Energy Regulation Board reduces pump price of petroleum products
The Energy Regulation Board (ERB) reduced the pump prices of petrol, diesel and kerosene by K0.25, K0.38 and K0.27 per liter, respectively while wholesale prices were cut by 3.66%. The changes took effect yesterday at midnight. The new pump prices of petrol, diesel and kerosene per liter are K10.48, K9.73 and K7.21, respectively. Global oil prices have fallen by over 27% over the last 5 months and yesterday Brent crude traded below $70 per barrel for the first time since 2010.
Miners respond to new mining tax regime
As expected, mining companies responded with displeasure to the new fiscal regime in their sector as outlined in the 2015 national budget last week. Barrick Gold (owners of Lumwana mine) said that the change in taxation would affect the viability of their mine. First Quantum talked about the negative impact the changes would have on jobs and future investment. Analysts shaved off an average of 4 percent off the Net Asset Values (NAVs) of some of the mines that they cover.
Minister of Finance Alexander Chikwanda announced the K46.7 billion 2015 national budget today - up 9.6 percent from last year’s figure. Here is a look at how it will be financed in comparison to 2014:
The central bank received bids worth K1.2 billion and allocated K1.036 billion at Treasury bill (T/bill) auction 20 of 2014 today. K900 million of T/bills were up for auction:
The following is the statement that Fitch Ratings released on Friday:
Fitch Ratings has revised the Outlook on Zambia's Long-term foreign and local currency Issuer Default Ratings (IDR) to Positive from Stable and affirmed the IDRs at 'B'. The issue ratings on Zambia's senior unsecured foreign and local currency bonds have also been affirmed at 'B'. The Country Ceiling has been affirmed at 'B+' and the Short-term foreign currency IDR at 'B'.
It is no secret that the Government has made revamping and expanding the road network in Zambia a huge priority. They have staked $5.8 billion on the flagship ‘Link 8,000’ project which is set to improve and expand a road infrastructure network which has been lacking for decades. Two types of companies are winning; the contractors who do the actual construction and consultants who do the design, feasibility studies and supervision of the works.
As of the July 2014 update from the Road Development Agency (RDA), there were 21 on-going works contracts under phase one of the Link 8,000 project with a combined awarded contract value of approximately K8.15 billion ($1.35 billion) to various companies broken down like this:
This time last year, there were many whispers and unconfirmed reports of the government having financial issues – which we later found out they had. Expenditure falling under the category ‘Grants and Other Payments’ was 68.9 percent above budget at K5.4bn! This in combination with unplanned civil service salary increments in September 2013 led to an overall budget deficit of K8.2bn (6.8 percent of GDP) above the projection of K5.4bn.
Fast forward 12 months, the Ministry of Finance released data of the performance of the K42.7bn National Budget in the first half of this year:
[Revenue & Grants of K15.1bn – Expenditure of K18.2bn = Deficit of K3.1bn (2.1 percent of GDP)]
The Government raised revenues and received grants amounting to K15.1bn:
Trying to decipher this puzzle that is Zambia by using a variety of publicly available data (structured and unstructured) in conjunction with my own skill/experience. * * *