Good morning. Here’s what you need to know
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Zambia to set up mineral investment and trading unit
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Zambia unveils first integrated plan to address electricity needs
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US inflation cools and interest rates held
In Local Business and Finance News
Zambia will set up a new entity for investment and trading in minerals as it seeks to earn more from its natural resources, the Cabinet said on Wednesday after giving its approval. The government of Zambia, Africa’s second largest copper producer which currently owns several mining assets through ZCCM Investment Holdings, will establish a Special Purpose Vehicle (SPV) for investment and trading purposes, it said. The new entity would help Zambia “move away from the dividend payment model for mineral resources and adopt a production-based sharing mechanism to ensure benefits accrue to the people of Zambia beyond Statutory obligations,” the Cabinet said. The new business model would allow for sharing of minerals produced as well as enable the government to negotiate mineral prices and ensure the correct declaration of mineral consignments designated for export and domestic use, it added. Read more: Reuters
The Government has announced the completion of the first Integrated Resource Plan (IRP) aimed at providing sustainable solutions to Zambia’s electricity sub-sector challenges. Energy Minister, Peter Kapala, highlighted that the IRP outlined a strategy to address these challenges through sustainable solutions. Speaking at a media briefing in Lusaka on Wednesday, Kapala stated that the IRP projected a need for an additional generation capacity of 6,505 megawatts (MW) by 2026, requiring an estimated investment of US$ 5 billion. To meet long-term demand, the IRP forecasts a total of 23,000 MW by 2050, with a corresponding investment requirement of nearly US$ 31 billion. “ZESCO Limited, as we have seen, the utility losing revenue amounting to an estimated average of US$ 300 million from standing contracts and market trading of electricity exports,” Kapala reiterated. Due to poor hydrology, current available average generation dictated by water availability in the reservoirs was about 900MW against an average demand of 2,400MW, resulting in a power deficit of 750MW as of May 2024. Read more: Zambia Monitor
ZANACO has held the second edition of its Leading, Edge, Agility, Diversity and Sustainability (L.E.A.D.S) initiative, providing a platform for players in the innovation industry to meet, discuss, and share ideas. The L.E.A.D.S initiative brought together creatives, innovators and decision-makers to inspire one another and drive positive change in the innovation sector. During the event held in Lusaka on Wednesday, Zanaco Acting Chief Executive Officer, Kalengo Simukoko, stated the firm’s commitment to fostering diversity and inclusion. Simukoko added that a diverse and inclusive workforce leads to greater innovation, creativity and performance. “We celebrate diversity and strive to create an environment where every individual feels valued, respected and empowered to contribute their unique perspectives and talents,” Simukoko said. Read more: Zambia Monitor
Finance and National Planning Minister Dr Situmbeko Musokotwane says a total of K2.94 billion was collected from toll gates in 2023, compared to K2.56 billion in 2022. Responding to Pambashe PF MP Ronald Chitotela, who asked how much revenue was collected in toll fees countrywide in 2023, Dr Musokotwane said the K2.94 billion was collected from 38 toll points, comprising 27 inland toll stations and 11 points of entry. “I wish to inform the House that the revenue collected as toll fees countrywide in 2023 is K2.94 billion. This revenue was collected from 38 toll points, comprising 27 inland toll stations and 11 points of entry. The K2.94 billion collected in 2023 represents a growth of 15 percent.” Read more: News Diggers
President Hakainde Hichilema’s Special Assistant for Economic Affairs, Jito Kayumba has disclosed that United Arab Emirates’ renewable energy company, Masdar, will commence its solar project development in the fourth quarter of this year. Last year, Zesco signed an agreement with Masdar to develop solar projects worth $2 billion. Once completed, the project is expected to contribute an additional 2,000 megawatts of electricity to the national grid. In an interview, Kayumba revealed that the project was now at the technical stage and the power from the first phase would be on boarded into the nation grid within a 13-month period after the official launch by President Hakainde Hichilema. Read more: News Diggers
In International News
Consumer price rises in the US eased slightly last month, official data has suggested, ahead of a decision to maintain interest rate levels at a 23-year high. According to the US Labor department, prices rose 3.3% in the year to the end of May, down 0.1 percentage points from the month before. Core inflation, which strips out more volatile items like food and energy prices, also slowed despite rents continuing to weigh on household budgets. Despite borrowing costs standing at their highest rate in years, officials at the Federal Reserve held off on any interest rate cuts this month. The US central bank held its target rate at 5.25% to 5.5% on Wednesday. It also forecasted a single rate cut this year – but policymakers were split. Four expected no cut, seven forecasted one cut, and eight thought there would be two. Read more: BBC News
Chinese electric cars may become pricier in the European Union (EU) after politicians called them a threat to its own industry. It has “provisionally concluded” that Chinese electric vehicle (EV) manufacturers will face tariffs from 4 July “should discussions with Chinese authorities not lead to an effective solution”. The EU’s announcement comes as it continues an investigation into what it claims is a flood of cheap, government-subsidised Chinese cars into the trade bloc. China alleged the tariffs violated international trade rules and described the investigation as “protectionism”. EV makers who co-operated with the investigation, which the EU’s governing European Commission launched in October, will face an average 21% duty, while those who did not will face one of 38.1%. Read more: BBC News
A looming glut in global oil supply could “upend” attempts by the Organization of the Petroleum Exporting Countries and its allies, or OPEC+, to prop up prices by cutting production, according to the International Energy Agency. The Paris-based IEA said Wednesday that it expects growth in global oil production — led by the United States and other countries in the Americas — to “inflate the world’s spare (oil) capacity cushion” to levels seen only once before, during the coronavirus pandemic when oil prices crashed. By 2030, global oil supply will outstrip demand by a “staggering” 8 million barrels per day, according to forecasts published by the agency in its medium-term oil market report. “(That’s) a major, major surplus and… might be one of the highest in the history,” Fatih Birol, the IEA’s executive director, told reporters. Read more: CNN
The United States has rolled out new sanctions against more than 300 individuals and firms accused of aiding Russia’s war effort in Ukraine, including entities in China, South Africa, the United Arab Emirates and Turkey. US Treasury Secretary Janet Yellen said on Wednesday the measures target Moscow’s remaining avenues for obtaining materials and equipment needed to sustain the war. “We are increasing the risk for financial institutions dealing with Russia’s war economy and eliminating paths for evasion, and diminishing Russia’s ability to benefit from access to foreign technology, equipment, software, and IT services. Every day, Russia continues to mortgage its future to sustain its unjust war of choice against Ukraine,” Yellen said in a statement. In remarks carried by Russia’s state-run TASS news agency, Ministry of Foreign Affairs spokeswoman Maria Zakharova said Moscow would “not leave such aggressive actions without a response”. Read more: Al Jazeera
Ghana’s monthly inflation rate soared to a 10-month high in May, driven by a sharp slump in the cedi, which led to a surge in the cost of non-food items. Ghana’s monthly inflation rate soared to a 10-month high in May, driven by a sharp slump in the cedi, which led to a surge in the cost of non-food items. Prices rose 3.2% last month, the highest increase since July, Government Statistician Samuel Kobina Annim reported in Accra on Wednesday. Despite this, the annual inflation rate decreased to 23.1% from 25% in April, due to favorable base effects, Bloomberg reported. Read more: Business Insider
Digital wallets are the fastest growing payment method in the world, and Asia is leading the charge, according to the latest report by payments processing firm Worldpay. Globally, digital wallets accounted for 50% of e-commerce purchases and 30% of in-store purchases in 2023, accounting for $14 trillion in transaction value. That figure is expected to hit $25 trillion by 2027, the report showed. Consumers in Asia-Pacific are the biggest users of digital wallets as physical cards and cash usage continue to decline. Last year, 70% of online payments and 50% of in-store payments in Asia-Pacific used digital wallets — the highest among all the regions. Total spending in the region for digital wallets — which include both e-commerce purchases and point-of-sales trade (POS) — amounted to almost $10 trillion in 2023, led mostly by China. Worldpay defines “point-of-sales” as payment in brick-and-mortar stores. In comparison, digital wallet spending in Europe accounted for just 30% of e-commerce transactions and 13% of physical payments. While in the U.S., digital wallets usage made up for 37% of online sales and 42% of physical spending. Read more: CNBC
Finally, Capital Markets News
In 256 trades recorded yesterday 145,652 shares were transacted resulting in a turnover of K2,282,720.73. The following price changes were recorded yesterday: K0.01 gain in CEC Zambia and K0.13 gain in ZAFFICO. Trading activity was also recorded in Airtel, Chilanga Cement, Madison Financial Services, PUMA, Real Estate Investments Zambia, Standard Chartered Bank Limited, Zambia Breweries, Zambeef, ZANACO, Zambia Sugar and CEC Africa on the quoted tier. The LuSE All Share Index (LASI) closed at 13,164.19 points, 0.12% higher than its previous close of 13,148.98 points. The market closed on a capitalization of K101,595,737,662.97 including Shoprite Holdings and K66,813,052,222.97 excluding Shoprite Holdings.
27 Govt Bond trades with a total face value of K129,368,000 and turnover K129,427,490 were processed yesterday.