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UPND Chairperson for Information and Publicity Charles Kakoma has said that it is a shame that that countries such as Rwanda, war torn even in the 1990s, is now far better in Information and Technology infrastructure than the so called peaceful Zambia.
In a statement released to the media in reaction that to a story that Grade 9 pupils had to wait till midnight to write ICT exams due to lack of computers, Mr Kakoma said that introducing compulsory computer lessons and examination is one policy that his party warned the PF Government that it would not work due to a lack of facilities, which has now only worsened due to current load shedding.
Below is the full statement
When we advise our friends in the PF to implement projects and ideas with a thorough and well thought out plan they claim we are bitter.
The case of introducing compulsory computer lessons and examination is one policy that we warned them would not work due to a lack of facilities, which has now only worsened due to current load shedding.
The PF have been risking the future prospects of our children across the country by making them sit for these exams sometimes until the early hours of the morning and without food. How do we expect children to have good grades when they are writing their exams half asleep?
The same President Edgar Lungu was busy insulting and threatening teachers across the country if they decampaign him. How does he expect any teacher to be cheering for him when they are being subjected to such poor working conditions?
Our teachers and civil servants are already facing serious economic hardships and now we add such inhuman treatment to both teachers and our children.
The money the PF leaders are using gallivanting the world in private jets would go a long way in purchasing computers for schools and some gensets. The same could be said for the money spent on the more than 30 parliamentary by elections since 2011.
What a shame that countries such as Rwanda, war torn even in the 1990s, is now far better in Information and Technology infrastructure than the so called peaceful Zambia.
If the PF cannot plan for such matters, how do we expect them to deal with issues of mine joblessness, high inflation, economic diversification programmes and job creation?
Charles Kakoma UPND Chairperson for Information and Publicity
President Lungu addresses pupils when he visited his former School at Mukuba Secondary school in Kitwe on Monday, November 2,2015 -Picture by THOMAS NSAMA
President Edgar Lungu has described his six day working visit to the Copperbelt province as successful. The President said that his visit to the province helped resolve most of the issues on the Copperbelt and added that he is scheduled to visit all provinces in the country.
Meanwhile, the President has announced that he will travel to Tanzania for the inauguration of that country’s’ new President. The President said this on Wednesday when he arrived in Lusaka from the Copperbelt.
And speaking to Journalists, Special Assistant to the President, Amos Chanda said that President Lungu has secured all jobs at Luanshya Copper Mines.
Mr. Chanda said that the President has also laid firm ground, for meaningful dialogue between the mines and the labour movement, at Konkola Copper Mines -KCM- and Mopani Copper Mines -MCM.
Mr Chanda said that the President has been assured that job losses at KCM and MCM will be the last resort.
Patents and Company Registration Authourity (PACRA) Board Chairman William Nyirenda (right) briefing the Minister of Commerce Trade and Industry Margaret Mwanakatwe (centre) and Central Province Minister Davies Chisopa how PACRA operates during the official launch of a new PACRA office in Kabwe
FIRST Capital Bank has dragged Commerce, Trade and Industry Minister Margaret Mwanakatwe to court over an unpaid loan after failing to meet the debt obligations before the October 31, 2013 which was the debt service period.
This is in a matter in which a company owned by Mwanakatwe and her husband Mupanga Mwanakatwe- Aluworks Industries Limited obtained a loan from First Capital Bank in October 2012 in the sum of K800,000 to be paid back within one year.
Aluworks Industries, Mwanakatwe and husband Mupanga as borrower, customer and guarantor respectively have been sued together in the sum of K1,034,965.48 as outstanding sum under a credit facility offered to the company, which was guaranteed to be paid by October 31, 2013.
“Repayment was guaranteed by the second and third responded as directors. The debt was secured by the third party mortgage dated October 18, 2012 relating to stand number 11357/M off Leopards Hill Road. In their submissions to the High Court, the Bank has demanded that the duo, as directors of Aluworks should pay back the money in 14 days or risk losing their property under the aforesaid credit facility that ordered to honour terms of their guarantee.
Aluworks Industries obtained an overdraft facility to finance its working capital at K800,000 on an agreed term on a revolving line of credit with 18 percent added only if the loan was serviced beyond the agreed first 12 months.
The Bank accused Aluworks and its directors of neglecting to settle the debt and as at October 15, 2015, the total outstanding amount was K1 034 965.48 which sum was due and payable either jointly or severally.
Wynter Kabimba
WYNTER Kabimba has very dictatorial qualities which make him unsuitable for national leadership, Southern Province Rainbow Party chairman Leonard Hiyachoma has said.
Mr. Hiyachoma alleged that in his administration Mr Kabimba was exhibiting autocratic and domineering administrative tendencies by operating without following rules of natural justice, including suspending members without informing them or giving them an opportunity to be heard.
Mr Hiyachoma who has been suspended after resigning from Rainbow Party said it had been difficult to work with Mr Kabimba as they had differences on a broad range of issues including how the party could be governed.
Attempts to get a comment from Mr Kabimba and Rainbow Party mobilization chairman Robert Chikwelete proved futile.
Mr. Hiyachoma said because of the differences, he had even decided to resign from the party and was shocked that Mr Kabimba decided to suspend him without any correspondence.
He told the Daily Nation that Mr Kabimba was a leader who did not believe in listening to the views of other party members and that accusations that he (Hiyachoma) had been treacherous were unfounded as he had never engaged in any form of clandestine political activities against the Rainbow Party.
Mr Hiyachoma said every organization had administrative procedures and that Mr Kabimba should have written to him before running to the Post Newspaper to announce his suspension.
He said he was disappointed that he had to learn about his suspension in the Post Newspaper when Mr Kabimba could have easily called him to find out the truth ‘’before excitedly rushing to the media’’.
He said he had never met any United Party for National Development (UPND) official and that it was shocking that Mr Kabimba who is the general secretary of the Rainbow Party could suspend him without verifying his allegations.
“You mean Mr Kabimba has suspended me from the Rainbow Party? I have not been informed and there has not been any form of correspondence. It is undemocratic to take punitive actions against members in a party without informing them or giving them an opportunity to be heard. I do not understand Mr Kabimba’s kind of administration and leadership. In a normal organization, I should have been given the opportunity to be heard before being punished.
‘‘I am shocked that Mr Kabimba has suspended me and decided to inform the Post Newspaper before giving me the letter. I have never belonged to the UPND and it is not true that I have been treacherous. In fact, because of the many differences I have had with Mr Kabimba, I resigned from the Rainbow Party,” Mr Hiyschaoma said.
Mr Hiyachoma said he was not a pushover in politics and that his suspension was going to anger a lot of his supporters in the region and that the Rainbow Party risked becoming extinct if Mr Kabimba was going to continue governing the party using autocratic means.
He said Mr Kabimba had been receiving false reports about him and it was unfortunate that the Rainbow Party leader had been acting against his party members on hearsay.
He said that since he was a more organized leader, he was going to follow administrative procedure and wait for his suspension letter before taking any action.
“Just wait, I want to follow procedure and wait for my letter of suspension”,Mr Hiyachoma said.
President Jacob Zuma has congratulated hip hop artist Cassper Nyovest on being the first South African musician to fill the 20,000 seating capacity Dome in Northgate, Johannesburg, without the help of an international act.
Cassper Nyovest, real name Refiloe Maele Phoolo, performed to a full capacity Dome arena over the weekend, fulfilling his dream and in the process achieved a feat that no other South African artist had ever achieved. “We congratulate Cassper Nyovest for his tremendous success which has demonstrated the rich talent that exists within our country’s music industry especially amongst our youth,” said President Zuma. “Cassper has also confirmed the enormous support for local music by our youth, which augurs well for the development of our arts, culture and heritage,” said President Zuma.
Are our Zambian artists capable of doing something similar ?
The Zambia Institute of Estate Agents says it is deeply concerned with current trend by landlords and property developers charging rentals in US dollars.
The Institute said this situation has caused serious difficulties amongst the business community.
Institute President Saul Kiwempindi said the hedging against Kwacha depreciation and uncertainty of future currency trends should not be shifted or be shouldered by tenants alone.
‘ZIEA is deeply concerned with current trend by landlords and property developers charging rentals in US Dollars. The current economic difficulties we are experiencing are caused by the regular depreciation factors among them the decline in the demand for our major export and therefore we need to bare and share the burden collectively,’ Dr Kiwempindi said.
Dr Kiwempindi said commercial and some residential tenants are having difficulties raising rentals that have increased in Kwacha terms due to the dollarization.
‘The dollarization of the rentals is stifling the economy and defeating government efforts to stabilize the economy. ZIEA understood the consequences of SI 33 and its revocation, however, it is time to bring to the attention of government the likely consequences of dollarization of rentals,’ he said.
Dr Kiwempindi said, ‘If the private sector is overburdened by high rentals due to dollarization government will not meet its targets in terms of revenue collections and ultimately fail to meet its obligations. ZIEA is calling upon government through Ministry of Finance, Ministry of Trade and Commerce and other related departments to critically examine this situation with the urgency it deserves.’
He said the Institute proposes a subsidiary legislation to deal with aspect of commercial rentals to enable the private sector continue operating in this current situation and emerge out of it without disturbance.
He said in some cases, the rentals have gone up between 50% to 100% while in other cases it is beyond 100%.
Dr Kiwempindi said the Institute believes that this situation is unacceptable in an economy which is suffering severe external factors beyond our control.
He said the dollarization of the rentals is stifling the economy and defeating government efforts to stabilize the economy.
‘Furthermore, we call upon property developers and landlords to seek the understanding of the current economic situation to be able to make informed decisions that will not harm the economy further.’
‘It is the concerted efforts of individuals and government that will allow the country emerge economically strong and therefore we appeal to property developers and landlords not to hedge against uncertainties by overburdening their tenants,’ he said.
Jay Rox recently won Best International African Act at the 2015 BEFFTA Awards ! We caught up with him to get his feelings about it , and about the continued success of his second album “Outside the Rox”.
KAPA187: First off, congratulations for winning Best international African Act at this years BEFFTA Awards. What does winning this award mean to you?
Jay Rox: This award means a lot to me, it’s my first international award as a solo act and will also be treasured.
KAPA187: What was your initial reaction when you heard you won?
Jay Rox: I only got to hear the news a few hours after the announcement was made. One of my managers from the UK that attended the awards on my behalf decided to not tell me just so she can see how anxious I can get. So when she told me I won, I kind of didn’t believe then after a few minutes it sank in and I was grateful to God and my fans for making it possible.
KAPA187: Zambian music is slowly but surely getting recognition internationally, what in your opinion needs to be done to accelerate the process?
Jay Rox: We need more artists focusing on exporting the music. When there are a lot of artist making noise internationally from Zambia, it will be impossible to avoid us.
KAPA187: Your Album “Outside the Rox” has been highly acclaimed by fans and music critics alike, some calling it the album of the year. How was the process of coming up with the album, and how do you feel about the success it has attained?
Jay Rox: The creation of Outside The Rox was not easy. I lost my mother along the way and she was the fuel behind the idea and also lost a couple of friends but God stayed faithful and made it possible.
Seeing the album do what’s its doing brings me great joy because for longest time, all I longed for is to be able to have a positive impact on the people that listen to my music and it’s happening now.
KAPA187: Having done some high quality videos for your singles such as “Autopilot” , “Not for Sello” , how important is it to have a good video to go along with great music.
Jay Rox: We are living in a generation were the fans tend to have their eyes glued to television sets more than they listen to radio. So for you to be able to reach the masses you have to work on both a song and a video. And the western world has accustomed our people to quality music videos, so the only way you can fully have the people’s attention is by producing a music video that’s of similar standard.
KAPA187: My favorite songs on your album are,” Time of my life” and “Not For Sello”. Can you give us a brief background about those songs?
Jay Rox: Time of my life talks about finding inner happiness. When man finds inner happiness no one can darken his days. The song was produced by Cashroll at So Good Ent.
– Not for Sello is a gender based violence and self-worth song. No matter how hard life maybe get, just believe in yourself and God. Selling yourself for temporal happiness will only damage your life.
KAPA187: What do you have in store for your growing fan base as the year draws to an end. Willz and yourself are said to be working on a collaborative album , could you shed some light on that . Could you also update us on the status of Zone Fam .
Jay Rox: Yes Willz and I are working on a collaborative album that will be coming out some time next year called “Run Town”. So before the end of the year, the fans should expect a single from the album.
– Zone Fam is still together and we have some new music dropping soon.
KAPA187: As Zambia just celebrated 51 years of independence, what is your word to your fellow young people as we moved to our next 50 years?
Jay Rox: Our fathers have managed to bring our country to where it is, it’s now time for us to wake up and build it for the next generation. Let’s start by registering to vote for next year’s elections.
KAPA187: Any last words…
Thanks a lot to everyone that voted for me at this year’s BEFFTA Awards. May God bless you guys..
Kabwata Member of Parliament GIVEN LUBINDA
Civil Society for Poverty Reduction (CSPR) says President Edgar Lungu’s warning that government could introduce price controls if miller’s continue exploiting consumers is a threat on the operations of the private sector.
CSPR Civic Participation and Advocacy Programme Officer Maxson Nkhoma says President Lungu should realize that Zambia is a free market economy where prices are determined by the forces of demand and supply.
Mr. Nkhoma says President Lungu should accept that things are not well in the country due to operational challenges affecting millers in their production.
He says it is a known fact that the power deficit current the country is facing has contributed massively to the escalating mealie meal prices because millers are spending a lot on their production.
And Agriculture Minister Given Lubinda says Government is concerned with the high cost of fertilizer in the country which most farmers cannot afford.
Mr. Lubinda says this high cost of fertilizer means the country should expect reduced production in the coming farming season.
He however, says government is looking at how best it can intervene to help reduce the cost of fertilizer so that as many farmers as possible can afford and thereby produce as much as they can.
Mr. Lubinda says government owes it to the farmers and to the citizens at large to ensure that the cost of fertilizer goes down.
He states that this is considering the impact farming has in reducing poverty in the country.
The Agriculture Minister has since encouraged relevant stakeholders to come up with suggestions on how best government can help reduce the cost of fertilizer.
First Lady Esther Lungu breaks down during the burial of the three Chinese nationals who were murdered on the Copperbelt. This was at Kitwe-Chingola road Cemetery in Kitwe on Tuesday, November 3,2015 -Picture by THOMAS NSAMA
The three Chinese business executives who were killed by bandits in Kitwe last week have been cremated at the Chingola Road cemetery.
First Lady Esther Lungu, who attended the cremation, said that the killing of three Chinese nationals on October 26 in Kitwe’s Garnatone area was regrettable.
Mrs. Lungu said that the Zambian people were devastated at the gruesome murder of the three. She said the death of the three Chinese nationals should not break the relationship between Zambia and China that has existed for decades.
The First lady said government is doing everything possible to bring the culprits to book.
Mrs. Lungu said this during the cremation of the three Chinese nationals at Kitwe Chingola Road Cemetery on Tuesday.
Mrs Lungu said that President Edgar Lungu is saddened that Zambians can behave in such a manner and has since directed the police to bring the culprits to book as soon as possible.
And Chinese Ambassador to Zambia Yang Youming has appealed to the Zambian Government to arrest the criminals that murdered the three Chinese nationals and take necessary action to safeguard the Chinese community.
Mr. Youming said China will continue working with Zambia to strengthen their relations.
He said the Chinese community is touched that First Lady Esther Lungu attended the funeral of the three Chinese nationals that were killed in Kitwe.
Meanwhile, Kitwe District Commissioner Chanda Kabwe said that three people have since been arrested in connection with the killings and will appear in court soon.
Mr. Kabwe also disclosed that the police have intensified patrols in Garnatone in view of the killings.
The three are Wang Gang, Yu Xiao Bin, Wang Hui of Golden King Investments, which deals in building materials, and employees about 70 Zambians.
First Lady Esther Lungu pays her last respects during the burial of the three Chinese nationals who were murdered on the Copperbelt. This was at Kitwe-Chingola road Cemetery in Kitwe on Tuesday, November 3,2015 -Picture by THOMAS NSAMA
TRANSPARENCY International Zambia (TIZ) has welcomed the Lusaka High Court’s dismissal of the appeal by former first secretary at the Zambian mission in Italy Andrew Banda in which he was challenging his two year jail sentence.
The Court on Monday rejected the appeal by Mr Banda who was found guilty by the Lusaka Magistrate of soliciting and receiving K171,000 as a reward for assisting Fratelli Locci SRI, an Italian firm.
TIZ information officer Charles Chulu said in a statement in Lusaka yesterday that the organisation was happy with the decision by High Court judge Mwila Chitabo.
“As an institution founded on morals of transparency and accountability, we further hope that the lesson of sentencing and conviction of Mr Banda will compel public officers to refrain from engaging in similar criminal offences that only benefit them and not the people of Zambia.
“As we welcome his conviction, we feel that the two year sentence slapped on him and others in the recent past, is light and will not serve to deter other would be offenders from engaging in acts of abuse of office and corruption,” he said.
He said the oragnisation hoped that the courts of law would consider increasing the number of years of imprisonment for similar offences.
He appealed to the Judiciary to continue finding means and ways of speeding up the onclusion of such matters in good time.
“We fully recognise the need for the due process of the law, but we would at the same time urge the necessary authorities to put in place measures that reduce the overall workload that the courts of law have to contend with,” he said.
He said the courts have an important role to stem out the wanton corruption and such judgments were strong reminders.
Maamba Collieries Plant
ZAMBIA is going to record an energy surplus by the end of next year once stakeholders participated effectively in efforts aimed at boosting power production.
Zesco, senior manager, in charge of generation, Ernest Banda said in Lusaka that Zambia is likely to record an energy surplus by the end of next year, as long as investors in energy, the public and all stakeholders participated effectively.
Mr Banda said this during a presentation at a stakeholders’ consultative meeting on the promotion of renewable energy hosted by the Ministry of Energy and Water Development and Tomorrow Investments.
“Going forward, in the long term, hydro power will increase with the successive completion of the power agreements and when all the energy projects go online. Zambia will exceed the demand of 1,900 mega watts and have surplus power by the end of 2016,” he said.
Mr Banda said the current demand for power is 1,750 mega watts and during peak hours, the demand was at 1,940.
The power that was available currently was 1,230 mega watts.
In order to mitigate these problems, Zesco with the support of Government has made interventions like importing power and managing the load using power cuts as well as embarking and supporting power projects.
Mr Banda said Zesco had also embarked on the third phase of distribution of compact fluorescent lamps and would soon be lobbying for the banning of importation of incandescent bulbs in the country.
Energy Minister Dora Siliya said there was need for investment alternative energy by the private sector in order to mitigate the energy deficit.
Ms Siliya said the private sector should be vibrant enough to come up with initiatives that would help the country.
She said the onus was especially for youths to invest in the energy sector.
“There are a lot of opportunities in the sector for the private sector especially the youth. Do not wait for Government to come up with measures to get you together. You should come together yourselves and tell Government what you want us to do for you,” she said.
She said each citizen had a role to play in energy saving by choosing to use energy saving bulbs and opting to use solar powered equipment.
Ms Siliya said she was holding discussions with her Commerce, Trade and Industry counterpart Margaret Mwanakatwe on coming up with measures to exempt certain solar powered goods from tax in order to encourage the public to use solar powered household goods.
VICE-President Inonge Wina has assured that President Edgar Lungu will not fail to run the country despite the economic problems that the country is currently going through.
Ms Wina said Mr Lungu was a humble leader whose interest was on Zambians and would do everything possible to improve their wellbeing.
She was speaking during a luncheon held in her honour by Zambia’s High Commissioner to the United Kingdom (UK) Muyeba Chikonde and his wife Musonda at the official residence.
This was according to a statement released yesterday by first secretary for press at the Zambian mission in the UK Abigail Chaponda.
She said the economic challenges that Zambia was facing were not unique to Zambia alone, but to many other African countries and that the country would pull through by the grace of God.
Ms Wina said the prayers that were held on October 18, this year, were not in vain because a lot of things in the country had started producing positive results.
She urged Zambians in the diaspora to ignore negative reports because they were coming from people that were not happy with the current administration.
Ms Wina was in London leading a Zambian delegation to an Investment Forum organised by the Developing Markets Associates (DMA).
She was accompanied by Commerce, Trade and Industry, Minister Margaret Mwanakatwe, Tourism Permanent Secretary Stephen Mwansa and other government officials and others from the private sector.
The Trade and Investment Forum is starting today in Central London with more than 200 UK based businesses and investors expected to attend.
The event would focus mainly on priority areas such as energy, agriculture, infrastructure and the extractive industries as well as industrialisation.
Mr. Emmanuel Mwamba makes an intervention during during discussion before the launch of the Zambia-South Africa Business Council in Johannesburg
TRANSNET of South Africa has proposed to establish a multi-purpose fuel pipeline from Ndola to Lusaka which will help Zambia reduce its fuel pump price, among other benefits.
Transnet has also offered, on terms that could be agreed on later, to pass on to Zambia Railways Limited (ZRL) its railway fuel tankers that it previously used to transport fuel stocks between Durban and Johannesburg. This follows Transnet’s completion of a 20 billion rand pipeline between Johannesburg and Durban.
This is contained in a statement issued to media by Press Secretary at Zambia’s mission to South Africa Nicky Shabolyo.
The company has had to take the pipeline option as this has in recent times been identified as the most cost effective and efficient way of delivering fuel across long distances.
The company has further called for the resolution of challenges it has been facing with ZRL in implementing its so-called North-South Corridor project which is part of its efforts to realising its grand venture of integrating South Africa with the rest of the continent through the creation of competitive corridor supply chains.
The projects came to light when Zambia’s High Commissioner-Designate to South Africa, His Excellency Mr. Emmanuel Mwamba met Indeni Chairperson Mr. Johnstone Chikwanda, Transnet Executive Manager for International Business Ms. Nyameka Madikizela and Commercial Manager in charge of private sector participation Ms. Maggie Tsholetsane at his office in Pretoria yesterday.
Transnet is a South African state-owned company with experience in rail transportation, port management as well as pipeline technology and transportation.
Ms. Madikizela said Zambia had strategic resources and its location was attractive to Transnet in as far as the logistics supply chain and rail transportation of imports and exports through South African ports was concerned. The North-South Corridor, to which Zambia is a major party, can accommodate bigger vessels at a shorter turn-around time when compared to other export/import corridors.
“Transnet has been working closely with Zambia Railways Limited as a strategic partner, as Zambia is one of the few countries where there is return cargo originating from its source,” Ms. Madikizela said.
She said Transnet has established three Joint Operating Centres (JOC’s) on three of their international corridors which are Maputo, Noth-South and East-West Corridors and that the plan was to integrate South Africa with the rest of Africa through corridor chains that will integrate its ports and railways efficiently.
Ms. Madikizela said ZRL was a co-signatory to the North-South Corridor operations memorandum of agreement (MOA) which included the development of the Maputo Corridor long-term railway and port investment plan so as to ensure that the planned volume growth and logistics are synchronised with the required infrastructure investment.
She regretted that the momentum on the North-South Corridor has slowed down and urged all parties to the project to re-dedicate themselves.
The North-South Corridor investment project was being led by the NEPAD Business Foundation; and sponsored by TFR and Grindrod (a shareholder in BBR). The project takes into account the current and future volumes, the infrastructure assessments, the funding requirements, and others. The NEPAD Business Foundation is in the process of appointing consultants to execute the outputs that the railway operators were unable to execute.
On the proposed pipeline from Ndola to Lusaka, Ms. Madikizela said this would be a public policy driven project which could be constructed along the ZRL corridor under a private-public-partnership (PPP) structure. The project would involve a local partner, ZRL and Transnet and did not require the Government of Zambia to raise or source any funds as financing would be raised by the PPP members.
She said the proposed multi-purpose fuel pipeline would be from Indeni Oil Refinery in Ndola to another terminal to be established in Lusaka.
Ms. Madikizela said the pipeline would be underground and made of appropriate material and envisaged to transport about 500 million litres of stock per year.
She said Government support would be needed as the bulk of the fuel to be transported would be inter-depot and belong to Government. Ms. Madikizela pointed out that revenue would be raised by charging fuel owners, who are the Government and oil marketing companies, a tariff for carrying the commodity.
“This is a huge project which, just as in the case of a similar project we have just finished between Durban and Johannesburg, will directly and indirectly create significant employment for Zambians both during and after construction.”
“This way of transporting fuel has several advantages which include reduced fuel cost for owners, it is safer compared to road tankers, there is reduced pressure on roads and above all it guarantees fuel security or availability in the country as the pipeline is complete with a depot which could contribute to increased fuel holding capacity in the southern region of Zambia,” she said.
His Excellency Mr. Mwamba said the Mission has written to the Ministry of Transport and Communications and proposed meetings with stakeholders in Zambia to be held between 15 and 19th November, 2015.
Mr. Mwamba said the proposed projects would help reduce the fuel pump price for the benefit of individuals and the business community in Zambia which he said would lead to economic growth.
The Bank of Zambia has raised its policy rate to 15.5 percent from 12.5 percent in a move aimed at curbing rising inflation.
The Central Bank has also announced that it is lifting caps on lending rates.
BoZ Governor Denny Kalyalya told a quarterly media briefing reporters in Lusaka that the move to raise interest rate.
Dr Kalyalya said the Bank’s Policy Monitoring Committee is hopeful that the measures will help stem the rise in inflation.
He said keeping inflation expectations anchored in single digits is critical to maintaining the targeted macroeconomic objectives and in particular steering inflation towards the 2016 target.
The next Monetary Policy Committee Meeting will take place in February 2016.
Below is the full statement from Dr Kalyalya
The Monetary Policy Committee (MPC) held its meeting on 2nd November, 2015. The MPC considered developments in the global and domestic economies during the third quarter of 2015 and the outlook for the fourth quarter.
The MPC also decided on the monetary policy stance aimed at achieving the inflation objective and to support macroeconomic stability.
GLOBAL ECONOMIC DEVELOPMENTS
The Committee observed that the trend of weak growth in the global economy evident in the second quarter of 2015 was sustained during the third quarter of the year.
The International Monetary Fund (IMF), in its October 2015 World Economic Outlook (WEO) Update revised global growth downwards to 3.1% in 2015, 0.2 percentage points lower than the July WEO Update. Growth prospects remain uneven as output in advanced economies is expected to pick up slightly while activity in emerging markets and developing economies is projected to further slowdown, maintaining the deflationary pressure on commodity prices.
Over the third quarter, the average prices for copper and crude oil (Dubai) continued on a downward trend, falling to US$5,267.0 per metric tonne (mt) and US$49.9 per barrel from US$6,057.0 per mt and US$61.4 per barrel, respectively. As was noted in the August 2015 Monetary Policy Statement, the prospects for interest rate increase in the USA during the year continued to shift investor preferences in favour of US dollar denominated assets and further supported the strengthening of the US dollar. With this prospect on the horizon and the further slowdown in the Chinese economy, it is expected that the currencies of emerging markets and developing economies will remain under pressure as investors realign their portfolios.
DEVELOPMENTS IN THE DOMESTIC ECONOMY
The Zambian economy is currently facing significant challenges, with deterioration in the external environment similar to what was experienced during the global financial crisis of 2007/8. This has been compounded by domestic shocks related to the significant reduction in energy supply, fiscal pressures and adverse sentiments. The Committee is cognisant of the urgent need to diversify the economy that will require measures to support investment and growth in key sectors, such as agriculture, energy and manufacturing.
Monetary policy coupled with fiscal consolidation will be critical in anchoring macroeconomic stability. The fiscal deficit target for 2016 of 3.8% of gross domestic product (GDP) announced by the Hon. Minister of Finance in his 2016 Budget Address to Parliament represents a significant step towards anchoring macroeconomic stability.
MONETARY POLICY
At its previous Meeting in August 2015, the MPC kept the policy rate constant, having raised the Statutory Reserve Ratio in April 2015 to 18% from 14%. During the third quarter, liquidity conditions in the banking system rose reflecting increased Government spending and the net maturity of Government securities.
The Bank of Zambia, therefore, heightened its open market operations and kept the interbank rate just above the upper policy rate band of 14.5%.
INFLATION
The average overall annual consumer price index (CPI) inflation was 7.4% in the third quarter, 0.3 percentage points higher than the second quarter average of 7.1%. Inflation ended higher at 7.7% in September 2015, up from 7.1% in June 2015. Food price inflation edged higher to an average of 7.9% in the third quarter from 7.1% in the preceding quarter. However, quarterly average nonfood price inflation declined to 6.7% from 7.0%.
The increase in inflation was largely attributed to the pass-through from the sharp depreciation of the Kwacha exchange rate, increase in pump prices of refined petroleum products, revision of fees and fines, and the high production costs induced by increased power rationing, which led to the use of more expensive power from diesel generators.
MONEY AND GOVERNMENT SECURITIES MARKETS
Excess liquidity in the banking system increased substantially in the third quarter due to net Government spending as well as maturity of Government securities.
The high liquidity level raised reserve money by 8.7% to K13.5 billion at the end of September, depressed demand for overnight lending facility funds, and pushed the Treasury bill and Government bond composite yield rates lower by 1.6 and 0.3 percentage points to 21.7% and 23.5%, respectively.
While the value of funds raised through Government securities auctions jumped 20.3% to K4.0 billion, the outstanding balance of Treasury bills and bonds (at face value) fell 2.0% to K25.5 billion.
To contain the liquidity build up and attenuate inflationary pressures, the Bank of Zambia heightened its open market operations.
MONEY SUPPLY, CREDIT AND INTEREST RATES
Broad money (including foreign currency deposits) increased by 26.3% to K46.6 billion in the third quarter largely due to the rise in deposits.
The expansion in deposits to K42.0 billion (and increase of 28.2%) reflected valuation effects owing to the sharp depreciation of the Kwacha against the US dollar in the third quarter.
Foreign currency deposits rose by 9.4% to about US$1.8 billion while Kwacha deposits marginally increased by 0.7% to K20.9 billion. Growth in domestic credit slowed down further in the third quarter to 2.7%, mainly due to a decline in lending to Government that fell by 52.9%. Lending to the private sector, however, rose by 22.0% in the third quarter from 1.2% in the second quarter. The average lending rate for commercial banks rose marginally to 20.8% at end-September from 20.4% at end-June.
Similarly, the average savings rate (ASR) for amounts above K100, and the average 30-day deposit rate for amounts exceeding K20, 000 marginally rose to 3.30% and 6.6% from 3.28% and 6.4% over the same period, respectively.
With the rise in inflation, real lending rates declined.
The average real lending rate decreased to 13.1% in September from 13.5% in June 2015.
Similarly, the real average 30-day deposit rate for amounts above K20,000 declined to -1.1% from -0.7% while the real ASR for amounts exceeding K100 declined to -4.4% from -3.8% in the second quarter.
FOREIGN EXCHANGE MARKET
The Kwacha came under severe pressure in the third quarter. Factors behind this were weak copper prices induced mainly by declining growth in China, the main buyer and consumer of copper; and adverse sentiments relating to power rationing, developments in the mining sector (prospects of job losses and scaling down of operations and reported loss of interest from investors), fiscal and current account deficits; and general performance of the economy.
Consequently, the Kwacha depreciated sharply by about 60% against the US dollar to end the quarter at K11.9800/USD. The Kwacha also weakened by an average of about 51% against the British pound sterling, euro and South African rand to end the quarter at K18.2334/GBP, K13.4435/Euro and K0.8679/ZAR, respectively.
EXTERNAL SECTOR
The current account deficit widened further in the third quarter to US$401.0 million from US$305.9 million recorded the preceding quarter on account of higher import related service payments and the increase in income on equity payments by foreign owned enterprises.
The deficit on the balance of goods narrowed to US$14.0 million from US$91.0 million recorded in the preceding quarter due to a higher growth in goods exports relative to imports. Preliminary data show that an overall balance of payments surplus of US$716.0 million was recorded in the third quarter against a deficit of US$27.8 million in the second quarter mainly as result of the receipt of the third Eurobond proceeds.
FISCAL SECTOR DEVELOPMENTS
The Hon. Minister of Finance in his 2016 Budget Address announced a reduction in the planned fiscal deficit to 3.8% of GDP from a projected 6.9% of GDP in 2015. Achieving this sharp fiscal consolidation will help to anchor macroeconomic stability, and ease domestic financing requirements and funding pressures.
This will therefore also support the conduct of monetary policy.
THE BANK OF ZAMBIA POLICY RATE
In arriving at the decision, the Committee took into account the inflationary developments in the third quarter and the inflation outturn of 14.3% in October, 2015.
The October outturn has pushed inflation into double digits, largely reflecting the sharp depreciation in the exchange rate as witnessed in recent months. Keeping inflation expectations anchored in single digits is critical to maintaining our targeted macroeconomic objectives and in particular steering inflation towards the 2016 target.
To this end, the MPC decided to further tighten monetary policy by raising the Policy Rate to 15.5% from 12.5%. In addition, to allow for better functioning of the credit market, the MPC decided to lift the caps on lending rates.
Both measures take effect immediately. The Bank of Zambia will continue to monitor domestic and external developments and stands ready to take appropriate monetary policy measures to support macroeconomic stability. The next MPC Meeting will take place in February 2016.
