zambia weekly wrap - march 15 edition

Zambia to triple petrol supply to ease shortage in capital

Zambia plans to triple petrol supply to 900,000 litres a day using imported stocks in its storage depots after panic buying by motorists led to shortages in the capital, the energy minister said on Wednesday. Christopher Yaluma told parliament that petrol supply to the capital and outlying areas was doubled to about 600,000 litres per day this week but shortages persisted. (Read more)

It quickly became apparent that the oil marketing companies (OMC’s) were not to blame for the petrol shortage when Indeni Oil Refinery admitted that they had shut down operations because there was no feedstock to ‘refine’. Hence, one can infer that this shortage is either a money issue or planning issue (for whatever reason, feedstock was not re-ordered in a timely fashion).

Lusaka province consumes over one-third of imported fuel because it has by far the highest vehicle population. Anyone who lives in Lusaka should have observed that there is a lot more traffic on the road this year than the last – due to the significant reduction of pump prices. So any hint of a fuel shortage (which has happened in the past 10 years at more extreme levels) will trigger a change in consumption patterns which will put more pressure on dwindling fuel reserves – leading to an exacerbation of the shortage.

It remains to be seen whether this shortage will be short-lived as per the statement by the Energy Minister as a prolonged shortage will have negative consequences on the economy.

Fitch Revises Outlook on Zambia to Stable; Affirms at 'B'

Fitch Ratings has revised the Outlook on Zambia's Long-term foreign and local currency Issuer Default Ratings (IDR) to Stable from Positive 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'. (Read more)

Treasury bill auction oversubscribed

The Government received bids worth K1.3 billion on their auction of K900 million in Treasury bills – an oversubscription of 44%. They allocate K943 million:

 Yields remained virtually unchanged on all except the 364 day bills which spiked by 4.9% from the previous auction. Yields are very attractive on T/bills especially because inflation is also on the decline. It’s a great place for individuals as well as institutions to park their money. Though if you are a foreign investor, exchange risk is as noticeable as it has been in a while.

President Lungu discharged after operation

Zambian President Edgar Lungu was discharged from a Pretoria hospital after an operation on Friday, and his specialist doctors had certified him “fit to resume full duties”, his spokesman said on Saturday. Lungu, 58, had an operation to correct a narrowing of his oesophagus – the tube that carries food from the mouth to the stomach – which had caused him to fall ill last Sunday in Zambia. (Read more)

Multichoice Zambia set to raise subscription rates on April 15

Pay TV service provider MultiChoice has clarified the latest price hikes for its various bouquets in Zambia after a public outcry. An online petition launched this week calling on Zambians to push MultiChoice to reduce the new rates or cancel their subscripts has gained ground with over 3,000 subscribers signing up. (Read more)

Visa fees waived for COMESA nationals and Chinese tourists

The Government of the Republic of Zambia has issued a circular waiving Visas and visa fees for all COMESA nationals on official business. Three other COMESA countries namely: Mauritius, Rwanda and Seychelles have also waived visas to all COMESA citizens. (Read more)

The Government also waived visa fees for Chinese tourists.

Key data

The 3-month LME copper sellers price closed the week at $5,837.50 per MT.