The Center for Trade Policy and Development says there is need for Zambia to put in place robust measures towards supporting and strengthening agriculture value chains.

The CTPD has also called government to consider short-term exemptions and modifications on taxation and labour legislation to prevent a total collapse of the commodity supply amid the COVID-19 outbreak.

Dr Simon Manda, the CTPD Senior Researcher thinks that Government should work with private sector players in ensuring that adequate logistical measures are put in place to facilitate the movement of agricultural commodities from place of production to the market.

He said the measures should ensure that agricultural production and marketing continues uninterrupted despite the COVID-19 outbreak especially that the country is a few weeks way from commencing the 2019/2020 agriculture marketing season.

Dr Manda said research is urgently required in profiling the implications of COVID-19 on Zambia’s agri-food system in order to not only map out actual agro-value chain impacts of COVID-19 but also to suggest possible recommendations for strengthening agricultural value-chains and boosting the economy post outbreak period.

“We further call for more sensitization targeting the farming communities, especially small-scale farmers who live outside the line of rail were information is hard to reach. The outbreak of the coronavirus in China is a serious threat and that the impacts on the agriculture sector and related value-chains remain uncertain and are yet to be understood fully”, he added.

Dr Manda noted that there is an increasing concern about whether there will be enough global food supplies at affordable prices for all countries adding that the availability of agricultural supplies cannot be guaranteed, and where it is guaranteed access has been challenged by social restrictions, challenging effective utilization across various uses and consumption patterns.

“Elsewhere for instance, European production is very well integrated into global value chains, via which intermediate goods and services are traded. The President of Zambia, Edgar Lungu has responded to the outbreak by announcing measures to contain its spread. These and with other measures are expected to have profound impacts on Zambia’s agricultural markets and wider performance of the sector”, said Dr Manda in a statement.

He said in terms of Zambia’s imports, the world market is reportedly well stocked in all food items and that any potential periodic shortfalls will mainly arise due to logistical disruptions caused by lock downs and restrictions on the movement of goods.

Dr Manda said this would only be the case for the specific agricultural items that are typically imported from affected regions in the world market such as Asia and Europe.

He said longer-term impacts on the agri-food labour force could possibly have more significant socio-economic implications.

“For instance, recent reports have shown an increasing important on seasonal workers such as in sugar sub-sector. COVID-19 will have a direct impact on agricultural production by inducing a drop-in labour supply”, he added.

The Zambia United Local Authorities Workers Union and the Fire Services Union of Zambia have commended the government for the timely funding of the local government equalization fund.

The allocation amounting to K75 million will fund about 100 out of the 116 local authorities, a move the two Unions say will go a long way in motivating the employees.

They have encouraged Government to continue with the same commitment they have continued to demonstrate in ensuring that local authorities are timely and adequately funded.

In a joint statement issued by Emmanuel Mwinsa, the ZULAW General Secretary and Clement Mulenga, the General Secretary of the Fire Services Union of Zambia, the two Unions expressed confidence that the resolutions collectively made by concerned parties will continue to be respected for the betterment of service delivery by local authorities.

Meanwhile, the two Unions are concerned with revelations by Lusaka Mayor Miles Sampa that Lusaka City market generated over K13 million in 2019 and that only K600, 000 was remitted to the Lusaka City Council main bank account.

They have since called on the town clerk to immediately investigate the matter and ensure that culprits involved in the misappropriation of the funds are brought to book and face the full wrath of the law.

Patriots for Economic Progress President Sean Tembo says he has noted with much consternation the statement that was issued by the Bank of Zambia regarding measures intended to stimulate the Zambian economy in view of the COVID-19 pandemic.

Mr Tembo says the measures that have been announced by BOZ are disjointed, impractical, vague and merely intended to give a false perception that BOZ is doing something about the current economic situation when in fact not.

He said the first measure announced by the Bank of Zambia was that it has set up a medium-term refinancing facility of K10 billion to be accessed by financial service providers in Zambia which is not a genuine measure because before BOZ can talk about lending money to financial service providers as a way of mitigating the economic impact of COVID-19 as they should first of all pay back all the money the Government owes these financial service providers in unremitted loan deductions from civil servants done at PMEC which are currently estimated at K2 billion.

Mr Tembo said it is hypocritical of Government to talk about lending money to institutions that they owe money instead of firstly paying back what they owe.

He said the second measure announced by the Bank of Zambia which is to scale up open-market operations in order to increase short-term liquidity to commercial banks lacks specificity and is vague as it does not outline what those open market operations are.

Mr Tembo said it is therefore meaningless and unlikely to have any positive impact on Zambia’s ailing economy.

On the third measure announced by BOZ is that it will revise rules related to inter-bank foreign exchange transactions, Mr Tembo said just like others, this pronouncement lacks specificity and is vague as it does not outline what those rules related to inter-bank forex transactions which will be revised, are.

Mr Tembo said the fourth and fifth pronouncements made by BOZ to relax rules related to loan classification and provisioning as well as extend the transitionally period for the application of International Financial Reporting Standard (IFRS) 9 which is an accounting standard that regulates the classification, measurement, impairment, presentation and disclosure of financial instruments such as loans have dire financial and economic consequences because Zambia’s financial reporting system will not be compliant with that of the rest of the world.

Mr Tembo said International Financial Reporting Standards are issued by the International Accounting Standards Board (IASB) and IFRS 9 in particular was issued on 24th July 2014 to replace IAS 39 and was optional during the transitionally period until 1st January 2018 when it became mandatory.

“It must further be noted that the Bank of Zambia has no authority whatsoever to defer or postpone the application of IFRS 9 as only the IASB is vested with such authority. It therefore follows that the pronouncement by BOZ to extend the transitionally period for the application of IFRS 9 to Zambian FSPs is utra vires, inconsequential and done without due research and advice on the matter. It must be further noted that other regulators have equally found IFRS 9 to be a thorn in the fresh for FSPs in view of the COVID-19 pandemic, but they have not called for its suspension because it is a worldwide accounting standard”, he added.

He said a case in point is the European Banking Authority which has issued an advisory that the application of IFRS 9 in view of the COVID-19 pandemic must be done by taking all factors into account including the economic stimulus packages that are being implemented by respective Governments.

Mr Tembo said the sixth pronouncement to allow financial institutions to use capital instruments that do not qualify as equity for purposes of computing capital adequacy levels amounts to window-dressing of the financial statements of these FSPs and is illegal as it conflicts with the requirements of section 251 of the Companies Act, 2017 and also amounts to fraudulent false accounting.

He added that measures 7 and 8 talk about reducing the cost of digital payment channels and are commendable, although most financial service providers are unlikely to immediately comply and there is need for the Central Bank to enforce timely compliance.

He has since urged the Bank of Zambia to revisit the majority of the pronouncements made in its communique and ensure that such measures are consistent and not in conflict of international and local laws and regulations.

Mr Tembo has acknowledged the efforts being made by BOZ to try and mitigate the economic impact of COVID-19, but such measures should be properly researched and well advised, otherwise the medicine may end up being more fatal than the disease.

South African clothing chains Edgars and Jets have filed for bankruptcy, sending over 270 workers on the streets.

In a notice to employees, EDCON Limited, the owner of Jets and Edgars clothing stores have applied for voluntary liquidation.

They say they are shutting down Jets and Edgars operations in Zambia because the stores have faced unprecedented financial challenges.

They claimed that the business is not making profits in Zambia.

One of the over 270 workers affected said in an interview that the South African bosses have already left the country leaving the workers stranded.

“The company has experienced unprecedented financial difficulties reflected in the poor performance, coupled with the expected massive impact of COVID-19 pandemic on the manufacturing and retail industry, which may likely result in a complete shutdown of EDCON Ltd (in South Africa). We were compelled to critically review our business initiatives, retail footprints and store portfolios,” reads the letter in part.

“Our operations in other territories in Africa could not escape this critical review. In Zambia, the majority of our stores are not profitable in either of our brands (Jet and Edgars) and combined, they recorded a moving annual negative EBIT of R21.3m as at the end of January this 2020.”

The letter also highlighted some factors contributing to the loss as property rentals which were paid in US dollars and South African rands, the requirement to implement computer hardware for the real time monitoring of the sales at a cost of “+R3.5m as well as the cost associated with the supplying of stock to the Zambian operators.

It further stated that the company had considered all possible options in trying to sustain the operation from South Africa without placing EDCON South Africa in more financial hardships.

However, the letter clarified that the company has been unable to secure any significant assistance from the landlords or other key stakeholders in Zambia in that regard.

“It is therefore with regret that we have to inform you that we will apply for a creditor led liquidation in terms of Section 95 (1) of the Corporate Insolvency Act, No, 9 of 2017. The creditor’s meeting will be held on 24 April 2020, where the creditor’s resolution to liquidate the company will be put to the creditors of the company and passed. Meetings will be scheduled with management at which matter of staff welfare will be addressed. PWC have been appointed to manage the process with the assistance of Musa Dudhia and company (attorney).”