zambia weekly wrap - may 31 edition

ZESCO to cut as much as 600 MW of power as a consequence of low water levels at dams

Zambia will probably cut power generation by more than a quarter as poor rainfall causes dam levels to drop in Africa’s second-biggest copper producer, Mines, Energy and Water Development Deputy Minister Charles Zulu said. The country may reduce power supply by as much as 600 megawatts from about 2,200 megawatts, he said Tuesday by phone.  (Read more)

94% of the 2,398 MW of power generated in Zambia is hydropower. It is clean, efficient and perfect for any country with Zambia’s water assets (albeit Capital Expenditure-heavy). However, with heavy reliance on hydropower, electricity output is susceptible to erratic rainfall patterns which are being affected by effects of climate change. It also does not help that Zambia has one of the highest deforestation rates in the world which is primarily caused by demand for charcoal.

There are about 1,837 MW worth of new projects (64% of which is hydro) underway set for commissioning/completion at various points between now and 2019. At that point, 84% of electricity generation will be from hydro – still leaving the country vulnerable to aforementioned risks. Solar energy is a no-brainer – it has been talked about but policy and incentive-wise, not a lot of action has gone that route.

Climate change and deforestation have also been talked about but suffer the same lack of concrete action as solar energy. The Government needs to be more vibrant on these issues in terms of concrete policies and incentives because that is the only way that the private sector will be motivated enough to invest in these areas. Increased private sector interest will lead to diversification of electricity generation mix as well as better solutions for curbing deforestation.

Inflation drops to 20-month low as trade deficit widens

Dangote Zambia begins operations Ndola cement plant

THE US$400 million Dangote cement factory in Masaiti has commenced operations following the completion of construction early this year. (Read more)

A 50kg Dangote cement bag currently costs K61 – K63 depending on type where as a Lafarge cement bag costs K64 – K66 depending on type. Lafarge cement bags were recently as high as K78 per. This will be a huge boost to the construction sector in Zambia which is plagued by high cost inputs. Oriental Quarries and Zambezi Portland Cement (once their legal issues are sorted out) will also add healthy competition to the sector which has been dominated by Lafarge Zambia for decades.

PEPZ set to launch Zambian SME database

BIG business will be able to increase local content in their supply chains with the help of a new database being developed by the Private Enterprise Program-Zambia (PEPZ) in partnership with the Zambia Association of Manufacturers (ZAM) and the Zambia Chamber of Mines. Small and Medium Enterprises (SMEs) can gain access to new markets and demonstrate their capabilities to larger customers under the initiative. (Read more)

AGCO opens first future farm in Chongwe

AGCO AGCO, -1.53%a worldwide manufacturer and distributor of agricultural equipment, today held an official opening ceremony of its Future Farm and Learning Center near Lusaka, Zambia. “We are very pleased to announce the grand opening of our first Future Farm in Africa,” said Rob Smith, AGCO Senior Vice President and General Manager for Europe, Africa and Middle East. (Read more)

Sweden resumes financial support to Zambia’s health sector

THE SWEDISH government has revived its funding to Zambia’s health sector by pumping in 400 million Swedish Kroners (SEK), which amounts to about US$47,3 million meant for improving the Zambian health sector. Zambia’s Deputy Ambassador to Sweden, Anthony Mukwita announced the development in a statement sent to Mwebantu New Media in Lusaka. Mr. Mukwita says funds money must be directed towards projects that will reduce the number or deaths among babies and mothers, including tackling other reproductive health challenges. (Read more)

 Government set to introduce age limits on imported vehicles

Government is in the process of introducing a maximum age limit for second-hand vehicles imported into the country to regulate the influx of old vehicles. Minister of Transport, Works, Supply and Communications Richwell Siamunene said the legislation, which will put an age limit to the vehicles entering the country, has since reached an advanced stage. (Read more)

Finance Minister Alexander Chikwanda elected as chairman of AFDB board

Finance Minister Alexander Chikwanda has assumed the leadership of the ADB Board of Governors as its Chairperson for the period 2015/2016. In addition, Zambia has been confirmed as the host of the 2016 Annual Meeting of the ADB to be held in Lusaka in May, 2016. Mr. Chikwanda assumed the position at the Bank Group’s 50th Annual Meeting in Abidjan, Côte d’Ivoire. (Read more)

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