Zambia’s Long Walk to Debt Recast

By Derrick Silimina

In his quest to jump-start the ailing economy, tackle external debt, tame inflation, create jobs for young people and inspire the confidence of international investors, President Hakainde Hichilema’s administration recently secured a deal in principle with the International Monetary Fund (IMF) that it hopes will anchor talks with creditors.

While the debt crisis is once again in the spotlight, stakeholders have been playing hide-and-seek over who is responsible for blocking a comprehensible deal to restructure the country’s debt stock. 

Although Zambia seeks to rework as much as $17.3 billion of external debt, it faces a complex test case for international efforts to tackle the looming crisis. 

United Kingdom Minister for Africa Vicky Ford recently said that Zambia’s debt restructuring efforts are being delayed by one international creditor that seems to be taking more time to make a decision.

Arguably, China is the largest creditor in Africa and it is part of the G20 Debt Service Suspension Initiative (DSSI), which is supported by the World Bank and the IMF, and has suspended debt payments to dozens of the world’s poorest countries. 

Zambia’s commercial and state-owned Chinese lenders account for over $5 billion, making the Asian country by far the biggest creditor, according to data from the Ministry of Finance. 

According to financial analysts, Chinese creditors helped finance a spending splurge that led to a socio-economic crisis under Edgar Lungu’s fallen regime.

In this context, Minister of Finance and National Planning Situmbeko Musokotwane has shared his hope for rapid progress on Zambia’s debt restructuring. 

“The New Dawn administration of President Hakainde Hichilema has a duty to the Zambian people to transform the country’s economy, so that it achieves sustainable growth, becomes resilient, more attractive to investors and internationally competitive. This methodical approach will help us lift our people out of poverty through the creation of decent jobs, development of enterprises, and sustained formation of wealth,” Dr Musokotwane said. 

This was during the just-ended World Bank Group and its Bretton Woods Partner, the IMF Spring meetings at the IMF Headquarters in Washington, DC, United States of America. 

COMPLETED 

The IMF has since confirmed having completed a joint debt sustainability analysis for Zambia to assess debt relief and strengthen its return to sustainable debt levels.

 

Speaking during the same event, IMF Managing Director Kristalina Georgieva commended Zambia for making impressive progress in implementing measures under the country’s economic reform programme. 

“We share the hope for rapid progress on Zambia’s debt restructuring so that the IMF Board can soon consider the authorities’ (Zambia) programme. This comes at a crucial time when we are entering a new phase of the debt restructuring process with the critical path to form the Official Creditor Committee,” Georgieva said. 

Following the Zambian Government’s concern at the delays in the formation of the Official Creditor Committee under the G20 common framework for debt restructuring, the IMF further announced that China is now committed to join the creditors’ committee on Zambia’s early debt resolution. 

Zambia, which became Africa’s first pandemic-era sovereign defaulter in 2020, has been seeking to restructure its dollar obligations under the Group of 20’s Common Framework, a set of guidelines that the most powerful countries drafted to mitigate debt crises in poorer countries. 

Speaking during the G20 Finance Ministers meeting, China’s Finance Minister Liu Kun affirmed that China, with the principle of collective action and fair burden sharing, is willing to implement the G20’s Debt Service Suspension Initiative in a methodical fashion on a case by case basis. 

In its latest report, World Bank Group President David Malpass met with Minister for Finance and National Planning Situmbeko Musokotwane of Zambia. 

COMMENDED 

President Malpass has commended Zambia’s progress in implementing fiscal and structural reforms and improving public service delivery in health and education. 

President Malpass also welcomed Minister Musokotwane’s thoughts regarding the impact of the war in Ukraine on Zambia. 

Malpass and Musokotwane further discussed the World Bank Group’s (WBG) support through IDA19 and IDA20, with projects under preparation for FY22 for a total amount of U$560 million. 

Malpass underscored to Dr Musokotwane the need for a deep and rapid debt restructuring for Zambia. 

The World Bank head welcomed China’s announcement to join the creditors committee for Zambia under the G20 Common Framework adding that a potential budget support operation from the World Bank could accompany a debt treatment plan by creditors and an IMF programme once it is approved. 

“Urgent action from the international community is critical at this point to support Zambia’s macroeconomic stability and debt sustainability to spur growth and poverty reduction,” Malpass stated. 

POSITIVE 

Some local financial experts are positive about the outcome of the debt talks at the just-ended Spring summit and they anticipate the strengthening of the economy. 

Zambia Revenue Authority Board chairperson Dr Caleb Fundanga recently acknowledged that the slight appreciation of the Kwacha in recent days can be attributed to China’s commitment to join the Official Creditors Committee for Zambia’s debt restructuring. 

According to ZANACO’s Indicative Forex Rates as at April 26, the Kwacha was buying at K17.03 and selling at K17.36. 

And economist Chibamba Kanyama says most foreign investors believe in President Hakainde Hichilema as evidenced by the number of invitations he receives to officiate at international investment forums. 

“Zambia is on the international radar. Foreign investors are highly confident about the prospects of the Zambian economy,” Kanyama said. 

Certainly, in the spirit of progressive economic fundamentals, China’s recent pronouncement and commitment is an important building block to cement Zambia’s case for debt restructuring. 

“Thank you to China and other creditors for agreeing to join the common framework on debt restructuring... we are on course,” Hichilema stated.

Unlocking the Enterprise Nickel Project…

By Derrick Silimina

President Hakainde Hichilema has called for a mindset change among Zambians who should consider themselves owners of the $250m Enterprise Nickel Project which will create an initial 700 jobs.

Speaking during the ground-breaking ceremony of First Quantum Minerals’ Enterprise Nickel Project in Kalumbila District, President Hichilema said the increased revenue from the project would enhance Government support to education, healthcare, Constituency Development Fund (CDF) and social protection. 

“We thank First Quantum, we thank the community of Kalumbila deeply, especially those that God placed around here and have been looking after this mine for centuries, making it available to be exploited and developed in this manner. I would like us Zambians to change our mindsets that the project like this does not only belong to FQM, it belongs to the people of Kalumbila, it belongs to this province, it also belongs to Zambia and Africa as well as to the rest of the world because from here, there are customers waiting for nickel coming out from these pits and that nickel will create more jobs,” Hichilema said. 

Zambia’s newest mine in North-Western Province would both create jobs and impact the lives of tens of thousands of local people, help to diversify Zambia’s mining activities, and turn the country into Africa’s leading nickel producer.

 

Hichilema disclosed that the Enterprise outfit would create an environment conducive for both local and international investors and create opportunities for local businesses. 

“This project was hanging on together with the Kansanshi expansion for over twelve years. I can reveal that we used to chat with these colleagues when I would sneak out of the country to Johannesburg and will find this gentleman there (pointing at FQM CEO Tristan Pascal) and he would complain. But I said there is not so much I can do to help. I will make noise but if this issue is not resolved after the 12th of August 2021, count it delivered thereafter. Here we are today and we have unlocked this project for the greater good,” Hichilema revealed.

The President emphasised that as the world moved further towards electric vehicles, Zambian nickel would be at the core of this new industry, adding that the investment would fuel the economy of the future. 

ENERGY 

The country was therefore well-placed to play a critical role towards the transitioning of energy from fossil fuels in a bid to reduce carbon emissions damaging the climate. 

“Our vision of Zambia plays a credible part towards the transition of energy from fossil fuels that are damaging our climate to green energy that will reduce carbon emissions. Therefore, transitioning from fossil fuels to drive our cars, to electric vehicles and nickel, is part of the package of minerals (copper, cobalt, nickel, manganese, lithium). We are fortunate as a country to host a fair share of these minerals, but if they stay in the ground and if we don’t unlock projects like this, we won’t be able to play our part in keeping our world cleaner and reducing the environmental damage.” 

The head of state urged the mining giant to create a long-lasting relationship with the community if the investment was to thrive and benefit all stakeholders.

“There is a need to create a Community Development Trust (CDT) to raise income to the community so that we can see benefits flowing from this asset up to even the children that are yet to be born, and that is creating lasting value,” he added. 

Speaking at the same event, Mines and Minerals Development Minister Paul Kabuswe commended FQM for having taken advantage of the economic climate created by the New Dawn Government and investing into the nickel mining project. 

Kabuswe highlighted the nickel project as a testament of the UPND leadership goal to revitalise the mining sector and the economic fortunes of the country. 

“Your Excellency, from the time you took over the reins of power, there is one statement that you have always talked about—‘Minister, we have to unlock the economy, Cabinet we need to unlock the economy.’ “You have unlocked the country through CDF which was a very difficult undertaking in the previous regime. Not only have you unlocked it but increased it by I don’t know how many percent points to K25.7 million per constituency every year. You have also unlocked the jobs sector through the recent employment of more than 30,000 teachers and the yet-to-be-unlocked 11,000 plus jobs in the health sector among others, and that is prudent leadership,” Kabuswe said. 

FOUNDATION 

FQM Chief Executive Officer Tristan Pascal said the mining entity’s contribution to Zambia’s socio-economic development through its Kansanshi mine in Solwezi and FQM Trident in Kalumbila had over the years laid a firm foundation on which to build the Enterprise nickel mine. 

“Our building in-house technical capacities in our people, delivering project executions and providing on-going contributions to the communities and to the nation have provided a firm foundation on which to build the Enterprise Nickel Mine. We are therefore confident that this project will be a success story for Zambia as a whole.” 

In attendance during the historic ground-breaking ceremony were Senior Chiefs Sailunga, Mukumbi and Chiefs Dr Mumena, Ntambo, Chieftainess Chikola and Kakoma from Kalumbila District. Also present were North-Western Province Minister Robert Lihefu, Lands Minister Elijah Muchima and his Labour counterpart Brenda Tambatamba, senior Government officials and mine suppliers among others.

An Obviously Creative Tailor

 

By Derrick Silimina

At 38, Obvious Makozo is a versatile entrepreneur running tailoring, hair salon and barbershop, typing and printing businesses in Kapepa area of Solwezi District.

Some of the products from his tailoring shop include dresses, shirts, leather handbags, school uniforms, jerseys and many more. 

“Our products are sold to schools and the general public. Some clothes are exchanged for maize and beans around April, and around December, we sell them at a 75 percent profit. My immediate plans are to register the business, and open a tailoring school that shall produce various items,” Makozo said. 

In 2019, armed with six blowers, five hair clippers and seven dryers, Makozo and his wife opened the barbershop. At the time, he had no sewing machine. 

“Some of the benefits from the training include a change of mindset as I was able to identify business opportunities and started purchasing tailoring machines towards the end of 2019 and 2020. The first machine I bought was a manual sewing machine out of proceeds from the barbershop and salon,” he said. 

He bought the hair clipper at K2,500 and nine months later, his business was able to purchase a pattern-making electric sewing machine at K4000. This was followed by an overlocking machine which he bought at K3, 800 five months later. 

“Today, I am a proud owner of nine machines altogether valued at approximately K25,000. With my printer and laptop the total value of assets is K35,000,” Makozo said. 

He is appreciative of sound business management practices he has learned, which have enabled him to diversify his business. 

With an initial monthly turnover of about K1,500, Makozo’s salon and barber business is now able to make a profit of over K6000 with a gross of about K7000. 

He proudly stated that currently, the business employs himself and his wife as partners. Makozo has continued following the training sessions on radio as it is beneficial to follow training on radio because of time saved while continuing to do his work. 

He has urged Kansanshi Mining Plc to continue with the good work to benefit more people. 

“My message to KMP is a word of thanks for imparting knowledge through the training which has greatly empowered me with knowledge from the training which has greatly impacted my business,” Makozo stated.

Solwezi Cellphone Repair Business Takes Off

By Derrick Silimina

Francisco Mwansa, 35, is one of the upcoming mobile phone repair names in North-Western Province.

Situated in the Kandundu car park area of Solwezi District, Mwansa’s phone repairing business caters for all brands. 

“I started my mobile phone repair business in 2016 with K1,000 after being motivated by experience I acquired after working for three years at COMESA in Solwezi. The business was doing well then, despite increasing competition,” Mwansa said. 

Despite not having been to any formal school of electronics, Mwansa explained that he learned the art from other phone experts from the community. Given an opportunity, he intends to study computer software engineering to expand his market In the IT industry. 

“My business is now worth over K5,000. Some accessories bring in business worth about K1,000. I intend to expand my business and employ other youths once I open a phone accessories shop and branches in Kalumbila and Manyama areas,” Mwansa hinted. 

With burning zeal to nurture his talent in the cell phone repairing business, Mwansa started attending the Kansanshi Mining Plc-sponsored business development training from 2018 to 2022.

He testified that the training had helped him in good customer care and record-keeping. 

“I now understand how to use a records book to indicate sales, daily expenditure and profits. My weekly profits are about K700 every week and I am currently in the process of registering a cooperative with 10 other members,” Mwansa said. 

He expressed glowing tribute to the KMP for the business training which has enabled the less privileged to acquire skills. 

The visiting mentorship team from Fortune World Investment, facilitators of the business training programme, encouraged Mwansa to save for further investment.

Mobile Money Rains on Solwezi

By Derrick Silimina

According to the Bank of Zambia, the number of mobile money users on the country’s network platforms grew from 4.85 million in 2019 to 8.6 million plus in 2020. That represents a year-on-year increase of 77 percent.

At the same time, and not coincidentally, more and more people in Solwezi District of North-Western Province are gaining access to financial services in general, whether provided by a mobile money booth, online platform or a physical bank. 

In Solwezi’s Kandemba area, Agness Kaumba owns a mobile money booth which provides financial services that include the receiving and sending of money, buying electricity units, paying bills like GOTV, DSTV and selling talk time.

“I started my business in December 2021 after I invested a minimal amount of K1000 where sending and withdrawing services were being provided via MTN only,” Kaumba said. 

She described the business as ‘very good’ because it is not labour intensive but requires good interaction customers.

 Kaumba stated that her business is now worth K5000, all in a period of five months. After realizing the need to sharpen her business acumen, Kaumba started attending the Kansanshi Mining Plc-sponsored business development training in October, 2021. 

“The training helped me to identify the business opportunity and a busy location where to target a lot of customers. Financial discipline is another virtue I learned and utilized in my business, hence my being able to grow my capital from K1000 to K5000 within a short period of five months,” she stated. 

With average sales of K100 per day, Kaumba is optimistic as the mobile money business is lucrative, especially during the first and second week of every month. 

Kaumba now intends to open three or four outlets, with one outlet planned for the town centre and another at the Kimiteto area starting January 2023. 

She also looks forward to diversifying into buying and selling timber as research indicates that the business is quite lucrative as well. 

“From my mobile money business, I have developed my plot in the Kimiteto area and bought another plot in Mulemba Villa Park worth K4,500,” she said. 

The visiting mentorship team from Fortune World Investment Limited urged Kaumba to improve her record-keeping habit if she is to track her income and expenditure done per day with ease.

Kalumbila Minerals becomes FQM Trident

By Derrick Silimina

Kalumbila Minerals Ltd will now operate as FQM Trident Ltd, catering for all projects and programmes while enabling clarity in the FQM group.

Management at Kalumbila Minerals Ltd has proposed to revise its trading name to FQM Trident Limited, a name that incorporates its true identity as a First Quantum Minerals owned company. 

According to an internal memorandum issued to all staff and contractors by KML General Manager Sean Egner, the renaming process is expected to be completed during the first quarter of 2022. 

“As we intend to seek board approval and bring the enterprise project into operation, management has considered the above and decided to revise our trading name to “FQM Trident Limited,” a name that incorporates our true identity as a First Quantum Minerals owned company and is inclusive of all the trident project operations,” Egner said. 

FQM Trident Ltd will remain a fully-owned subsidiary of First Quantum Minerals Ltd as there is no ownership or control structure change. 

“You will therefore see a few changes in our branding to reflect this name change. Please note; there will be no changes to conditions of employment or any effect to the day-to-day operations at Sentinel and Enterprise Mines. Please let us all welcome and embrace this new identity that continues to confirm our association to both FQM and our Trident Project operations,” he assured. 

Egner disclosed that since inception, the mining operations and project has incorporated three mining licences, namely Sentinel, Enterprise and Intrepid which collectively make up “The Trident Project”. 

He further highlighted that the setting up of FQM Trident Mine, formerly known as KML, has created new opportunities for economic growth in Kalumbila District of North-Western Province and beyond. 

He said the influx of migrant employees and subsequent increase in population have created a demand for new projects, business activities and infrastructure which has ultimately improved the quality of life for the rural community. 

Egner stated that with the existing resourceful environment, businesses have since tapped into the multiplier effects that have been brought about as a result of increased cash flow and skills development after the setting up of FQM Trident Mine and one such business is Nvumabaranda Group of Companies. 

“We fully understand that our operation presents a significant conducive socio-economic environment that extends from local to regional scale. The opening of this private hospital symbolises the growth of our town, which has been developed in an environmentally conscious manner fostering green initiatives and responsible environmental management,” Egner said. 

Recently, during the official opening of Nvumabaranda Hospital in Kalumbila District, FQM Trident Mine General Manager said when FQM embarked on the audacious vision to establish a green mine and town in the little known part of Zambia, there were many doubts about how the company would develop a town with amenities such as schools, markets and clinics. 

Egner has since commended Nvumabaranda Group of Companies for building a hospital and setting up various businesses in Kalumbila and has urged other small and medium enterprises to seize the available opportunities and work with other stakeholders to grow into viable business houses. 

He stressed that with support from Government line ministries and through collaboration with the community, FQM Trident Mine through Trident Foundation Limited (TFL), has undertaken various initiatives to promote sustainable development that meets the locally defined social, environmental, and economic goals over the long term. 

“The company has invested heavily in education, infrastructure, wildlife, farming and health in order to promote and uplift the living standards of the local people. While some local people are employed to work on the mine; FQM is committed to reduce dependence on the mine alone and has been promoting local business development to enable community members to have sustainable livelihoods at the end of the mining life.” 

And Nvumabaranda Group of Companies Chief Executive Officer Kennedy Nduna has appreciated FQM Trident Ltd for creating an enabling environment for other businesses to thrive in Kalumbila District. 

Nduna intimated that he has received tremendous support from the mine which has made it possible for him to expand his business in hospitality, cleaning services, catering, conference facilities and health service provision. 

He has since called on more businesses to emulate his efforts and contribute to the economic development of Kalumbila District.

EU Fisheries Project uplifts Seven Districts

 

By Derrick Silimina

Seven districts are upgrading the fishing sector following the entry of the Zambia Development Agency (ZDA) and cooperating partners to strengthen the industry.

T he ZDA in partnership with ActionAid Zambia, the Department of Fisheries, the ECOFISH Programme, the European Union (EU) and other cooperating partners, is implementing the Zambia Sustainable Small-Scale Fisheries Project (ZSSSFP) in seven districts including Kafue and Luangwa districts. 

The team is training cooperatives in the fish value chain to equip them with requisite information, skills and resources to run fishing projects as viable and profitable businesses. In the process the team is also creating a platform for cooperatives to gain relevant information and access technical support. 

Traditional leaders in Luangwa district of Lusaka Province have welcomed the ongoing development initiatives in their area.

In a joint statement, Senior Chief Mburuma of the Nsenga-Luzi people and Chief Mphuka of the Chikunda people, have welcomed the activities conducted by ActionAid Zambia and the ZDA in their chiefdoms. 

Speaking after attending one of the business and entrepreneurship training sessions held by AAZ and the ZDA on how to run fishing as a viable and profitable business venture, Chief Mphuka expressed gratitude for the support rendered to the cooperatives and encouraged his people to be committed if they were to see the desired results. 

“We have been crying for development and jobs in our communities and this is one way in which our cries have been answered. Let us embrace the people that are helping to bring development to our communities, utilize the resources and knowledge prudently and show commitment,” said Chief Mphuka.

The traditional leader urged the cooperatives to jealously guard the knowledge and resources given to them as resources were scarce. 

The chief said cooperatives were a sure way of creating jobs for the youth and women, thereby improving the standard of life in the communities. 

He stressed the need for continued dialogue between traditional leaders and stakeholders for the success of the projects. 

He further urged the Kakaro community that received a scale and a booster pump after the training not to abuse the equipment but use it for the intended purpose.

“Time and again, I will be passing through to monitor the use of this equipment and to see how you are implementing the knowledge you have learnt from the training,” added Chief Mphuka. 

And Senior Chief Mburuma saluted ActionAid Zambia, Government and the cooperating partners for considering Luangwa District for their interventions in the fishing industry value chain.