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Economically Empowering Zambians through Infrastructure Investment

File:Some road rehabilitation projects left by the MMD government are still progressing. Here, a grader from Sable Construction levelling gravel and stones on the once rugged Katima Mulilo road in Lusaka. The road will be upgraded from two lanes to four lanes to ease congestion on the stretch.

1. Introduction

Every now and then, especially since the Patriotic Front took over the running of government, the citizenry of Zambia has become accustomed to hearing pronouncements of different projects being launched. In the beginning the people used to get excited and would praise the government for “taking” development to their areas. It was their belief then, and to an extent it is today, that such projects would lift the masses out of poverty. Most of the projects came with massive machinery never seen before in these villages, a horde of foreign cadres (disguised as experts) and a few temporal jobs were given mostly to the men within the particular project area. On completion however, people yes remained with the infrastructure but had no use for it apart from it potentially posing a safety hazard to their livestock and children (in particular road infrastructure). Others have been left with diseases (new
strains of STD’s) that they have never seen before and in some cases loss of business (this is more especially true for bridge projects). The result of the above is that people, particularly within the project areas are no longer interested to hear pronouncements of projects being launched.

On the national front however, the drive for infrastructure development has left the country with huge loans (the exact amount is disputed) and a widened budget deficit. Interest rates have gone sky high mostly due to a number of bad debts that banks have taken on. The end result is that money for the general populace has become so difficult to come by and equally the government is struggling to finance the social
sectors of the economy (evidenced by the constant closures of the universities due to non payment of salaries to staff or indeed failure to pay student allowances, as well as outbreak of cholera).

I do believe however that the above scenario can be reversed over a period of time and in future we may look back at this period and appreciate some of these decisions the current government has made. This will however only come to pass with the concerted effort from both the (Zambian) private sector and government of the Patriotic Front. In the ideas I will expound below, my concentration will be on the Physical Infrastructure side of the economy (due to my background and expertise) but can however be extended to other areas of the economy with minor adjustments.

2. Current Scenario

On the 29th September 2017, former Minister of Finance Felix Mutati, presented the 2018 budget to parliament outlining how he wished to spend the Zambian tax payers’money during the 2018 fiscal year. He dubbed the year 2018 as one that would accelerate fiscal fitness in order to sustain an all-inclusive growth that is would not leave anyone behind. He stipulated a few issues to be achieved as listed below:

  1. Achieve real GDP growth of at least 5.0 percent.
  2. Maintain single digit inflation in the range of 6.0 to 8.0 percent.
  3. Accelerate implementation of measures towards diversification of the economy.He further pledged to align the government policy interventions to the following pillars:a. Economic diversification and job creation
    b. Poverty and vulnerability reduction
    c. Reducing development inequalities
    d. Creating a conducive governance environment for a diversified and inclusive
    economy.

The Patriotic Front government in their first mandate (2011 to 2016) went into full gear trying to empower local people and businesses. The empowerment drive did not end at mere pronouncements but was actualised through the enactment of various acts like the CEEC act that stipulated that citizen owned companies be given preferential treatment in the award of government contracts. Further, the RDA issued guidelines
aimed at reserving a minimum of 20% of the total road construction contract value for the majority citizen owned companies. The overall objective of this 20% rule was to empower local contractors both financially and technically in order to create jobs for Zambian citizens and indeed create a sustainable local contracting capacity. These guidelines were further aimed at keeping some of the money spent on road
construction within the local industry and indeed the local banking sector. Most industry players were optimistic that the trickle-down effects would be numerous such that by the end of the “ambitious” Link Zambia 8000 project, the economy of Zambia and indeed the local engineering and construction sectors would be a marvel to look at.

Alas, the opposite has happened. 7 years since these guidelines came into effect, there is no local construction industry to talk about. The economic performance of the country is not as vibrant as the 2010 – 2011 levels. The engineering sector has received the biggest beating as most firms have had to lay off workers due to nonpayment of service fees by the RDA while others are grappling with court cases.
Yet, on the national front, very big projects are being announced and indeed launched.Some of them include;

  • The Lusaka 400 project phase II and III.
  • The CB400 project.
  • The Ndola airport project.
  • The Millenium challenge funded Lusaka drainage project.
  • The Kafue gorge expansion project.
  • The Lusaka – Kabwe dual carriageway.
  • The Kazungula bridge project.
  • The Kafue hook bridge rehabilitation project.
  • The Kalabo – Sikongo road project.
  • The Mwomboshi dam construction.
  • The Chinsali – Nakonde road project.
  • The scaling up solar project.
  • The Mbesuma bridge project.
  • KKIA construction project.
  • Paul Mushindo university construction project.
  • Kariba dam rehabilitation project.
  • Kalungwishi hydro-power project.
  • 1,000 communication towers under ZICTA.
  • Feeder roads under the USD200 million World Bank facility.

The big question lingering within the industry is that who is really benefiting from these projects? Others are actually wondering who the real beneficiaries are especially that the local community who are on the receiving end of the negative effects emanating from such projects are not benefiting anything tangible at all. The dream or should I say the objective of lifting people out of poverty through infrastructure development is not being realised.

The companies (local contractors) that were privileged to receive some of the subcontracts under the 20% sub-contracting scheme are all bankrupt (well most of them). The reason for this is mainly due to financial incompetence by most of the beneficiaries. By financial incompetence I mean, the companies could not raise the financial requirements needed to execute such huge projects. In rare instances, the
owners of the companies exhibited financial indiscipline where they failed to adhere to well established accounting practices and in very rare instances, exhibited blatant financial mismanagement of their company’s financial resources. So from the foregoing and getting back to the budget pronouncements by the Minister of Finance, one would wonder how exactly he will be able to achieve his objectives and indeed if his pillars are really on firm foundation. My answer to this question is a big

“NO”.

In a nutshell, the following are some of the problems that were encountered in this “empowerment” agenda and indeed the implementation of the 20% sub-contracting mandate;

I. The lack of financial capacity within the local construction industry to execute major projects running in million USD.

II. The lack of technical acumen to be able to predict whether the contract may turn a profit or not.

III. Most contracts were being awarded to companies in good standing with the party and not necessarily in good standing with National Council for Construction (NCC).

IV. They lacked financial discipline and mismanaged their resources. Most of them were being “Zambian”.

V. Lack of political will from the government to ensure that local companies benefit.

VI. The existing commercial banks have stringent rules when it comes to lending out money or indeed issuing bank securities and guarantees such that most local companies could not meet the requirements.

VII. As a result of the above challenges, most contractors opted to sell those contracts back to the main contractor (or indeed another foreign firm) or went ahead to get loans from micro financing organisations with very high interest rates (as high as 35%).

VIII. Lack of an oversight or indeed a monitoring tool from RDA on how the program is running. This would have enabled them to identify the problems well in advance and remedies would have been applied.

3. Proposed Schemes

Nevertheless, despite the many challenges discussed above, we are yet presented with another opportunity to remedy these short comings. According to the annual work plan by RDA, ZMW 8.6 billion has been budgeted for this year to be spent on road construction alone. Other government departments have budget lines towards infrastructure development, rehabilitation, maintenance or indeed overhaul. This is briefly tabulated below.

S/N Project Description Implementation Agency/ Amount
Dept (ZMW)
1 Roads and Bridges RDA/NRFA 8,660,314,680
2 Strategic Food Reserves Ministry of Agriculture/ 1,051,200,000
FRA
3 International Airports Ministry of Transport 940,500,000
4 Rural Electrification Rural Electrification 251,331,670
Authority
5 Climate change Ministry of National 457,574,620
Resilience Planning
6 Water Supply and Ministry of Water 564,508,860
Sanitation Development,Sanitation
and Enviroment
Protection
7 Markets and Bus Ministry of Local 17,822,620
stations Government
8 Health Infrastructure Ministry of Health 274,580,400
9 School Infrastructure Ministry of General 740,060,458
Education
10 University and College Ministry of Higher 321,865,420
Infrastructure Education
11 Constituency Ministry of Local 218,400,000
Development Fund Government
Total 13,498,158,728
Source: 2018 Budget Speech by Hon.Mutati,MP

From the above table, over ZMW13.0 Billion has been allocated towards the construction of physical infrastructure just for the 2018 fiscal year. If we can reserve 20% of that for the local companies, it will mean we are empowering our local contractors with about ZMW2.7 Billion just within one year. Over a period of 5 years we would have empowered them with over ZMW13.0 Billion, and of which by that time we should have built capacity within the local industry for them to take up even more than 50% of the total budgetary allocation.

Going forward and in particular within the year 2018 and beyond, we should go further by actually allocating 20% of all the material requirements on these infrastructure projects to be supplied by the local contractor/suppliers.Despite these prospects being positive, the underlying challenges listed above still remain unresolved. Here now are some of the measures that I feel could be implemented in order to empower our people economically.

a. The monitoring and evaluation sections of each of the implementing agencies should devise early warning mechanisms to detect problems early enough within the 20% implementation framework.

b. The government of the Republic of Zambia should setup and capitalise a Bank of Construction (Development Bank of Zambia or Natsave can work in the interim) with a clear mandate of supporting the local construction industry with bank guarantees, securities, loans, etc.

c. All Interim Payment Certificate’s (IPC’s) to the contractors should be paid through this bank and the bank should not release more money to the firm in question than what is needed to advance the project until the project is complete and handed over to government (to stem the abandonment of projects and misuse of project funds)

d. The local firms should sign up to an agreement that they will not be allowed to access any physical cash during the project implementation apart from their remunerations for the time input on the project. All other payments relating to the execution of the project would be paid directly to the suppliers and into the worker’s salary accounts (This will further stem illicit financial flows and payments for corruption related activities as all the monies will be monitored).

e. The moneys due to the contractors will only be released upon receipt of a completion certificate and conclusion of the defects liability period.

f. Only contractors demonstrating that they have undergone certain trainings should be considered for the award of these contracts (just like the NCC and Workers compensation requirements). These may include; deliberate technical courses to be run by NCC and TEVETA. Short accounting courses to be run by ZICA, Some training in banking and finance to be run by either the Bankers Association of Zambia or the newly formed “Bank of construction”. A short course on investments and the value of money to be conducted by ZDA. Some courses on corruption, fraud and financial intelligence to be conducted by the FIC in collaboration with ACC. All these courses should be tailored for the construction industry and should be aimed at equipping contractors with skills to manage their financial resources prudently.

g. NCC should be given the mandate to certify which contractor qualifies under the 20% sub-contracting after the said firm has fulfilled all the above. The current scenario of RDA giving authorisation certificates should be stopped as it has the potential to breed corruption.

h. Further subcontracting opportunities should be based on merit (performance based) as opposed to political or tribal patronage.

4. Conclusion

The above write up is aimed at unlocking the economic potential of this great country whereby masses of our people are lifted out of poverty. The measures contained herein are mostly applicable to the construction industry, but that is not to say they cannot be extended to other sectors of the economy. I believe, with political will, all these things are not far-fetched and are achievable within the resources and human expertise currently existing in Zambia. Further refinement to these ideas is possible to make the plan implementable within the existing legal framework.

It is my firm belief that the development of our country will only be achieved once both the local private sector and government rise up and find home-grown solutions to our local problems. Infrastructure development without a deliberate enabling policy does not achieve economic growth anywhere in the world. In fact, I like to say it this way, “the mere pouring of concrete into the ground without right policies in place benefits no one and does not lead to economic growth (development)”.

By Michael Kopulande
The Author is a Chevening Scholar (2016/17), Structural Engineer and Infrastructure planning expert.

Should Social Media be Regulated?

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Chanda Mfula
Chanda Mfula

By Chanda Mfula, University of Sussex, United Kingdom

In this article, I leave aside – perhaps for another day – my considered argument that by worrying too much about how citizens are using social media, the Zambian government seems to have gotten its regulatory vectors wrong, and that it should rather be more worried about how social media companies, particularly Facebook, are, as Roger McNamee observed at the beginning of 2018, fostering psychological addiction and how they can actually work to undermine democracy.

Instead, I argue that while social media has become a habitat for both petty and serious offences as well as outright crimes, state-controlled regulation may harm its virtues in the process of taking out its vices, chiefly because of the way politicians in power tend to blur the lines between self-interest and public interest. I also suggest that perhaps the government must invest more in educating rather than regulating social media users.

Minister of Transport and Communication Brian Mushimba was quoted in February as saying the government wanted to regulate social media to stop ‘the ongoing abuse of the internet which was manifested in cyber bullying, posting of fake news, fraud and the creation of fake accounts.’ On the face of it this looks like a reasonable decision, particularly when one considers the flurry of undesirable activities online in which many innocent people are targeted for abuse especially by those who choose to hide in cyberspace under the comfort of anonymity. Nonetheless, history is replete with reminders that state-controlled regulation is rarely used for its publicly stated aims. Instead, it becomes a mechanism for protecting the interests of those who control the state by abridging the rights of citizens which such regulation is supposed to aerate.

Even if the regulation of social media does eventually manage to weed out abuse, the challenge is that such regulation is usually ambiguous enough to also be used to turn citizens’ rights into the ‘noblesse oblige’ of the state. Governments generally have shown that they cannot be trusted with the ability (or even sincerity) to draw a line between liberties and their abuse. Those in control of government have their own political self-interest to protect, and they often see this self-interest as under constant threat, not so much from those abusing social media as from those with legitimate interest in political power, particularly opposition political parties, as well as other groups with a stake in the affairs of the country, including the media, civil society and the general citizenry. Social media has, in more ways than one, given such groups an untrammelled platform on which they are rediscovering their voices which had petered out on account of government’s preponderant and at many times repressive control of the mainstream media space. Thus, social media is going some way towards reworking the balance of power in the definition of reality, which until now has favoured the party in government. To many people, government is, therefore, anxious to restore their monopoly over the national political narrative by extending their stranglehold on newspapers, radio and television to social media.

We can thus know a thing or two about what to expect of government regulation of social media by looking at the way they have regulated mainstream media. To begin with, the tight regulation of what is otherwise supposed to be public media has resulted in the Zambia National Broadcasting Corporation (ZNBC), Times of Zambia and Zambia Daily Mail projecting the political interests of those who hold power over and above public interest. It is this supplanting of public interest with political self-interest, enabled by a lack of clean separation between government and regulatory agencies, which makes it hard for many citizens to be confident about any chance of fair regulation of social media use.

A simple content analysis of public media coverage of the 2016 elections would reveal the blatant blackout of opposition voices at a time when all political players deserved to be heard equitably as one way in which citizens can be helped to make informed choices when they vote. There have even been times when the abuse of public media has shamefully exceeded all proportions, as was the case in 2011 when ZNBC incessantly ran documentaries under the banner ‘Stand Up for Zambia’, which contained outrageous personal attacks aimed at denigrating then opposition leader Michael Sata in a futile bid to contain his surging popularity at the time.

Furthermore, we can also look at the way independently owned media have been regulated in Zambia. Attempts by independent media to be critical of the state have often been met with ruthless clampdowns by state agencies ostensibly operating as regulators. A more recent example was the suspension of broadcasting licences of Muvi TV and two radio stations, namely Komboni and Itezhi-tezhi, in August 2016 under section 29 (1) (J) of the Independent Broadcasting Authority (IBA) Act, which empowers the state-controlled IBA to suspend a licence ‘in the interest of public safety, security, peace, welfare or good order’. The ambiguity in the interpretation of a section of an act worded this way creates a risk and proclivity for it to be used for purposes other than public interest. As a result, and perhaps rightly so, there were many people that interpreted the action against the three media outlets as borne out of the fact that these outlets often broadcast content which appeared critical of the ruling party during the rat race that was the 2016 elections.

These sad chapters in the recent history of media regulation in Zambia are, but only a few examples out of several, including worse, acts of repression to which the media in Zambia is subjected in the name of the law. Public media are made to parrot the agenda of the government of the day while independent media are punished for any attempt to be robustly critical of government.

There is little reason to argue against suspicions that the government wants to regulate social media for the same reasons for which they regulate mainstream media. After all, social media can and does serve the same political and democratic purposes as traditional media. In fact, the more popular view in media studies appears to be that people’s voices are amplified on social media, where citizens are no longer just audiences or users but are also producers of content. The implication, therefore, is that whereas with mainstream media government has mainly targeted its regulation at media organisations as producers of content, they will target individual citizens when it comes to regulating social media.

The accounts above make regulation look like such a bad thing, simply because it has been umpired by an interested player rather than by a neutral referee. Regulation is beneficial to citizens and the country if it is done purely in public interest. Majority of the citizens want social media to be safe space for their democratic citizenry and other genuine uses. They do not want cyberbullying, fake news and other vices. This is not just a Zambian, but a global concern. Questions about regulating social media have been raised elsewhere including in the United Kingdom.

Ordinarily, the IBA, whose name is really a misnomer, and the Zambia Information and Communication Technology Authority (ZICTA) (under whose ambit social media has been assigned), as well as other regulators, are supposed to be independent of government if any form of regulation is to be carried out purely in public interest. Such independence, at least in theory, is best guaranteed by insulating the board and management of regulatory authorities against political interference. In countries where this has worked, such insulation is achieved through avoiding a direct appointment of the board and top management by government. An independent appointments committee can be set up to nominate board appointees using transparent criteria, and then subjecting the appointees to parliamentary scrutiny and ratification. A board so constituted can then have the authority to hire qualified professionals into top management positions. This is the model the Media Institute of Southern Africa (MISA) has fought so hard without success to impress upon government in relation to the structures of the IBA and ZNBC.

Independent regulation achieved in form and substance is likely to quieten the anxiety in many citizens that their rights are about to be truncated by the impending regulation of social media, which, as Zeynep Tufekci observed in the summer of 2015 with regards to Facebook in Turkey, ‘is among the few spaces outside of government control’ and which ‘challenge governmental control over the censored mass media sphere.’

Questions can also be asked whether existing laws are not sufficient to cover the online offences the government has been talking about. For instance, the same laws that apply to defamation and fraud offline can be used to address these offences online. In fact, as an example, over three years ago in the UK, the chairperson of the House of Lords Select Committee on Communications, Lord Richard Best made a similar suggestion in his report with regards to his country and sounded this warning: ‘We need to be careful: we need to balance people’s right to freedom of expression with implementing the criminal law, whether the offences are committed online or offline.’ No doubt the law may need a second look and possible strengthening in parts to conform with the dynamics of the newer technologies but enacting sweeping legislation may be going overboard, potentially leading to rights violations.

It is also possible to shift focus from regulation to education or to balance one with the other. How about educating citizens about using social media the right way? I have found this very persuasive, particularly in thinking about how it can be incorporated in the curricula in schools. In the words of Lord Best, ‘Educating the next generation about how they should behave in the technological world is as important as teaching them the rights and wrongs of how to behave in person.’

The main argument here can be restated for avoidance of doubt, and that is, many citizens probably share some of the concerns raised by the government about social media abuse. There is quite some consensus against cyberbullying, fake news, hoaxes, fraud, defamation, and the lot. What many do not agree is that regulation, especially under the current regulatory framework which is yoked to the state, can address these vices without destroying the democratic virtues of social media. And there is a good reason for this disquiet: state-controlled regulators have a tendency of being used as prefects on duty for those who control the state rather than for public interest. A clear separation in form and substance between the state and the regulators need to be achieved before any regulation is contemplated. In addition, the government may wish to think about whether existing laws, maybe with a little rejigging, can be sufficient to cover online offences. Lastly, the answer may well lie in educating rather than regulating citizens.

ABOUT THE AUTHOR:
Chanda Mfula is a doctoral researcher at the University of Sussex, UK. His research interests currently focus on the use of social media in the performance of the democratic roles of journalism, particularly where this involves (or results from) circumvention strategies against restrictions imposed on mainstream media.

He is also an alumnus of the University of Leicester, UK, where he obtained an MA in Communications, Media and Public Relations and is former One-World Broadcasting fellow.

Analysts question ZRA’s huge tax bill slapped on FQM

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ZRA Headquarters
ZRA Headquarters

Some analysts have questioned the US$7.9 billion tax bill that Zambia Revenue Authority has slapped on First Quantum Minerals describing it as unrealistic.

ZRA this week handed First Quantum Minerals Ltd. a $7.9 billion tax bill and said it’s planning an audit of other mining companies going back six years.

FQM’s shares fell as much as 13 percent in Toronto, the most in almost two years, when its stock was halted ahead of the company’s statement.

The Vancouver-based company said in a statement that it received a letter from ZRA dated Monday “noting an assessment for import duties, penalties and interest on consumables and spare parts.”

“The company unequivocally refutes this assessment which does not appear to have any discernible basis of calculation and will continue working with the ZRA, as it normally does, to resolve the issue,” it said.

First Quantum, which operates the Kansanshi and Kalumbila mines in the country, accounted for more than half of Zambia’s copper production last year and is the biggest individual taxpayer.

But Stephen Walker, Head of global mining research at RBC Capital Markets said the proposed tax assessment is unrealistic.

“We would not rule out a potentially larger political motive behind the ZRA announcement,” he wrote. “With the fiscal deficit and debt position still worrisome, this could push the government to find alternative methods to raise revenue and repair the government’s fiscal position.”

The Zambian government has struggled with fiscal deficits in recent years and failed to secure a $1.3-billion bailout from the International Monetary Fund.

That could be behind the tax assessment, Deutsche Bank AG analyst Patrick Jones said in an emailed note.

Zambia’s tax bill to First Quantum is likely an opening parry in a negotiating process to obtain greater revenues — “a high-ball first offer,” according to David Manley, an economist with the Natural Resource Governance Institute in London.

“This also feels very much like the Tanzania-Acacia dispute,” he said in an email, referring to a dispute that began last summer when the East African nation sent a US$190 billion tax bill to Barrick Gold Corp.-subsidiary Acacia Mining Plc., and which remains unresolved.

“The government accuses a company of a very high, seemingly impossible amount, then a protracted battle across many fronts develops,” Manley said.
Manley suggested that ZRA likely know that they won’t receive US$7.9 billion.

“Perhaps the final bill won’t be as high as ZRA is asking, but it at least signals a determined desire from the government to get more money for Zambians,” he said.

BMO Capital analyst Alex Terentiew said while there are a ‘lot of unknowns,’ preliminary assessment suggests the company’s operating costs in the country could rise by as much as eight per cent.

“A hard push by the government could risk future investment,” Terentiew told clients in a note, but added that the risk of a significant “cash grab” by the government was low.

And FQM Chief Executive Philip Pascall jumped on a hastily arranged conference call on Wednesday to soothe investors about the tax bill.

Mr. Pascall rejected the US$7.9 billion figure which is more than two-thirds of the company’s US$9.5 billion market capitalization.

He declined to describe the worst-case scenario for the company, which derived 83.5 per cent of its revenue in 2017 from mines in Zambia and is hoping to develop a third mine in the country.

The company said its annual tax payments to the country vary, but claimed it pays $200 million in annual royalties.

“We do have cash available to pay what we would expect to pay, if at all,” he said to one question about how First Quantum might finance a payment of even several hundred million dollars to Zambian authorities.

The company has US$1.29 billion of cash in hand, according to its latest filing.

Mr. Pascall said the US$7.9 billion fee included a US$150 million assessment, US$2.1 billion in penalties and $5.7 billion in interest.

He estimated four to six months to review the bill.

UPND Councillor rescinds resignation after alleging President Lungu bribed him to resign

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An unidentified pedestrian walks along the great east road reading writings at the welcome billboard in Sinda

Sinda District Council Secretary has been advised to summon UPND Chilongozi Ward Councillor, Newstead Phiri, who recently withdrew his resignation, to discharge the burden of proof that he did not intend to resign if his withdrawal of resignation is to be accepted by the Council.

The Chilongozi Ward Councillor alleged that Republican President Lungu paid him K20,000 to resign thereby facilitating the unnecessary causation of a vacancy in Sinda District Council, a matter Governance Activist, Isaac Mwanza stated is against the spirit of the Constitution that discourages by-elections.

In a 6-page letter dated 14 March 2018 written to Sinda District Council Secretary and copied to Electoral Commission of Zambia, Mr.Mwanza, cited various local and English legal authorities to show that the law does not provide for unilateral withdrawal of a resignation by the person resigning without the consent of the other party.

Mr. Mwanza has further stated even though the letter of resignation had overlooked the 30 days notice, the Courts in Zambia still consider such resignation as valid and effective.

Mr. Mwanza has since explained that the 30-day period for notifying a mayor or council chairperson that a councillor intends to resign is, by legal authorities he cited, regarded as a “cooling off” period under English law whose disregard does not render the resignation ineffective.

He said Councillor Newstead Phiri, is by law allowed to withdraw his resignation within the 30 “cooling off” days before the date of termination of his services but only with the consent of Sinda District Council.

Mr. Mwanza has stated that at the time councillor Newstead Phiri was purporting to unilaterally withdraw his resignation, he levelled serious public allegations against President Lungu as Head of State which cannot be overlooked during the Council’s consideration of whether to give it’s consent to withdrawal of resignation or to refuse the retraction.

Mr. Mwanza described these allegations as serious in nature and capable of bringing the Presidency into disrepute and public odium. Mr. Mwanza has since charged that the burden of proof rests with Councillor Newstead Zimba who must satisfy the Council that he did not intend to resign at the time of his resignation or that he only did so in the heat of the moment or under pressure.

Mr. Mwanza has explained that in the event that Sinda District Council refuses to accept retraction of Councillor Phiri’s resignation due to failure by Councillor Phiri to discharge the burden of proof that he did not intend to resign, Councillor Phiri’s representation of residents of Chilongozi Ward terminates on 6th April, 2018, paving way for a by election.

By Isaac Mwanza

Barclays Bank Zambia commits to three-year sponsorship of the Musikili Triathlon and trail run

Regina Mulenga – Barclays Zambia Business Banking Director speaking and handing out prizes at the 2018 Musikili Triathlon

Barclays Bank Zambia is pleased to announce the sponsorship of the Musikili Triathlon and Trail Run which was held on Saturday, 16 March 2018 at Musikili Primary School in Mazabuka. The Triathlon involved swimming, bike riding and running with an option to participate as an individual or in teams. This is in line with the Bank’s commitment to supporting various sporting disciplines in the country other than football.

Commenting on the triathlon, Event Organiser for the Musikili Parents Teachers Association, Jenna Coventry said “Having a big bank like Barclays gives us the financial backing to raise our event to international racing standards. This year, we have grown from 300 entries in 2017 to over 400 competitors. Together, we have created synergies that complement to make a great team. Because of our relationship with Barclays, the community and everyone volunteering in this event, the future looks bright for triathlon in Zambia”.

As the main sponsor, Barclays has committed about K120,000 towards organisation and prizes for this year’s sporting event in a three-year sponsorship which runs from 2017 to 2019 in line with the Barclays’ Shared Growth Citizenship Agenda which is focused on investing in community development to help drive sustainable growth.

Regina Mulenga – Barclays Zambia Business Banking Director speaking and handing out prizes at the 2018 Musikili Triathlon

Barclays Bank Zambia Business Banking Director, Regina Mulenga said “We are pleased to be part of the 2018 Musikili Traithlon and Trail Run as the anchor sponsor. This is part of our commitment to of supporting agriculture development, working with farmers, cooperatives, individuals and communities. The Bank is focused on offering financial services and support to the farming community in different regions of the country through its agri-business proposition.”

“In the Mazabuka area in particular, the Bank is working with different business sizes from corporates like Zambia Sugar, the farmers, cooperatives, individuals and the community at large. The sponsorship of the Musikili Triathlon and Trail Run is yet another way for Barclays to promote sport in the country, assist in harnessing the sporting talent in the community that may result in meaningful opportunities or careers for the community members of Mazabuka District,” Mrs Mulenga added.

Musikili is in the heart of the thriving agricultural town of Mazabuka that is predominantly a sugar producing region but is also strong in the production of soya beans, wheat, diary and cattle. Barclays Bank Zambia remains committed to supporting key sectors of the economy including the agricultural sector and its value chain to supplement Government efforts of fuelling growth through diversification and thereby reducing over-dependency on the mining industry. Support to the agriculture sector also extends to the Farmer Input Support Programme (FISP) of which Barclays is a key player in offering digital payment solutions.

As one of the leading and award-winning commercial banks in Zambia, Barclays Bank Zambia remains committed to delivering exceptional service to its customers. The Bank is one of the biggest lending institutions in the country, with the agriculture sector being among the top beneficiaries. The commitment to serving customers has seen Barclays being named the 2017 Best Bank in Zambia by Global Finance, 2017 Best Retail Bank and 2017 Best Transactional Bank by the Asian Banker including the 2017 Best Commercial Bank and 2017 Best Corporate Social Responsibility Initiative Award by International Finance.

Regina Mulenga – Barclays Zambia Business Banking Director speaking and handing out prizes at the 2018 Musikili Triathlon

 

Meet Maybin Mudenda, Zambia’s multimillionaire

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Meet Maybin Mudenda, Zambia’s multimillionaire
Meet Maybin Mudenda, Zambia’s multimillionaire

When Maybin Madiba Mudenda was 15 years old, he sold CDs and blank cassette tapes across the back of threadbare seats on the train on his way to school from Livingstone to Lusaka.  It is a heck of a long train ride to where Mudenda sits and sells now, in a leather backed chair with a polished table in his offices at African Grey Insurance, in the heart of Lusaka. In his pocket he has over $9.5 million, enough to buy a pile of CDs that could derail a train or match his mountain of ambition.

“Give me five years and I’ll be on the cover of FORBES AFRICA magazine, there with Adrian Gore and Patrice Motsepe,” he says with a smile.

It may take longer. On the FORBES AFRICA 50 Richest List, Motsepe is ranked 11th with $2.7 billion and Gore 45th with $460 million.

It’s not a worry for Mudenda, who makes his money carrying risk. He is of a new generation of confident, cool and savvy Zambians. He started out in logistics for Oxfam and the United Nations High Commission for Refugees (UNHCR) in the drought ridden bush around Nangweshi, in the Western Province of Zambia. The contracts dried up, so did Mudenda’s job. Out of the blue stepped the appropriately named Saviour Konie, known as the father of Zambian insurance. Konie gave him a chance as a salesperson for ZIGI Insurance in 2000.

Money proved the spur. Mudenda’s first commission was $2,000.

“Now that’s when life started to get interesting,” says Mudenda.

A year later, he was confident enough to make a bold move to sell in Zambia’s Copperbelt, the lifeblood of the Zambian economy. The mines needed insurance badly, but few took the trouble to sell it. Mudenda didn’t need an invitation and made $50,000 in his first year.

No sooner had the dust settled on the copper mines, along came another piece of luck. Sandra Valenzo, an Italian working in Zambia and owner of VS Cargos, wanted to move large amounts of copper. Again Mudenda stepped in and oversaw the movement of 10,000 tons of copper from the Democratic Republic of Congo to South Africa in a deal worth $250,000 that earned him 20% commission.

Twelve years later, Mudenda is a multimillionaire. He’s never looked back. He holds 50% of African Grey Insurance which is valued at $6 million and 20% of Genesis Finance Limited which is valued at $3 million. He also owns the $1-million Insizwe Consult , a $2-million 2,000-hectare farm, Muccabella Farms, in Chisamba as well as the Kabanana House and Halen Kaunda House, in Lusaka, valued at $650,000 each.

Through a string of canny deals, Mudenda has also garnered shares with H&F Hydraulics, a company based in South Africa worth $125,000, and 25% stakes in Burton Karya Resources and Kurema Resources.

“The new generation now wants to come out. The older generation still lives in the fear that if you talk about your wealth, the politicians will still come and haunt you. You will find guys that will call you and say ‘no you mustn’t tell people about your wealth. People will put some sort of juju on you. You are attracting commissions to you’. I have got nothing to hide,” says Mudenda.

Among his assets are cars that are the envy of most people he passes in the street. A Mercedes Benz SL500, ML500, E300, the new S Class and a Land Cruiser are parked in his garage. It is a long drive from the tiny apartment he shared 15 years ago.

“We used to have nothing. We used to live in a little two bedroom flat in Northmead, Buchi Road. My mom gave us a Toyota Camry 1998/99 model. We were comfortable, but we didn’t have all these luxuries,” he says.

Mudenda says Zambians must not be afraid to start their own businesses.

“The next generation must go for what you think is right for you. Most young Zambians believe in being workers. They are so scared of being entrepreneurs. But you need to go out and fight to get the business. I’ve got files of people who I’ve been to school with that could do it. You know what I’ve started doing now? I’ve started employing them as agents. That’s what Konie did for me,” says Mudenda.

Mudenda might not be on the cover of FORBES AFRICA anytime soon, but with more deals on the way he could put himself in the fast lane. At the very least he plans on shaking hands with the men he looked up to when he had nothing.

Source: FORBES AFRICA

Bailiffs pounce on Football House

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Truck at Football House collecting items from FAZ offices
Truck at Football House collecting items from FAZ offices

BAILIFFS yesterday afternoon confiscated various office furniture from Football House.

The bailiffs who arrived at Football House around 15:00 hours confiscated various office items belonging to Football Association of Zambia over money believed to be owed to a Copperbelt-based company.

The operation which lasted about an hour saw bailiffs leave with assorted items such as refridgerators, sofas, printers and photocopiers.

Earlier, one of the officers executing the order caused an uproar when he also confiscated ZNBC, Q-TV cameras as well as a Mast recorder from the Journalists who were covering the activity.

ZNBC later summoned police officers to intervene in the matter but that just resulted in an exchange of bitter words.

Police intervention could not succeed as the officers from the Sheriff’s office maintained that they would not surrender the items to the journalists.

After about an hour of bidding, the officers drove off in a truck registration number GRZ 410 CF.

No one at Football House was available to explain what transpired.

Statement by LSA Group of Companies regarding false news reports

Dr Lawrence Sikutwa
Dr Lawrence Sikutwa

The LSA Group has defended its Group Chairman Lawrence Sikutwa from accusations that he is using his influence in the Industrial Development Corporation Board to make risky business decisions.

Some online reports have indicated that Dr Sikutwa, as a member of the IDC board influenced the board to convert his Madison’s deposits in Intermarket Banking Corporation into equity and have IDC resuscitate the ailing bank.

Other accusations are that Dr Sikutwa also made the IDC to buy a loss making Zam Palm business from Zambeef where he also sits as a board member, raising possible conflict of interest issues.

But LSA Group Communications Manager Patience Chisanga has defended Dr Sikutwa’s record saying his actions have been above aboard.

In a statement, Ms. Chisanga said Dr Sikutwa nolonger sits on the IDC board and that the LSA Group prides itself as being a well-run indigenous Group of Companies with good corporate governance at its core.

She said the Group observes a strict code of ethics and has never and does not seek business support through political patronage nor does the Group resort to underhand methods.
Ms. Chisanga stated that Dr. Sikutwa is himself apolitical and does not belong to any political party and refuses to mix business with politics.

“Professionalism is encouraged across the Group and the young men and women who work in the Group are among the most qualified in the sectors we operate in. We are proud of this. For your information, Dr. Sikutwa was first appointed to the IDC board by our late President Mr. Michael Chilufya Sata on 24 February 2014 and subsequently President Edgar Chagwa Lungu re-affirmed that appointment on 10 March 2015,” she said.

“During his tenure as a member of the IDC Board, Dr. Sikutwa was chairman of the Finance and Administration Committee and under his leadership the committee presided over the drafting and introduction of many administrative policies in the IDC and he remains proud that he chaired the meeting that deliberated on the IDC’s first 5-year Strategic Plan.

That stated, Dr. Sikutwa has no influence whatsoever on the IDC nor does the Group have any dealings with the IDC save for the joint interest they hold with others in the Zambia Industrial Commercial Bank (ZICB), the successor to Intermarket Banking Corporation.”

Ms. Chisanga said that in attempting to rescue Intermarket where LSA was one of the large depositors, the Bank of Zambia offered the large depositors who were caught up in Intermarket a number of options.

She added, “Payment of all depositors up to K200, 000, Corporate depositors with balances in excess of K200,000 could choose between a 40% haircut or conversion to equity provided that the balance was not less than K1 million and residual balances not converted were to be paid within 36 months from the commencement date of ZICB.”

“We chose to convert our deposits into equity on the basis of which the Group took a 6% interest in the new ZICB. A search at the Patents and Companies Registry (PACRA) would reveal the other shareholders in ZICB as the information is public. Further, at the time the issue of the Intermarket Bank rescue scheme was floated by the Bank of Zambia, Dr. Sikutwa had already vacated his seat on the IDC Board. The Bank of Zambia and IDC can be contacted to verify this,” she said.

Ms. Chisanga said the LSA Group would welcome any investigation into its affairs now or in the future.

Below is the full statement

The culture that has developed in Zambia of people purveying false news and making baseless claims is to be regretted.

The author of an article which appeared on 18th March 2018 on one the local news sites about Dr. Lawrence S. Sikutwa and the Madison Financial Services PLC should have made some enquiries to verify facts before publishing the article. An enquiry would have revealed that Dr. Sikutwa no longer sits on the board of the Industrial Development Corporation (IDC).

The LSA Group prides itself as being a well-run indigenous Group of Companies with good corporate governance at its core.  Accordingly, the Group observes a strict code of ethics and has never and does not seek business support through political patronage nor does the Group resort to underhand methods. Dr. Sikutwa is himself apolitical and does not belong to any political party and refuses to mix business with politics. Professionalism is encouraged across the Group and the young men and women who work in the Group are among the most qualified in the sectors we operate in. We are proud of this.

For your information, Dr. Sikutwa was first appointed to the IDC board by our late President Mr. Michael Chilufya Sata on 24 February 2014 and subsequently President Edgar Chagwa Lungu re-affirmed that appointment on 10 March 2015.

During his tenure as a member of the IDC Board, Dr. Sikutwa was chairman of the Finance and Administration Committee and under his leadership the committee presided over the drafting and introduction of many administrative policies in the IDC and he remains proud that he chaired the meeting that deliberated on the IDC’s first 5-year Strategic Plan. That stated, Dr. Sikutwa has no influence whatsoever on the IDC nor does the Group have any dealings with the IDC save for the joint interest they hold with others in the Zambia Industrial Commercial Bank (ZICB), the successor to Intermarket Banking Corporation.

If it is the shareholding in Intermarket which raises the notion that there could have been corrupt practices surrounding IDC and the Group, we wish to put on record that in attempting to rescue Intermarket, the BOZ offered the large depositors who were caught up in Intermarket when the BOZ took it over (our Group was one of the large depositors in Intermarket), the following options:

Payment of all depositors up to K200,000.

Corporate depositors with balances in excess of K200,000 could choose between a 40% haircut or conversion to equity provided that the balance was not less than K1 million.

Residual balances not converted were to be paid within 36 months from the commencement date of ZICB.

We chose to convert our deposits into equity on the basis of which the Group took a 6% interest in the new ZICB. A search at the Patents and Companies Registry (PACRA) would reveal the other shareholders in ZICB as the information is public.

Further, at the time the issue of the Intermarket Bank rescue scheme was floated by the Bank of Zambia, Dr. Sikutwa had already vacated his seat on the IDC Board.

The Bank of Zambia and IDC can be contacted to verify this.

Meanwhile, please be informed that the Group would welcome any investigation into its affairs now or in the future.

In future, commentators would do well to contact the undersigned for any information regarding Dr. Sikutwa or the LSA Group of Companies and information will be readily availed. It is therefore unfortunate that the author of the article sought to cast aspersions on Dr. Sikutwa and gave inaccurate and misleading information to the readers to bring the good name of Dr. Sikutwa and the LSA Group into public ridicule.

Let us give credit where it is due.

Patience Chisanga

Corporate Communications Manager

LSA Group of Companies

Maamba Collieries Thermal Power doubles power input into the National Grid

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Maamba Collieries Plant

Maamba Collieries Thermal Power Plant has added another 330 megawatts of electricity to the national grid. This is in addition to the current 330 megawatts of power being produced at the plant.

Company Managing Director Venkat Shankar said that this will bring electricity generation at the plant to 660 megawatts. Mr. Shankar added that more than one thousand workers have been employed since the plant became operational in 2016.

Mr Shankar said this when Minister of Energy Matthew Nkhuwa visited the plant.

And Mr. Nkhuwa said it is government’s strategy to continue attracting investment in the energy sector so that Zambia becomes a regional hub for electricity export.

Mr. Nkhuwa said the one billion dollars that has been invested in the Maamba thermal power plant is testimony that investors have confidence in the policies being pursued by the PF government.

Tourism Minister excited about the soon to open Hilton Garden in Hotel

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The hotel is looking for passionate individuals to join its team – The hotel aims to help youth achieve their full potential in the hospitality industry and close the youth unemployment gap.

MINISTER of Tourism and Arts Hon. Charles Banda has said he is excited that the first Hilton Garden Inn Hotel will soon open doors to the public in Zambia.

Speaking when the hotel General Manager Kudzayi Nheweyembwa paid a courtesy call on him at his office this morning, the Minister said there is need for hotel infrastructure in all areas of interest.

He said the good news coming from the Hilton is that they have already set a target market and that the hotel will provide the kind of accommodation that the different clientele are look for.

Hon. Banda said the investment is welcome to Zambia and that his Ministry will support it by giving all the support required for the hotel to succeed.

And Mr. Nheweyembwa said National Pensions Scheme Authority (NAPSA) owns the hotel and Hilton comes in as brand and operators.

He said the hotel currently employs 110 members of staff with a strong focus on youth employment with 45 percent of the staff below the age of 30 and 25 percent below the aged of 25.

Mr. Nheweyembwa said the hotel is also in the process of signing of a second hotel in Lusaka because Zambia appears to provide a huge potential in tourism and that Hilton is here to stay.

Hilton Garden Inn Hotel is an American brand but has been in Africa for over 50 years with presence in 17 countries.

No lives were lost from the power outage at UTH, Health Minister

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Health Minister Dr Chitalu Chilufya
Health Minister Dr Chitalu Chilufya

Minister of Health Chitalu Chilufya has revealed that no lives were lost from the power outages experienced at the University Teaching Hospital (UTH) on the 18th of March, 2018.

Dr. Chilufya said the wards affected were the E and G block which are the medical and surgical wards.

The Minister said this during a ministerial statement delivered to Parliament yesterday.

Dr. Chilufya disclosed that there was planned maintenance works by the power utility company ZESCO at the main sub-station located at the main gate of UTH.

He said the maintenance works were planned and executed to minimise disruption to key strategic and critical services of UTH.

The Minister explained that the strategic effort to minimise power loss to critical areas necessitated that power be rationed in less critical areas.

He added that, ZESCO exceeded the planned time span for the maintenance works resulting in a continuation of the rationalizing of power in non-critical areas beyond the planned 18 hours until 21 hours when full power was restored to the entire hospital.

Dr. Chilufya noted that during the time of maintenance, UTH was being powered by the installed Generator Set capacity within the hospital.

Floods disrupt classes in in Kaoma’s Mangango Constituency

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School going children in Kapili Ward in Kaoma’s Mangango Constituency have abandoned class due to floods and lack of a boat.

And one teacher’s house has also collapsed leaving him homeless.

Kapili School PTA Chairman Likwasi Likonge confirmed the development to ZANIS yesterday.

Mr. Likonge who is also the former Ward Councillor explained that the banks of Luena River have busted due to the continued rainfall being experienced in the area.

He said the school does not have a boat which pupils can use when crossing the Luena River to get to the school.

Mr. Likonge expressed concern that if government does not immediately assist the school with a banana boat, pupils in examination classes will not perform well.

He feared that pupils might not attend classes the whole of this term.

The former civic leader has since appealed to the Vice President’s office to help the school with a banana boat.

Matibini defends decision on Chilanga Seat Vacancy

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Speaker of the National Assembly Patrick Matibini
Speaker of the National Assembly Patrick Matibini

Speaker of the National Assembly Patrick Matibini has defended his decision to declare the Chilanga Parliamentary seat vacant following the conviction of former area Member of Parliament Keith Mukata for murder.

Dr. Matibini told Parliament that he is obliged by the Republican Constitution to write to the Electoral Commission of Zambia (ECZ) informing them of the vacancy in Chilanga Constituency.

He explained that the amended constitution no longer allows a Member of Parliament who is serving a prison sentence pending appeal to continue holding the seat.

Dr. Matibini cited among others Article 70 (2) (f) of the constitution which states that a person is disqualified from being elected as a Member of Parliament if the person is serving a sentence of imprisonment for an offence under a written law.

He further said that in the case of Mr. Mukata, a certificate of death sentence is sufficient evidence that he is serving a prison sentence therefore, his disqualification.

Dr. Matibini stated that he informed the ECZ of the vacancy in Chilanga in accordance with Article 72(8) which states that where a vacancy occurs in the National Assembly, the Speaker shall, within seven days of the occurrence of the vacancy, inform the Electoral Commission of Zambia of the vacancy, in writing, and a by-election shall be held in accordance with Article 57.

The Speaker was reacting to accusations of bias with regards to the declaration of seats vacant for Members of Parliament facing court cases.

Meanwhile, Dr. Matibini has reprimanded Roan Member of Parliament Chishimba Kambwili for failing to provide evidence to back his allegations that Home Affairs Minister Steven Kampyongo received three vehicles from Mr. Bokani Soko of GrandView as gratification for awarding the tender for the supply of the fire tenders to the company when he served as Local Government Minister.

Mr. Kambwili who stood by his allegations when he appeared before the Parliamentary Committee on privileges, absences and support services however, declined to avail the evidence he claims to have to the committee.

Mr. Kambwili who was not present during proceedings will be required to tender an apology to the house.

Kambole propels Zambia to 4-Nations Final

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Lazarus Kambole on Wednesday night scored a goal and a post match penalty to send hosts Zambia through to the Four Nations Tournament final after beating Zimbabwe in their semifinal doubleheader at Levy Mwanawasa Stadium in Ndola.

Kambole came off the bench in the 80th minute to score a dramatic stoppage equalizer that saw the match end 2-2 and decided on spotkicks that Zambia won 5-4.

All the four goals came in the second half that saw Zimbabwe take the lead via an own-goal scored by defender Isaac Shamujompa in the 47th minute when he turned in Evans Rusike’s shot.

Justin Shonga equalized in the 64th minute but Zimbabwe reclaimed the lead in the 73rd minute through Talent Chawapiwa who fired in a deceiving sweet shot that curled in on the near post.

Then with ten minutes left on the clock , Kambole then came off the bench for a wasteful Augustine Mulenga and struck in added time when he pounced on a rebound after Zimbabwe goalkeeper George Chigova parried Ronald Kampamba’s shot into his path.

Zambia will face South Africa in the final on March 24 at Levy Stadium.

Bafana also advanced to the final via penalties when they beat Angola 6-5 in their shootout following a 1-1 draw at fulltime in the early kickoff at Levy Stadium.

Zambia signs the African Continental Free Trade Area meant to create One African Market

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Foreign Affairs Minister Joseph Malanji
Foreign Affairs Minister Joseph Malanji

Zambia is among the forty-four other African Countries that have welcomed the establishment of an African Continental Free Trade Area (ACFTA) meant to create One African Market.

The development was reached at during the 10th Extraordinary Heads of States and Government Summit in Kigali, Rwanda that was called by African Union Chairperson Paul Kagame.

Foreign Affairs Minister Joseph Malanji who represented President Edgar Lungu at the summit signed the African Free Trade Area Declaration and not the Agreement.

Mr. Malanji stated that Zambia has not signed the agreement on ACFTA because negotiations on some of the protocols of the agreement are still on going.

He pointed out that Zambia had negotiated the protocol on goods, and services and the dispute settlement mechanism.

Mr. Malanji said the remaining protocols that included trade competition, Investment and the intellectual property are yet to be negotiated.

He however, noted that the signing of the declaration shows that Zambia stands with all other African Nations in its quest to improve intra Africa Trade.

Meanwhile, Commerce, Trade and Industry Minister Christopher Yaluma said Zambia will not sign the protocol on the free Movement of People.

In a statement issued to ZANIS in Lusaka this evening by First Secretary for Press and Tourism at the Zambian Embassy in Ethiopia, Inutu Mwanza, Mr. Yaluma who also attended the summit said Zambia is not ready for such a protocol.

On the ACFTA, Mr. Yaluma explained that Zambia needed to undertake internal consultations with the business community and other stakeholders before signing the Agreement.

He indicated that Government will only engage in treaties that have a positive bearing on the Zambian people especially the youth and women.

And officially opening the summit, Rwandan President Paul Kagame who is also African Union President noted that time has come for Africa to boost its own trade.

General Kagame said the African Continental Free Trade Area is a sure way of economic prosperity and urged member states to ratify the Agreement.

He further stated that the ACFTA will bring job creation particularly among the youths.