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Budget Must Undesrscore Progressive Fiscal Reform To Enhance Domestic Revenue Mobilization While Prioritizing Expenditure

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By Nalucha Nganga Ziba Country Director – ActionAid Zambia

As the finance Minister Dr Bwalya Ng’andu presents the 2021 national budget in parliament on September 25, 2020. We share our expectations.

EXPENDITURE SIDE

Both covid-19 and high public debt levels presents a fiscal challenge for the provision of public services. 2021 national budget must, therefore, clearly identify priority expenditure. With limited resources, the 2021 national budget must demonstrate the need to ensure sustainable spending specifically on key and strategic sectors which will assure both citizens resilience to the socio-economic impact of Covid-19 and economic recovery. This is in line with observations made by the President in His State of the Nation Address on 11th September 2020, that “economic recovery post Covid-19 era must be a national priority”

We would like to see a significant allocation towards education, health, social spending and economic recovery. We believe that income security in social spending promotes dignified life more especially during the Covid-19 pandemic. We would, therefore, like to see an increase in the budgetary allocation towards social protection from an average of 2.8% in the past ten years to at least 5% of the total 2021 National Budget.

Though Zambia has not been hit as hard as other countries, we, however, observe that COVID-19 has exposed starkly the underfunding of the health sector in Zambia. With Covid-19 we have seen how the provision of other health care services haves suffered due limited number health personnel and inadequate health facilities.

In the past ten years national budgetary allocation towards the health sector has not only be short of the 15% Abuja declaration commitment but it has also been declining since 2013. We wish to remind the government amidst the battle against Covid-19 which is far from over, the 2021 national budget should seek to secure adequate funds for the health sector to assure the country’s ability to respond/mitigate possible surge in the Covid-19 cases and continuation of the provision of other health care services. We expect the 2021 national budget to at least meet the 15% Abuja declaration national budgetary commitment.

The 7NDP has identified agriculture as the main vehicle for achieving economic diversification and job creation. We, however, note with dismay that budgetary allocation toward this critical sector has not only been insignificant but that also it has dwindling in the past five years. In 2020 the agriculture sector only received 3.7%; this is usually couple with erratic disbursement.

We also observe that major part of the agriculture budgetary allocation usually goes to activities such as purchase of Maize under Food Reserve Authority (FRA) and the politicized Farmer Input Support Program. Indaba Agriculture Policy Research Institute (IAPRI) observes that in the 2019 Agriculture Budget 50% of the allocation went to FISP, 23% FRA, 16% Personnel Emoluments, 7% other and 4% Operational Funds (RDCs). With FISP Program there have been several challenges observed such as poor targeting. Consequently, despite the Program running for many years the benefits have been minimal.

It is our considered view that the allocation to the agriculture sector should focus more on: Research and Development, Irrigation Development, Extension services. Expenditure in these areas will transform the Agriculture sector in terms of improved productivity in the context of climate change.

ActionAid Zambia also expects serious and/or signification reduction in the budgetary allocation towards, Road Infrastructure and Public Order Management in the 2021 national budget. Many stakeholders including ActionAid have observed that Zambia is generally a peaceful Country as such high budgetary allocations to Public Order more that than the allocations towards Social protection is not only questionable but also unrealistic as this can be attributed to the deteriorating human rights situation of the country in line with state brutality.

REVENUE SIDE

Covid-19 presents a mammoth challenge for resource mobilization for the government. It is, however, suffice to note that the pandemic also presents a compelling need and/or demand of adequate provision of public services. ActionAid Zambia, therefore, expects the 2021 National Budget to underscore progressive fiscal reform to enhance domestic revenue mobilization while offering macroeconomic stimulus to regain economic growth.

We are of the considered view that in order to expand the fiscal space which will enable us to provide the much needed public services and the sustainable financing necessary for long-term socio-economic resilience, there is need first to urgently fight aggressive tax evasion and tax avoidance, including illicit financial flows. Zambia is signatory to many detrimental tax treaties such as the recently cancelled Mauritius tax treaty which have proved to be the major contributor of tax avoidance and/or evasion by most multinational corporations.

Zambia is also still giving tax incentives to various investors without any significant economic benefit. We, therefore, expect the government to suspend and/or cancel all the tax incentives and treaties proving to be of no economic sense and redundant in the 2021 national budget. This will expand the revenue base for the country in the wake constrained fiscal space.

We also expect the government to introduce the long-awaited capital gains tax and categorical net-wealth tax to further expand tax and/or revenue base. Personal Income in PAYE is largest contributor to Zambia tax revenue. The current personal Income tax largely targets working and middle-class taxpayers leaving out the higher earners who typically make most of their money from investments and property holdings. Net wealth tax, will, therefore, not only increase government revenue but also make the tax system more progressive and fairer.

Additionally, though Covid-19 has been a thorn to the Zambia economy and the majority people not only in Zambia but around the globe, some industries and/sectors have, however, benefited significantly from the pandemic. ActionAid, therefore, expected the introduction of variable Profit Taxes or an excess profits tax in the 2021 national budget for the most profitable industries during the COVID_19 pandemic period.

Finally, in the wake of Covid-19 most businesses including SMEs have severely impacted, we therefore, expect the 2021 national budget to offer tax relief and/or waiver to the most hit sectors. This will enable businesses time to recover from the impacts of COVID_19 hence triggering economic recovery. Any tax relief, however, must be targeted, cost effective and temporal.

Sexuality Education was Introduced due to Increasing Teenage Pregnancies, STIs and HIV infections-ZANEC

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Zambia National Education Coalition (ZANEC) has said that Comprehensive Sexuality Education (CSE) in Zambia came about because of the increasing cases of teenage pregnancies, STIs and HIV infections especially among girls leading to their dropping out of school.

In a statement released to the media by ZANEC Executive Director, George Hamusunga, in response to criticism of CSE by the Government, traditional leaders, and Zambia’s main Church bodies, ZANEC said that CSE was designed to empower pupils with knowledge on abstinence, culture, society, hygiene, human development, life skills and values to empower teenagers to be more assertive and careful with their sexuality.

ZANEC also said that there was nowhere in the CSE Framework where issues of abortion, transgender, or indeed other inappropriate behaviors are encouraged either directly or indirectly.

Below is the full statement

ZANEC PRESS STATEMENT ON COMPREHENSIVE SEXUALITY EDUCATION
24th September 2020

The Zambia National Education Coalition (ZANEC) has reviewed both Zambia’s Comprehensive Sexuality Education (CSE) framework produced in 2013 as well as the teachers’ guides and learners’ booklets for grades 5 to 12 designed to operationalize the CSE framework in Zambia.

Findings from the review of our CSE materials indicate that the current content is appropriate for the targeted age-groups and is in line with our national values and the best interest of our children.

Among others, the Framework places abstinence at the center of the prevention of teenage pregnancies, STIs, and HIV infections among school-going children. More importantly, the curriculum framework pays particular attention to the limits concerning the modes and styles of communicating CSE information in schools.

Evidence also shows that the rolling of CSE to schools is always preceded by the training of teachers by trainers approved by the Ministry of General Education through the Curriculum Development Center (CDC). In addition, there is nowhere in the CSE Framework where issues of abortion, transgender, or indeed other inappropriate behaviors are encouraged either directly or indirectly.

It is also important to note that the teaching of CSE in Zambia came about because of the increasing cases of teenage pregnancies, STIs, and HIV infections especially among girls leading to their dropping out of school.

It is for this reason that CSE was designed to empower pupils with knowledge on abstinence, culture, society, hygiene, human development, life skills, and values to empower teenagers to be more assertive and careful with their sexuality.

There is no evidence whatsoever showing that the introduction of CSE in schools has led to increased sexual activity and pregnancies. On the contrary, official statistics show a reduction in the number of school pregnancies at the primary school level from 12,753 pregnancies before the introduction of CSE in 2013 to 11,453 pregnancies by 2018 according to the Education Statistical Bulletins.

Finally, ZANEC’s evidence shows that the government through the Ministry of General Education has paid due attention to our local context and values in domesticating the international instruments on CSE. Therefore, the Coalition would like to encourage all education stakeholders and members of the public to take a keen interest in reviewing our CSE Framework and raise specific issues that they deem inappropriate to avoid debates that are not based on our existing policies and practices. It is on this basis that we would like to conclude that there is no locally derived empirical evidence in support of the suspension of the rolling out of CSE in schools.

For/ZANEC 

George Hamusunga
Executive Director

Keep your hands off Nevers Mumba, MMD youths Tell PF

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The Opposition New Hope Movement for Multi-party Democracy (MMD) Youths have warned the ruling Patriotic Front (PF) to keep their hands off their Party President Dr. Nevers Mumba.

New Hope MMD President on Monday revealed that the ruling Patriotic Front rigged the Lukashya by elections and had brought in a South African IT Guru to help them rig next years elections. The following day, PF Deputy Secretary General Mumbi Phiri announced that the PF would take MMD President to Court for him to prove his revelations.

In a change of twist, the Zambia Police yesterday at 13:30 hours delivered two police reports to the MMD National Secretary at Democracy House (MMD Secretariat) where they summoned Dr. Mumba to appear before at Force Headquarters within an hour for Interrogation. Hon. Chitika responded to them that Dr. Mumba was out of town for Party Activities and would only present himself on Monday, the 28th of September, 2020 at 10 hours.

In a statement, MMD Youth Chairman Mr. Joshua Mulenga said that there was nothing sinister about what Dr. Mumba said.

“As the Youths of the New Hope MMD in Lusaka, we are shocked with the reaction of the PF over the revelations of President Mumba. It is open gossip that the playing field wasn’t levelled in Lukashya as there was Vote buying, Violence and rigging was openly done. Our President said that We would soon petition the results of those elections, so we are surprised why the PF are busy trying to intimidate President Mumba and Us from taking the case to Court”, Mr. Mulenga said.

Mr. Mulenga further said that PF are suffering from Memorial Loss because President Sata accused MMD of rigging but was never intimidated.

“Furthermore, we are shocked with the memorial lapses that our colleagues from the PF seem to be suffering from. In 2008, there then President Micheal Sata alleged that the MMD had rigged the Presidential By elections at Mulungushi Conference Centre. Did we as the MMD threaten to take him to Court or send the Police to arrest him with two call outs? Hell, No!! Because We understood what Democracy entails and respected the rule of law, we respected the opinions of President Sata and the PF. So, to Us, the PF are suffering from Memorial losses and President Sata in the grave must be ashamed of them”, Mr. Mulenga said.

Mr. Mulenga further wondered why the PF are panicking over their Dr. Mumba revelations and advised them to keep their hands off him.

“Lastly but not the least, we are wondering why the MMD are panicking over arresting our Party President if they fairly won the elections. The behavior reminds Us of a guilty Person who’s trying to hide his wrong doings. We are hence warning them to leave our President and Our Party alone and concentrate on the recovering the economy which they have messed up”, Mr. Mulenga said.

Mobile NRC issuance exercise in Lusaka gains momentum

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The ongoing National Mobile Registration Exercise in Lusaka has gained momentum.
Lusaka District Commissioner David Silubanje has advised parents and guardians to utilize the 40 days mobile national registration exercise to obtain the national identity cards for the children.

Mr Silubanje said the exercise accords Lusaka residents a rare opportunity to obtain the NRCs closer to their doorsteps unlike the ones offered at static offices at the Lusaka Boma, Chelstone, Matero and Chilenje, which are usually congested.
The Lusaka District Commissioner said this when he toured Chawama constituency where the department of National Registration, Passport and Citizenship is currently conducting a week long issuance of the NRCs.

“I want to warn parents and guardians not to be tempted in bringing children below the prescribed age as doing so will result in serious consequences,” he warned.

“Again, I advise parents and guardians with children above the recommended age to come to the Boma offices so that they can be interviewed why their overage children didn’t get the cards at the right age before they are issued the cards.

Mr Silubanje further warned foreigners not to take advantage of the exercise in tempting them to get the cards saying doing so is a serious criminal offense.

He explained that the current exercise is targeting Zambian citizens who have reached 16 years hence foreigners should not think of attempting of getting the cards.

“The General National Registration Card is a preserve of Zambian citizens only and those with intentions of illegally getting one will be punished. Generally, am happy at the pace at which our officers are working and may l commend Lusaka residents are at the orderly manner in which they are conducting themselves. I want to implore you to be patient with the officers as they discharge their work and every eligible child will be issued with the card,” he said.

And some of the children that were issued with the cards have commended the government for the mobile national registration exercise which has brought the service closer to the people.

Faith Tembo, 17, is happy to have successfully obtained the card after failed attempts to get one from Lusaka’s Boma Office due to overcrowding.

“Am very excited because this year l will be completing my senior secondary school education and l intends to apply for tertiary education next year,” she said.

Kitwe District PF Chairman condemn MMD leader’s utterances

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Patriotic Front Kitwe District Chairman Evaristo Chilufya has urged Zambians to ignore claims by Movement for Multiparty Democracy (MMD) President Nevers Mumba that the ruling party has devised a strategy a rig the 2021 general elections.

Speaking in an interview with ZANIS in Kitwe today, Mr Chilufya said the remarks by Dr Mumba are dangerous and irresponsible especially that they are coming from a senior political leader who once served as Republican Vice President.

Mr Chilufya has urged Dr. Mumba to refrain from misleading Zambians and instead concentrate on mobilizing his party.

“The Patriotic front is a party of the people and it rides on clean politics with a clean record, and in a case, Zambia is not going for elections in 2021 for the first time but has held elections every five years, and no party has ever proved election rigging so, so Dr Mumba should not mislead the public,” Mr Chilufya advised.

He stated that everyone knows that Dr Mumba has for a long time been fighting for the top executive position in his party as such his utterances do not surprise the PF.

He however noted that the young generations that do not fully understand politics could take his claims as true yet they are all lies.

He urged the MMD leader to be responsible and desist from making political claims that would discredit the electoral process and cause chaos in the country.

Early this week, Dr Mumba alleged that the Patriotic Front (PF) has devised a strategy to rig the 2021 general elections.

He also alleged that the ruling party rigged the recently held Lukashya and Mwansabombwe parliamentary by-elections.

Two Teenage Youths buried alive in Mining Accident

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Two youths have died in Mpima area of Kabwe District after the land caved in and buried them as they were mining stones.

Central Province Commissioner of Police, Chola Katanga, has confirmed the development in an interview with ZANIS in Kabwe.

Mr Katanga identified the victims as Evans Kanta and Godfrey Simfukwe aged 19 and 18 respectively all of Mpima area.

“Kabwe police received a report of sudden and unnatural death in which two people namely Evans Kant aged 19 and Godfrey Simfukwe aged 18 both of Mpima area died while they were mining stones,” Mr Katanga said.

He said the incident happened yesterday around 12: 45 hours when the two went into the quarry to mine stones but the earth caved in killing them in the process.

Commissioner Katanga said police together with the fire brigade have visited the scene and have since retrieved the two bodies.

He said the corpses have been deposited at Kabwe Central Hospital mortuary and that the next of kin have been informed.

The police chief observed that a lot of people in the area where indulging in stone mining but could not ascertain whether it was the main source of livelihood.

Chamber of Mines calls on government to organise an indaba

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The Zambia Chamber of Mines has called on government to institute a national indaba in the mining sector to find a ways of enhancing its performance.

Speaking in an interview in Kitwe yesterday, Chamber of Mines Chief Executive Director Sokoni Chilembo said the Chamber expects government to give a signal of how the economic performance of the mining sector will look like in the few coming years.

He said this could be done through interventions such as institution of a national indaba in order to revamp its performance.

“Government has to work out modalities that will ensure that the mining sector is boosted amidst the COVID-19 pandemic, I believe we are not the only country that is doing it, South Africa, Namibia, is doing it as something key to structure our way out of this covid-19,” Mr Chilembo said.

And Mr Chilembo said the chamber of mines expects the Minister of Finance to give various tax relief to the mining sectors as he presents the budget today.

He cited tax relieves such as withdraw of mineral royalty to lower the cost of production and also a reduction of duty on capital equipment coming into the country to enable the sector to grow.

He further explained that the chamber also expects removal of duties on export of ores and concentrates leaving the country.

The Mining sector has this year recorded a significant reduction in production and the reduction has been attributed mainly to the COVID-19 pandemic.

The country has seen the general drop in the economic performance coupled with falling copper prices on the international market.

Finance Minister Bwalya Ng’andu is tomorrow expected to present to parliament the proposed National Budget for 2021 amid various expectation from different stakeholders.

Chipolopolo U15 Beat Bosnia & Herzegovina

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Chipolopolo Under-15 finally got their Eight-Nation Tournament campaign going away in Croatia following a 2-1 win over Bosnia & Herzegovina on Thursday night.

Joseph Banda scored a brace to give them a bright start and give Chipolopolo U15 its debut competitive victory.

Chipolopolo play Romania in their final Group B match on Friday.

“The most important thing is that this game is gone, now we shift attention to the next game we need to focus ,the job is not yet over , we have just started and now we have to wait for the next game,” Chipolopolo U15 coach Chisi Mbewe said.

The win is a huge boost following a frustrating last week for Mbewe’s side who first saw last Sunday’s scheduled pre-tournament friendly in Egypt against Zamalek Youth cancelled.

This is after an administrative hitch over Ciovid-19 testing in Cairo where Chipolopolo U15 had made a two-day transit stop en-route to Croatia.

And then on Wednesday, just 24 hours after landing in Croatia, their opening Group B match against North Macedonia was suddenly called-off at the last minute and that match is now cancelled and the group will be decided in Friday’s round 3 games.

But Bosnia did play on Wednesday when they drew 0-0 with Romania.

PF in Monze calls for a peaceful reception of the President as he visit the district

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The ruling Patriotic Front (PF) in Monze District has warned the opposition United Party for National Development(UPND) cadres against booing and jeering President Edgar Lungu as he tours the District on an official engagement tomorrow.

District Youth Chairperson Titus Chiluba said the party would not tolerate any barbaric behavior aimed at embarrassing the Head of State who will be on official duty in Southern Province.

A few months ago some alleged unruly UPND cadres booed and jeered the head of state when he came to officially hand over housing units for men and women in uniform, an action that was widely condemned.

In a press statement made available to ZANIS today, Mr. Chiluba said just like other citizens, the UPND is expected to give the Head of State due respect especially when he is in the area to attend to matters of development.

President Lungu is expected in Monze to meet Chiefs following their call for the President’s call to declare a new District east of Monze.

The chiefs want the new district to be named after the late Freedom fighter Mainza Chona who hailed from the same area.

“As PF we want to sound a strong and timely warning to the opposition UPND to desist from any kind of barbaric behavior which they exhibited last time by booing and jeering the Head of State. The UPND must know that just like any citizen in this country, we expect them to give respect to the Head of State who is on a mission to steer development for the benefit of the people of Monze,” said Mr. Chiluba.

Mr. Chiluba however, said the UPND has already started provoking the peaceful atmosphere in Monze ahead of the President’s visit by hoisting party flags all over the town.

And in a separate interview, UPND Monze District Chairperson Michelo Kasauta has assured the PF members and President Lungu of a peaceful reception during the entire visit to the District.

Mr. Kasauta said he has engaged UPND supporters throughout the district to refrain from any activities which might undermine the Head of State.

But Mr. Kasauta who is also Bweengwa Member of Parliament advised the PF in the District to desist from threatening the opposition as the President is coming for national duties and not political activities.

Consider COVID-19 in the 2021 Budget – PMRC.

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The Policy Monitoring and Research Centre (PMRC) has observed that the country needs to plan for the 2021 National Budget in such a way that it continues to shield the economy in an event that the negative effects of COVID-19 are still prevalent by next year.

PMRC Executive Director Bernadette Zulu said key sectors that have been negatively affected by the COVID-19 pandemic must be prioritized in the 2021 National Budget to spur economic recovery.

Mrs Zulu explained that there is an urgent need to factor in alternative financing in the 2021 national budget for infrastructure projects in the road, transport and infrastructure sectors especially the roads and airports that are currently being constructed.

In the statement availed to the media in Lusaka today, the PMR Executive Director pointed out that Zambia should begin to position itself by developing a National Continental Free Trade Agreement (CFTA) implementation plan that prepares the country for industries and businesses to participate effectively in the CFTA.

“Industrialization remains very critical and Zambia must review the performance of Industrial Yards and Multi-Facility Economic Zones to establish lessons that can be learnt and then set out a next phase of strategically developing industrial yards across the nations. PMRC also submits that the National Local Content Strategy should also be emphasized across all manufacturing lines,” the statement read in part.

On domestic resource mobilization, PMRC called for the government to accelerate the implementation of the Land Titling Programme, which will significantly contribute to the generation of Government revenues.

She was quick to state that government should provide an update on the operations of the development funds such as the Fisheries Development Fund, Youth Development Fund, Skills Development Fund and the Tourism Development Fund and the progress made towards achieving their intended goals as they are key in the implementation of government programmes.

In the Mining Sector, the policy think tank urged the government to put in place a fiscal regime that will attract the necessary investment, so that the mining sector can make a quick recovery as was the case in 2009.

To further enhance the agriculture sector, PMRC proposes that Government prioritizes upfront funding to the Farmer Input Support Programme (FISP) focusing on the Electronic-FISP as opposed to Direct Input Supply (DIS) as it is cost-effective.

Minister of Finance Dr Bwalya Ng’andu is tomorrow, September 25th expected to present the 2021 proposed national budget at the National Assembly.

EU affirms its support in improving renewable energy

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The European Union(EU) and the French government have pledged to continue supplementing government’s efforts in improving the power generation and access to electricity by all citizens in the country.

European Union Head of Mission to Zambia Jacek Jankowski said the EU has injected at least 240 million euros in the energy sector for the enhancement of modern energy production such as renewable.

Mr. Jankowski pointed out that the EU pays attention to renewable energy as it increases access to electricity by all in the wake of climate change.

Mr. Jankowski explained that renewable energy should be explored by all countries as it is cheap and affordable.

“Securing affordable, accessible, and reliable energy is key for economic growth in any given country and Zambia is among the country that is pursuing renewable energy as it expands the generations of hydro-electricity stations. We pay special attention to renewable energy because it is very cheap and people from rural and urban areas can easily access it,” stressed the EU envoy.

And the French government underscored its continued support to the country in the generation of renewable energy.

Speaking at the preparatory meeting for the Renewable energy conference to be hosted in Lusaka from October 27th to 28th 2020, French Ambassador to Zambia Sylvain Berger explained that France remains steadfast to cushion the load shedding in Zambia that has been necessitated by the effects of climate.

Mr. Berger pointed out that Zambia has the potential of supplying renewable energy in both Southern and Eastern Africa adding that the forthcoming renewable energy conference will be a platform for experts to share knowledge.

He emphasized that the conference being organized by the French Chamber of Commerce will further enhance renewable energy production.

“France and Zambia have cemented bilateral ties in the energy sector as well as other key sectors of the economy. We are collaborating well in the rehabilitation of Kariba Dam and where enhancement of renewable energy production is concerned we are organizing the conference that will bring together over 100 experts in October to share the knowledge,” said Mr Berger.

Meanwhile, the French Ambassador to Zambia whose mandate comes to an end by October month-end described his stay in Zambia as memorable.

Mr Berger recollected that during his stay in Zambia the ties between the two countries have been strengthened.

He pointed out that despite the COVID-19 pandemic, France and Zambia collaborated well in the energy and security sectors.

The French–Zambian Chamber of Commerce is organizing the conference on renewable energy in Zambia that will be held from 27th to 28th October whose major objectives are to access the potential of the renewable energy sector in Zambia and its prospects as well as allowing the private and public stakeholders to debate thematic subjects.

Residents of Kankoyo complain of sulphur dioxide pollution

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A civic leader of Mufulira District says the continued sulphur dioxide pollution from Mopani Copper Mine has damaged most roofs in Kankoyo Township.

Kwacha Ward Councilor Sofa Mwanza said most of their roofs in Kankoyo have corroded and are leaking badly which he said may expose people to rains if left unattended to.

“During the rainy season, people in my ward cannot sleep but stay up all night holding buckets under the leaking parts of the roofs to prevent their homes from flooding,” she said.

She said it has been costly for people to keep changing their roofing sheets as they still get damaged within a short period of time due to the strong emissions.

“My ward is very close to the mine plant and a lot of houses have been affected by these sulphur emissions such that people stay up all night in the rainy season with buckets on their heads just to protect their houses from flooding,” she said.

She said as the rain season draws close, the people of Kwacha Ward in Kankoyo are living in fear, adding that there is need to find a quick solution to the problem.

“My appeal to all stakeholders is that let whatever can be done to help these people be done quickly because they are really suffering, these people are not living well,” she said.

Fitch Downgrades Zambia to near junk status, says debt default is imminent

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Fitch Ratings has downgraded Zambia’s Long-Term Foreign-Currency Issuer Default Rating (IDR) to ‘C’ from ‘CC’.

Fitch has also downgraded the ratings on Zambia’s senior unsecured foreign-currency bonds included in the “consent solicitation” to ‘C’ from ‘CC’.

This includes all of the foreign-currency bonds rated by Fitch.

Fitch typically does not assign Outlooks or apply modifiers for sovereigns with a rating of ‘CCC’ or below.

The downgrade reflects Fitch’s view that a sovereign default will follow the “consent solicitation” issued by the Zambian government on suspending debt service payments on its three outstanding global bonds.

A suspension in payments, if agreed to by bondholders, would constitute a distressed debt exchange (DDE) in Fitch’s view.

“Fitch deems this formal request to be the initiation of a default-like process, consistent with a ‘C’ rating. Should majorities of creditors agree to the request at the thresholds specified in collective action clauses, the payment standstill would constitute a DDE under Fitch’s criteria given that it entails a material reduction in terms and is needed to avoid an outright default,” it said in a statement.

The government has indicated that they will continue to make debt service payments on outstanding Eurobonds if an agreement is not reached.

Fitch however judges that there is a high risk of a missed debt payment over the forecast horizon.

“The sovereign’s already constrained external liquidity was exacerbated by the shock from the coronavirus pandemic.

Fitch downgraded Zambia’s rating to ‘CC’ on 16 April to indicate the increasing likelihood of a default event as a result of these pressures.

Hichani Himonde Joins Ndola United Bench

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Former Chipolopolo and TP Mazembe defender Hichani Himonde has joined Ndola United as an assistant coach.

Himonde, the 2012 Africa Cup champion, has joined the United bench headed by Coach Nchimunya Mweetwa.

Speaking at Musa Kasonka Stadium in Ndola, Himonde said he was excited to be part of the FAZ Copperbelt Division 1 side.

Himonde had been working with a youth academy in Ndola before this appointment.

“I am happy to be here at Ndola United and I am grateful to management. This is a big team with big history. I am coming here to learn as well and contribute to the well being of the club,” he said.

“I can’t wait to share my experience in football with the club. For the club to bring me here, they expect something from me and they have seen something in me,” Himonde said.

He expressed his excitement to work with Mweetwa.

“Mweetwa is like my elder brother, when I was playing for the Under-23, he was playing for the senior national team. He is like a teacher and a brother to me; we have been talking even before I came,” said Himonde.

The Masala outfit is next season aiming to win promotion to the FAZ National Division 1 League.

Bank of Zambia disburses 1.8 billion of the 10 billion Kwacha Stimulus Package

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The Bank of Zambia has disbursed 1.8 billion of the 10 billion Kwacha stimulus package.

According to a Status Update Report circulated by the Central bank, six commercial banks and five non-banking institutions accessed the funds as at September 22, 2020.

The Central Bank has also approved six billion Kwacha which is expected to go to priority and non-priority sectors of the economy.

Meanwhile, 11 banks and 17 non-banks have applied for a total of 7.1 billion Kwacha.

The Central Bank estimates that over 16,800 individuals and households have benefited from the stimulus package.

One of the biggest beneficiaries of the stimulus package is Atlas Mara which has been granted 533 million Kwacha.

Stanbic Bank is the second-largest beneficiary with 494.4 million Kwacha.

Indo-Zambia Bank is third with 323 million Kwacha.