Story of the Day
As the world grapples with slowdown in GDP and rising prices (stagflation), Zambia is not immune to the consequences of this economic pressure. As fuel and transport costs fluctuate, coupled with constrained cash flow and other challenges – all putting pressure on the profit margins of SMEs, FNB says the silver lining potentially lies in managing cash flow effectively and efficiently. The cost of fuel globally has increased over the last year, and with the cost-reflective fuel prices we have in Zambia, we have seen small businesses experience a resultant increase in the cost of running their businesses. The Central Bank, Bank of Zambia anticipates that economic expansion will come in at 3.5% in 2022 and 3.6% the year after that indicating recovery of the Zambian economy. It goes without saying that all firms will eventually experience economic volatility at some point in the life of the business; it is anticipated that companies operating on a smaller scale would be more negatively impacted. Read more
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Zambia on Thursday launched a new national development plan with President Hakainde Hichilema calling for hard work to actualize its objectives. Launched under the theme, “Social Economic Transformation to Improve Livelihoods”, the plan runs from 2022 to 2026. Hichilema said the plan presents the country’s ambitious but bold steps for the country’s social-economic development. He said the plan was the country’s medium-term blueprint to unlock the country’s potential in various sectors for sustainable, holistic and inclusive development. Read more: Xinhua
Zambia’s second most preferred network provider Airtel Networks scaled its top line higher by 26% to K2.02billion in 1H22 supported by a 15% expansion in subscriber base to 8.22 million. The stellar sales take a positive cue from increased data demand in the copper producer as risk appetite restores to pre pandemic levels. Zambia has seen an uptick in digital commerce which is a key demand driver. Read more: The Business Telegraph
Zambia’s debt restructuring will be a mixture of haircuts to loans’ original value and maturity extensions, a senior Zambian finance ministry official said Thursday, after the Fund approved a $1.3 billion program for the southern African country. “The choice between haircuts and stretching the repayment period…is a matter of negotiations. And that negotiation will reflect the preference of the particular creditor,” said Zambia’s finance minister Situmbeko Musokotwane. Some creditors “will choose to have their money faster,” he said. “Others will choose not to have a haircut but get the money to be paid over a longer period of time.” Read more: Yahoo Finance
Ministry of Small and Medium Enterprises Development Permanent Secretary Yvonne Mpundu says most Zambian businesses have remained stagnant in the informal sector, hence government’s resolve to ensure that they are transformed through entrepreneurship, business knowledge and transition into SMEs. And International Labor Organization country director for Zambia, Malawi and Mozambique George Okutho says SMEs have the potential and ability to get people out of poverty and raise their living standards. Read more: News Diggers
International Business and Finance
While most African airlines are experiencing headwinds amid tough operating environments, Ethiopian Airlines has continued to perform well financially. The airline reported a 79% revenue growth for its fiscal year ended July 30, even as profit grew by 90%. This information is according to a tweet by Mamo Mihretu, the CEO of Ethiopian Investment Holdings. According to Mr Mihretu, the state-owned airline “posted $5 billion in revenue this financial year, a 79% growth compared to last year. Profit grew by 90%, reaching $937 million despite the headwinds of the worsening global economic outlook, rising fuel cost, global pandemic.” Read more: Business Insider
Flutterwave, Africa’smost valuable fintech startup, has secured a Switching and Processing License by the Central Bank of Nigeria (CBN)— widely regarded as CBN’s most valuable payments processing license. This license allows Flutterwave to offer customers transaction switching and card processing services. Others include non-bank acquiring, agency banking and payment gateway services. The company can also process card transactions, participate in agency banking and offer various payment services without intermediaries. Prior to this license, Flutterwave operated with its Payment Solution Service Provider (PSSP) and International Money Transfer Operator (IMTO) licenses. Read more: Business Insider
While there has always been a strong desire to boost Arab-Africa trade, the rhetoric has largely failed to match the delivery. Arab-Africa trade has been static at 17% of the continent’s total trade for the last seven years, with China and the EU by far its two largest trading partners. Continental trade with its Arab neighbours according to Afreximbank is estimated at a mere $80bn in 2021. But the signs are that the trade and investment winds of change are blowing over the continent from the north-eastern enclave of Arab countries centred around Egypt, the new gateway to sub-Saharan Africa (SSA). Read more: African Business
The summit between Japan and Africa finished on Sunday with a promise of $30 billion in investment in African aid. Speaking via video link, Japanese Prime-Minister, Fumio Kishida, also promised to pressure for an African seat at the UN Security Council. The summit held in Tunis also served as a platform for business between Japan and the Continent. Read more: Africa News
Worries over the prospects for the UK economy led the pound to slide by about 5% against the US dollar in August. The last time the pound fell so much against the dollar was in October 2016, in the aftermath of the Brexit vote. Sterling sank again on Thursday morning, dipping below $1.16 on the currency markets. Analysts said the fall reflects the darkening outlook for the economy, with consumers and businesses facing rising prices and soaring energy bills. Read more: BBC News
Capital Markets Report
In 73 trades recorded yesterday, 60,136 shares were transacted resulting in a turnover of K94,792. A share price gain was recorded in Chilanga Cement of K0.01. Share price losses were recorded in Standard Chartered Zambia and ZAMEFA of K0.01 and K0.08 respectively. Trading activity was also recorded in Bata, Copperbelt Energy Corporation, Investrust, Real Estate Investments Zambia, Zambeef, Zanaco, ZAFFICO and CEC Africa on the quoted tier. The LuSE All Share Index (LASI) closed at 7,013.48 points, 0.05% down from its previous close of 7,017.34 points. The market closed on a capitalization of K71,460,086,535 including Shoprite Holdings and K36,677,401,095 excluding Shoprite Holdings.