Despite the tough business terrain, there are still opportunities in Zambia for businesses and individuals. This is not to say that the Zambian economy hasn’t been hit hard by the current Covid-19 pandemic but going forward, we as Zambians need to be compelled to redirect our path and unleash abundant opportunities for sustainable growth and opportunities.
According to trading economics, the Stanbic Bank Zambia Purchasing Managers Index (PMI) sank to 37.3 in April of 2020 from 44.7 in the previous month. The Stanbic Bank Zambia Purchasing Managers Index (PMI) is an index of the prevailing direction of economic trends in the manufacturing and services sector which consists of a diffusion index that summarizes whether market conditions as viewed by purchasing managers are expanding, staying the same or contracting. The purpose of the PMI is to provide information about current and future conditions to company decision-makers, analysts and investors. The 37.3 reading pointed to the steepest contraction ever recorded in the country’s private sector, amid widespread Covid-19 shutdowns and collapsing demand. Output, new orders and employment fell at the fastest pace since the survey began in March of 2015. Looking ahead, business sentiment entered into negative territory for the first time in the survey’s history, due to concerns about the Covid-19 pandemic and how long any disruption will last.
So far, a typical Zambian business alone would face multiple hurdles such as poor or low electricity supply, low capital or funding and poor infrastructure to carry out business to name a few, and these must be tackled to allow significant inflow of domestic sustainable investments. Foreign investments alone at the moment cannot suffice and the Zambians need to realize that one of the solutions to fix this is self-reliance and that means supporting local businesses. The government’s role is key in terms of public policy. For businesses and individuals to maximize the opportunities that exist across key sectors especially during and post-Covid 19, the government needs to play its part in ensuring a favorable business and in providing support and incentives to businesses.
According to Zambia Statistics Agency, the annual inflation rate for April 2020 increased to 15.7% from 14.0% in March 2020 while the April 2020 monthly overall inflation rate increased to 2.2% from 1.2% the previous month (March). This was due to increases in both monthly food and non-food inflation and largely the lagged pass-through from the sharp depreciation of the kwacha against the US dollar that led to the increase in prices of, especially imported goods. The increase in the monthly food inflation rate was mainly attributed to the price increase of food items such as Dried Bream, Dried Kapenta Mpulungu, Cooking oil, and Sugar. On an annual basis, the analysis of retail prices between April 2019 and April 2020 shows that the national average price of a 25kg bag of Breakfast Mealie meal increased by 58.41 percent from K104.74 to K165.92. The national average price of a 20-litre tin of Maize grain increased by 60.31 percent from K51.32 to K82.27. Maize is Zambia’s staple food. This is relatively high and suggests that majority of citizens are at the survival stage with low income.
The central Bank of Zambia during its May 2020 Monetary Policy Committee meeting (MPC), cut the policy rate by 225 basis points to 9.25% and this reduction complemented the broader set of measures the bank has already taken and this includes the Targeted Medium-Term Refinancing facility, prudential measures taken to ease the flow of credit to businesses and households and scaled-up use of digital financial services. Government policies, therefore, must focus on increasing income and ensuring the appropriate distribution of wealth for citizens. One thing is establishing a favorable business environment for job creation; implementing income transfers to poor and affected households (in the light of COVID-19) among other measures.
As a mandate to identify and redistribute wealth and resources among others, let us scrutinize the area of skills and labour with our mines in focus. While corporations and establishments at commercial level seek and employ foreign nationals(expatriates), congru
Mines across the country employ a significant number of ‘expats’ in various disciplines. To facilitate this comes at a high cost, that is – in order for companies to get ‘expats’ onboard, they [companies] have to handsomely remunerate them [expats] and in most cases provide flights in and out of the country on and off-cycle [monthly or quarterly] on a regular basis as well as accommodation to mention but a few.
In prospect, expats should be granted a period of time within which to train and transfer specific skill sets to local people [Zambians] with records intrinsically kept and readily accessible to the public. The personnel with the skills acquired in turn will be able to pass it on and retained, thereby, resulting in more employment opportunities, better salaries for locals and profits as the companies cut down on certain costs e.g. flights and accommodation for Expats.
However, a number of these expats are somewhat ‘’non-essential’’ as their input and skill set can be sourced within the country e.g. Mining Machinery Operators, Fitters, Mechanics, Electricians and Boilermakers among other tradesmen. Thus, promotion of ownership in persons, as well as stern transparency and accountability, should be encouraged and this will lead and result in quality and standard. Mining as a business in Zambia has been going on for a very long time and so the government is encouraged to really facilitate policies to enable us as Zambians to achieve development by providing conditions that make locals eligible for funding or loans, prerequisite tax exemptions as well as the prime choice of business partner during and post the Covid pandemic.