Michael Phiri 01/03/2023 Michael Phiri 01/03/2023

Zambia Investor Briefing: February 2023

ZAMBIA INVESTOR BRIEFING

February 2023

OVERVIEW

Minister of Health Sylvia Masebo has identified Zambia’s pharmaceutical sector as a priority industry for foreign direct investment. It will form a key part of the government’s post-pandemic approach to improving health security, she said, and the drive to promote private sector driven socio-economic development. Her comment comes as Lusaka readies itself for the Zambia-EU Pharmaceutical Manufacturing Forum, designed to foster greater collaboration between Zambia’s pharmaceutical industry and international pharmaceutical giants. Other participants will include those from the finance, textiles and insurance industries.
President Hilchilema travelled to Addis Ababa, Ethiopia, to take part in the 36th Ordinary Session of the Assembly of the African Union. While there, the president held bilaterals with a number of heads of state, including President Samia Suluhu Hassan of Tanzania, and the DRC’s Félix Tshisekedi. Presidents Hilchilema and Hassan agreed to fast-track the upgrade of the TAZAMA pipeline, which carries crude oil between Tanzania and Zambia, while his meeting with Tshisekedi centred on solving issues at the Kasumbalesa border crossing.
US Under Secretary for International Trade, Marisa Lago, met with President Hichilema in Lusaka. The pair discussed the Commercial Memorandum of Understanding (MoU) that “will leverage our shared interests into closer business linkages between our two nations and drive inclusive economic growth”, the president wrote. Lago’s visit came off the back of the Africa Leadership Summit, held in December in Washington, D.C., when Hilchilema met with both US Secretary of Commerce, Gina Raimundo and President Joe Biden.
Blue Carbon signed an MoU with the Government of Zambia which will kickstart carbon removal projects in Zambia’s forestry sector. The Dubai-based company supports such projects under Article 6 of the Paris Agreement. Both President Hichilema and Blue Carbon Chairman Sheikh Ahmed Dalmook Al Maktoum were present at the signing in Lusaka. Al Maktoum said “We are confident that our robust decarbonisation model will enable the Zambian government to preserve its forest resources and reduce greenhouse gas emissions efficiently”.
Invest Africa are to lead a delegation for an Investment and Trade Mission to Lusaka in March. The Mission aims to provide a platform for international and regional investors to engage with senior government officials, in addition to key investment and trade institutions, such as the Zambia Development Agency. The delegation will hold meetings with President Hichilema, the Central Bank Reserve Governor, and the Minister of Industry, Trade and Commerce, amongst others.
The Board of Directors of the Zambia Development Agency has appointed Albert Halwampa as the New Director General. The ZDA said “Mr Halwampa brings with him a wealth of knowledge and strategic experience in promoting trade, investment and policy development in regional and international markets. There is no doubt his experience will bring about the desired change and contribution to the increase in investments in Zambia”.

Foreign Direct Investment

February saw a number of significant developments with regards to foreign direct investment (FDI) in Zambia. High-level meetings took place between President Hichilema and UAE-based Blue Carbon, representatives from Citi Bank and Standard Bank, in addition to discussions with US Under Secretary for International Trade, Marisa Lago.

State House also played host to a delegation from the Africa Finance Corporation, meeting with its President and CEO Samaila Dalhat Zubairu to how Zambia can best utilise public-private partnerships to accelerate economic development.

All of this comes ahead of the Zambia-EU Pharmaceutical Manufacturing Forum, which will be held from 01 - 03 March 2023 in Lusaka. Health Minister Sylvia Masebo told the media that nine Zambian pharmaceutical firms have confirmed their plans to attend, alongside 28 international pharmaceutical companies, under the theme “Strengthening Healthcare Through Local Pharmaceutical Manufacturing.” “The need to promote FDI and other forms of private-public partnerships has already been identified as key to the ambition”, she added.

A delegation from Invest Africa, a business and investment platform that aims to provide its members with information and exposure to business opportunities to invest in the continent, will travel to Lusaka in March. Limited spaces are still available for international delegates to join the Mission. If you are interested, please contact farha.musa@investafrica.com.

Regional Partners

The 36th Ordinary Session of the Assembly of the African Union was held in Addis Ababa, which saw President Azali Assoumani of Comoros elected as New Chairperson for 2023, taking over from Senegal’s President Macky Sall.

President Hichilema met with several leaders on the sidelines of the summit, including Tanzania’s President Suluhu Hassan. The pair agreed to expedite the upgrade of the 50 year old TAZAMA oil pipeline that runs from the Tanzanian port city of Dar es Salaam to Ndola in Zambia. Energy Minister Peter Kapala said the agreement would help help the cost of petrol affordable for citizens and businesses alike.

Both Hichilema and his Congolese counterpart Félix Tshisekedi have vowed to solve the issues that persist at the Kasumbalesa border crossing between their two countries. A huge increase in the demand for copper and cobalt globally, key components in electric batteries, has seen long queues form on both sides of the border. Zambia’s Transport and Logistics Minister Frank Tayali has said that poor customs services are also partly to blame.

LATEST TRENDS

GDP

Inflation

Currency

1 USD = 19.95 ZMW 30 day average = 19.349 Volatility (last 30 days) = 0.5%

OTHER NEWS

Angola, Zambia and DRC take step towards creating trade corridor, 01.02.23, Business Live

Letter: China is the key to unlock Zambia debt restructuring, 06.02.23, Financial Times

Zambian finance minister criticises creditor delays in debt restructuring, 13.02.23, Financial Times

World’s largest man-made dam weighs using floating solar panels, 16.02.23, Bloomberg

Zambia secures funds for climate adaptation with Commonwealth support, 21.02.23, The Commonwealth

Zambia inflation accelerates as underlying price pressures build, 23.02.23, Bloomberg

Zambia’s Moping halts mine shaft operations after worker dies, 28.02.23, Reuters

UPCOMING EVENTS

01.03.23 - 03.03.23

Zambia-EU Pharmaceutical Manufacturing Forum

Lusaka, Zambia

20.03.23 - 23.03.23

Investor Mission to Zambia, Lusaka

CONTACT US

If you would like to find out more or receive tailored briefings on specific sectors get in touch via info@zambiaisback.com. To stay up to date follow us on social media:

Facebook: @zambiaisback

Twitter: @ZambiaIsBack

Instagram: zambia_isback

Michael Phiri 01/02/2023 Michael Phiri 01/02/2023

Zambia Investor Briefing January 2023

ZAMBIA INVESTOR BRIEFING

January 2023

OVERVIEW

US Treasury Secretary Janet Yellen visited Zambia as part of a three-country visit to Africa. She reiterated the importance of restructuring the country’s debt, something she remained optimistic about following talks with the Chinese in Zurich the week before. Yellen further encouraged President Hichilema to continue the fight against corruption. “I would say the work isn’t done, but there clearly has been an important focus on it”, she said. Talks also touched on food and health security.
State House played host to the International Monetary Fund (IMF)’s Managing Director, Kristalina Georgieva, who met with President Hichilema, Finance Minister Situmbeko Musokotwane and central bank governor Denny Kalyalya, amongst others. The visit centred on debt restructuring, with both sides urging the country’s creditors to ensure an agreement is in place as soon as possible. Georgieva praised the New Dawn government’s efforts “to improve the use of public resources” and “tackle corruption” which, she said, would “create a better environment for investors and businesses”.
A Zambian government delegation, headed by the President, attended Abu Dhabi Sustainability Week, an antecedent to COP28, which will be hosted in the Emirati capital between November and December 2023. The summit yielded a number of agreements, including a Memorandum of Understanding (MoU) and Joint Development Agreement (JDA), signed with the UAE, aimed at facilitating renewable energy investment. Zambia’s state-backed energy company, ZESCO, will form a joint venture with MASDAR, a UAE-government owned renewable energy company, that will develop and deploy solar projects that are estimated to generate an additional 2000 megawatts of energy.
President Hilchilema attended the ‘Dakar 2 Feed Africa: Food Sovereignty and Resilience’ summit in Senegal. Held in collaboration with the African Development Bank and the International Fund for Agricultural Research, the summit convened heads of state from across the continent to mobilise and align government resources, development partners and private sector financing to “unleash Africa’s food production potential”.
Angolan President Joāo Lourenço welcomed President Hichilema for a three-day state visit to discuss trade, investment, energy and infrastructure. In addition to signing an MoU, the two countries agreed to resume direct flights between Lusaka and Luanda. The President also addressed Angola’s National Assembly on the importance of good governance and democracy.

Debt Management

Visits from both the IMF’s Managing Director and US Treasury Secretary this month highlighted the support the Zambian government enjoys from both the international and multilateral communities on to the question of debt restructuring.

Both the IMF’s Georgieva and the US’s Yellen urged creditors to quickly resolve negotiations that have until now, according to Zambian Finance Minister Musokotwane, moved too slowly with a still uncertain outcome. Yellen singled out China as being a “barrier” to ending the debt crisis.

Without restructuring Zambia cannot access a USD 1.3 billion bailout form the IMF, which would give a much-needed boost to the economy. It is hoped that the two high-profile visits will bring renewed attention to the issue of debt management.

Foreign Direct Investment

The Zambian Development Agency (ZDA) registered a more than 150% increase in the number of investment ventures in 2022 compared with 2021. Last year saw 351 registered ventures, yielding an investment of USD 8.59 billion, compared with 255 the previous year, an increase of close to 158%.

According to Albert Halwampa, the ZDA’s acting director general, this translates to just under 75,000 new jobs in critical sectors such as manufacturing, energy, mining, transport, construction and agriculture.

A ZDA report indicted that the country’s improved macroeconomic environment was underpinned by an increase in investor confidence, “triggered by sound economic policies by the government including stabilisation of the macroeconomic fundamentals, implementation of fiscal measures and reaching the IMF Staff Level Agreement on an extended credit facility arrangement with Zambia”.

Agricultural and Mining Developments

Following the December announcement from KoBold, a consortium backed by tech giants Jeff Bezos, Bill Gates and Richard Branson, stating that they will invest in Zambia’s mines, the country’s agriculture sector is too enjoying an economic boon.

Munkotachi, an SME based in the Chongwe district of Lusaka province, has received certification from GlobalG.A.P. - a European retailers standard for good agricultural practices - which will allow its avocados and avocado oils to be sold in the European Union.

Managing Director Christopher Lesa has also said that that the company hopes to expand its poultry farming operation, with the aim of developing more than 90 cooperatives, each with at least 20 members. “The government is trying to support SMEs in so many ways”, he said, “so that people out there can benefit and improve their lives”.

Munkotachi is hoping to plant two million avocado trees on 5,000 hectares across four regions of Zambia, and expects to employ more than 30,000 small-scale farmers.

Load Shedding

The government-backed energy provider, ZESCO, has extended electricity rationing to mining companies following a drop off in water levels at Lake Kariba. According to the Zambezi Water Authority, which manages the lake’s dam, water levels were down to 1.66% of usable storage for both the Kariba North Bank Power Station and the Kariba South Bank Power Station, found on the Zimbabwean side of the lake.

ZESCO had already been forced to reduce electricity flows to domestic customers as the low water levels threatened power generation.

The utility’s chairman, Vickson Ncube, has said that power rationing was expected to be reduced by the middle of next month as water levels recovered. Full generation is likely to resume in March.

LATEST TRENDS

GDP

Inflation

Currency

1 USD = 19.05 ZMW 30 day average = 18.484 Volatility (last 30 days) = 0.48%

OTHER NEWS

Zambia: Abolition of the death penalty ‘a historic milestone’, 06.01.23, United Nations

Climate change action could set off a copper mining boom: How Zambia can make the most of it, 08.01.23, The Conversation

Zambia, UAE to develop $2 billion solar projects, 17.01.23, Reuters

Zambia joins Ghana in its quest to restructure its debt under the G20 Common Framework, 23.01.23, Business Insider Africa

Janet Yellen pushes China on debt relief for Zambia, 23.01.23, The Wall Street Journal

Yellen visits Zambian farm to showcase Africa’s ag potential, 26.01.23, Associated Press

Zesco seeks liquidation of Zambia Electrometer Ltd over unpaid debt, 30.01.23, Diggers

UPCOMING EVENTS

06.02.23 - 09.02.23

African Mining Indaba 2023

Cape Town, SA

20.03.23 - 23.03.23

Investor Mission to Zambia, Lusaka

CONTACT US

If you would like to find out more or receive tailored briefings on specific sectors get in touch via info@zambiaisback.com. To stay up to date follow us on social media:

Facebook: @zambiaisback

Twitter: @ZambiaIsBack

Instagram: zambia_isback

Michael Phiri 01/01/2023 Michael Phiri 01/01/2023

Zambia Investor Briefing December 2022

ZAMBIA INVESTOR BRIEFING

December 2022

OVERVIEW

President Hakainde Hichilema travelled to the US to take part in the US-Africa Leaders Summit, hosted by US President Joe Biden in Washington, D.C. The summit was attended by almost all African heads of state, in addition to business leaders and investors from the continent. While there, President Hichilema participated in the inaugural US-Africa Business Forum, co-hosted by the US Department of Commerce, the US Chamber of Commerce and the Corporate Council on Africa, in partnership with the US government’s Prosper Africa initiative.
A US-based company, KoBold Metals, will invest USD 150 million in Zambia’s Mingomba mine project. The deal was announced by President Hichilema at the recent US-Africa Leaders Summit. The California company, which is backed by tech tycoon Bill Gates, said the Mingomba project’s potential to become “one of the world’s top-tier mines”, was why they were so attracted to the deal. KoBold Metals are buying into the joint venture with Australian firm EMR Capital and ZCCM-IH.
The DR Congo and Zambia have signed a Memorandum of Understanding (MoU) with the US. The agreement promises US support to both the DR Congo and Zambia in developing an electric vehicle value chain. Present at the signing, which took place on the first day of the US-Africa Leaders Summit, were US Secretary of State Anthony Blinken, DR Congo Vice Prime Minister and Foreign Minister Christophe Lutundula and Zambian Foreign Minister Stanley Kakubo.
Canadian mining company First Quantum Minerals (FQM) are to pay the state-backed ZCCM-IH in revenue royalties, rather than dividends, following negotiations between parties.
President Hichilema opened a new one-stop-border-post at Mchinji-Mwami with his Malawian counterpart Lazarus Chakwera. The border post is of “vital importance to the economies of Zambia and Malawi”, the president said.
Radisson Hotel Group has opened its first Zambian resort. Found on the banks of the Zambezi River and just 4km from Victoria Falls, Radisson Blu Mosi-oa-Tunya Livingstone Resort is the Group’s first safari resort in Africa.

Mining Developments

President Hichilema travelled to Washington, D.C., to attend the US-Africa Leaders Summit, which took place over 3 days between 13-15 December. The summit aimed to strengthen ties between the world’s largest economy and its African partners.

While there, the president announced a USD 150 million investment in the Mingomba mine, thought to be the world’s highest-grade undeveloped large copper deposit. The pledge came from KoBold Metals, a California-based artificial intelligence firm backed by Bill Gates and EMR Capital.

EMR Capital executive chairman Owen Hegarty told reporters that KoBold Metal will take a 52% stake in the Mingomba project, while the other joint venture partners, EMR Capital and Zambia's state-backed ZCCM-IH, will own 28% and 20% respectively.

Elsewhere, Canadian mining company FQM has agreed to convert dividends from its copper mine at Kansanshi to a revenue royalty. According to the agreement, ZCCM-IH will receive 3.1% in a revenue royalty from the mine, which is forecast to produce between 140,000 and 150,000 tons for the financial year ending December 31.

According to economist Oliver Saasa, the deal will allow ZCCM-IH to extract more value from the Kansanshi mine than would have previously been the case with the divided model. “The overall average revenue from the royalty model that ZCCM-IH has opted for is expected not only to be higher, but also more predictable and consistent”, he told Mining for Zambia. “If you ask me, this could be a model for all mining business[es] in Zambia to consider”.

Debt Management

US Treasury Secretary Janet Yellen held a closed-door meeting with President Hichilema during his recent trip to the US. The pair discussed “the need to address debt sustainability and the imperative to conclude a debt treatment for Zambia”, according to Yellen. She added that it was important for Zambia’s creditors to conclude an equitable debt restructuring deal as quickly as possible to lend credibility to the G20 Common Framework for poor country debt relief.

Yellen also announced plans to visit the continent from 17-28 January, taking in Zambia, South Africa and Senegal. US President Joe Biden too said he hoped to visit next year, which would be the first visit to sub-Saharan Africa by a sitting US president since Barak Obama’s in 2015.

President Hichilema held further meetings with World Bank officials in Washington, D.C., accompanied by Minister of Foreign Affairs Stanley Kakubo, Commerce Minister Chipoka Mulenga and Mines Minister Paul Kabuswe.

Other sideline discussions at the summit yielded a promise from the Millennium Challenge Corporation, an independent US government foreign aid agency, that a second so-called compact aid package would be signed with Zambia in 2023, targeted largely at the agriculture sector. The first of such packages was secured in 2018, with USD 355 million aimed at boosting the country’s supply of drinking water.

Regional Partners

The New Dawn government has agreed to further help the US secure batteries for electric vehicles. An MoU was signed between the US, Zambia and the DR Congo, aiming to develop an industry to process strategic raw materials like cobalt, lithium, nickel and manganese in the Copper Belt.

Closer to home, President Hichilema launched the Mchinji-Mwami one-stop border post with his Malawian counterpart, Lazarus Chakwera. “We are one people and we need to invest jointly to grow the economies of our two countries”, he remarked at the ceremony.

LATEST TRENDS

GDP

Inflation

Currency

1 USD = 17.86 ZMW 30 day average = 17.220 Volatility (last 30 days) = 0.42%

OTHER NEWS

IMF to assess Zambia in spring, urges debt deal with creditors, 09.12.22, Reuters

Government calls on proper management of mineral resources in Mkushi, 12.12.22, Lusaka Times

ZDA calls for increased trade and investment between Zambia and USA, 12.12.22, ZDA

Beeline Telecom to launch operations in January 2023, 13.12.22, Lusaka Times

Debt defaulter Zambia seeks to offload costly presidential Gulfstream jet, 15.12.22, Bloomberg

Government launches interim guidelines on carbon market and trading, 19.12.22, Lusaka Times

Government implores stakeholders to invest in electricity generation, 19.12.22, Lusaka Times

HH to hold end of year press conference, 20.12.22, Diggers

UPCOMING EVENTS

25.01.23 - 29.01.23

International Kingdom Business Conference

Livingstone, Zambia

CONTACT US

If you would like to find out more or receive tailored briefings on specific sectors then get in touch via info@zambiaisback.com. To stay up to date follow us on social media:

Facebook: @zambiaisback

Twitter: @ZambiaIsBack

Instagram: zambia_isback

Michael Phiri 01/12/2022 Michael Phiri 01/12/2022

Zambia Investor Briefing - November 2022

ZAMBIA INVESTOR BRIEFING

November 2022

OVERVIEW

According to the Zambia Development Agency (ZDA) Zambia recorded USD 1.1 billion worth of investment pledges in Q3 2022, comparing favourably to USD 631 million in Q3 2021. ZDA projects that the 95 investment ventures will create more than 8,000 new jobs. Manufacturing attracted the most investment (USD 396 million), with energy, mining construction, transport, services, tourism, real estate, health and agriculture also featuring.
The Bank of Zambia has maintained the monetary policy rate unchanged at 9%, forecasting growth at 3% for 2022, 4% in 2023 and 4.1% in 2024. Governor Denny Kalyalya indicated that he expected inflation to continue its recent downward trend and return to the target range of 6-8% in Q1 2024, with an average of 8.5% expected in 2023. The next Monetary Policy Committee meeting is schedule for February 13 and 14, 2023.
President Hakainde Hichilema travelled to COP27 in Egypt where he met with creditors to press for the finalisations on a memorandum of understanding (MoU) on debt reduction. During the conference he also signed an MoU with the European Union on Forest Partnership as part of the EU Green Deal.
MTN Zambia launched its 5G service on November 24. The service covers approximately 65% of the population in Lusaka, Kitwe and Ndola, in addition to parts of Chingola, Solwezi and Kalumbila. MTN aims to reach 100% 5G coverage for Lusaka, Kite and Ndola by mid 2023, as well as continuing its rural connectivity programme. Meanwhile, Minister of Technology and Science Felix Mutati said government wants to achieve 100% internet connectivity by 2024.
The US launched two new projects in the country. USAID TradeBoost is a USD 30 million investment project to increase trade and investment nationally, regionally and internationally, while the USAID Business Enabling Project is a USD 14 million initiative to bring inclusive private sector investment and trade to Zambia that includes a strong focus on increased opportunities for women.
Government launched a fund in partnership with Huawei - the Hakainde Hichilema Innovation Fund. Under the initiative 50 young Zambians will receive scholarships in the ICT sector.

Mining Developments

As of November 21 Zambia’s mining cadastre office is accepting new license applications, having reopened on October 19 following its closure in February as part of efforts to clean up the licensing process.

The 10th Zambia International Mining, Energy Conference and Exhibition (ZIMEC) attracted over 300 delegates in Kitwe. During the President’s address he reiterated the government’s “steadfast commitment to meeting the ambitious yet achievable goal of raising annual copper production levels from the current 830 metric tons to 3 million metric tons.”

This month President Hichilema opened a new manganese mine in Luapula province. The 40 million tonnes deposit will be mined over a 20 year period. The mine is Zambian owned by Musamu Resources. The mine currently employs 250 people, which is expected to increase to 1,000 in five years time.

Debt Management

The Export-Import Bank of China (EximBank) is expected to lead Beijing’s team to renegotiate loans owed by Zambia to Chinese state-owned creditors worth almost USD 6 billion. The World Bank and IMF officials continue to press creditors to accelerate negotiations and US Ambassador to Zambia Michael Gonzales called on creditors to reduce the capital that is owed. Bank of Zambia Governor Kalyalya has indicated that he expects debt restructuring to conclude over the first half of 2023 with a significant positive impact on the budget. Meanwhile, the government has hired a private firm to audit domestic debt.

Events

The International Growth Centre (IGC) hosted the inaugural Zambia Economic Growth Forum 2022 (EGF) in partnership with the Government of Zambia. President Hichilema delivered the keynote during which he reiterated the importance of prioritising economic growth.

Speaking at the 2022 Zambian Association of Manufacturers - Proudly Zambian Expo President Hichilema directed the Ministry of Commerce, Trade and Industry to deliver reductions to business licensing costs.

Zambia hosted the 2022 Innovation Africa Ministerial Summit under the theme “digital transformation in education and skills development for Africa.” The event was officially opened by President Hichilema who called for joint efforts towards advancing innovation, transformative education and skills development on the continent, through impactful partnerships between government and industry.

Accountability and Transparency

Government launched the Risk Management Guidelines for the management of resources in the public sector. Commenting on their launch Minister of Finance Situmbeko Musokotwane said they were aimed at improving transparency, accountability and good governance.

LATEST TRENDS

GDP

Inflation

Currency

1 USD = 17.09 ZMW 30 day average = 16.519 Volatility (last 30 days) = 0.39%

OTHER NEWS

Zambia central bank launches "go cashless" campaign, 03.11.22, CGTN

Zambia gets a new lease of life, 04.11.22, fDi Intelligence

EXCLUSIVE Zambia says EximBank to represent Chinese lenders in debt talks, 08.11.22, Reuters

US Envoy Says Zambia Debt Restructure Must Inolve Haircuts, 13.11.22, Bloomberg

Jubilee Metals produces first export quality cobalt in Zambia, 22.11.22, Proactive Investors

Entain makes first play in Africa launching bwin Zambia, 17.11.22, SBC News

Fintech Unicorn Chipper Cash set to buy Zambia fintech pioneer Zoona, 18.11.22, TechCabal

Why Now Is the Right Time to Invest in Zambia, 24.11.22, Lusaka Times

UPCOMING EVENTS

13.12.22 - 15.12.22

U.S. Africa Leaders Summit

Washington, DC

15.12.22 - 16.12.22

International Conference in Information and Communication Technologies

Lusaka

CONTACT US

If you would like to find out more or receive tailored briefings on specific sectors then get in touch via info@zambiaisback.com. To stay up to date follow us on social media:

Facebook: @zambiaisback

Twitter: @ZambiaIsBack

Instagram: zambia_isback

Michael Phiri 01/11/2022 Michael Phiri 01/11/2022

Zambia Investor Briefing - October 2022

ZAMBIA INVESTOR BRIEFING

October 2022

OVERVIEW

Following the presentation of the 2023 budget by Minister of Finance Hon Dr Situmbeko Musokotwane, the New Dawn government continues its focus on stimulating private sector development by introducing new measures and incentives across sectors including mining, agriculture, manufacturing, tourism, telecommunications, insurance and gaming.
Government continued to pursue its debt management plans setting out its expectation that it hopes to agree debt relief terms with creditors by the end of 2022 or early 2023 during a presentation to Eurobond holders. Meanwhile, the World Bank approved a loan of US$270 million for economic relief.
The inaugural US Zambia business summit to boost trade and investment was convened in Lusaka.
President Hichilema travelled to Namibia to enhance trade ties between the two countries, following an agreement to develop a 2,000km oil and gas pipeline earlier in the month.
A trade mission to Lubumbashi in the Democratic Republic of Congo generated export deals for Zambian firms worth US$24.5 million, including for the supply of mealie meal, chicks, meat products and maize seeds.
VAT and excise duty on petrol and diesel was re-instated effective October 1st.

2023 Budget

On 30 September 2022 Minister of Finance Hon Dr Situmbeko Musokotwane presented the 2023 budget. Titled ‘Stimulating Economic Growth for Improved Livelihoods’ it is the second budget by the New Dawn government and contains additional measures and incentives to stimulate private sector development, as well as commitments to increase social spending. These will be financed in part by the K9 billion (approx US$560 million) in additional funds the government expects to have available in 2023 after announcing an end to fuel subsidies and the reintroduction of VAT and excise duty on fuel and other commodities. Measures to improve public financial management were also announced.

In the mining sector the royalty rate regime was restructured to tax only incremental value in price at various thresholds and property transfer tax for transfer of exploration rights was cut from 10% to 7.5%. Read more at ZambiaIsBack.com.

In the agriculture sector reform of the Fertiliser Input Subsidy Programme (FISP) was announced, with the new Comprehensive Agriculture Support Programme to include extension service support, irrigation development and access to finance. In addition, 256 extension officers and supporting equipment will target an extra 1.5 million smallholder farmers, while 16 new dams will support irrigation and new farming blocks are to be established.

In the manufacturing sector the government announced tax concessions geared at stimulating investments in corn starch production and a 50% suspension on excise duty on clear beer made with cassava or malt at certain levels of production.

For tourism there is a continued suspension of customs duty on selected capital equipment and waived visa fees from certain countries including EU member states, the United Kingdom, the United States, and China.

In telecommunications a single corporate income rate of 35% will replace the pre-existing two-tier system.

In the insurance sector government announced the removal of the 15% withholding tax on investment income on life insurance.

For betting and gaming the withholding tax on winnings reduced by 5% and presumptive tax on land-based betting companies reduced from 25% to 15%.

Other notable measures include a change in the basic rate PAYE threshold from K54,000 (approx US$3,343) to K57,600 (approx US$3,566), a reduction of the tax on income received by special purpose vehicles under Public Private Partnerships during a set period, and the announcement that timber exchanges are to be set up across the country to improve transparency in the sector.

Debt Management

During a presentation to three of Zambia’s Eurobond holders the government indicated that it hopes to agree debt relief terms with creditors by the end of 2022 or in Q1 2023. A net-present value reduction of US$6.3 billion is required in line with IMF targets, equivalent to 49% of the face value. The government is currently preparing for its third official creditors committee meeting, which it hopes will take place in the coming weeks

US Zambia Business Summit

The inaugural US-Zambia Business Summit was held in Lusaka on October 12th and 13th. US companies and investors from sectors ranging from mining to technology attended alongside representatives from the US International Development Finance Corporation, the US International Trade Administration, the US Trade and Development Agency and the Office of the US Trade Representative. During the event Ambassador Gonzales stated, “Working with the Zambian government to improve Zambia’s business enabling environment is my top objective”.

Zambia and Namibia Strengthen Trade Ties

President Hichilema travelled to Namibia as a guest of President of Namibia Hage Geingob at the Swakopmund International Trade Expo. Earlier in the month the two nations signed an agreement on the Cooperation in Facilitating Private-Sector Development and Implementation of an Oil Products and Natural Gas Pipeline project. The two governments have committed to working together with private partners to assess the cost and viability of the 2,000km pipeline which could supply 100,000 to 120,000 barrels per day and help reduce the cost of delivering petroleum products, with the ambition to also supply other countries in the SADC region.

LATEST TRENDS

GDP