 24 hours

That was it! No one should die from cholera from then on!You don’t have to be a doctor or be educated to know this. It is public knowledge.

But why have we failed to deal with the evil we know can kill if left unchecked, 170 years after Snow’s discovery, 60 years after Zambian independence?

Why do we still have people without clean water and adequate sanitation in the national capital, Lusaka? Why do we still have compounds and residential areas where no human being should live?

Why do we allow flooded toilets and pit latrines every rainy season and keep hoping it will not lead to cholera? Why do we allow unplanned settlements when it is against the law for a good reason?

Like I said, this is very painful to see in this time and era, Zambia has good resources available to tackle this compared to other countries in the region, including peace, stability and predictability. Yet we just cannot provide clean water and sanitation to our own people.

Unfortunately, the medical fraternity end up bearing the brunt of the epidemic as sick people and dead people must pass through our hands and so we are forced to respond as if we can actually control a cancer which has spread.

We are simply dealing with symptoms and not the root cause in the fight against cholera.

We have all good intentions, including a master plan to end cholera by 2025, but how far have we come in 2024, a year before the deadline?

Cholera is a social problem that manifests its ugly face as a medical emergency creating fear and anxiety.

Put diarrhea and vomiting aside, these can be managed in most cases, but what we have failed to deal with as a nation is the social determinants of cholera, namely water and sanitation, housing, and inequalities.

It seems to me that inequalities have been normalized with shanty compounds being taken as a normal place to be born and die. Our future generation is being told that it’s okey to live in a place without toilets and water.

It’s okey to live in flooded shanty compound every rainy season as long as you do not get cholera!! It is not okey and it is embarrassing for a rich nation, which is not at war, to be in a situation where 500 people are admitted each day with cholera and numbers are rising. It should not happen and must not happen.

The question that you might ask me, what can we do then? Excellent question!

The answer lies in the presidency and his cabinet not the ministry of health. That is where all the answers have been sitting for the past 60 years even as I write this, I believe the solution is very close. While the ministry of health is mopping up, it is possible to close the tap.

Here is my suggestion:

1) The president should form an inter-ministerial emergency committee which he should head. Here, he will need ministers to sit with him as members, supported by technocrats. Not the other way round.

Key in this are the following Ministries: local government, infrastructure and housing, water and natural resources and health. The ministry of health should play an advisory role, not leading this cholera elimination program.

2) Make a plan on how you will re-settle the people in cholera hot spots and make temporary shelters whilst exploring options and contractors that can partner with government to make new affordable housing in Kafue or Chongwe with proper access to water and sanitation.

It is cheaper to do this and give free housing than to keep fighting cholera and losing lives every year.

3) The president must make all ministers and their respective ministries accountable, not accepting any excuses. Those working with water, sanitation and housing should be given adequate support and resources to do their jobs well – executing immediate, contingency and long-term plans.

It is also critical that innovation is allowed, and that Ministry of finance be allowed to prioritize cholera elimination as doing this is equal to national development. A country fighting cholera every year is unlikely to develop.

4) The case fatality rate is very high in the current cholera outbreak (4%) when it should be less than 1% if patients and families are aware and seek care early. That’s where we are losing it! While opening big cholera centres is a good thing, about 50% are dying from home.

The president must order deployment of mobile emergency multi-disciplinary teams to be stationed in hot spots, with medical teams within 1-2 kms reach so that whoever has symptoms can quickly go and get medication and fluids in these units. These must also be used as entry points for community awareness with loudspeakers attached and environmental heath teams doing surveillance and community mapping.

We already have mobile hospitals at the ministry of health, these can move into cholera hot spots.

5) Use church leaders more since we are a Christian nation, and most patients are church members somewhere. Let the church leaders receive Cholera prevention information and resources from CDF to do something around their church catchment area and among their church members. People listen to and trust their church leaders, so they will believe cholera messages coming from their own church leaders.

6) Continue other initiatives, but with better coordination and active research to know what is working and what is not working and how we can maximize on the good things we are doing.

7) Lastly, we as citizens must do all we can to help and support each other. What do you have in your hands that God has gifted you? Please use this to protect someone from Cholera or help someone with cholera or help someone fighting
cholera on our behalf, whilst staying safe.

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The post Getting the cholera fight right: Leading from the front, By Prof Wilbroad Mutale first appeared on Zambia Monitor.

Introduction

On 22 December the ZCCM-IH gave further details concerning the Strategic Equity Partnership (“SEP”) with International Resources Holding RSC Limited (“IRH”) for Mopani Copper Mines.

The four notable highlights include: new capital injection; increased ZCCM-IH shareholding; loans to repay the Glencore loan and; that there would be no labour retrenchments.

Read more: Mopani Copper Mine set to receive $1.1 billion investment from International Resources Holdings

The total consideration is US$1.1 billion split between equity and debt as follows: US$620 million in new equity in return for a 51% stake in MCM, which will be used for MCM’s capital projects, and to stabilise the working capital position of the business; US$300 million as a shareholder loan by way of novation of part of the Glencore Transaction Debt; Up to US$100 million for settlement of the Glencore procured letters of credit; Up to US$80 million in shareholder loans, if required

This article raises the following three questions about this deal: What does the new capital mean? Does the new funds improve ZCCM-IH debt portfolio? Does the deal satisfy the growing calls for increased shareholding?

What the new capital means

At the time of its renationalization in 2021, Mopani needed about US$ 300 million to complete the capital projects.

This would have helped the company to increase production from around 80,000 tonnes to over 200,000 tonnes.

This level of production would have pushed Mopani, which made a net loss of US$ 91 million 2021 to profitability making it able to repay the Glencore debt.

The new dawn government neglected to inject this capital in the company, even refusing to offer Mopani millions of dollars, it is owed by the Zambia Revenue Authority through VAT refunds.

Similarly, despite Glencore being the most likely beneficiary of a profitable Mopani, it also refused to inject this capital. Instead, Glencore advanced Mopani US$100 million as credit.

Clearly, Glencore was ready to perpetuate its tight control over Mopani for the US$1.5 billion-plus-interest, plus the US$100 million-plus-interest. In short, Glencore’s plan was to hold Mopani under siege.

Mopani losses undermined its ability to meet its obligations towards its contractors, who in turn started closing down and sending their workers on forced leave or retrenching them. The resulting crisis left many families in poverty and severe financial crises.

Remember, the over 5000 contract workers who lost their jobs during the COVID-19 pandemic when Mopani cancelled the contracts of their employers have not been re-employed.

The injection of new capital thus breathes new life into the company.

One hopes that the resulting profit that this new capital entails is likely to improve Company’s profitability and ability to repay the Glencore debt. Equally progressive is the assurance that there would be no retrenchments.

Having been paid their retrenchment packages up to 2021, under the reckless deal signed during the PF, any new retrenchments sends these workers into poverty. Because Banks are allowed to recover their loans from the retrenchment packages, any retrenchments would spell doom for most families.

Does the new funds improve ZCCM-IH debt portfolio?

The new Mopani deal does not in any way improve ZCCM-IH debt portfolio. In fact over 40 percent of the total investment will go towards repayment of the Glencore debt.

The new company (IRH), will give over US$400 million to ZCCM-IH for it to make a partial repayment of its Glencore debt.

The new company has agreed to take only 51 percent shares, enough to give it controlling power over sales and key decisions and left 49 percent to ZCCM-IH. However, it is not taking over ZCCM-IH’s debt to Glencore.

What this means is that ZCCM-IH increased shareholding enables it to repay its Glencore debt if things go well. It does not mean that the profits would now come to Zambians.

Remember the Glencore deal stipulated as follows: Mopani owed Glencore group creditors US$1.5 billion of debt under the following terms:

1. interest to be capitalised for the first three years after completion, and thereafter payable quarterly at LIBOR + 3% (subject to a switch to an equivalent interest rate based on SOFR);

2. principal outstanding repayable under a dual mechanism:•3% of gross revenue of the Mopani group from 2021-2023 (inclusive), and 10-17.5% of gross revenue of the Mopani group thereafter; and

3. About 33.3% of EBITDA less tax, changes in working capital, capital expenditure, royalty payments and interest and principal (calculated under the first mechanism) payments in respect of Transaction Debt.

4. Repayment of principal (together with accrued interest) may additionally be required in the event of an occurrence of certain other early prepayment events, including certain change of control events in respect of Mopani.

5. After completion of the sale, Glencore will retain offtake rights in respect of Mopani’s copper production until the Transaction Debt has been repaid in full.

These conditions are super exploitative. The new investor is offering loans to ZCCM IH Plc to repay Glencore. The details of both loans are not disclosed. The new Mopani deal provides no details about this deal. If the status quo remains, this agreement is yet another disaster.

It would mean increased shareholding with zero-benefits to Zambians and 100 percent benefits to Glencore. We need details about how this deal was resolved, including full disclosure of the key terms and conditions. In short, while the new deal brings in new funds, it sustains or even deepens ZCCM-IH’s debt crisis.

Does the deal satisfy the growing calls for increased shareholding?

Given the effortless and seemingly senseless way the government recklessly handed out Konkola to Vedanta, 49 percent shareholding in Mopani sounds reasonable.

However, as I argued above, if the terms of the Glencore deal remain as they have been, this increased shareholding means nothing. Also, we need further details regarding the conditions offered to these companies e.g.

in terms of taxes especially that the so-called new dawn government is well known for being unnecessarily too generous to the mining companies. We also need to know how the government deals with illicit financial flows associated with mining capital.

A War on Want Report in 2015 for example, revealed that Zambia loses up to $3 billion a year due to tax avoidance and tax evasion by multinationals.

At the heart of these illicit dealings is Vedanta, the company which the government recently handed KCM back, and Glencore.

In 2014 an arbitration hearing in the London High Court of Justice revealed how Vedanta used a Dubai based subsidiary called Fujairah Gold to buy under-valued copper from its subsidiary KCM, and hide its profits, in a scam known as transfer mispricing. Fujairah Gold is a subsidiary, controlled by several other Vedanta subsidiaries and managed by Anil’s son Agnivesh Agarwal.

In 2020, the Supreme Court of Zambia fined Mopani Copper Mines and its Swiss parent company Glencoe $13 million for tax evasion, in particular for violating the Arm’s Length Standards (ALS), in which a buyer and seller are expected to act independently without one party influencing the other.

Similarly, First Quantum Minerals (FQM) Zambia sells all of its copper to FQM’s Swiss trading company, Metal Corp Trading to sell on the global market and in turn carries out sophisticated derivatives management to handle price risk’.

Although Metal Corp Trading has a brass plaque and a letter box in Zug, its main business is carried out through offices in London’s Great Portland Street housed in the same building as First Quantum Minerals Ltd UK headquarters.

In view of this, the Zambian government needs to be clear about how to combat these illicit flaws, because this is typical of all mining companies.

Conclusion

The key basis of the current deal is the original deal. Increasing shares, bringing new capital without addressing the flaws in the original deal left by the PF does not improve the situation. This deal illustrates one of the recurring issues in Africa, how to maximise benefits for its people.

Mineral dependent states have a tendency to fail to harness their resources for national development and even to be harmed by them in many cases. In these countries, living conditions are close to or below the average for sub-Saharan African countries.

While mineral booms promote bursts of temporary headline economic growth the after effects are so deep and so negative that in the long term growth is often lower than it would have been without the resource.

In this instance, resource dependence becomes not only a curse in terms of economic growth but also in terms of risks of violent conflict, greater inequality, less democracy and more corruption.

There is a need in the present instance for more clarity on the Mopani deal. Otherwise, it is not good enough.

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The post ZCCM-IH and IRH-Mopani deal: Not good enough, by James Musonda first appeared on Zambia Monitor.

Introduction:

Zambia is facing the challenging issue of its currency, the Kwacha, undergoing devaluation, which has had a significant negative impact on the country’s economic growth and development.

In an effort to address this problem, the Zambian government has recently announced the implementation of an Export Proceeds Tracking Framework, scheduled to begin on January 1, 2024.

While this framework shows promise in reversing the devaluation of the Kwacha, it is essential to adopt a holistic approach that takes into account and manages various other factors that influence market liquidity.

Read more: Kwacha in record crash, trades the lowest in 30 years, depreciates to K25/US dollar

This article delves into the potential mechanisms for addressing the Kwacha devaluation through the Export Proceeds Tracking Framework, emphasizing the importance of effectively managing monetary and fiscal policy tools and ensuring clear communication and education for all stakeholders.

Understanding the Export Proceeds Tracking Framework:

The Export Proceeds Tracking Framework mandates that all exporters must funnel their earnings through a Zambian bank.

This centralized system aims to promote transparency, generate accurate balance of payments data, and contribute to efficient economic planning and policy formulation.

By centralizing export earnings, the framework can strengthen foreign exchange reserves, foster financial stability, and provide the central bank with an additional tool to effectively implement monetary policy.

Consideration of Monetary Policy Tools:
To successfully implement and reap the benefits of sustainable economic growth and development through the Export Proceeds Tracking Framework, it is crucial to carefully consider and adjust various monetary policy tools. The following tools require meticulous management:

1. Open Market Operations: The central bank must assess the impact of open market operations on the money supply and make necessary adjustments to securities in order to maintain liquidity.

2. Reserve Requirements: The minimum reserve requirement should be reviewed to ensure that banks have sufficient liquidity to support lending and investment activities.

3. Discount Window Lending: The central bank should closely monitor and adjust the discount rate to manage liquidity and ensure financial stability.

4. Interest Rate Policy: Monitoring and adjusting interest rates are indispensable in controlling borrowing and lending costs and maintaining a sound economic environment.

5. Foreign Exchange Interventions: The central bank may need to intervene in foreign exchange markets by purchasing or selling domestic currency to stabilize the Kwacha.

6. Liquidity Facilities: Given the potential for capital flight and market volatility, the central bank should establish and manage liquidity facilities to address temporary liquidity needs of financial institutions.

Incorporating Fiscal Policy Tools:
In order to ensure a successful implementation and harness the benefits of sustainable economic growth and development through the Export Proceeds Tracking Framework, it is vital to consider and adapt various fiscal policy tools. The careful management of the following tools is paramount:

1. Government Expenditure and Investment: The government should prioritize strategic expenditure and investment in sectors that promote economic diversification, export competitiveness, and job creation. This will stimulate economic growth and enhance the effectiveness of the framework.

2. Taxation Policies: The government should review and streamline tax policies to incentivize exporters and encourage compliance. Striking a harmonious balance between tax rates and revenue generation is crucial, ensuring a business-friendly environment while maintaining sufficient resources for public welfare and infrastructure development.

3. Public Debt Management: Effective management of public debt is essential to maintain fiscal sustainability. The government should assess its debt levels, borrowing costs, and repayment capacity to ensure that debt remains manageable and does not jeopardize the benefits of the Export Proceeds Tracking Framework.

4. Public-Private Partnerships (PPPs): Encouraging PPPs can attract private investment, leverage expertise, and enhance the implementation of infrastructure projects. The government should foster an enabling environment for PPPs, facilitating collaboration between the public and private sectors to drive economic growth and development.

Sensitization, Education, and Communication:
The successful implementation of the Export Proceeds Tracking Framework hinges on effective sensitization, education, and communication with the public and stakeholders.

The government and central bank must communicate the objectives, benefits, and processes of the framework clearly to garner support and ensure compliance.

Raising awareness and understanding amongst stakeholders will ensure a smooth implementation and encourage positive market reactions, ultimately contributing to a stable currency and sustainable economic growth.

Conclusion:

Zambia’s Export Proceeds Tracking Framework presents a promising mechanism for reversing the devaluation of the Kwacha and achieving economic stability.

To navigate the implementation process effectively, it is vital to manage and adjust various monetary and fiscal policy tools to support liquidity and encourage sustainable economic growth.

Taking into account factors such as open market operations, reserve requirements, discount window lending, interest rate policy, foreign exchange interventions, government expenditure and investment, taxation policies, public debt management, and liquidity facilities will be imperative.

Additionally, sensitization, education, and communication will play a critical role in garnering support and maximizing the benefits of the framework.

Michelle heads the Institute of Research Analysis (TIRA)

With over 12 years of professional experience in public policy advisory and 22 years in finance, Michelle is a highly motivated, experienced individual with a strong background in public policy, quantitative methods, project management and various experiences in the financial industry.

A World Bank Group (WBG) Consultant, she is talented in leading and developing teams to accomplish strategy-critical goals.

Under a Presidential appointment and MOU with the government of Zambia, she ran a public policy think tank which she founded, providing the needed public policy support to Cabinet Office and the Office of the Vice President.

Skilled in identifying problems and recommending practical solutions. She possesses the ability to effectively communicate technical and complex issues.

She has an excellent background working with international institutions and businesses. She is multilingual.

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The post A comprehensive approach to tackling Kwacha devaluation in Zambia, by Michelle Morel first appeared on Zambia Monitor.

Consider this paradox: Nigeria has achieved the largest economy in Sub-Saharan Africa, but 45%, or about 85 million, of its residents still live without electricity. Across Sub-Saharan Africa, that figure looms to 600 million.

I believe renewable energy is part of the solution to this dilemma — both in Nigeria and throughout the sub-continent. But there are several hurdles to be cleared before wind, solar, hydrogen, and other clean energy sources can provide the same economic benefits that natural gas — the other part of the solution — already offers. One of those hurdles will be preparing domestic workforces for employment and leadership in the growing renewable energy sector.

Read more: Africa shows real promise in Green Hydrogen with projects in Egypt, Mauritania, Namibia and South Africa by NJ Ayuk

We are seeing movement in that direction. In Nigeria, for example, global renewables-promoting nonprofit, RMI, is providing technical training in partnership with four Nigerian energy distribution companies, two developers, and vocational training schools such as RMI’s Energy Transition Academy and the Lagos Energy Academy. Aimed at producing leaders and energy entrepreneurs, the Nigerian Cohort of RMI’s Global Fellowship Program, started in 2022, uses online learning and in-person experiences to develop leaders who know how to produce and employ solar PV, battery storage, and microgrid technologies.

We will need many, many more efforts like this for Africans to fully reap the economic benefits of our energy transition. For that to happen, more investment capital must be attracted for curriculum development, to support training efforts, and to help fledgling renewable businesses find their footing.

This is a critical topic, one that deserves attention at the 2023 United Nations Climate Change Conference (COP28) that is now underway and beyond.

Africa Must be Proactive in Building Capacity

The International Energy Agency (IEA) has predicted that 4 million new renewable energy jobs will be needed in sub-Saharan Africa by 2030 to meet 2050 net-zero goals. But it is not a given that those positions will be filled by Africans, especially if we rush forward with our transition from fossil fuels to renewables, as many wealthy nations and environmental groups are demanding.

Currently, there is a significant shortage of qualified human resources — people educated and prepared to take advantage of the opportunities for employment and entrepreneurship that renewables offer.

What’s more, only 76,000 renewable energy jobs have been created in Africa, less than 1% of 10.3 million globally. That means the vast majority of Africans have absolutely no experience, or hands-on opportunities to develop skills, in green energy.

Education is Key

Turning this situation around begins with investing in and emphasizing the importance of science, technology, engineering, and math (STEM) education at all levels in Africa.

African governments will need to do their part by driving improvements in all-around education in science and technology and green energy vocational programs.

Government policies should also provide advantages to attract private-sector visionaries and incentivize public-private collaborations that foster the education and training of Africans for career-level, leadership positions in the renewables sectors.

Africa’s renewable energy sector is growing. That reality is a mixed blessing because of the shortage of homegrown, trained professionals able to create, construct, and run renewable projects. We do, however, have an advantage — our large, youthful demographic.

Many of our young people need jobs, and many more soon will. If we can put together partnerships among governments, learning facilities, and private industry, we can train our youth for careers in renewable technologies that offer them brighter futures.

We should be building on the examples of the promising educational opportunities that are available for African students who want to build a career in renewable energy. Here is a sampling:
A German-African partnership, the Atlas of Green Hydrogen Generation Potentials in Africa, states, “Green hydrogen offers a real chance to launch a development in Africa which is driven by African countries themselves.” As part of the effort, a master’s degree program in green hydrogen technologies was begun in 2021. Students from all 15 countries of the Economic Community of West African States (ECOWAS) may apply. Universities in Cote d’Ivoire, Niger, Senegal, and Togo host the program.
Another German government initiative, Green People’s Energy for Africa, “supports vocation training institutes and technical universities to offer new and improved practical training modules for professionals” as well as other methods for skills development in renewable energy technology.
An EU-US cooperative agreement supports sub-Saharan Africa’s just transition to green energy. Working at the regional and national levels, efforts include empowerment of women in the sector, knowledge sharing to provide technical assistance, and the leveraging of investments by the private sector.
Another Opportunity: Green Hydrogen

Surveying the renewables horizon, there is general agreement that decarbonizing all the world’s economic sectors won’t be possible without the use of green hydrogen — for feedstock, fuel cell technology, and electric vehicles.

The demand for this clean and adaptable fuel, produced with renewable energy sources, compounds the need for a trained renewable energy workforce.

Green hydrogen presents both a large opportunity and a large challenge for African nations. With its massive area and plentiful solar and wind resources, Africa could potentially be producing about 10% of the world’s green hydrogen by 2030. But there is an “if” attached to that projection.

If African states strategize and invest now to develop a green hydrogen workforce, they can be ready for the coming wave of green hydrogen development and utilization. Hydrogen learning opportunities should be made available from the high school level upward as part of comprehensive skills plans for developing a prepared workforce.

With forethought and smart implementation, young Africans can be readied to lead the way in bringing the benefits of green hydrogen to their communities. In the process, job shortages can be mitigated as these young employees put their skills to work in the production, storage, and transportation of green hydrogen.

More African countries should be taking measures to ensure their people and businesses capitalize on green energy opportunities. And these must not stop with education and skills training; we also need local content measures to help ensure our residents benefit from renewable power projects and facilities operations.

Ensuring Strong Local Content Policies

Just as local content rules continue to function as vital safeguards in African oil and gas operations, they will be tremendously important in the renewables sector, both for individuals and for businesses. As I’ve stated in the past, every nation needs to create a framework that empowers indigenous companies to fully capitalize on renewable energy opportunities.

There are times when power needs may justify temporary modifications to these policies. As an example, South Africa’s National Energy Crisis Committee (NECOM), early this year, relaxed its local content rules for the construction of solar modules. Easing local employment requirements from 100% to 30% for local component production is meant to facilitate quicker deployment of solar projects, and hopefully, help alleviate the country’s crippling power outages.

Power supply levels and other factors show the need to perform a balancing act when writing local content rules. Those other factors include the supply of current local skilled workers and infrastructure. We don’t want to discourage developers, so we need appropriate, tailored local content regulations.

One reasonable approach is the one taken by Kenya, where guidelines requiring contractors to formulate a local content plan have been drafted. These plans must include training, succession, jobs, technology transfer, R&D, legal, financial, and insurance issues. This approach places the “ball” in the “court” of each project’s contractor, allowing for their input in local content formulation.

A similar policy has been enacted in Nigeria. The local content policy is part of the government’s Electricity Act 2023. It requires the Nigerian Electricity Regulatory Commission (NERC) to provide for local content participation involving employment, production, and assembly of components for solar PV, deep cycle batteries, and the electro-mechanical parts of SHP technology, wind boilers, and some turbines.

The act goes further, requiring contractors, sub-contractors, and licensees involved in renewable energy to include local content in all their related activities.

If widely enacted across the continent, similar local content rules can work hand-in-hand with training efforts to ensure Africans benefit from renewable energy development — through employment and the growth of their economies.

We are seeing promising movement in the effort to address Africa’s skills gap, but we need many more programs, and we need them now. African countries and energy industry stakeholders should be doing everything possible to support these efforts, so Africans don’t miss out on renewable energy industry opportunities.

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The post The challenges: Building capacity for Africa’s renewable sector, By NJ Ayuk first appeared on Zambia Monitor.

Recently, the Bank of Zambia issued the following Public Notice:

“The Bank of Zambia wishes to inform the General Public and investors in Government securities that effective from January 2024, the Government of the Republic of Zambia bonds (GRZ bonds) will be issued at par in the primary market for all new issuances. This means that Government bonds will be sold at their face value, that is, the cash amount to be invested will be the same as the face value amount.

“Issuance at par entails that the coupon rate for each instrument will be determined during the auction. We further wish to advise that the coupon rate for each instrument on auction will be the respective highest accepted yield rate. Re-issuances of any existing bonds and secondary trading of any bonds may be done at discount, par or premium depending on market conditions.

“The change has been made to streamline Government debt metrics and debt service in general.”

Read more: BoZ revises issuance of govt bonds method, coupon to be determined during auction sale

This public notice from Zambia’s Central Bank provides information about a change in the issuance method of the Government of the Republic of Zambia bonds (GRZ bonds). Here’s a breakdown of the key points:

1. Change in Issuance Method: Effective from January 2024, there is a change in the way the government bonds are issued in the primary market. Remember that the Primary market is where bonds are issued for the first time.

2. Issuance at Par: The new method involves issuing the GRZ bonds at par in the primary market for all new issuances. “At par” means that the bonds will be sold at their face value.

Let me give an example; if an investor is Paying K2.8 million for a Bond valued at K3.0 million, this is called buying at a discount. The K2.8 million is the Par Value while the K3.0 million is the Face Value. The return on the Bond will be the interest rate which is called the Coupon Rate plus the K0.2 million, since GRZ will pay back K3.0million upon maturity. The change means that the Bond will be sold at K3.0 million and will have the Face Value of K3.0 million, this is selling “At Par”. This means that the only return will be in form of interest or coupon rate as no discount is offered at the point of sale. This leads me to point 3;

3. Face Value: This means Investors will need to invest an amount equal to the face value of the bond. There won’t be any premium or discount; the cash amount invested will be the same as the face value amount.

4. Coupon Rate Determination: The coupon rate for each bond will be determined during the auction process. The coupon rate will be the respective highest accepted yield rate during the auction. This means, since there is no discount, the Coupon rate will not be set in advance, this will be determined using an auction. Example, BOZ will offer a low rate and see who is willing to buy and will continue to increase it in order to get more investors to buy the bonds.

5. Re-issuances and Secondary Trading: Re-issuances of existing bonds and secondary trading of any bonds may be done at a discount, par, or premium depending on market conditions. This suggests that existing bonds may still be traded at different prices in the secondary market.

6. Purpose of the Change: The change in the issuance method is aimed at streamlining Government debt metrics and debt service in general. I think this means it is easier for government to plan and project debt based on interest alone as compared to having different discounts as well as coupon rates.

In summary, the main change is the shift to issuing government bonds at their face value in the primary market, with the coupon rate being determined during the auction process. This is done to simplify debt metrics and debt service for the government. Existing bonds may still be traded at different prices in the secondary market based on market conditions.

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The post On the change in bond insurance by the Bank of Zambia, by Bright Chizonde first appeared on Zambia Monitor.

Any person who has lived in Zambia since the introduction of Multiparty Democracy will definitely see we are witnessing the highest level of political polarisation.Our country now, has very few moderates.

We are experiencing what I may call political extremism. Many people may be familiar with religious extremism which makes some religious fanatics to believe killing another person will guarantee free entry into heaven.

This fundamentalism creates a scenario where people have to choose one side and no middle ground is accepted as a viable choice.

As we have seen in many places across the world, religious extremism has resulted a less stable world. Extrem violence has been experienced including records of terrorist attacks such as the one in America on September 11,2001.

Unfortunately Zambia seems to have adopted a similar approach in the political environment.Prior to the 2021 general elections we witnessed this.

The PF extremists would physically attack anyone who opposed them,by the way I was a victim of this Violence.

Reaf more; Environment watchdog raises the alarm on pollution of rivers on the Copperbelt, calls for sanctions

In the same period the UPND as the Largest opposition Political Party labelled anyone who didn’t agree with them as sarogates of the PF.

This set the ground for the polarised political environment which we are experiencing under the rule of the New Dawn government.

As indicated earlier, this is a dangerous approach to managing our country. Political extremism is detrimental to the progress of the nation.

If this country is to make progress, those entrusted with the governance of this country need to ensure Political polarisation is eliminated by empowering institutions of governance to operate independently.

This is the only way we can guarantee progress as well as sustained peace.
I would like to encourage the Citizens of the country to avoid picking sides based on political polarity when it comes to serious national matters.

Our role as Citizens is to participate in the governance of our country by electing leaders and holding them accountable to the aspirations of the nation.

This means the Citizens should take the lead on setting the agenda of the nation while political parties compete to be the best vehicle for the delivery of the people’s aspirations.

The current scenario in our country is worrying, our people seem to have lost their ability to determine their future, we seem to have accepted to be at the mercy of politicians.

We seem not to care when our police officers are available to protect politicians while crimes go unhindered in our communities, we seem not to care when institutions which should enforce the law legitimises illegal activities, we do not seem to care when injustices are committed for as long as the injustice is on my political opponent.

This is dangerous and we need to quickly start working towards converging for national building rather than for political power gaining or consolidation.

I am afraid all signs are pointing to our country degenerating into a law comes second and power comes first.

This is a recipe for lawlessness and instability. We need to put a stop to this journey of distraction!

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The post How a polarized political environment affects you, by Henry Muleya first appeared on Zambia Monitor.