The Zambia National Farmers’ Union (ZNFU) has said that it is saddened with the maize price of K60/50kg bag announced by the Food Reserve Agency (FRA).

In a press statement released to the media , ZNFU said that the offered price will leave a farmer with a loss of K15 per 50Kg bag.

“As ZNFU, we have since classified FRA as briefcase buyers for the 2016/2017 Marketing season as its decision is now going to inject more poverty in our farmers. In the past FRA could come to the aid of farmers when such times arose,” read the statement

Below is the full statement

press release
25/07/2017

FRA MARKET PRICE OF K60

The Zambia National Farmers’ Union (ZNFU) is saddened with the maize price of K60/50kg bag announced by the Food Reserve Agency (FRA).

It is obvious that this price will not benefit the farmer in any way. With a breakeven price for a 50kg bag of maize estimated at K75, the K60 FRA market price leaves a farmer making a loss of K15 per 50kg bag.

In reality, the FRA is offering farmers K1.20 per kg, way below full cost recovery price. This, really, is a morale dampener for farmers, coming from a season where they experienced Fall Army Worms (FAW), red locusts and flush floods, but withstood the odds.

Affected farmers had to replant, meaning more seed, more fertilisers, and more chemicals to spray farms against pestilences and hire labour. The cost of production has clearly been overlooked.
Farmers have been on the bad receiving end of the value chain all the time as opposed to consumers.

This development is disheartening to farmers that worked very hard to ensure the maize bumper harvest of 3.6 million metric tonnes was attained, even against the pestilences outbreaks and climate change vagaries.

Is this the best FRA could offer? What is the rationale behind this pricing mechanism?

The Union is alive to the mechanisms of demand and supply.

As ZNFU, we have since classified FRA as briefcase buyers for the 2016/2017 Marketing season as its decision is now going to inject more poverty in our farmers. In the past FRA could come to the aid of farmers when such times arose.

But if the FRA does not want to buy maize from farmers, let them clearly state so than punishing the farmers with a lowly price.

It is sad that farmers have once again been offered a pittance for their hard work, and the ZNFU will not shy away to state that this is discouraging. If this is the way to make agriculture the mainstay of the economy, then surely farmers must be looking at it from the wrong side of the fence.

The Union has been left with more questions than answers as to how such a price would be a motivating factor to even produce more during the 2017/2018 farming season. If anything, the message is don’t go out there and grow maize as farmers.

This season, in spite of bumper production in several other crops other than maize such as soya beans, conditions are pointing towards disaster for farmers, marketing-wise. We have had the worst market prices for soyabeans, which crushed from K5 to K1.50 per kg. The K60 for a 50kg bag of maize has just driven in the last nail to bury the farmer. All this comes against a backdrop of droughts experienced two seasons one after the other, astronomical interest rates and an increase in a host of costs that farmers have no control over.

Going into the 2017/2018 farming season, it will be difficult for farmers to gather courage to plant maize and soyabeans again, given the raw deal they have received for their sweat as the FRA is a market leader since it sets the parameters even for outlying areas.

If not carefully handled, the coming season might give us the worst figures in maize production ever which could jeopardise the country’s food security. What FRA has sown on the maize price, its impact will be felt in 2019. The indicators of this price show that farmers that are not on FISP will go bankrupt.

We should not forget what has happened to the cotton industry. What has happened to the coptton industry will surely happen to the maize sector. It it is self destruction.

We again, wish to implore government to consider engaging farmers every time they plan to make an important decision that impacts their businesses and lives.

For Zambia National Farmers’ Union

Jervis Zimba (Mr.)
PRESIDENT

Stanbic Bank Zambia has signed an agreement with mobile phone service provider Airtel Networks Zambia Plc for the sponsorship of the country’s largest music event of the year, which is planned for September 22-23, 2017.
The Stanbic Music Festival, now in its fourth year, has previously been sponsored by Stanbic Bank, but this year’s edition has attracted the support of other partners including Airtel Zambia, which lays ground for an even better and more spectacular music event.
Continuing with the tradition of attracting international entertainers of acclaim, this year’s music festival will feature iconic American rhythm and blues (R&B) vocal group Boyz II Men as the headline act. In 2016, the festival hosted award-winning UK-based pop-reggae band UB40. It has previously hosted renowned acts including Hugh Masekela, Oliver M’tukudzi, Mi Casa, Earl Klugh and Zonke as well as a host of top local artistes.
Stanbic Chief Executive Charles Mudiwa said he was happy that the music event was attracting the support of like-minded and progressive corporates to give a boost to an event that supports local arts, culture and tourism.
“We are happy to have Airtel on board in sponsoring this prestigious event. This event is our way of creating a legendary event platform that offers a unique artistic event that contributes to our culture and local tourism. For us this year it all about the local artists and giving them a platform to share a stage with an international act,” said Mr Mudiwa.
“We have been in Zambia for over 60 years and we’ve been part of the country’s growth story. Part of our commitment and investment in Zambia has been focused towards uplifting local communities through sponsorship of arts and culture,” he added.
“Due to the diversity and quality of performances slated for the festival, we have built a platform with variety of local artistes who will take the stage with Boyz II men; local music talents that offer their unique music genius to this legendary event whose profile keeps growing with every annual hosting of the festival. It’s also an opportunity to enable Boyz II Men sample Zambia’s music and culture,” he said.
Speaking at the partnership announcement event, Airtel Zambia Managing Director Peter Correia said “We are excited about this partnership and believe that this year’s festival will be even bigger than the previous years. We have always had a good working relationship with Stanbic and consider this partnership as the beginning to even more collaborations between the two entities.”
Airtel Networks Zambia Plc has pumped in K500,000 to be the Platinum Sponsor of the Music festival.

THE CATHOLIC Bishops in charge of reconciliation between President Edgar Chagwa Lungu and opposition leader Hakainde Hichilema say they have merely sown the seeds in the ground and it is too soon to tell if the process will bear desired fruits.

Speaking to journalists shortly after Catholic Archbishop Telesphore Mpundu and Alick Banda held a meeting with President Lungu this morning following their meeting with Hichilema last week, Archbishop Mpundu asked journalists to be a little patient noting that the process has had some ups and downs.

ZCCB president Telesphore Mpundu said that Bishops have heard both President Lungu and Mr. Hichilema’s sides and that the nation will updated on the progress.

“We went to hear one side and we brought what we heard from him to the President and now we came to convey what we heard from him (Hichilema) to the President,” Archbishop Mpundu said.

“There is no conclusion, we are just beginning. The process has its own ups and downs but hopefully the ups and downs are going up so we will see after some time whether we have made progress or not. We can not pre-empt now when we have just started. You are being too impatient. We have just put seeds in the soil and you are waiting for it to be harvested.”

He added that the role of the Catholic Bishops was to be mediators of communication between the two leaders.

And National Guidance Minister Godfridah Sumaili has thanked the church for the role they have have chosen to support dialogue.

She encouraged all other churches to additionally pray for peace and unity in the nation.

“It is a process and we have to allow the process to take its course.What is important is something is being done,” she said.

“And to all the churches out there I want to encourage them to pray for peace in our nation, unity and also to use their pulpits to talk their congregants about the importance of patriotism, loving our nation. And the importance of being One Zambia, One Nation.”

Zambia’s Minister of Finance Felix Mutati has said that he is confident that the projected growth rate of 4.3 percent for 2017 remains feasible.

In a statement released to the media on the mid year performance of the Zambian Economy, Mr Mutati said that the projection is mainly driven by observed growth in the major sectors of agriculture, mining, construction, transport and storage, and the wholesale and retail trade.

The Minister also said that the increased electricity generation will also contribute to this positive perspective and, expectedly, support growth in other sectors.

Below is the full statement

MID-YEAR PERFORMANCE OF THE ZAMBIAN ECONOMY

The Ministry of Finance has undertaken to issue quarterly briefs on the performance of the economy in order to keep citizens, the business community, cooperating partners, and other stakeholders abreast with periodical developments. The second quarter having ended, my Ministry has compiled an update for the period January to June, 2017.

GDP Growth

I remain confident that given the developments in the first half of 2017, the projected growth rate of 4.3 percent for 2017 remains feasible. This is mainly driven by observed growth in the major sectors of agriculture, mining, construction, transport and storage, and the wholesale and retail trade. Increased electricity generation will also contribute to this positive perspective and, expectedly, support growth in other sectors.

Fiscal Management

Following enhanced tax collection efforts, the underperformance in terms of total revenue collection declined as at end June, 2017. Revenues and grants for the period totalled K20.4 billion, against the half-year target of K22.3 billion. During the same period, the government maintained its commitment to collection of programmed revenues. For instance, as a result of the initiative to appoint agents to withhold VAT at source, the total VAT collection was above target by 22.6 percent.

Further, the Government moved forward with other measures aimed at enhancing revenue collection by implementing initiatives such as:

1) Use of fiscal devices to further enhance VAT collections and reduce cheating particularly in the retail and wholesale sectors. The devices were expected to be installed on a pilot basis in Lusaka during this quarter to enhance compliance by VAT suppliers; and,

2) Appointment of agents for withholding tax on rental income to enhance compliance.

In the period under review, the Zambia Revenue Authority offered the business community a tax amnesty on interest and penalties arising from late returns and non-payments on all tax liabilities. The amnesty ends this month end; 31st July, 2017.

As at end of June, 2017, a total of 229,700 [TWO-HUNDRED-TWENTY-NINE-THOUSAND-SEVEN-HUNDRED] applications had been received, resulting in collections of K384.65 million. A further K448.5 million in “time-to-pay-agreements” is expected to be paid before 31st December 2017. The total expected yield from the tax amnesty on interest and penalties is therefore K833.2 million, against the target of K750 million. In view of the foregoing, I take this opportunity to appeal to the business community to take advantage of the remaining few days of the amnesty. There will be no extension.

The total debt collection target for ZRA, including the amount expected from the amnesty was K2.25 billion. A total of K2. 212 billion was collected between January and June, 2017.

In order to raise more financing for developmental projects, and in line with the guidance by the Republican President for Pension Funds to support infrastructure development, NAPSA recently participated in financing of the Ndola-Solwezi road. Similar arrangements will be explored for other capital projects.

Given the revenue outturn and Government’s efforts to restrain expenditure, the projection is that the budget deficit for 2017 will be maintained at budgeted levels of round 7 percent. Further, in line with the overarching fiscal consolidation policy, the target is to gradually reduce the deficit to around 3 percent of GDP, by 2020.

Dismantling of Arrears

I wish to point out that in order to address the problem of domestic arrears, the Government has designed a MEDIUM-TERM-TIME-SPECIFIC-ARREARS-DISMANTLING-STRATEGY. The Government will gradually clear the arears including through the use of budgetary provisions and restructuring of some of the debt into longer term debt instruments.

Inflation Developments

The inflation rate as at end June 2017 was 6.8 % [Six-Point-Eight-Percent] down from 7.5% [Seven-Point-Five-Percent] in December 2016. Largely, this reflected stability in most food items and in the Kwacha against major currencies. The expectation is that inflation will remain within the range of the medium term target of 6-8 percent that has been set by the Government.

Exchange Rate Developments

The exchange rate of the Kwacha showed resilience over the first six months of the year. As at end June, 2017 the exchange rate of the Kwacha per US dollar was K9.25. Further, over the past few weeks, the Kwacha has appreciated and is currently trading around K8.8 to the US$ [United States Dollar].

The appreciation of the Kwacha is a reflection of increased supply of foreign exchange arising from among others, a higher participation of foreign portfolio investors in Government Securities. Additionally, continued strong copper prices and market confidence has supported the Kwacha. Going forward, we expect the exchange rate to remain stable. Government is alive to the need for stability of the exchange rate as it is supportive of both exporters and importers. We will work hard to stay on this positive slate.

External Sector Developments

During the first half of 2017, Zambia’s external sector performance improved relative to the corresponding period in 2016. Preliminary data showed that Zambia’s merchandise TRADE BALANCE RECORDED A SURPLUS OF US$186.6 MILLION compared to a DEFICIT of US$316.4 million in the first half of 2016. The positive external sector performance was due to a rebound in copper and cobalt export earnings as export volumes and realized prices recovered. However, non-traditional exports declined on account of a reduction in exports of maize, gemstones, cotton lint, and wheat.

Imports grew by 15.4 percent to THREE-POINT-NINE-THREE-EIGHT BILLION UNITED STATES DOLLARS [US$3.938 billion] in the first half of 2017 from THREE-POINT-FOUR-ONE-TWO BILLION UNITED STATES DOLLARS [US$3.412 billion] in the first half of 2016. Higher imports of food items, fertilizer, chemicals, industrial boilers, and equipment accounted for the outturn. An increase in plant area and fertilizer usage accounted for higher imports of fertilizer, whilst a rebound in mining activity partly explains the increase in imports of industrial boilers and equipment.

Developments on Debt

The debt stock as at end June 2017 was SEVEN-POINT-THREE BILLION UNITED STATES DOLLARS [US$7.3 billion] from SIX-POINT-NINE BILLION UNITED STATES DOLLARS [US$6.9 billion] in December, 2016. The increase in the debt stock was on account of new disbursements from previously signed loans.

REGARDING DOMESTIC DEBT, the stock was K42.01 billion in June, 2017, compared to K33 billion in December, 2016. The rise is explained by a higher recourse to domestic borrowing; consistent with the Government’s Medium Term Debt Strategy.

As at end of June 2017, foreign reserves amounted to TWO-POINT-FOUR BILLION UNITED STATES DOLLARS [US$2.4 billion] which translated to 3.3 months of import cover. The Government’s objective is to attain four months of import cover over the medium term.
Update on Intermarket Bank Corporation

The shareholders of the Bank have made good progress and we expect the bank to soon be operational. Capitalization of the bank has been done and the shareholders will be announcing the new management team soon. The Government is closely monitoring developments at the bank to ensure that re-opening of the institution was done quickly.

The Honourable Minister observed that fundamentals in the economy had improved over the first half of 2017. However, this did not mean that economic players should relax.

ISSUED BY:

FELIX C. MUTATI, MP
MINISTER OF FINANCE