Story of the Day
This September 2022, the fintech inspired Payments Association of Zambia (PayZ) in collaboration with ICT Association of Zambia (ICTAZ) will host its inaugural festival that seeks to bring together like minded stakeholders of an industry that has found itself on the right side of the future of finance. Leading the association in his freshman year is the tech visionary and Chief Executive of Zambia’s largest fintech by corporate client base Roy Muyelu. The Probase Limited founder was a natural choice to lead the payment association in their maiden year as his company has been in the forefront of innovation that until now has remained largely invisible to the discerning customers who “use” the ubiquitous backend solutions in their day -to-day financial transaction. Read more
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The International Monetary Fund (IMF) has released the country report for Zambia containing most of the information on the recently approved Extended Credit Facility (ECF) to the southern African country. According to the comprehensive report, Zambia and the IMF have agreed that the country enhances social sector spending while ensuring fiscal discipline to restore fiscal and economic health. Read more: International Monetary Fund
Zambia wants $8.4 billion in cash debt relief from this year through 2025, from creditors ranging from Chinese state-owned banks to eurobond holders. The nation, which in 2020 became Africa’s first pandemic-era sovereign defaulter, finalized a deal with the Washington-based lender last week for a $1.3 billion bailout and economic program. The government is seeking to restructure its external liabilities that reached $17.3 billion last year, and the IMF report reveals for the first time the forecast economic parameters that will frame talks starting this month. Read more: Financial Times
A total of 9,800 ghost workers were being paid salaries in Zambia’s public service even when they were not rendering any public service, an audit by the country’s Office of the Auditor-General revealed on Monday. This follows an audit of government payroll for the financial years from 2017 to 2021. Dick Chembe, the Auditor-General, said the audit has established that the ghost workers were from 19 different government ministries. He told reporters during a press briefing that irregular payments were also being made to 22,000 other public workers who were not stationed at their pay points while 87 people from three ministries diverted salaries into their personal accounts for people who were no public workers. Read more: Xinhua
Energy Expert Dr. Johnstone Chikwanda says the fuel pump price reduction of August 2022 saved consumers K440 million. Chikwanda said the reduction in the fuel pump price for September 2022 will save consumers K240 million by the end of the month adding that by the end of September 2022, consumers will have been saved a total of K680 million which is considerable combined savings on the part of the consumers. Chikwanda said from January 2022 to July 2022, return on Investment (ROI) in the oil Industry covering Oil Marketing Companies (OMCs) and Retailers deteriorated by at least 40% due to continued price hikes by the regulator while the regulated industry margins remained fixed leading to significant pressure on the working capital thereby leading to recapitalization options in most cases. Read more: Zambian Business Times
International Business and Finance
Common Market for Eastern and Southern Africa (COMESA) estimates that Africa’s intra-trade has the potential to grow to US$100 billion from the current US$9.7 billion. However, this can only be achieved if some of the non-tariff barriers hindering trade in border facilities are eliminated. Some of the barriers include poor border infrastructure, lack of advanced information communication and technology (ICT) equipment and poor road networks leading to the crossing points. Most borders are characterised by long queues and traffic congestion due to non-tariff barriers. Ultimately, this results in reduced trade volumes between African countries. Data capturing in some border facilities is also a challenge due to lack of ICT equipment. To tackle problems of inefficiencies in border posts, COMESA is currently implementing the €48 million Trade Facilitation Project (TFP) funded by the European Union (EU) under the 11th European Development Fund (EDF). Read more: Zambia Daily Mail
The European Central Bank is expected to frontload a series of rate hikes and sacrifice growth in the region due to the rising cost of living which is threatening to surge even higher. ECB Executive Board Member Isabel Schnabel’s speech in Jackson Hole set the tone for the upcoming policy meeting this week. With inflation in the euro zone projected to rise to at least 10% in the coming months and the risk of consumer prices rocketing higher, a “jumbo” rate hike of 75 basis points on Thursday is certainly a possibility. Read more: CNBC
US tech companies that receive federal funding will be barred from building “advanced technology” facilities in China for 10 years, the Biden administration has said. The guidelines were unveiled as part of a $50bn plan aimed at building up the local semiconductor industry. It comes as business groups have pushed for more government support in an effort to reduce reliance on China. They are faced with a global microchip shortage which has slowed production. Read more: BBC News
Oil prices jumped 4% on Monday after OPEC+ crude producers agreed to cut output quotas and Russia said it won’t sell its exports to countries that abide by a US-led planned price cap. Members of the Organization of Petroleum Exporting Countries and their allies agreed at a meeting Monday to reduce production by 100,000 barrels a day from October, surprising analysts who widely expected the group to maintain current levels. Leading oil exporter Saudi Arabia floated the idea last month to ease pricing dysfunction in the oil market. Read more: Business Insider
Capital Markets Report
In 66 trades recorded yesterday, 29,622 shares were transacted resulting in a turnover of K61,169. Share price gains were recorded in Copperbelt Energy Corporation, Standard Chartered Zambia and Zanaco of K0.01, K0.02 and K0.01 respectively. Trading activity was also recorded in AECI, British American Tobacco Zambia, Chilanga Cement and Zambeef. The LuSE All Share Index (LASI) closed at 7,058.61 points, 0.21% up from its previous close of 7,043.90 points. The market closed on a capitalization of K71,656,558,044 including Shoprite Holdings and K36,873,872,604 excluding Shoprite Holdings.