2015 National Budget unleashed!
The Minister of Financed announced the K46.7 billion 2015 National Budget yesterday in front of a packed parliament. 75 percent of it will be financed by tax revenue, 22 percent by debt and 3 percent by grants.
The budget still had road infrastructure spending as a major component and was not too dissimilar in composition from the 2014 budget. Government coffers are still constrained by personal emoluments which consume a significant portion of revenues. However, most discussed feature will be the change in the fiscal regime in the mining sector – replacing the current structure with combinations of upping mineral royalty and taxing other specific activities which will raise an additional K1.7 billion in revenues. It will be interesting to see how miners react with respect to current operations and future investment.
Once you cut through all the noise, the really important part of the budget is efficient execution. This is the part where everyone who pays tax needs to hold the government accountable.
Parliament unanimously backs motion to repossess illegally allocated land
Former ruling party Rufunsa Member of Parliament Kenneth Chipungu moved a motion urging the Government to repossess illegally allocated land in Wednesday’s parliamentary session. He specifically referred to customary land which was allocated to “foreigners or unscrupulous people”. The motion was unanimously backed.
With Zambia’s rapidly expanding urban population, demand for land has quickly outstripped supply – this is most evident in Lusaka because of the city’s economic appeal. One only has to look at the land wrangles in Lusaka West to gain an understanding on this situation. The government recently commenced a land audit and started setting up an electronic land management system to replace the shambolic system that was there before – both of which are yet to be completed. Bottom-line, parliament needs to tread carefully and understand the full extent of this land “situation” before any type of action is taken. Otherwise they risk acting on sentiment/emotions – which could have serious ramifications. This is definitely something to keep an eye on over the coming months.
Konkola Copper Mines pays 83% of electric bill to Copperbelt Energy Corporation
Konkola Copper Mines (KCM) paid $50 million toward what was revealed to be a $60 million electric bill to Copperbelt Energy Corporation after they restored full power to the miners operations last week. The rest of the bill is still under discussion. Vedanta-owned KCM has recently been reported to have financial problems which have led to various disruptions to their operations.
Tanzania’s $455m power link to Kenya and Zambia set for April 2015 completion
Tanzania is set to complete a 667km power transmission line which will connect it grid to Kenya and Zambia by April 2015. The country recently discovered 46.5 trillion cubic feet of proven offshore gas supplies and sits huge quantities of coal reserves. They are looking to increase generation to 3,000MW by 2016 in order to service domestic demand and capitalize on deficits experienced by neighboring countries.
Mergers and Acquisitions
South Africa’s Metrofile Holdings acquires 60% stake in Flexifile
Johannesburg-listed Metrofile Holding acquired a 60 percent stake in Flexifile Limited as part of its expansion strategy in Africa. Flexifile is a record management company which prior to this deal offered archiving, storage and small amount of scanning of documents.
Two Zambians receive awards at Africa Investor Award ceremony
Bank of Zambia governor Dr. Michael Gondwe was awarded African Central Banker of the year at the African Investor Awards in Washington DC. Monica Musonda, Founder and CEO of Java Foods was awarded Leading African Business Woman of the year.
Congratulations to both of them. We bet Monica Musonda, had she been there, would’ve been asking Dr. Gondwe to lower the policy rate (currently at 12 percent), now that inflation and the Kwacha have stabilized, in order to help ease the cost of financing businesses.
Kwacha closed at K6.34 per USD, K10.20 per GBP, K8.01 per EUR and K0.57 per ZAR
LME 3-month Copper seller price closed week at $6,640 per MT
The LuSE all-share index closed the week at 6,211.76, down 0.05%.
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. * * *