Casting a wide net

 By Derrick Silimina

It’s not often that a mining company dives into the fishing business. But in the mining region of Zambia’s North-Western Province, Kalumbila Minerals Ltd (KML) has done exactly that. 

The company recently put a large quantity of fish in two dams that it had built to facilitate its mining operations.

In particular the company, a subsidiary of First Quantum Minerals, put 30,000 young fish of the species Tilapia, green bream and yellowfin bream into freshwater dams at Chisola and Musangezhi.

The action is part of KML’s corporate social responsibility programme, aimed at presenting itself as socially and environmentally responsible. It is also a way to defuse any remaining objections that environmentalists, farmers and local residents raised when the dams were first built nine years ago.

“We cast our net wide by putting 30,000 fingerlings (young fish) into the ecosystem,” says KML general manager Sean Egner. “We are not doing this just to meet a compliance obligation. We are affirming our commitment to extract resources responsibly. Our sustainability strategy is part of everything we do.”

In addition to contributing to the environment, KML hopes to boost the region’s fishing industry. Despite Zambia’s many water resources, which include lakes, rivers and streams, the country’s fishing and aquaculture industries face many challenges.

According to a 2020 econometric analysis by agricultural experts Emmanuel Chibanda Musaba and Enedy Namanwe, constraints on fish production in Zambia include: “high feed cost, poor extension services, poor marketing support, inadequate storage facilities, limited capital, poor power supply, predators, high cost of pond construction, high fish prices and inadequate water supply.” The study was published in the International Journal of Research Studies in Agricultural Sciences.

In addition, the sector suffers from a lack of adequate fish seed and feed supplies. As a result of all these issues, Zambia is a net importer of fish, with most of its supply coming from China.

Local officials praise KML’s contributions both to the environment and to replenish fish stocks. “We are really pleased with KML management’s initiative to restock the Chisola and Musangezhi dams with fingerlings,” says Alick Mbewe, a technical officer at North Western Province’s Fisheries Ministry. “We encourage other stakeholders to emulate KML.”

Moreover, restocking of fish should not be a one-time event. Water bodies need to be restocked frequently with a variety of species to meet high consumer demand for fish, according to Mbewe.

Before putting small fish into the two dams, KML took advice from North-Western Province’s fisheries department. The company is also working with a local Community Resource Board to develop good strategies for managing fisheries. The aim is to manage all water ecosystems within the mines’ catchment areas in a sustainable way, Egner says.

Is Mobile Money Complementing or Challenging Traditional banking?

By Mbuyoti Silimina

The dawn of digital payment technologies is opening doors to a whole new generation of clientele in Africa whose very first ‘bank’ account is accessed purely through mobile phones. 

Lauded as a revolutionary tool for expanding access to financial services in low resource environments on the continent, the onset of mobile money technology is helping transform economic sectors in many developing countries.

The story of mobile money in Africa begins in Kenya when Safaricom launched its M-PESA solution for peer-to-peer money transfer in 2007. Before that, due to a low rate of banking, sending money to family, friends or business associates could be a big issue.

In Zambia, countless mobile money account holders say financial transactions have been made much easier, thanks to advancements in FinTech.

“With just my mobile phone, I can transact at a low cost. For me, this is a real deal, unlike in the past where access to an existing bank account was hectic,” George Manda told Nkwazi.

Undoubtedly, just as the internet has changed the way people access information and shop for products online, mobile phones are transforming many industries, ranging from finance and travel to advertising and retail. Users can receive, withdraw, and send money without being connected to the formal banking system.

For Sarafina Mambwe, a mobile money agent at Lusaka’s sprawling Kamwala market, “If you check around, many youths including me are self-employed and depend on this sector for survival and in that way, mobile money services are helping in job creation.”

The Bank of Zambia recently disclosed that mobile money platforms had recorded increased usage last year, with numbers growing to 8.6 million users by December 31 compared to around 4.85 million in 2019.

The central bank further hinted that higher mobile money usage in Zambia has coincided with increased financial inclusion over the two corresponding years where financial inclusion in the country increased by 10.1 percentage points last year.

“Zambia has continued to make significant progress in the digital transformation agenda, especially in the area of digital financial services. For example, the number of active MNO (Mobile Network Operator)-based mobile money users increased by 77 percent from 4,852,040 as of December 31, 2019, to 8,607,461 as of December 31, 2020,” BoZ Deputy Governor for Operations Dr Francis Chipimo stated.

According to a 2020 FinScope survey, financial inclusion in Zambia increased 10.1 percent to 69.4 per cent from 59.3 per cent in 2015. This was mainly attributed to mobile money services. Further afield, it is estimated that in Uganda, 43 percent of people have a mobile money account while in Kenya, it’s 72 percent.

With approximately 100,000 plus agent lines officially registered in Zambia, according to the Mobile Money Business Association of Zambia, the sector is contributing significantly to the national treasury in terms of taxes.

Asked whether mobile money service providers are reducing banks’ clientele base, the Bankers Association of Zambia told Nkwazi that the current is beneficial for both parties.

“We’re not in competition with mobile money platforms. It’s a win-win situation for both parties. For instance, mobile money transactions have increased our reach as some clients can do banking online even through mobile platforms that are interconnected with various banking payment platforms such as e-wallet, e-pay and payment vouchers, among others,” Bankers Association of Zambia Public Relations Officer Mirriam Zimba affirmed.

Lusaka based economist Mambo Haamaundu echoed BAZ’s observation and reiterated the importance of mobile money because Zambia has low levels of financial inclusion and a high number of unbanked people.

“Mobile money services are tapping into the unbanked population and as a result play a complementary role with traditional banks. For instance, cash can now easily be transferred from a bank account to a mobile money account with ease,” Haamaundu stated.

In view of the global outbreak of the COVID-19 pandemic, most businesses in Zambia have been crippled. MNOs have stepped in to provide the Zambian business sector with digital transaction solutions in light of the negative impact of the coronavirus pandemic.

Putting money in the right hands

By Derrick Silimina

Zambia’s government has significantly increased the amount of money it gives directly to local districts to spend on development projects. But corruption and mismanagement continue to plague the funding system, blocking the intended improvements in local services.

Since 1995, Zambia has given funds to electoral districts through its Constituency Development Fund (CDF) programme. The money is intended for local infrastructure and services such as roads, schools, clinics, courts, canals, bridges and community boreholes.

Significantly, local officials – not government ministries – decide how CDF money is spent. The idea is that local officials can best decide what projects are most needed in their communities. Unfortunately, however, the funds have been misused in many electoral districts across the country.

“The CDF has been misused, leading to constituencies lagging in development ,” says a recent editorial titled “Use CDF for intended purposes” in Times of Zambia, a national daily newspaper. “There has been rampant abuse of the funds … across the country. It is high time that the local authorities entrusted to handle these funds channel the resources to the intended projects.”

Despite persistent reports of CDF mismanagement, the government has boosted the amount of money available for distribution. The 2022 national budget increases CDF funding from 1.6 million Kwacha to 25.7 million Kwacha (about €81,000 to € 1.3 million) for each of Zambia’s 156 electoral constituencies.

To address complaints of mismanagement, the government has changed its disbursement system. Instead of handing CDF money to individual members of parliament to distribute in their constituencies, the government now gives the money to councils in each constituency.

The government also asks the councils to write Integrated Development Plans (IDPs) detailing their spending priorities. Significantly, however, most local constituencies still do not have IDPs. In response, the government has issued guidelines to help local authorities write the documents.

The increased funding and the IDP requirement will produce good results, according to Mubika Mubika, a member of parliament from Shangombo District in the Western Province. “This is the first budget that will uplift the lives of the people of Shangombo,” he says. “We will try by all means to ensure that we have enough roads, clinics, classrooms, computers and accommodations for our teachers.”

However, Peter Sinkamba, president of the Green Party of Zambia, remains sceptical, noting that CDF spending has been plagued by corruption. “If nothing is done to ensure accountability and transparency, the increased funding will not yield desirable results,” he says.

Several pieces of existing legislation that involve the use of CDF funds should be amended to increase transparency in how the funds are used, says the Zambia United Local Authorities Workers Union, an association of local officials. Their aim is to make CDF an effective tool for community development.

 

Link

Editorial: “Use CDF for intended purposes,” Times of Zambia, 20 Sept.  2021.

http://www.times.co.zm/?p=111494

Derrick Silimina is a freelance journalist based in Lusaka.

derrick.silimina@gmail.com

Dar es Salaam Port Upgrade: Zambia’s Gateway to Global Trade

By Mbuyoti Silimina

As the African continent rides on the waves of globalization, a quiet, yet intense battle for freight business is under way in East Africa with Tanzania, Kenya, Djibouti and Somalia taking major steps to upgrade their maritime infrastructure.

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Undoubtedly, seaports play a vital role in any import-based economy, especially in developing countries where maritime transport is the primary form of access to the international market.

Trade experts believe that robust modernization of seaports in East Africa is vital to the development of maritime infrastructure and its interaction with inland transport systems on the continent.

According to a recent World Bank report, inefficiencies in Dar es Salaam costs Tanzania and neighboring countries up to US$2.8 billion in lost revenue annually. This has a negative effect on regional trade, especially among landlocked (or ‘land-linked’) countries such as Zambia that depend on the Dar es Salaam port as a gateway for international trade.

For this reason, the Dar es Salaam Maritime Gateway Project (DSMGP) worth US$421 million was established in a bid to overhaul the port of Dar es Salaam’s infrastructure by 2023.

“This project will have both direct and indirect effects on the regional economy, as it will generate new jobs and value, which will help to boost GDP. Maritime freight transit will reduce transportation costs, increase area employment and support local and port-related industries,” Lusaka based economist Boyd Muleya told Nkwazi. 

“The project will further promote an efficient channel through which Tanzania and Zambia can earn much-needed foreign exchange and tax revenues from their exports to the rest of the world, which have largely been lost due to inefficiencies and a lack of capacity to deal with rising export and import volumes.”

Muleya, who is also the head of research at the Center for Trade Policy and Development (CTPD), stressed that by minimizing the costs associated with port clearance delays and inadequate technology, increasing the port’s capacity will result in more efficient delivery of commodities into Zambia. 

Another argument in favor of the port upgrade is that it will lead to decreased business costs, higher import supply in the region, and, as a result, downward pressure on the price of imported goods for consumers and manufacturers.

Cross-border traders have described the ongoing rehabilitation of Dar es Salaam port as a game changer in the inter-continental connectivity initiative in Africa which will continue to shape the continent’s socio-economic trajectory.

“The Dar port is key to our business growth and the ongoing rehab is long overdue as it will enhance our import-based enterprise,” Rueben Tembo, a car dealer based in Lusaka told Nkwazi. Tembo regrets that the port’s unbearably long queues from offloading ships leads to a high cost of doing business.

The Dar port facelift project is supported by the Tanzanian government and a coalition of development partners, which includes the TradeMark East Africa (TMEA), the UK’s Department for International Development (DFID) and the World Bank.

It is estimated that over 70 per cent of imported goods for landlocked nations in the region transit through Dar es Salaam Port, Tanzania’s busiest crossing point via Nakonde-Tunduma border post, which is a gateway into Zambia, the Democratic Republic of Congo and through to Zimbabwe. On average, the value of cargo passing through the border to Zambia, the DRC and Zimbabwe is estimated to be US$1.5 billion (TSh3.4 trillion) annually.

With its strategic location to serve as a convenient freight linkage not only to and from East and Central African countries but also to the Middle and Far East, Europe, Australia and America, the Dar es Salaam port provides a gateway for 90 percent of Tanzanian trade, and is ultimately the East African nation’s principal port with a rated capacity of 4.1 million (dwt) dry cargo and 6 million (dwt) bulk liquid cargo.

The port has a total quay length of about 2,600 metres with 11 deep-water berths and handles about 95 percent of the country’s international trade and serves neighbouring land-linked countries like Zambia, Malawi, Burundi, Rwanda and Uganda, among others, according to the Tanzania Ports Authority (TPA).

With Zambia’s import driven economy, which stands to benefit a lot from the upgrade of Dar es Salaam port, the move has excited local entrepreneurs who feel the facility contributes greatly to the country’s treasury in terms of taxes and customs duty whenever they import and export goods and services.

Valued for its proximity to the Nakonde-Tunduma border point, the Dar es Salaam port is an asset to many Zambian traders, especially car dealers who depend on this port to bring in vehicles from Japan.

Since the port is key to the survival of Zambia’s automobile business, the ongoing facelift has elated most car dealers as the move will speed up the clearance process and in turn lower the cost of doing business.

Just like car dealers, many Zambian shop owners selling groceries, hardware and second-hand clothes and medical supplies, among other things, share the same concerns about inefficiencies at Dar es Salaam’s port.

“Whenever my merchandise takes long to be delivered, this affects my cash flow due to the usual delays at the port but the ongoing facelift will facilitate efficient clearance of cargo,” said Martin Sepiso, a trader of Chinese smartphones.

Catherine Simumba, a private clearing agent based in the bustling border town of Nakonde, shares: “The ongoing rehab of the maritime facility will undeniably help grow my clientele base as my customs clearances will be done on time.”

The China Harbor Engineering Company (CHEC) has been engaged to upgrade the Dar es Salaam port with the aim of ensuring the maritime facility will have the capacity to accommodate a greater number of vessels from across the world, including much larger vessels than it currently accommodates.

“This project mainly involves the upgrade of seven existing berths and the building of a new berth that will enable large vessels with a load carrying capacity of up to 70,000 tonnes to dock at the port which previously had a capacity of under 30,000 tonnes,” TPA Director General Eric Hamissi recently said.

The port authority further stated that with a length of 300 metres and depth of 13.5 metres, the new berth will have the capacity to accommodate mega cargo ships weighing 65,000 tonnes and will be equipped with state-of-the-art cargo handling equipment.

Tanzania’s Prime Minister Kassim Majaliwa recently added that the Dar es Salaam port upgrade is in the final stages of completion as the country is focused on ensuring optimal use of its strategic geographical location to enhance regional trade, stimulate economic growth and reduce transportation costs.

“These projects will enable the nation to make the most of the geographical opportunities we have, as well as stimulate economic growth and facilitate transportation,” the premier said while tabling his office’s budget proposals for the 2021/2022 financial year.