Good afternoon. Here’s what you need to know
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Zambia export development fund secures $25 million to boost non-traditional exports
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ZESCO applies for emergency upward tariff adjustment
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IMF denies pressuring govt, IDC to sell assets
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MTN Group suffers major loss as Nigeria currency devaluation bites
In Local Business and Finance News
The recently concluded first-ever Zambian-organized Energy Forum for Africa Conference in Lusaka, Zambia, was a pivotal event in Zambia’s quest to address its mounting energy crisis. President Hakainde Hichilema, who was Guest of honor at the Conference, was clear on governments concern over the energy crisis. The energy deficit facing the nation is not just an economic issue but a national security concern that has far-reaching implications for job security, economic growth, and national development. His Excellency noted: “We are challenged by the energy deficit in Zambia – we have an energy crisis in this country, region and beyond in the continent. This context is why we should work in a different way, not business as usual- otherwise we will not be able to deliver on our agenda. In energy we trade in the same regional market, that’s why you see GreenCo there – we trade in the same market so we are happy to be part of the solution. Your agenda is our agenda, I don’t like people always looking at each other as competitors, it’s the complimentary that we seek”. Read more on Financial Insight
Zambia’s energy regulator is considering an application from the state-owned power utility to increase electricity tariffs by as much as 156% as an emergency measure to cover drought-induced losses. The price rise will help Zesco Ltd., as the utility is known, to raise $14 million from retail electricity users, the Energy Regulation Board said in in a statement published on its website Aug. 16. Zambia’s electricity shortage has rapidly worsened as an El Nino-induced drought caused water levels to plunge at the hydropower dams it relies on for about 85% of generation. At Kariba, the biggest, the nation is set to deplete its water allocation by the end of September, according to Zesco. The emergency tariff increase threatens to further fan inflation already running at 15.4% in July. Read more: Bloomberg (via Energy Connects)
International Monetary Fund (IMF) Resident Representative in Zambia Eric Lautier has refuted claims that the institution is pressuring IDC to offload some of its assets. Lautier observes that there’s too much politics in economic discourse at the moment. On Wednesday, PF faction president Miles Sampa alleged that IDC was facing pressure from IMF and that’s why it was offloading assets and being instructed to remove President Hakainde Hichilema from serving as board chairperson. But reacting to Sampa’s allegation in an interview, Thursday, Lautier observed that the current economic debate in the country was devoid of facts. Read more: News Diggers
The Energy Minister, Makozo Chikote, held a press briefing to address the nation on the current energy situation, highlighting the challenges and measures being implemented to manage the country’s power supply. This week, the available power generation remains at an average of 890 megawatts, significantly below the installed generation capacity of 3,777 megawatts. The national peak demand stands at 2,400 megawatts, leaving a power deficit of 1,510 megawatts. To mitigate this shortfall, ZESCO Limited, along with other traders, is importing 496 megawatts of power from the region. However, this still leaves a net deficit of 1,014 megawatts, resulting in over 12 hours of power rationing across the country. The water levels at the country’s major reservoirs, including the Kariba Dam, continue to decline. The Kariba Dam currently holds only about 10% of usable water for power generation, with a high utilization rate required to meet demand. With ZESCO’s water allocation at Kariba nearing depletion, the power deficit is expected to increase by 300 megawatts. Additionally, scheduled maintenance at Maamba in September 2024 is expected to cause another 135 megawatts deficit, leading to an extension of power rationing hours to 17 hours daily starting September 1, 2024. Read more: Lusaka Times
The Southern African Development Community (SADC) has officially endorsed Zambia’s Samuel Maimbo as its candidate for the African Development Bank (AfDB) Presidency. The decision was finalised during the 44th Ordinary Summit of SADC Heads of State and Government, which convened on Sunday in Harare, Zimbabwe. This endorsement was announced in a statement released by the Ministry of Foreign Affairs and International Cooperation in Lusaka. According to the statement, Maimbo was selected through a rigorous and competitive process, emerging as the preferred candidate among seven other contenders. “Maimbo was selected through a competitive process, emerging winner among seven contestants,” the statement read. Read more: Zambia Monitor
The Zambia Export Development Fund (ZEDF) has successfully secured US$25 million in third-party funding from development finance institutions, investors and other supporters to bolster local firms. ZEDF claims to be a leading financier of Non-Traditional Exports (NTE) for Zambia’s Small and Medium Enterprises (SMEs) and other firms. It reported that new funding would enable ZEDF to provide affordable and appropriate financing to non-traditional exporters, significantly contributing to the growth of NTEs and the creation of jobs. In a statement issued on Friday, ZEDF Board Chairperson, Biemba Maliti, expressed optimism about the impact of the increased funding. “This funding support, which raises the fund base from US$4 million to US$29 million, would enable ZEDF to expand its financing base, increase the loan size and tenor, launch new financing capabilities and provide its customers with a broadened range of financing products,” Maliti said. Read more: Zambia Monitor
In International News
Africa’s largest telecom operator, reported a half-year loss on Monday, impacted by the devaluation of the Nigerian naira and operational difficulties in Sudan. MTN Group, Africa’s largest telecom operator, reported a half-year loss on Monday, impacted by the devaluation of the Nigerian naira and operational difficulties in Sudan. The group reported a loss of 7.39 billion rand ($414.7 million) for the six months ending in June, compared to a profit of 4.14 billion rand in the same period last year, according to a statement released on Monday. The loss is MTN’s first since it paid a fine of more than $1 billion imposed on the company by the Nigerian government, per Bloomberg. Read more: Business Insider
South Africa’s rand is experiencing its longest winning streak in 13 years. The currency has gained for nine consecutive days, reaching its highest closing level in five weeks. South Africa’s rand is experiencing its longest winning streak in 13 years. At 07: 05 GMT, the rand traded at 17.97 against the U.S. dollar. The currency, often viewed as a key indicator of emerging market trends, has gained for nine consecutive days, reaching its highest closing level in five weeks. This marks its best performance against the dollar among 150 global currencies tracked by Bloomberg. Investor confidence in South African assets has surged since a pro-business coalition took power two months ago, coinciding with an improvement in the country’s economic data. Read more: Business Insider
Democratic candidate Kamala Harris has promised to “bring down costs and increase economic security for all Americans” in one of her first major policy speeches in the United States presidential campaign. The US vice president, who secured the Democratic nomination after President Joe Biden dropped out of the race last month, put forward a set of proposals on Friday that she said would help boost the economy and combat food “price gouging”. “I will be laser-focused on creating opportunities for the middle class,” Harris told a crowd of supporters in North Carolina. “Together, we will build what I call an opportunity economy.” The plan includes an effort to end so-called price hikes on groceries, with Harris saying she would seek to pass a “first-ever federal ban” on the practice. She also proposed a scheme to provide $25,000 in support for some first-time homebuyers, as well as tax incentives for affordable home builders. Read more: Al Jazeera
The U.S. and China last week signed agreements for cooperating on financial stability, according to a People’s Bank of China readout Monday. The agreement was part of a meeting of the U.S.-China Financial Working Group in Shanghai on Thursday and Friday. Brent Neiman, deputy under secretary for international finance at the Treasury Department, and Xuan Changneng, deputy PBOC governor, co-lead the working group. The two sides also exchanged a list of people to contact in the event of financial stress or risk events, the PBOC readout said. A Treasury readout was not available as of early Monday afternoon Beijing time. Representatives from the Federal Reserve, U.S. Securities and Exchange Commission, National Financial Regulatory Administration and China Securities Regulatory Commission also attended, the PBOC said. The readout described the conversation as “professional, pragmatic, candid and constructive,” according to a CNBC translation of the Chinese statement. Topics discussed included capital markets, cross-border payments and the two countries’ monetary policy. Read more: CNBC
Gold prices have been hitting new highs and analysts expect more records, with some forecasting the metal to hit $3,000 per ounce next year, as the U.S. Federal Reserve meeting draws closer. Spot gold held steady at last session’s record high of $2,508.14 per ounce, according to data from FactSet, while U.S. gold futures jumped 0.16% to set a new record of $2,540.8 per ounce during Monday Asia hours, extending gains from Friday. “2024 is the year where gold is supposed to reach multiple highs,” said Sabrin Chowdhury, head of commodities analysis at BMI, citing gold’s appeal as a safe haven asset. “Gold thrives from uncertainty… [and] uncertainty is at its peak,” she added, referring to 2024 being the year of elections, Ukraine’s recent incursion back into Russia and growing Middle East tensions. Israel and Iran appear on the verge of a direct conflict after Iran vowed to retaliate following the assassination of Hamas political leader Ismail Haniyeh in Tehran earlier this month. Israel has placed its military on high alert, and the U.S. sent a carrier strike group and guided-missile submarine to the region to support its ally’s defense. Another factor driving bullion prices is increasing chances of a Fed rate cut in September. July’s Fed meeting bolstered investor confidence that a rate cut next month is “on the table.” Read more: CNBC
Finally, Capital Markets News
In 35 trades recorded on Friday, 48,956 shares were transacted resulting in a turnover of K345,607.25. The following price changes were recorded on Friday: +K0.47 in Puma, -K0.02 in Standard Chartered Bank Limited and -K0.01 in Zambia Sugar. Trading activity was also recorded in Airtel, CEC Zambia, Chilanga Cement, Real Estate Investments Zambia, Zambia Breweries, Zambeef and ZANACO on the quoted tier. The LuSE All Share Index (LASI) closed at 14,414.34 points, 0.31% higher than its previous day close at 14,369.95 points. The market closed on a capitalization of K118,269,939,512.26 including Shoprite Holdings and K74,791,582,712.26 excluding Shoprite Holdings.
10 Govt Bond trades with total quantity K265,190,000 and turnover K187,774,910 were processed on Friday.
