President Michael Chilufya Sata dies in London
On 28 October 2014, the country lost President Michael Chilufya Sata who had been receiving treatment for an unspecified ailment in a London hospital. President Sata, who carried the knick name ‘King Cobra’, was 77 years old and only three years into his first term in office. He will be buried on November 11 2014. Vice President Guy Scott will act as president until fresh elections are held within the next three months.
Though more sombre, it was business as usual for a population which is experiencing this type of misfortune for the second time in the last 6 years. The Treasury Secretary also issued a statement indicating that the economy was still fundamentally strong and that there would not a shift in policy after the president’s death. Bank of Zambia also issued a statement echoing a similar message and intervened in the currency markets in order to avoid significant volatility. In addition, the Ministry of Finance also held an emergency meeting with top officials from various government wings and parastatals to layout economic and financial management measures during this transitional period.
COMESA, SADC and EAC set to launch flagship tripartite ‘Free Trade Area’
Common Market for Eastern and Southern Africa (COMESA), Southern Africa Development Community (SADC), East African Community (EAC) will be launching their flagship tripartite Free Trade Area (FTA) in mid December this year. It will be the largest economic bloc in Africa and a prelude to the creation of the Continental Free Trade Area (CFTA) in 2017. The launch was agreed at a meeting of the Tripartite Sectoral Committee of Minister in Bujumbura, Burundi on October 24 and 25. See chart of member states and some key stats below:
The FTA, among other things, will ultimately reduce the cost of doing business for members. Zambia is already a member of both COMESA and SADC. This will be a tremendous boost to the country especially if they diversify and ramp up agriculture output as well as widen their manufacturing base (currently quite low). The infrastructure (roads, railway and air) is already being worked on to ease movement through and around this vast country. The biggest winners right now are South Africa because their economy is more advanced with a much wider manufacturing base than other members. It will be interesting to see how this dynamic changes over time.
Zambia falls in World Banks 2015 ‘Doing Business Report’
Zambia now ranks 111/189 countries with a score of 59.65 out of 100 after ranking 90 in 2014:
· Made it easier to pay taxes by introducing enhanced electronic systems and merging or eliminating tax other than profit tax
· Improved sharing of credit information by expanded scope of information collected and reported by credit bureau or registry
· Regressed by making transferring of property more diﬃcult - increasing the property transfer tax rate.
The country ranks lowest in the ‘trading across borders’ category. This in one of the key areas to be improved if Zambia is to fully realize the opportunities which will be brought about by the FTA. The takeaway is that there needs to be a lot more reforming and improvements in various aspects of the business environment in order to stimulate both domestic and foreign investment.
Mopani Copper Mine sinks new shaft
Mopani Copper Mine completed the sinking of a new at their flagship $323 million ‘Synclinorium’ project. The shaft will provide Mopani access to 115 million tonnes of ore with a grade of 1.9 percent copper and 0.09 percent cobalt. This will increase ore production by 50 percent to 5.1 million tonnes per annum at the Nkana Mine site by 2018. The work was carried out by Murray and Roberts Cementation Zambia. The shaft is set for commissioning in December 2015.
Lusaka Stock Exchange, Currency and Treasury bill rates:
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. * * *