Good afternoon. Here’s what you need to know
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Zambian manufacturers identify infrastructure gaps as key hurdle to Africa’s integration
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US Justice Department accuses Visa of illegal monopoly that adds to the price of ‘nearly everything’
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Global economy growth to stabilize at 3.2% in 2024, 2025 – OECD
In Local Business and Finance News
President Hakainde Hichilema says there is need to urgently prioritise investments in education to ensure that youths are adequately prepared for the future. President Hichilema says it is critical for Africa’s leadership to prioritise foundational literacy, numeracy and social learning. The President was speaking when he virtually addressed the Association of the Development of Education in Africa (ADEA) in which he is the Global Champion of Foundational Learning. He said his administration will continue to work with all partners to advocate for increased investment in education with foundation learning at the heart of the development agenda. Read more: ZNBC
A seven-member delegation from the Energy Regulatory Board of Zambia has paid a three-day working visit to Ghana’s National Petroleum Authority (NPA) to understudy the Authority’s operations in the regulation of the petroleum downstream industry. The team was to have a better insight into the Unified Price Petroleum Fund (UPPF), fuel marking, and electronic cargo tracking, amongst others from September 18th to 20th, 2024. In her remarks at a meeting with the Zambian team in Accra on Friday, a Deputy Chief Executive of NPA, Mrs Linda Boamah Asante, who stood in the stead of the Chief Executive, Dr Mustapha Abdul-Hamid, expressed profound appreciation to the Zambian Energy Board for their continuous engagement with the NPA. Read more: Ghanaian Times
The Zambia Association of Manufacturers (ZAM) has identified inadequate infrastructure at entry points, roads and railways as major obstacles to Africa’s economic integration. ZAM president, Ashu Sagar, noted that despite the establishment of numerous free trade areas across the continent, Africa’s integration efforts had faltered. Speaking at the 2024 Exporters’ Competitiveness Workshop at Protea Tower Hotel in Lusaka on Tuesday, Sagar emphasised that Africa conducted the least amount of trade with itself compared to other regions. He pointed out that intra-African trade remained stubbornly low, at just 15-20 percent, while Europe and Asia consistently report figures of 60 percent and above. “It is no coincidence that poverty and unemployment remain widespread in our economies,” Sagar remarked, adding that Africa’s largest trading partners are outside the continent, a reality that holds true for Zambia and many other African nations. Read more: Zambia Monitor
Somalian President Hassan Sheikh Mohamud has commended the Zambian government for its inclusive policies that foster a welcoming environment for foreigners residing in Zambia. President Mohamud commended Zambia’s efforts in encouraging foreign participation in the economy, particularly through business ventures. He made these remarks while receiving Letters of Credence from Zambia’s Ambassador to Ethiopia, Rose Sakala, who also served as Zambia’s Ambassador Extraordinary and Plenipotentiary to Somalia. “I urge you to promote investment opportunities for the Zambian private sector in Somalia, especially in areas such as mining and tourism, where both countries can collaborate effectively,” President Mohamud said. He emphasized the importance of strengthening bilateral ties between Somalia and Zambia, noting that enhanced cooperation would be mutually beneficial for both nations. Read more: Zambia Monitor
In International News
U.S. Vice President Kamala Harris has announced a basket of economic proposals aiming to lower living costs for middle and lower-class Americans and boost the economy overall by using tax incentives and other tax shifts. Some of her ideas build on unfinished business in President Joe Biden’s economic agenda but expand their scope and size. Harris has echoed President Joe Biden’s promise not to raise taxes on households that earn less than $400,000 a year. She has quietly endorsed most of the nearly $5 trillion in tax hikes over a decade in Biden’s fiscal 2025 budget proposal, which would boost the top income tax rate to 39.6% from 37%. These include a new 25% minimum tax on people with fortunes exceeding $100 million, including on unrealized capital gains. For those earning more than $1 million annually, Harris has proposed raising the long-term capital gains tax rate paid after selling assets like stocks to 28% from 20%, an increase far smaller than the 39.6% full top income tax rate proposed by Biden. Harris has proposed increasing the corporate tax rate to 28%, partially reversing former president and Republican rival Donald Trump’s 2017 tax law that cut company tax rates to 21% from 35%. The step would raise $1 trillion for the federal government over a decade, budget experts estimate, but cut into company profits, Wall Street says. Big U.S. companies pay a far lower effective tax rate than their foreign competitors at an average of 16%, a Reuters analysis showed. Any broad corporate tax changes would need to be passed by Congress. Read more: Reuters
Governments need to cut spending and raise taxes to bring down debt and recover the fiscal firepower needed to respond to future economic shocks, the OECD has warned. Large economies have now “turned the corner” in tackling inflation, the Paris-based organisation said on Wednesday. In its new forecast, the OECD said price pressures would continue to ease and global GDP growth was set to stabilise at 3.2 per cent in 2024 and 2025. This should create space for central banks to continue cutting interest rates, although the timing and pace of reductions would need to be “carefully judged”, the OECD said. But it urged governments to step up efforts to contain spending and boost tax revenues to rebuild fiscal buffers. Please use the sharing tools found via the share button at the top or side of articles. “Fiscal issues have not been given enough importance in the past few years,” said Álvaro Pereira, the OECD’s chief economist, noting the growing pressures of ageing populations, climate change, rising defence spending and higher debt service burdens. “The sooner the better in restoring fiscal discipline.” The OECD’s intervention came against a backdrop of growing alarm over France’s ability to close its budget deficit, with Paris asking for a delay in submitting its plans on how it will comply with EU rules. Bank of France governor François Villeroy de Galhau on Wednesday said it was “not realistic” for the French deficit to meet the EU rule of 3% of its GDP in the next three years, but that this could be achieved within five years. Meanwhile the relative reliance of global growth hides a sharp transatlantic divergence. The US economy is set to grow by 2.6 per cent in 2024 and 1.6 per cent in 2025 on the new OECD projections, while the eurozone is expected to grow by just 0.7 per cent this year and 1.3 per cent in 2025. Read more: Financial Times
U.K. Prime Minister Keir Starmer insisted on Tuesday that tough decisions taken now will spark a new era for Britain, as he sought to shake a fog of pessimism that has clouded his new premiership. “Change must mean nothing less than national renewal,” he told a crowd of Labour Party delegates Tuesday. Starmer lambasted the previous Conservative government for decimating public services and destroying trust, insisting that politics could be a “force for good” as he outlined Labour’s plan for progress. “We must build a new Britain” he said. The prime minister’s efforts to instill a sense of optimism come after the government has been accused of doom-mongering over the state of the U.K. economy and providing little detail on how it plans to improve things. Among his government’s progress so far, Starmer cited settling the NHS doctors’ strike, new solar projects and offshore wind farms, planning reforms, stopping no-fault evictions, the creation of a National Wealth Fund, and legislation to renationalize railways. Starmer used his speech to repeat his five priorities for securing the so-called national renewal: boosting economic growth, reforming the National Health Service, enhancing Britain’s borders, improving education and shifting to clean energy. Read more: CNBC
(UPDATED) The US has filed a lawsuit against Visa, accusing the financial giant of illegally stifling competition to maintain a monopoly over the debit card market. It said Visa had punished companies that wanted to use alternative payment networks and paid off potential competitors to keep its hold over the market. The Department of Justice said the moves had slowed innovation and led to significant additional fees for American consumers and businesses. Julie Rottenberg, Visa’s general counsel, said businesses and consumers chose Visa because of its “secure and reliable network”. “Today’s lawsuit ignores the reality that Visa is just one of many competitors in a debit space that is growing, with entrants who are thriving,” she said. “This lawsuit is meritless, and we will defend ourselves vigorously.” The filing against Visa is the latest competition lawsuit from the Biden administration, which has taken a more aggressive approach to monopoly concerns, known as antitrust in the US, than previous administrations. The company’s practices have also faced lawsuits and scrutiny from merchants and competition regulators in other parts of the world including in Europe and Australia. The Department of Justice started investigating Visa in 2021. The company processes more than 60% of debit transactions in the US, according to the complaint, bringing in $7bn in fees annually. Read more: BBC News
Finally, Capital Markets News
In 143 trades recorded yesterday 27,237 shares were transacted resulting in a turnover of K141,525.94. The following price changes were recorded yesterday: -K0.22 in Airtel, +K0.02 in British American Tobacco Zambia, +K0.15 in CEC Zambia, +K0.02 in Standard Chartered Bank Limited, -K0.01 in Zambeef Breweries and -K0.01 in ZANACO. Trading activity was also recorded in Bata, Chilanga Cement, Pamodzi, PUMA, Zambia Reinsurance, ZCCM, Zambeef, ZANACO and CEC Africa on the quoted tier. The LuSE All Share Index (LASI) closed at 15,978.01 points, 0.34% lower than its day previous close. The market closed on a capitalization of K149,715,837,512.66 including Shoprite Holdings and K81,780,905,012.66 excluding Shoprite Holdings.
A total of 4 Govt Bond trades with a total quantity of K1,825,000 and turnover K1,848,450 were processed yesterday.