President Lungu announces part of his cabinet, Inonge Wina as Veep
President Lungu announced part of his cabinet the day after the presidential inauguration at Hero’s Stadium on Sunday. This saw Honorable Inonge Wina (MP of Nalolo constituency) become the first female Vice President in Zambia’s 50 year history:
The president announced 6 out of 20 cabinet positions leaving 14 vacancies to be announced after he returns from a working holiday. He has been in cabinet over the last couple of years and should be well placed to know who to retain and who to let go. A key appointment will be that of Special Assistant to the President for Press and Public Relations Amos Chanda. Communication and PR has been a key weakness in the PF administration (and previous ones) and Amos Chanda has already started to fix that by taking the stigma out of medical checkups. It will be interesting to see the composition of the rest of cabinet – especially the new recruits. Could we see some poaching from the private sector?
Zambia recorded a trade deficit in December 2014
According to data from the Central Statistics Office (CSO), Zambia recorded a trade deficit of K81.9 million (provisional) in December 2014. This was the first trade deficit since May 2009. This ended a 65 month streak of trade surpluses for Zambia.
The deficit was driven by an acceleration of consumer goods, raw materials and intermediate goods imports. Spending on election campaign materials, from motor vehicles to t-shirts, was most likely a major component in the acceleration of imports in December 2014. Imports of consumer goods averaged K1.3 billion in 2014 after averaging K813 million in 2013 – this has been one of the contributing factors to the recent decline of the Kwacha. This trend can only be reversed by increasing and diversifying the manufacturing base so that the country can cut down on its import bill – especially consumer goods from South Africa.
Energy Regulation Board reduces price of low sulphur gasoil
The Energy Regulation Board (ERB) has reduced the pump price for Low Sulphur Gasoil (LSG) by K0.83 per litre which translates into 7.74 percent (price now at K10.12 per litre).
The Energy Regulation Board (ERB) has taken over the pricing of Low Sulphur Gasoil (LSG) from the Ministry of Mines and Energy. They will be using the same ‘cost-plus’ pricing model used to price other fuels. The decrease is quite marginal seeing as other fuel pump prices have decreased by over 28 percent since the end of November 2014.
Vedanta plans capex cuts, 'deep restructuring' in Zambia
(Reuters) - Vedanta Resources Plc (VED.L), hit by weaker commodity prices, said it planned "hundreds of millions of dollars" in capital spending cuts and deferrals, while looking at a "deep restructuring" of its struggling Zambian copper business. Vedanta spent $1.42 billion (0.94 billion pounds) on capital projects in year ended June 30, 2014, down from $2.02 billion a year earlier.
Konkola Copper Mines (KCM) has had a host of liquidity problems which have led to suppliers and utility providers not being paid on time. A recent Government audit discovered that their liabilities exceeded their assets. Parent company Vedanta is not an experienced copper miner like First Quantum or Glencore which begs the question – how will they handle a prolonged decline in copper prices seeing as KCM already has financial difficulties? They tried to cut staff by 2,300 in 2013 but Government (owns 20%) intervention prevented this. They are already under pressure from falling oil prices which account for a significant portion of group earning. It will be interesting to see whether they stick it out with KCM or shed the asset to concentrate on their core operations.
LME 3-month copper seller price closed the week at $5,465 per MT
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. * * *