Building a better gateway

By Derrick Silimina

Somalia, Kenya and Tanzania, all on the Indian Ocean south of the Horn of Africa, are in a race for dominance in the international cargo-handling business.

The three East African nations are upgrading their seaports by modernizing cargo-handling equipment, deepening berths where ships are moored, improving cargo terminals and strengthening links with inland road and rail networks.

Among the biggest such projects is under way at the port of Dar es Salaam, which handles 90 % of Tanzania’s international cargo. The upgrade, called the Dar es Salaam Maritime Gateway Project, was launched in 2017 with a World Bank loan of $345 million plus a $12 million grant. The project is planned for completion in 2024.

The port is a major player in the region. About 35 % of its throughput travels onward to neighboring landlocked nations including Zambia, Malawi and Burundi. But the port is reaching the limits of its capacity. Long queues for loading and unloading ships – caused by obsolete equipment and inefficient processes – raises costs for maritime carriers and for their customers, the cargo owners say.

“Our automobile business depends on this port’s efficiency and its ability to process cargo intended for Zambia,” explains Webster Mulambia, chairman of the Car Dealers Association of Zambia. “This project will speed up cargo handling and customs clearance, which will lower our cost of doing business.” Ruth Chinyimba, a dealer in spare automobile parts at Lusaka’s Town Centre Market, adds: “The rehabilitation of the Dar es Salaam port will help my business. My customs logistics will be done with ease.”

Currently, ships carrying cargo from across the world queue up for an average of 10 days before they can be unloaded. It takes another 10 days to unload cargo from large vessels, clear it through customs and get it onto trucks or freight trains.

“My merchandise takes two months to be delivered and this affects my cash flow,” says Reagan Nkamba, a Zambian importer of Chinese-made smartphones. “As you know, in business time is money.”

Looking at the broader picture, Tanzanian Prime Minister Kassim Majaliwa says the upgrade will help Tanzania to compete with neighboring countries in making the most of their strategic location on trade routes between Africa, South Asia and the Far East. “This project will enable Tanzania to make the most of its geographical opportunities and will stimulate economic growth,” he said recently when presenting his 2021-22 budget proposal to parliament.

Derrick Silimina is a freelance journalist based in Lusaka. He focuses on Zambian agriculture and sustainability issues.
derrick.silimina@gmail.com

Namibians turn to Chinese medical therapy

A Chinese TCM practitioner attends to an African patient battling with swollen feet

By Derrick Silimina

In its quest to enhance the health care infrastructure and medical facilities in Africa, China continues to boost medical cooperation in a number of ways with Africa.

Over the years, the Asian economic giant has gone an extra mile to assist most African nations in building their medical institutions, providing medicine and equipment, assisting in the prevention and control of infectious diseases, particularly malaria, dispatching medical teams to Africa to provide medical care and trainings, and offering scholarships to African students to study medicine in China, among others.

Since 1963, more than 21,000 Chinese health professionals have been sent to Africa to support local programs, having benefited about 220 million patients, according to figures released by the National Health Commission of China.

Sharing experience learnt from its domestic successes is a key element of China's health cooperation with Africa. For instance, when the first COVID-19 case was confirmed on the African continent, China, despite being ravaged by the virus then, rushed to help African nations by wholeheartedly providing medical supplies and sharing health experience.

As the Chinese medical workers shuttle back and forth between China and African countries to help prevent the outbreak of diseases, their curative ingenuity offers potential opportunities for health investment, capacity building, knowledge sharing on disease threats, and approaches to enhance health governance.

A part of this health cooperation, China has also been introducing the age-old practice of traditional Chinese medicine (TCM) to countries across Africa.

As TCM grows in demand internationally, medical experts say a growing number of African patients are turning to the therapy, becoming a new trend in the nearly six-decade China-Africa medical cooperation.

Adoption of TCM in Namibia

Mable Haufiku, 32, had almost lost hope of recovering from her persistent migraine headaches after several conventional medical treatments; but thanks to TCM, she now has a reason to smile.

"I can testify that acupuncture treatment is real and effective because this medical therapy provided by the Chinese medical team has given me a second chance in life with its miraculous effect," Haufiku said with confidence.

Many Namibians with persisting ailments have embraced TCM, a therapy which has proven to be effective in enhancing the quality of life for many local people in Africa.

At Katutura State Hospital located in the heart of Namibia's capital Windhoek, people can avail quality medical care. Together with Windhoek Central Hospital, Katutura is a state-run medical facility in the Windhoek area, and Namibia's only general referral hospital.

"I turned to acupuncture therapy following severe backache and pain in my legs. The Chinese medical team's timely and caring delivery of TCM has given me hope as I have fully recovered," Leonard Nambahu, a resident of Windhoek, told ChinAfrica.

Acupuncture.com, a Chinese online medical platform, defines acupuncture as an age-old healing technique of TCM in which needles are inserted into energy points on the human body. TCM is one of the world's oldest forms of medical practice and includes a range of treatments from herbal concoctions and acupuncture to Tai Chi. With a history of thousands of years, TCM therapy includes various forms of massage, exercise, and diet therapy, among others.

Medical assistance team

The 13th Chinese medical team to Namibia has delivered TCM treatments to more than 7,000 locals across the country during an 18-month visit to Namibia between January 2020 and July 2021. Some of the diseases they attended to include muscle and joint pains, paralysis, and migraine, according to local health authorities.

Tina Kazenene, another resident of Windhoek, disclosed that she had introduced TCM treatment to three of her family members, all of whom have been treated and have seen impressive improvement in their health.

"The Chinese doctors have indeed left memories in the hearts of the people they treated here in Namibia, as many patients had given up hope," Kazenene stated.

The Namibian Government has since lauded the Chinese medical team that was stationed at Katutura State Hospital in Windhoek.

Minister of Health and Social Services Kalumbi Shangula commended the Chinese medical team for their diligent and professional service, noting that the knowledge and skills have also greatly contributed to the government's efforts in accelerating the access to health and ensuring the health and well-being of the nation.

"Now that the term of the medical team from Zhejiang Province [of China] has come to an end, allow me to express my sincerest appreciation to the team for the services rendered to the Namibian people because one of the consistent and much-valued support over the years came through the Chinese medical teams," Shangula said.

Namibian Founding President Sam Nujoma noted, "The People's Republic of China is indeed Namibia's all-weather friend," and stated that the sustained quality service delivered by the Chinese medical team further cements China-Namibia ties.

Fang Lianqiang, medical team leader of the outgoing 13th batch, said, "It makes one happy to impact the lives of others positively through providing medical service."

Apart from treating patients, the Chinese medical staff also ran a skill exchange program to build the capacity of intern doctors at the University of Namibia's School of Medicine and made further contributions to the patients by donating anti-epidemic materials to the hospital in a bid to fight COVID-19.

For this reason, Chinese medical workers have won admiration from local officials and medical staff in their mission to provide treatment for various ailments that have claimed lives in the country.

Certainly, TCM treatment is becoming one of China's distinguished medical contributions in Africa in general and Namibia in particular, especially in far-flung places where there aren't enough medicine or medical equipment supplies.

"Chinese medical teams have lifted the level of service in our hospital," said Nelago Amagulu, Medical Superintendent at Katutura State Hospital. 

Reporting from Zambia

Derrick Silimina is a freelance journalist based in Lusaka. He focuses on Zambian agriculture and sustainability issues.
derrick.silimina@gmail.com

WhatsApp : +260977402031

A Rising Tide of Hope

 

© stepmap.de

By Derrick Silimina

Hakainde Hichilema was finally elected president of Zambia in August 2021 after unsuccessfully contesting five previous elections. Hichilema – a cattle rancher, businessman and politician representing the United Party for National Development (UPND) – unseated the long-entrenched Patriotic Front (PF) regime by winning 59 % of the vote. He defeated former President Edgar Lungu by over a million votes.

Voters across the country were jubilant after Hichilema won the election. Entrepreneurs in particular are pinning their hopes on Hichilema’s promises to revive the economy. The new president is popularly known as “HH” or as “Bally”, an informal way to address a person as one’s father.

In the run-up to the election voters had grown disenchanted with the Patriotic Front. The previous regime took office in 2011 promising to cut taxes and foster job creation. But it largely failed to deliver on those promises.

Disappointment with the PF was especially strong among entrepreneurs. Many of them accused the former regime of extorting illegal levies from small businesspeople such as market traders and bus owners. Critics pointed to rampant corruption under the PF, which slowed economic activity.

One such critic is Morgan Chibuye, a bus driver at Lusaka’s intercity bus station. “The PF regime made our business unattractive,” he says. “If a bus driver refused to pay off thugs posting as revenue collectors, he was blacklisted and prevented from loading his bus. This discouraged bus owners from entering or staying in the business.”

Entrepreneurs and local officials expect this situation to improve soon under the new government. “The new government’s policy direction will enable the City Council to collect revenues properly,” says Alex Mwansa, town clerk of the Lusaka City Council. “This will help us to maintain the bus terminal.”

Other sectors also suffered under the former regime. Extortion used to be a daily burden, says Sara Mofya, a mobile money agent at the Kamwala market in Lusaka, Zambia’s capital and largest city. “The PF’s party operatives would come around twice a week and extort money from market traders,” she says. “I had to pay them if I wanted to continue operating my business.”

The new regime promises to stop such practices. “We will be available to listen and to support you,” Hichilema said to citizens and entrepreneurs during his inaugural speech. He pointed to his own background as a businessman with interests in cattle ranching, tourism, health care and finance, to show that he understands entrepreneurs’ concerns.

Small and mid-sized enterprises are engines of job creation and economic growth, Hichilema emphasizes. “We have created the Ministry of Small and Medium Enterprise Development to facilitate the creation and growth of your businesses,” he wrote on his Twitter feed recently.

The new administration’s economic challenges are considerable. Zambia faces slow economic growth, high unemployment, heavy national debt and fiscal deficits and double-digit inflation. In addition, the country’s currency is volatile and interest rates charged to small businesses are high.

A key to solving these problems is to promote entrepreneurship and job creation, the new president and his loyalists say. “We want to have a good partnership with small and mid-sized businesses,” says Elias Mubanga national youth mobilization chairman for the UPND. “When they succeed, we all succeed.”

Derrick Silimina is a freelance journalist based in Lusaka. He focuses on Zambian agriculture and sustainability issues.
derricksilimina@gmail.com

Zambia's Gateway to Global Trade

  

Bigger international vessels are now able to dock at one of the upgraded berths  

By Derrick Silimina

A quiet battle for the shipping business is under way in East Africa, with Tanzania, Kenya, Djibouti and Somalia taking the lead in upgrading their maritime infrastructure in the region. 

As the African continent glides on the waves of globalization, the modernization of its seaports is key to the development of maritime infrastructure and its connectivity with inland transport systems.

Undoubtedly, seaports play a vital role in any economy that is reliant on imports and exports, especially in developing countries where maritime transport is the primary form of access to the international market and a key contributor to local job creation.

According to a recent World Bank report, inefficiencies at the main port of entry cost Tanzania and neighboring countries up to $2.8 billion in lost revenues annually, and as a result, this had a negative impact on regional trade, especially among land-locked countries such as Zambia that look up to one of Africa's reliable seaports – the Port of Dar es Salaam - as a gateway for international trade.

 

One of the re-built facilities at the port is already commissioned

A shipping hub 

Currently, it is estimated that over 70 percent of imported goods for land-locked nations in the sub-region transit through the Port of Dar es Salaam via Tunduma-Nakonde Border Post, which is Tanzania's busiest crossing point, the gateway into Zambia, the Democratic Republic of the Congo (DRC) and, to some extent, Zimbabwe. On average, the value of cargo passing through the border to Zambia, the DRC and Zimbabwe is estimated to be to the tune of $1.5 billion annually, according to trade experts.

With its strategic location as a freight link not only to east and central African countries but also to the Middle and Far East, Europe, Australia and Americas, the Port of Dar es Salaam has a total quay length of about 2,600 meters with 11 deep-water berths, handles about 95 percent of the country's international trade and serves neighboring land-locked countries like Malawi, Burundi, Rwanda and Uganda, among others, according to the Tanzania Ports Authority (TPA).

For this reason, the Dar es Salaam Maritime Gateway Project, worth $421 million, was established in a bid to overhaul the Port of Dar es Salaam's infrastructure by 2023.

In the 1970s, China was already involved in the construction of the Tanzania-Zambia Railway linking Tanzania and Zambia and, in this context, the ongoing upgrade of the Port of Dar es Salaam is another game changer in the intercontinental connectivity initiative, as China's past approach to partnership on infrastructure development in Africa has continued to shape the continent's socio-economic trajectory.

With Zambia's import-driven economy set to benefit a lot from the upgrade of the Port of Dar es Salaam, the move has excited local entrepreneurs as the facility contributes greatly to the southern African country's treasury in terms of taxes and customs duty.

"The port's close proximity to the Nakonde border is key to the survival of our automobile business. The ongoing facelift will definitely speed up customs clearance and in turn lower the cost of doing business for us," Car Dealers Association of Zambia Chairperson Webster Mulambia told ChinAfrica.

Mulambia regrets that a long queue of offloading ships is painful for most importers and exporters of cargo who seek to have it delivered to their respective destinations on time.

Just like car dealers, many Zambian shop owners who sell daily goods such as diapers, powdered milk, clothes, sanitary products, as well as medicines and medical supplies share the lament that delays extend for several weeks or months due to container vessels transporting imported cargo from across the world were on average queuing for 10 days to be able to berth at the port. It further takes another 10 days to offload the merchandise, clear it and transport it.

"My merchandise takes two months to be delivered and this affects my cash flow due to the usual delays at the port, and you know in business, time is money," Reagan Nkamba, 45, a trader of Chinese smartphones, stated.

 

The Port of Dar es Salaam upgrade is in final stages of completion 

China's role 

Thanks to China Harbour Engineering Co. (CHEC) whose global engineering strength is equipping the Port of Dar es Salaam with modern apparatus, the maritime facility will have the capacity to accommodate large vessels from across the world and be able to anchor at Tanzania's largest seaport.

As CHEC is taking on the first World Bank project in a decade, engineers say it is a momentous step forward for the Chinese engineering firm, and that the project will enhance the company's level of operations and expertise in East Africa.

"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 tons to dock at the port, which previously had a capacity for under 30,000 tons," TPA Director General Eric Hamissi recently said.

The port authority further affirmed that with a length of 300 meters and 13.5-meter depth, the new berth will be equipped with state-of-the-art cargo handling equipment.

Ruth Chinyimba, 40, a spare parts dealer based at Lusaka's bustling town center market, said, "The ongoing upgrade of the port will definitely help grow my client base as my customs clearance will be done with ease."

Chinyimba, who owns Ruth-Auto shop, added that due to high demand for spare parts in the local market, her business will see growth with a more efficient maritime facility in the region.

Tanzania's Prime Minister Kassim Majaliwa recently noted that the Port of Dar es Salaam upgrade is in final stages of completion as the East African country is focused on making optimal use of its strategic geographical location to enhance regional trade, stimulate economic growth and ease 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," said the prime minister while tabling in parliament his office's budget proposals for the 2021/22 financial year.

In line with China's Belt and Road Initiative, a multifaceted and connectivity-oriented grand strategy, the port upgrade will certainly serve Africa's current regional infrastructure challenges which are primarily inward-looking as they seek to deepen the continent's regional integration.

The project is supported by the Tanzanian Government and a coalition of development partners which includes the TradeMark East Africa, the United Kingdom Department for International Development, and the World Bank.

On March 1, Tanzania's Works and Transport Minister Leonard Chamuriho officiated the handover ceremony of Berth No. 5 held for the No. 1-7 Berth Project at the Port of Dar es Salaam.

Chamuriho said the completion of berth No. 5 marked the official entry of the project into the final sprint stage, adding that the smooth completion of the berth laid a solid foundation for its full completion and the smooth development of subsequent projects.

"We recognize the achievements of the project in terms of safety, quality and management and the company's outstanding performance capabilities," Chamuriho said, expressing gratitude to the Chinese engineering firm for its efforts in the construction of Tanzania's mega port.

Reporting from Zambia

China Enhance Technology Transfer

 

Workers at a face mask firm in Lusaka, Zambia (XINHUA)

By Derrick Silimina

As part of the realization that it is a "knowledge and technology transfer" approach that helped China become one of the major global economies, the Asian giant is employing training as one of the vital ways of skill and technology transfer to Africans.

In Zambia, some Chinese companies are providing training to its local employees mostly through formal programs such as mentoring and on-the-job training. For these reasons, Chinese investments in Zambia's key economic sectors have continued to change people's lives, especially the youth, with many direct and indirect jobs created.

Recently, government reiterated its call to Chinese Ambassador to Zambia Li Jie to encourage Chinese companies operating in the country to transfer skills to locals.

Nestled at the edge of Chongwe District 50 km east of Lusaka City is Zhongyang Eco-Agriculture Industry Park, a Chinese-owned agriculture and construction company. Apparently, Chongwe is home to some other Chinese businesses that contribute immensely to Zambia's agriculture and construction industries, key economic sectors which have since benefited many people in terms of employment creation in the area.

Zhongyang Eco-Agriculture Industry Park Administrative Manager Fredrick Sashi is one among many local workers who appreciates the value of skills and technology transfer by foreign entities to its employees.

Interestingly, the Chinese company was recently left in Sashi's hands when its directors returned to China during the Chinese New Year celebrations early this year. Their prolonged stay in China following the outbreak of COVID-19 in that country did not disrupt operations in Zambia because Sashi had acquired the appropriate management skills.

Sashi told ChinAfrica that it was an amazing achievement and a boost to his career prospects being delegated to manage the company's finances and operations.

"For me, the responsibility was timely because I had already been groomed to do the job by my Chinese managers. Apart from that, it's an excellent experience when you get entrusted by foreign investors to manage the company's operations on their behalf," he said.

Sashi, who is an accountant by profession, stated that having been at the helm of the company and coordinated its financial transactions for about 20 months was enlightening as he had gained valuable skills in using Chinese apps to communicate and carry out monetary transactions more efficiently.

Mutual benefits

But it is not knowledge transfer alone that is mutually benefitting Zambia and China. Recently, there has been more technology transfer of vital knowledge diffusion from Chinese companies to local members of staff. This has been in the form of machinery and production processes and models among others.

For instance, Hongsen Investment is another Chinese company involved in recycling plastic waste materials into finished household products such as dishes, cups, brooms and hangers.

Hongsen Company Administration Officer Thandiwe Chaaba said they are creating value out of plastic waste material by contributing to job creation and environmental sustainability.

"This plant here uses unique technology because it was one of the first to be established in the country and I believe its operators, who are mostly locals, have learnt the value of such equipment not only to help sustain the environment, but also to create jobs in the community," said Chaaba, who is also a Mandarin/English translator at the company.

Francis Kabaso, 42, works at Chinese company CAMCO Equipment (Zambia) Ltd., known for its supply of durable and affordable agricultural equipment in the country.

As CAMCO's Operations Manager, Kabaso coordinates the company's outlets countrywide through the supply of state-of-the-art agricultural equipment in line with the goal to scale up agriculture productivity in the country.

Kabaso said that during the course of his duties, he has learnt how technology transfer is key to national industrialization. If it is well harnessed, local workers who have been taught how to operate certain equipment can easily pass on the technical skills to future generations, a catalyst to national emancipation, he said.

Meanwhile, China-Africa Cotton (CAC) is one of the first Chinese cotton companies to enter the African market. CAC is a wholly-owned subsidiary of China-Africa Cotton Developed Ltd., and has become an integrated enterprise including cotton seed planting, cotton ginning, sales and cooking oil production, based on excellent cotton growing conditions in Africa.

CAC has contributed greatly to technology upgrades in Zambia's textile industry through the introduction of improved seed varieties and cost-efficient chemical products. This has meant an increase in productivity in cotton production. CAC's goal is to form a complete industry chain, including cotton planting, ginning and spinning as well as oil production.

"We will take advantage of our cutting-edge technology and efficient management skills to provide good products and service to all our clients," CAC Chairman Wang Chuanguan said recently.

While it may be too early to measure the significant role technology and knowledge transfer from China to Zambia is playing in shaping its development agenda, experiences in Zambia and other growing economies on the continent point to a mutually beneficial outlook.

Derrick Silimina is an award-winning multimedia journalist based in Lusaka, Zambia. His work has appeared on many media outlets in Zambia and abroad.

BARLOWORLD EULOGISES KK’S ECONOMIC LEGACY

 

Advertorial

By: Mbuyoti Silimina

The story of Barloworld Equipment Zambia Limited is one of success, longevity and high-performing products.

Ms. Mfikeyi Makayi
Barloworld Zambia Country Manager

With over 100 years of operations in Africa, the firm is backed by Johannesburg Stock Exchange-listed Barloworld Limited, a R62 billion company with secondary listings on the London and Namibian Stock exchanges.

Having entered the Zambian market in 1994 taking over the Caterpillar dealership from Mazembe Tractor Company, Barloworld’s past 26 years as an operator investor has seen the business expand its presence in the primary sectors of mining and construction.

“Our fixed presence in Lusaka, Kitwe, Solwezi, Lumwana and Kalumbila has consolidated our support to these industries as well as the Zambian people over the last two decades,” Barloworld Zambia Country Manager Mfikeyi Makayi told Nkwazi.Barloworld Zambia is cognizant of the socio-economic reforms put in place by Zambia’s first president Dr. Kenneth Kaunda. Reforms which laid the foundation for the future success of Barloworld Zambia today.

But over and beyond political freedom, Dr. Kaunda wanted to achieve economic emancipation and improve the welfare of ordinary citizens through an enormous drive to accelerate investment especially, in the fields of mining and construction.

Dr. Kaunda’s investments in Zambians laid the foundation on which Zambians across the country can build on today. “KK’s mining policies were multi-faceted, in retrospect with good intention during difficult times. Firstly, of key note and success to this day was KK was very deliberate about education policies for Zambians. He ensured a deliberate policy that the Zambian people attained the best international education & exposure in running the mining sector through scholarships without discrimination or prejudice, Zambians were sponsored to universities globally by ZCCM with the view that they returned to work in the mining industry. Many Zambians today are known globally for their expertise in the fields of copper mining, engineering, geology and metallurgy.

Secondly, the 1969 Mulungushi and Matero Reforms significantly shaped the future of Zambia’s mining policy with the formation of ZIMCO and MINDECO. The intention was to maximize the sector’s economic potential & drive development,” Makayi noted, “it coincided with tumultuous times in independence struggles in southern Africa, with Zambia as a key frontline state.

As a result, Zambia became and remains one of the world’s largest copper producers and the second largest producer on the African continent (behind the Democratic Republic of Congo). Copper is the mainstay of the country’s economy and has been for almost a century.

The Barloworld country manager highlighted that KK’s One Zambia, One Nation motto which is embedded inevery Zambian’s mind has kept Zambia a peaceful and inclusive nation that has never experienced war. “This element of his leadership has shaped how we lead our business in Barloworld by reinforcing inclusion, having dialogue and appreciating differences.”

In this context, Barloworld’s consistency in delivering quality construction and mining equipment to the earthmoving industry has contributed to the growth of the country’s mining industry

In 2014, Barloworld solidified and affirmed its investment commitments by increasing its footprint North Western and Copperbelt provinces constructing a $14million facility in Kitwe, which comprises of a world class training facility, component rebuild centre and 10,000m2 warehouse to ensure adequate support to the mining operations in the Copperbelt and North Western provinces.

In the construction sector, whether one is in a residential or non-residential building, infrastructure or road construction, Barloworld Equipment’s best machinery and power generation equipment in Southern Africa – including 35 different types of work-tools ensure quality after sale service to all its paraphernalia.

“We seek to support projects that will ensure access to local and international markets with ease as the expansion of our road infrastructure is cardinal to boosting regional trade and with eight neighbours to become a land-linked country,” Makayi stated

Barloworld will always remember Kaunda for creating a solid foundation for the country’s development program which the firm renowned for its Cat earthmoving machines is happy to be associated with.

“Over the last 26 years, favorable mining policies encouraged mine operator’s exploration programmes into the North Western Province as our primary clients invested in new equipment which consequently meant increased opportunities to create employment and growth for Barloworld as well as to support the sector,” Makayi noted.

 

Zambia’s Uphill Inflation Woes

 

By Mbuyoti Silimina

As Africa struggles to respond to the deadly third wave of COVID-19, its month on month inflation is ultimately worsening the already depressed economic fortunes on the continent.

The Zambia Statistics Agency (ZamStats) recently announced that annual inflation for June, 2021 increased to 24.6% from 23.2% in May 2021.

According to the agency’s monthly bulletin announced by interim Statistician General Mulenga Musepa on 24th June 2021, stated that on average, prices of goods and services increased by 24.6% between June 2020 and June 2021.

Interestingly, Zambia became the second country in the world to increase its benchmark interest rate this year as it seeks to bring down spiraling inflation that’s at a five-year high. In this context, the Bank of Zambia decided to maintain the monetary policy rate at 8.5%.

“The Monetary Policy Committee (MPC) noted that, although inflation is projected to remain above the upper bound of the 6-8% target range over the forecast horizon, inflationary pressures are projected to ease faster than earlier anticipated, particularly towards the end of the forecast horizon. This is in view of improved supply of food, particularly maize and wheat following a strong crop harvest, higher than anticipated copper prices and improved external sector support,” Bank of Zambia Governor Christopher Mvunga said recently during the MPC of the central bank at its May 17-18 2021 meeting.

However, the Centre for Trade Policy and Development (CTPD) has charged that the MPR alone cannot be seen as the silver bullet to address Zambia’s inflation dynamics. Rather, in addition to robust monetary policy interventions, correcting the fiscal situation is of prime importance.

Topping the African list of inflationary pressure is Zimbabwe with a rate of 194% year on year, followed by South Sudan (46.8%), Angola (24.8%), the Democratic Republic of Congo (DRC, 20.4%) Ethiopia (19.2%), Nigeria (18.1%), Guinea (12.3%), Sierra Leone (10.9%) and Liberia (10.5%), according to the Economist Intelligence Unit’s (EIU) latest country analysis.

Financial experts say the spiking inflation rate in Zambia is due to a combination of complex factors such as the rise in food prices and depreciation of the kwacha which has in due course gulped the life out of the local economy.

Historically, the Zambian kwacha reached an all-time high of K22.61/US$1 in June of 2021 and global financial analysts expectations estimate it to trade at K22.85/US$1 in 12 months’ time. This has garnered public interest given the exchange rates’ link to other economic variables such as inflation.

“When you look at the reports from ZamStats, they point to the fact that food inflation is one of the major factors meaning that the prices of food have gone up and this entails that it is becoming more expensive to produce this food and with an import-based economy like ours where, for instance, agricultural inputs such as fertilizer and chemicals are imported, it is obvious that will continue to induce inflationary pressures,” Lusaka-based economist Mambo Haamaundu told Nkwazi.

Haamaundu further hinted that for as long as the high cost of production, widening fiscal deficits, unsustainable debt levels, low forex reserves, and tight liquidity conditions among others are not rectified, inflation will accelerate further.

As to whether Zambia’s inflationary pressures will get better or get worse, Haamaundu predicted, “I don’t see the rate of inflation going down in the next one or two months even before the year ends for as long as the country’s deepening macro-economic challenges are not addressed.”

With inflation up by 1.4% from 23.2% in May to nearly 25% for June, Private Sector Development Association (PSMD) Chairperson Yusuf Dodia has also charged that Zambia’s high inflation is unacceptable.

Dodia lamented that since Zambia is a net importer of goods and services, a continuous rise in its month on month inflation rate is an indicator of a struggling economy as consumers will continue paying the price due to high cost of doing business.

“We really need to deal with inflation at its root cause and two clear areas that we need to look at is to increase production of goods as a nation so that we can export more and to ensure that export earnings are returned into the economy,” Dodia stated. “Right now with a US$ 10,000 per metric ton of copper price on the international market, we are not benefiting from this in any way as a nation because once the export of copper is done, earnings are being kept outside Zambia, a situation that ought to be changed by government policy.”

Meanwhile, the EIU’s further glimpse in the sub region revealed that another anchor for price trends down south is low inflation in South Africa whose central bank, the South African Reserve Bank (SARB) expects inflation to stay well within its 3-6% target-range, at 4.3% for the year.

“We expect even lower inflation, of 3.7% based on softer economic growth than the SARB is projecting for 2021 (at 2% versus 3.8%), which makes its record-low policy rate of 3.5% sustainable,” the EIU stated adding that as South Africa is a leading trade partner for Namibia, Botswana, Lesotho and Eswatini which all have currencies pegged at parity to the rand low price growth in South Africa is reflected in these countries and provides their respective central banks with space to remain accommodative over 2021 at least.

Interestingly, despite the COVID-19 outbreak, Ghana remains a shining example on the continent for having recorded lower inflation to a record low of 7.5% in May of 2021 from 8.5% in the previous month, below the middle of the central bank’s target range of 6-10%. Food inflation reached an all-time low of 5.4% (vs 6.5% in April). Also, non-food inflation declined (9.2% versus 10.2%), according to that country’s statistical service.

“We need a policy that will stimulate and facilitate competition in the economy without government interference in pricing mechanisms as well as the need to digitalise the economy by lowering taxation among ICT businesses especially during the COVID-19 pandemic,” Dodia highlighted.

In this context, with existing vulnerabilities in the local financial sector and fragile economic growth, Zambia’s quest to restore and anchor macroeconomic stability is scheduled to implement its fiscal adjustment measures in line with the Economic Recovery Programme (ERP) and understandings reached in discussions with the International Monetary Fund (IMF) over an economic bailout programme.

Zambia, which last year became Africa’s first pandemic-era sovereign defaulter on its Eurobond debt, will likely be able to finalise the IMF deal once the dust settles following a general election which took place in August of this year. An agreement with the fund is indeed crucial under the Group of 20’s so-called common framework for debt restructuring that Zambia will use to rework its more than US$12.7 billion in external debt.

It is also worth noting that at the time of writing Zambia had just voted in a new government in August 2021. We wait to see what effects this will have on the country’s inflation and overall economy.