President Hakainde Hichilema announced today at a press briefing held at State House that the Zambian government has successfully secured Foreign Direct Investment (FDI) pledges amounting to a staggering US$8.3 billion in the first quarter of this year. This remarkable achievement surpasses the FDI recorded in both 2021 and 2022, which stood at US$3.2 billion and US$6.9 billion, respectively.

President Hichilema attributed this significant increase in FDI pledges to the successful implementation of the government’s policy on economic diplomacy. He emphasized the importance of Zambians understanding the purpose of his and his Cabinet members’ travels, as these visits play a crucial role in attracting investments and strengthening the country’s economic prospects.

During the press briefing, President Hichilema also addressed the economic challenges faced by Zambian citizens due to the country’s debt distress. He assured the public that the government would provide support to alleviate the burdens imposed by the high cost of living. The president emphasized that his administration is diligently working to improve the situation and mentioned specific measures being taken, such as the introduction of free education to alleviate school fees expenses.

Furthermore, President Hichilema proudly announced his selection to participate in a global forum aimed at discussing mechanisms to establish low-interest rates on financing for African countries and the private sector. This recognition demonstrates Zambia’s growing international influence and the president’s commitment to advocating for favorable financial conditions that will benefit not only his country but the broader African continent.

The president’s remarks regarding the substantial increase in FDI pledges reflect a positive sentiment about Zambia’s economic prospects under the new administration. The government’s policy on economic diplomacy appears to be yielding fruitful results, attracting a substantial influx of foreign investment. This influx is expected to drive economic growth, create job opportunities, and enhance the living standards of Zambian citizens.

President Hichilema’s acknowledgement of the economic challenges faced by the population demonstrates his administration’s commitment to addressing these issues promptly. By implementing measures such as free education, the government aims to alleviate the financial burden on families and create an environment conducive to social and economic development.

The president’s inclusion in the global forum on low-interest financing for African countries and the private sector is a testament to his international recognition and credibility. This participation will provide an opportunity for Zambia to contribute to the discourse on financial mechanisms that can stimulate economic growth across the continent. President Hichilema’s involvement signifies Zambia’s active engagement in international forums and its commitment to promoting the economic interests of African nations.

The Zambia National Farmers’ Union (ZNFU) has expressed its satisfaction with the recently announced maize prices set by the Food Reserve Agency (FRA) at ZMK280 per 50kg bag. ZNFU sees this as a positive step towards implementing cost reflective pricing for maize in the country. The new pricing structure is expected to incentivize farmers to return to maize production, thereby ensuring national food security and facilitating exports. The Union believes that the introduction of favorable pricing will attract more farmers to engage in maize cultivation.

In a press release, ZNFU applauded the government’s efforts in establishing this pricing scheme, emphasizing the importance of price as a determining factor for farmers when choosing which crops to produce. Over the years, a significant number of farmers have abandoned maize production due to the lack of price incentives, making it impossible to recoup their investments. The Union acknowledges the government’s role in providing the right signals and expresses optimism about the future of maize production if cost reflective prices are maintained.

While pleased with the maize pricing development, ZNFU expressed disappointment over the exclusion of soybeans from the FRA strategic reserves this marketing season. ZNFU highlighted the significant crop diversification and promising soybean harvest in remote areas, urging the government to allow regulated soybean exports immediately. The Union emphasized the importance of sustaining all participants in the soybean value chain and avoiding any disadvantages for farmers. ZNFU pointed out that abandoning soybean farmers during the crop marketing process, after encouraging them to adopt soybeans as an alternative crop, would be counterproductive. Additionally, soybeans are beneficial for soil health through crop rotation practices, further underscoring the need to reconsider this decision. ZNFU called for a consultative meeting with the government to find pragmatic solutions and ensure the sustainability of the soybean value chain.

ZNFU also highlighted the potential for exporting soybeans, considering the sizeable soybean crop in South Africa, which is likely to impact regional demand for value-added soybean products. Exploring the export of soybeans, especially Zambia’s non-GMO variety, could provide an advantage in niche markets that traditionally pay premiums for non-GMO commodities.

The Union urged the government to make timely decisions on exports and send clear policy signals to market participants, considering the relatively short crop marketing window. ZNFU emphasized the importance of taking into account historical dynamics and current market conditions to ensure effective decision-making.

In conclusion, ZNFU expressed confidence that the positive signal set by the FRA’s maize pricing would be sustained, reversing the declining trend in maize production observed over the past three years. The Union remains encouraged and optimistic about realizing Zambia’s potential to become the region’s breadbasket.

Jervis Zimba, President of ZNFU, conveyed these sentiments and called for collaboration between the government and the Union to achieve these goals. The ZNFU’s press release sets the stage for further discussions and actions to support the agricultural sector in Zambia, ensuring food security, economic growth, and the prosperity of farmers and related stakeholders.

Opposition Party of National Unity and Progress (PNUP) President Highvie Hamududu has said he hopes the announced maize price for the 2023 crop marketing season is cost reflective for majority farmers in the country.

The Food Reserve Agency (FRA) on Wednesday announced that it will be buying a 50 kilogramme bag of maize at K280.

This year’s maize price is an increase above last year’s 180 Kwacha per 50 kilogramme bag of maize.

FRA Board Chairperson Kelvin Hambwezya announced that the agency’s 2023 maize price at a media briefing today in Lusaka saying the decision was arrived at considering the maize prices pertaining in the region.

Commenting on the new crop prices, Mr. Hamududu said farmers need cost reflective prices to increase production.

He further advocated that FRA starts announcing crop prices before the farming season so that farmers make informed decisions on production beforehand.

Mr. Humududu said the trend of announcing selected crop prices by government through its agency, the Food Reserve Agency (FRA)after the farming season is not right and must be changed.

The economist and former Bweengwa Member of Parliament said profitable agriculture is the fastest way to create jobs and fight poverty.

“Announce indicative crop prices before farming season and reform overall agriculture policy.The tradition of announcing selected crop prices by government through its agency, the Food Reserve Agency, FRA, after the farming season is not right and must be changed, as it is an ambush on the farmers since farmers will have already produced. There is need for FRA to announce indicative crop prices of their interest before the farming season so that farmers make informed decisions on production beforehand.Prices are the biggest incentive for any production including farming. Farmers need cost reflective prices to increase production and as long as we suppress producer prices in agriculture, we must forget increasing production as farming is not charity but business,” Mr. Hamududu said.

“Policy makers in government must also understand that profitable agriculture is the fastest way to create jobs and fight poverty and income inequalities; and easily earn foreign exchange through exports, since over 70 percent of our citizens are involved in this sector. Agriculture has the lowest hanging fruits to improve the welfare our of people and grow the economy and must, therefore, be given evidence-based policy interventions and facilitation by government.We hope the announced Maize of K280 per 50kg bag is cost reflective for the majority of our farmers,” he said.

Meanwhile, FRA Board Chairperson Kelvin Hambwezya said the new crop prices are a reflective of the cost of production.

“The agency has endeavored among other
things to analyse the cost of production for the designated.Crops indicated above and therefore, prices to be announced today are reflective of the cost of production and specific to what the agency will be offering. Please note that other players in the sector are urged to buy these crops as the prices to be announced are not floor prices but rather FRA prices under the principle of willing seller and willing buyer.In setting these crop prices, the agency expects accrued benefits to farmers in that: -(I) farmers will be provided with a readily available market access closer to their localities through the 1,200 satellite depots to be established countrywide; (ii) farmers will get a reward for their labour which will entail more money in their pockets; (iii) there will be stimulation and growth of rural economies for farmers as well as local service this stimulus will enable farmers to adequately prepare for the upcoming agricultural season and
Further be motivated to increase crop production for the country’s food security taking into consideration the increased national population.You will note that related to the economic stimulus and growth of rural economies, last year, in 2022 the agency bought designated crops worth k2.2 billion of which about 72 % was paid to farmers in outlying areas.I further wish to state that in arriving at the determined prices for 2023, the agency acknowledged the urgent need to
Replenish the strategic grain reserves from a dynamic grain market obtaining locally and in the region.It is anticipated that the agency prices shall not disadavantage the private sector who are expected to purchase a larger share of the agricultural produce. As you ay know, the fra purchase share has averaged 20% of maize,” Mr. Hambwezya said.

The Food Reserve Agency (FRA) has officially announced the floor prices for white maize and paddy rice for the 2023 crop marketing season. According to the agency, the price of paddy rice has been set at K200 per 50kg, while white maize will be sold at K280 per 50kg. The per kilogram prices for the commodities have been set at K5.60 for paddy rice and K5 for white maize.

The announcement was made by Kelvin Hambwezya, the Chairperson of the FRA Board, during a press briefing held today. Hambwezya explained that the prices were determined after conducting a survey of prevailing farm gate and market prices, taking into account indicative gross margin budgets. The FRA also assured farmers that they would be provided with accessible market access options closer to their localities.

Hambwezya emphasized the importance of maize buyers adhering to the prices set by the agency. He urged them to purchase both white maize and paddy rice at the announced prices, ensuring fair compensation for the farmers.

To facilitate easy market access for small-scale farmers, the FRA plans to establish 1,200 satellite depots. This initiative aims to support farmers by bringing the market closer to them and reducing transportation costs.

During the briefing, Hambwezya disclosed that the FRA currently holds a carryover stock of 652,000 metric tonnes of grade white maize. Out of this stock, over 400,000 metric tonnes have already been sold to local millers, while 248,772.35 metric tonnes remain in the strategic food reserves.

The FRA’s decision to set maize and paddy rice prices aligns with the FRA Act No. 6 of 2020, which mandates the agency to establish and regulate floor prices for strategic crops in Zambia.

Farmers and stakeholders in the agriculture sector will closely monitor the market response to the announced prices, as they play a crucial role in determining the profitability and sustainability of agricultural production in the country.

Technology and Science Minister Felix Mutati has hailed ABSA Life, Airtel money, and Inclusivity firms for the creation of a potent solution at the digital distribution model umuyo funeral cover driven by innovative technology, collaboration and partnership.

Mr. Mutati said the partnership is devised on the digital technological front that is introduced to administer and cover life insurance for customer service – satisfaction round the clock.

Speaking during the re-launch of ABSA’s Life Zambia’s micro-insurance umoyo funeral cover plan in partnership with Airtel money and Inclusivity firms, Minister Mutati said the launched cost effective product is convenient as it can be easily accessed on the spot distinct from physical point of search for service.

“In the face of increased development of digital services, questions about the quality and standards that meets customer satisfaction remains a big challenge. In fact, we are faced with a challenge of most not meeting the standard that is being set today. This I say because we are going to witness the launch of a digital distribution model by some of powerful brands not just in Zambia but at sub-regional level. This partnership will not only benefit absa customers but all airtel customers as well. If you have heard me on several platfoms talk about partnerships and collaborations, this is it. From the outset, I can only say congratulations to absa and airtel!Ladies and gentlemen,one of the key measurements of a growing economy is easy access to financial services for its population. Financial services as we know vary from mainstream banking, wealth, and investment to insurance and over the years, we have seen significant digital uplift of financial services in the banking sector, where customers can now complete transactions on their mobile phones that previously required a series of approvals and steps at a physical branch.”

“Today we are witnessing the expansion of such services to insurance. With this product offering, customers will be able to acquire insurance from the comfort of their homes, offices and even while on the street by simply accessing the service on the airtel money platform using used. Ladies and gentlemen,this government has emphasised time and again how financial inclusion is a key strategic agenda and working with the financial industry regulators such as the bank of zambia, the insurers association of Zambia and the pensions and insurance authority with the support of other organisations, we are beginning to see this benefit expand not just to high income earners, but to the lower sections of our communities and primarily those in the informal sector. We are living in a world that is constantly evolving with new exciting and innovative technology and it is therefore comforting to see that absa life is embarking on a journey to be digitally led. I believe such a strategy will result in efficiencies that will grow not just the insurance industry, but the country as a whole. Recognising that your customers are spending more time on their digital gadgets,” he said.

Mr. Mutati continued:”The government is creating an enabling policy environment for the development and uptake of digital services. We need to adopt digital services for the simple reasons of convenience and efficiency of the services, cost savings in the use of platforms, inclusion and equality for the marginalized groups.Ladies and gentlemen,at our ministry, we believe that technology is the foundation for economic growth and sustainability. As we have recently come to experience, a significant number of our people in Zambia both young and old are adopting the many tools and applications available for use on their mobile phones and other gadgets not just for social interaction but also for financial transactions.”

“It is therefore only right that insurance must also be accessible through the same tools and applications. It is gratifying to see the culmination of the absa life Zambia and airtel mobile commerce Zambia (airtel money) partnership powered by inclusivity solutions that is driving the digital advancement agenda through the distribution of the micro-insurance umoyo funeral cover which will be beneficial to all airtel subscribers.A few years ago, it would have been impossible to imagine an insurance distribution model of this kind in zambia, however, technology has made this possible and we hope that we will see a lot more of such products coming out of this model.Ladies and gentlemen,it is important to note that both absa and airtel are pan african brands that are providing a wide range of products and services to millions of customers not only in Zambia but across the continent, as such, I have all the confidence that this partnership will be able to meet its objectives and work with the Zambian government for the growth of our economy.Once again, I congratulate absa life zambia and airtel money on this milestone,” he said.

Pensions and Insurance Authority (PIA) manager policy and analysis Namakau Ntini said it was gratifying that the insurance regulator knows that ABSA, Airtel money, and Inclusivity customers are going to be an integral part of this roadmap – partnership.

Ms. Ntini said that previously the uptake of insurance suffered a hindrance due to lack of access however with such an implementation of a digital initiative funeral cover service the aspect of inclusion is realized for customers.

Airtel managing director Manu Sood said the established solutions initiated on partnership is a stepping stone for the telecom firm hence collectively effecting umoyo funeral cover product – service reaching people in far flung areas across the country. Mr Sood said his company was looking forward to interrogate more innovations.

ABSA Life managing director Collins Hamusonde said this collaboration is also driving the use of digital platforms to service customers.

Mr. Hamusonde said the umuyo funeral cover will benefit families to cushion impacts that comes with unexpected loss of beloved ones.

The current account deficit narrowed in the first quarter of 2023 as deficits on both primary and services accounts reduced. The primary income deficit reduced on account of lower investment income following a decline in dividend payments on foreign direct investment. Similarly, the services account deficit narrowed, reflecting lower expenditure on transportation attributed to passenger travel. In the medium term, the current account balance is poised to post a surplus due to a faster rise in exports relative to imports on the back of the recovery in global growth. The recovery is underpinned by a rebound in growth in China, unwinding supply-chain constraints, and subsiding disruption to food and energy markets.

According to Bank of Zambia Governor Dr. Denny H. Kalyalya, “The narrowing of the current account deficit in the first quarter of 2023 is a positive development for Zambia’s external balance. Lower investment income and reduced transportation expenditure have contributed to this improvement. As the global economy recovers, we expect a faster rise in exports compared to imports, which will further strengthen our current account position.”

Credit growth slows down, money supply expands, and economic growth to rebound in the medium-term

In March 2023, growth in domestic credit slowed down to 12.1 percent, year-on-year, from 18.7 percent in December 2022 following reduced lending to the government. However, over the same period, credit to the private sector continued to grow—35.9 percent compared to 34.2 percent. Money supply grew further by 30.0 percent in March 2023 compared to 24.5 percent in December 2022 due to increased credit to the private sector and valuation effects relating to US dollar-denominated credit.

Dr. Kalyalya commented on the credit growth slowdown, stating, “The deceleration in domestic credit growth is primarily driven by reduced lending to the government. However, credit to the private sector remains robust, indicating ongoing economic activity and investment. The expansion of money supply is a result of increased credit to the private sector and valuation effects. It is important to strike a balance between credit growth and maintaining stability in the financial system.”

The economy is projected to slowdown in 2023, and rebound in 2024. This is underpinned by the recovery in agriculture and mining sectors as well as sustained growth in information and communications, manufacturing, transport, and financial and insurance sectors. However, a slowdown in global growth, tight global financial conditions, adverse weather conditions due to climate change, and elevated energy and food prices related to the ongoing Russia-Ukraine war continue to be key downside risks to the growth outlook.

Dr. Kalyalya highlighted the economic outlook, stating, “We anticipate a slowdown in the Zambian economy in 2023, but expect a rebound in 2024. The recovery will be driven by the revival of the agriculture and mining sectors, as well as sustained growth in other key sectors. However, we remain mindful of the potential risks, including global economic conditions, adverse weather events, and geopolitical tensions impacting energy and food prices. These factors require close monitoring and appropriate policy responses.”

Preliminary data from the May 2023 Bank of Zambia Quarterly Survey of Business Opinions and Expectations and the Stanbic Bank Zambia PMITM point to a moderation in economic activity in the first quarter of 2023. This was largely attributed to the depreciation of the exchange rate and increase in fuel pump prices.

Dr. Kalyalya commented on the moderation in economic activity, stating, “The depreciation of the exchange rate and the increase in fuel pump prices have had a dampening effect on economic activity. We are closely monitoring these developments and their impact on inflation and overall economic performance. It is important to address these challenges through appropriate policy measures to support a sustainable and inclusive recovery.”

The Finance and National Planning has announced that the Government released a total of K11.4 billion for developmental programmes and public service delivery in April 2023.

In a statement released by the ministry’s Public Relations Unit, of the K11.4 billion, K2 billion was released for transfers, subsidies and social benefits, whilst K2.2 billion was spent on debt service (domestic and external) and dismantling of arrears, and K3.6 billion was spent on the public service wage bill.

In addition, the Government released K3.2 billion for implementation of various government programmes and general operations.

Finance and National Planning Minister Dr Situmbeko Musokotwane has since called for consistent and effective monitoring of budget execution by all stakeholders in their sectors of operation and interest.

According to the statement, the Minister has affirmed that the implementation of the 2023 budget is on course as all major budgeted programmes are now being funded, considerably.

He has also appealed to members of the public (individual and corporate) to actively participate in the formulation of the 2024 National Budget and the 2024 to 2026 Medium Term
Expenditure Framework (MTEF).

“Dr Musokotwane was commenting in connection with the April 2023 funding report whereby the Government released a total of K11.4 billion for developmental programmes and public service delivery. Of the K11.4 billion, K2 billion was released for transfers, subsidies and social benefits, whilst K2.2billion was spent on debt service (domestic and external) and dismantling of arrears, and K3.6 billion was spent on the public service wage bill. In addition, the Government released K3.2 billion for implementation of various government programmes and general operations,
while K359.7 million was spent on road infrastructure. From the K2.2 billion released for debt service and dismantling of arrears, a sum of K1.6 billion went towards both domestic and external debt payments to multilaterals while the component related to dismantling of arrears for suppliers of goods and services, got K627.4 million,” the statement read.

“Furthermore, the Government released K2 billion towards transfers and subsidies. Notable expenditure items under this category, included:
1) K388.3 million as grants to schools;
2) K275.3 million for the Farmer Input Support Programme;
3) K209.9 million for the nationwide Social Cash Transfer Programme;
4) K436.5 million for the operations of hospitals, other grant aided institutions under various Ministries;
5) K221.2 million for the Public Service Pension Fund (PSPF) for pensioners financing gap and grant;
6) K100 million for the Local Authorities Superannuation Fund (LASF) financing gap;
7) K115.1 million for university grants to ensure smooth operations; and,
8) K111.6 million to the Local Government Equalization Fund.
K3.2 billion was released to facilitate service delivery under various public institutions. Under this aspect, notable
expenditure items included:
1) K436.7 million for the procurement of drugs, medical supplies and equipment (Ministry of Health).
2) K22.4 million for TAZAMA workers’ salaries;
3) K125 million for the Compensation and Awards Fund;
4) K42.5 million targeted at youth skills development through the Skills Development Fund.
5) K24.6 million Tourism Levy for development of Infrastructure in tourist locations; and,
6) K2.7 billion for general operations of Ministries, Provinces and Agencies (MPA’s), of which K631 million went towards public, health, education as well as water and sanitation infrastructure.
K24.6 million Tourism Levy for development of Infrastructure in tourist locations; and,2024 Budget Preparations.

Meanwhile, the Government has started receiving submissions for the 2024 National Budget and the 2024 to 2026 Medium Term Expenditure Framework.

“Over the last one month, the Government has been receiving submissions for the 2024 National Budget and the 2024 to 2026 Medium Term Expenditure Framework. The exercise is aimed at according stakeholders the opportunity to contribute in shaping the direction of economic policy and other development priorities, through an all-inclusive process.In view of the foregoing, the general public, private sector players (micro, small, medium and large firms, inclusive), Government departments and agencies, civil society, youth, women, and all other interest groups (too numerous to mention), are encouraged to continue submitting proposals for tax, non-tax (such as user fees and fines) and expenditure proposals, for our review and possible inclusion in the 2024 National Budget and the 2024 to 2026 MTEF. We are confident that all sectors will take advantage and make their submissions because their participation in the budget formulation process is essential in ensuring that the Government and stakeholders move together in creating a conducive policy environment for business; employment creation; generation of wealth; and facilitating a sustainable future for all citizens and prosperity for the nation,” the Ministry of Finance revealed.

“The guidelines for submissions are as below: 1) Clearly state the sector or policy area of interest for which remedies or stimuli are sought and whether such remedies or stimuli relate to policy, public expenditure, tax, or non-tax measures;
2) Outline the challenges of the current tax and non-tax policy regime and explain how local businesses and other developmental affairs are negatively impacted, as a result;
3) Clearly state proposals for public expenditure and or taxation in line with the Eighth National Development plan (8NDP) and their expected impact on economic recovery and growth, fiscal sustainability, public
welfare, and general public service delivery; and
4) Justify why the Government should undertake the suggested measures and the expected positive impacts, thereof. As a way of ensuring that proposals are evaluated professionally, an inter-ministerial team, will, where necessary,
invite those who will submit proposals for further discussions or clarification on any matter concerning their submissions.In conclusion, we reiterate the appeal by the Minister of Finance and National Planning Dr Situmbeko Musokotwane
for stakeholders to not only monitor budget execution in their areas of interest but also ensure that they actively,” the statement concluded.