(NEWZIMBABWE) Zimbabwe secures $53m from AfDB
22/01/2014 00:00:00
by Business Reporter
AFRICAN Development Bank (AfDB) on Wednesday signed deals with the government worth US$53 million expected to help revive the country’s power generation, infrastructure rehabilitation, water and sanitation.
Three of the grants are funded by the Zimbabwe Multi-Donor Trust Fund (ZimFund) worth a total of US$39,3 million while the other three are financed by AfDB totalling US$13,5 million. AfDB will be the administrators.
Finance Minister Patrick Chinamasa said the grants will go a long way in meeting the requirements of the Zimbabwe Agenda for Sustainable Socio-Economic Transformation (ZimAsset).
The six grants cover the areas of power and infrastructure rehabilitation, US$20 million water and sanitation, US$19,8 million, governance, US$8 million, youth and tourism US$4,1 million and transport US$1,3 million.
“I am pleased with the implementation progress of ZimFund projects since their inception. Some equipment which includes transformers has also been received for the Emergency Power Rehabilitation projects. I believe the signing of three more grants will further these results,” Chinamasa told journalist at a press conference.
“These projects will increase the total commitment of the bank’s active portfolio in Zimbabwe from US$113,5 million to US$166 million expanding the range and extent of our activities in support of the recovery of Zimbabwe’s economy through capacity building and also protecting assets and lives by investment in critical infrastructure such as water and power,” he said.
Chinamasa commended the country’s development partners namely Australia,Denmark, Norway, Sweden, Switzerland and the United Kingdom who have contributed to the fund.
“I urge our development partners to scale up their contributions to the Fund and also call upon non-participating partners to come on board,” he said.
AfDB resident representative Mateus Magala said the signing of the protocols was testimony of the strong partnership between ZimFund contributing donors, government and the bank.
“These projects are aligned to ZIMASSET. They are also consistent with the bank’s group ten year strategy which aims to place the bank at the centre of Africa’s transformation. They will support the country’s recovery efforts and its quest to address the critical challenges of promoting strong and inclusive growth that promotes a prosperous and equitable society,” he said.
Zimbabwe, has since dollarization in February 2009, been failing to attract funding to improve power generation, water reticulation and improve the infrastructure.
Most companies are under-capitalised and struggling to pay their bills. The banking sector, itself in dire straits, lacks capacity to lend to businesses to buy new equipment or fund their working capital.
Labels: AfDB, ENERGY
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AfDB launches 3-month pilot initiative in Zambia, Tanzania
By Kabanda Chulu
Mon 02 Sep. 2013, 14:00 CAT
AfDB has launched a three-month pilot business development initiative in the industries and services sector of Zambia and Tanzania aimed at unlocking the industrial potential of the two countries.
Under its private sector department, the African Development Bank (AfDB) was interested in engaging with sponsors in Zambia and Tanzania who have project concepts that were aligned to the strategic priorities of the bank.
"Project promoters are encouraged to visit the webpage to understand the criteria for project selection. Should your project comply with the criteria specified, you are advised to upload an executive summary of the project, including the project description, the sponsors, cost estimates, financing plan, key technical and environmental features, feasibility indicators, business climate and market prospect, and implementation plan," it stated.
"The Bank's team will then get in touch with prospective project developers to take the discussion forward."
AfDB stated that projects would be screened through a rigorous due diligence process focusing both on commercial viability and development outcomes.
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Govt consults on new minerals policy
08/07/2013 00:00:00
by Business Reporter
THE government is in the process of developing a minerals policy that seeks to, among others things, address challenges affecting the sector and explore ways of attracting new investment the African Development Bank (AfDB) has said.
In its monthly economic review for May released last week, AfDB said the Ministry of Mines and Mining Development had held consultations with stakeholders in Masvingo, Bulawayo and Kadoma to solicit views and enhance stakeholder buy-in on the draft policy.
“More stakeholder consultations are planned for the other mining centres across the country. The draft policy proposes to establish an internationally competitive, stable and conducive business climate to attract and sustain foreign and local investment, while ensuring equitable distribution of benefits from mining activities to meet both current and future needs,” said AfDB.
“It further proposes to overhaul the Mines and Minerals Act and introduce new minerals development legislation that will maximize the impact of mineral assets on growth and development,” the bank said.
AfDB said a web based mining survey and information management system would enhance transparency in the awarding and monitoring of mineral rights.
“The development of a mineral policy is critical, particularly given the increasing role of the mining sector in supporting the socio-economic growth objectives of the government, job creation, and revenue and export earnings,” said AfDB.
In terms of key sector developments in recent days AfDB said the Trojan refurbishment program was completed, and the first shipment of nickel concentrate to Glencore was dispatched in April 2013.
The Mwana Africa subsidiary delivered its first shipment of nickel concentrate to Durban, South Africa, as part of an agreement with Glencore International signed between Bindura Nickel Company and the global commodity trader.
The agreement allows Glencore to purchase all of the concentrate produced at the Trojan mine at a price linked to the London Metal Exchange settlement price.
Refined platinum output at Unki mine decreased by 22 percent, dropping from 18,000 ounces in the first quarter of 2012 to 14,000 ounces during the same period in 2013.
At least 362,000 tonnes of platinum ore were milled during the period under review against 379,000 tonnes milled in the same period last year. Unki mine’s refined platinum production decreased due to lower head grade and also a depletion of pre-production stockpiles.
Since 2009 the mining has been one of the sectors anchoring the recovery and growth in Zimbabwe.
Labels: AfDB
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AfDB urges ZAWA to open up game ranching
September 24, 2012
FRED KWESIGA
By CAROLINE KALOMBE
THE African Development Bank (AfDB) has urged the Zambia Wildlife Authority (ZAWA) to revise its policy on game ranching to allow citizens to set up game ranches in a bid to create employment.
AfDB Zambia country representative Freddie Kwesiga says ZAWA needs to revise its policy of 2007, to allow communities to own game ranches.
Dr Kwesiga said in an interview in Lusaka on Thursday that game ranching will allow for breeding and restocking of animals, to increase animal population in game management areas.
“ZAWA is in the process of revising its policy of 2007 to allow for game ranching, which will ensure ownership by the communities,” Dr Kwesiga said.
He said genuine empowerment of the people will only take place when communities are allowed to own ranches.
Dr Kwesiga said this can be done by allowing chiefs, who are the custodians of land surrounding game management areas, to own 50 per cent of the business and employ local people.
“How can you reduce poverty and empower the people if you do not allow them to own the land?” he asked.
He said game ranching is not a very difficult undertaking because wild animals do not need veterinary care.
Dr Kwesiga said all the animals need is an area where there is adequate pasture and water, which is not a problem in most parts of the country.
He said the animal population has been on the decrease and restocking will increase their numbers and open up the country to tourism.
Recently, Minister of Tourism and Arts Sylvia Masebo urged Zambians to take advantage of business opportunities being offered in the game ranching sector which has remained untapped for many years.
Ms Masebo said game ranching and the tourism sector in general have great economic potential and urged the private sector to take up the challenge and open up new facilities.
Labels: AfDB, WILDLIFE, ZAWA
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Chikwanda bemoans high levels of inequality in urban areas
By Chiwoyu Sinyangwe
Tue 10 July 2012, 13:24 CAT
THE levels of inequality in urban areas are extremely high, says finance minister Alexander Chikwanda. And
African Development Bank (AfDB) vice-president Mthuli Ncube says Zambia and other countries are facing a unique phenomenon of "educated unemployed" youths resulting from mass higher education.[What is his solution - less education? - MrK]
Speaking during AfDB's regional high level policy dialogue workshop on youth employment, Chikwanda said the recent growth seen in the country had not done much to improve lives of ordinary people in rural areas and slums.
He said there was need to focus on creating jobs that did not only guarantee wages but also long-term social security.
"Rural poverty is very high at 80 per cent while inequality, especially in peri-urban areas is extremely high," said Chikwanda.
"How can we fashion our economic growth so that they can generate growth and focus on productivity? Economic growth and job creation are synonymous to one another. We must do more to encourage responsibilities and greater social cohesion."
And Ncube who is also AfDB chief economist said high youth unemployment and slow progress in poverty reduction has overshadowed any gains made from impressive economic growth of about five percent per year.
Ncube said the situation of youth unemployment deserved serious attention.
"Not only does it threaten to violate the principle of equality and solidarity between generations, which is important aspect of social justice. This therefore calls for paradigm shift," he said.
"Supply factors constraining youth employment include high prevalence of illiteracy among African youth and disconnect between 20th century education systems and 21st century labour market demands.
Paradoxically and concomitantly, African countries are increasingly experiencing the phenomenon of the 'educated unemployment' resulting from mass higher education."
Ncube said the government should prioritise measures that targeted young people most at risk by strengthening apprenticeship and other vocational training programmes for low-skilled youth.
"For those youth at greatest risk of social exclusion, while back-to-the classroom strategies might prove counterproductive for them, training programmes taught outside traditional schools, combined with regular exposure to work experience and adult mentoring, are often better strategies for these school dropouts," said Ncube.
Labels: AfDB, ALEXANDER CHIKWANDA
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Zim poised to clear AfDB arrears
Friday, 08 June 2012 12:00
Tawanda Musarurwa Business Reporter
ZIMBABWE’S arrears to the African Development Bank will be cleared under the Fragile States Facility, Reserve Bank of Zimbabwe Governor Dr Gideon Gono has said. The country owes the regional financier around US$510 million.
The FSF was established as an operationally autonomous special purpose entity within the AfDB to provide eligible fragile states with clearance of arrears for eligible countries.
The facility also provides technical assistance and capacity building support in an effort to contribute to accelerated state building and supplemental grant resources to support post-conflict states in their rehabilitation and reconstruction efforts.
Zimbabwe is one of the targeted beneficiaries of the FSF, and is listed as one of the “moderated fragile states”.
Commenting on the country’s Zimbabwe Accelerated Arrears Clearance, Debt and Development Strategy (ZAADDS), a strategy to fight the country’s external debt overhang which is estimated at over US$8 billion, Dr Gono said the country was able to meet the requirements of the FSF.
“Under this facility, Zimbabwe would be required to meet up to one-third of its arrears clearance obligations, while the remaining two-thirds of the required financing would be provided through the FSF.
“Zimbabwe is already on course towards fulfilling the preconditions for accessing financing under the FSF,” he said.
The key preconditions for accessing FSF funds include commitment to consolidating peace and security, a demonstration of the unmet social and economic needs, a track record of sound macro-economic and financial management reforms, respect of the preferred credit status of the AfDB group and eligibility for traditional debt relief.
The use of the AfDB’s FSF is one of the mechanics of the ZAADDS through which the country plans to re-engage with its respective multilateral, bilateral and commercial creditors.
Dr Gono said the re-engagement of bilateral creditors would be done primarily through the Paris Club, while the other official and non-Paris Club creditors members will be dealt with individually.
In terms of re-engagement with the Paris Club Creditors, the RBZ Governor said Zimbabwe would seek debt relief from the Paris Club under the Naples terms to clear its arrears to the Paris Club Creditors amounting to US$2,1 billion.
Under the Naples terms, the Paris Club creditors may write off up to 67 percent of the total outstanding debt stock and reschedule the balance over several years.
The Naples terms are applicable to countries whose Gross National Income per capita is less than US$500, and Zimbabwe qualifies since its GNI per capita is currently around US$340.
Dr Gono also added that the country is at an advanced stage towards entering a staff-monitored programme with the International Monetary Fund, which is a critical step towards re-engagement with the Paris Club creditors.
In terms of the ZAADDS strategy to re-engage with the IMF, the country is expected to secure resources from other development partners at concessional terms and deploy them towards clearing arrears to the IMF. Currently, the country is unable to pay off the overdue amount using its own resources.
Zimbabwe still owes the IMF about US$140 million contracted under the Extended Credit Facility.
The Government has since declined to settle its arrears with the institution under the Highly Indebted Poor Country strategy.
In terms of re-engagement with the World Bank, Dr Gono explained that the ZAADDS strategy proffers two options that the country can pursue.
The first option involves utilising the World Bank’s soft credit window, the International Development Association, to clear 15 percent of Zimbabwe’s arrears to the
World Bank Group, under the IDA15 replenishment arrangements. On the other hand, the World Bank can provide an Exceptional Arrears Clearance Grant under which a bridging loan can be provided by development partners and repaid with the proceeds of the IDA Development Policy Co-operation.
Dr Gono also said the Government would negotiate for a bridging loan or grant for the clearance of the European Investment Bank arrears. The idea is to repay the loan through proceeds of financing facilities from the international financial institutions.
Meanwhile, the Government is finally going to take an active approach in dealing with the issue of securitising the country’s vast mineral resources as part of the ZAADDS strategy.
Such players as the Confederation of Zimbabwe Industries, whose members are in dire need of effective sources of funding, have made calls for mineral securitisation.
“The policies enunciated in ZAADDS are at variance with the HIPC initiative as it leverages on the country’s natural resources for sustainable economic development,” said Dr Gono.
Labels: AfDB, GIDEON GONO
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AfDB chief urges Beitbridge solution
03/05/2012 00:00:00
by Business Reporter
IMPLEMENTATION of a one-stop border post at Beitbridge is “imperative” to reducing trade-restricting transactions costs currently estimated to be as high at $35-million a year, African Development Bank chief economist, Professor Mthuli Ncube argues.
In a paper entitled ‘Border Posts, Checkpoints and Trade in Southern African Development Community (SADC) Countries’, Ncube says chronic delays, congestion and inefficiency at Beitbridge are costly in both time and money.
Waiting times range from 33 hours to 45 hours, while yearly transaction costs are estimate to be between $29.3-million and $35-million.
By implementing a one-stop solution, similar to the one that has already been deployed at the Chirundu crossing between Zambia and Zimbabwe, Ncube believes the flow of commercial goods and services, as well as the movement of people, will improve significantly, helping to facilitate further trade and investment.
At Chirundu, northbound trucks are inspected and cleared by the Zambian authorities, while Zimbabwean officials clear southbound vehicles, reducing the duplication associated with two checks.
Average waiting times have reportedly fallen from around two days to two hours, while those using the fast-track preclearance procedure are now crossing within 15 minutes.
The reduced transaction costs associated with the one-stop solution have stimulated trade, which has increased revenues for Zambia by 30 percent.
Ncube believes the solution should be replicated at Beitbridge, which is one of the busiest border posts within the SADC, with more than 3 500 vehicles and 12 000 people crossing daily during peak periods.
The paper also makes the case for a more generalised roll-out of one-stop border solutions across the region.
Trade liberalisation efforts, Ncube notes, have helped raise trade volume within the SADC from $12.4-billion in 2000 to $34.5-billion in 2010, after peaking at $36-billion in 2008.
However, the large number of border posts and roadblocks along key SADC corridors are costing the region about $48-million a year.
“The customs environment in the regional grouping is characterised by a lack of coordination among the multiple government agencies on both sides of borders,” he said.
“This raises the common challenge of the duplication of procedures at each border, which increases the potential for risk management and fraud.”
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There is also a lack of computerised customs management systems, while such systems are not compatible when they do in fact exist.
The solution, Ncube states, lies in one-stop border posts, whereby people and products make a single stop and pass through simplified and harmonised customs and immigration procedures.
“One-stop border posts do not only facilitate the movement of goods and persons by reducing the bureaucracy and clearance times at the borders, they also enhance trade by reducing the high cost of trading emanating from delays, bribes, and cumbersome procedures at border posts,” he said.
Labels: AfDB, BORDER POSTS
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COMMENT - This article is peppered with the standard Reuters talking points (in baldface).
Election to hit growth prospects: AfDB
05/01/2012 00:00:00
by Nelson Banya I Reuters
ZIMBABWE'S projected economic growth in 2012 depends on a stable political environment which could be undermined if a contentious general election takes place, the African Development Bank (AfDB) said in a monthly review released on Thursday.
Finance Minister Tendai Biti expects the economy to expand by a further 9.4 percent in 2012 from a forecast 9.3 percent last year, mainly on the back of a rebound in agriculture and mining. Inflation is projected to average 5 percent this year.
The southern African country has been on a recovery path since 2009 when long-time ruler President Robert Mugabe agreed to share power with his rival, Prime Minister Morgan Tsvangirai, after disputed 2008 polls and in a bid to reverse a decade-long economic slump.
The AfDB said while international commodity prices would be key to Zimbabwe's economic growth prospects, internal policy decisions, such as Mugabe's drive to give control of foreign owned firms to locals, could hurt the economy.
"The on-going implementation of the indigenisation and economic empowerment laws and the expected national elections in 2012 continue to weaken external investor confidence," the AfDB said in its review of Zimbabwe's economy.
"The achievement of the 2012 projections is therefore subject to a stable political and economic environment ... and continued firming of the international commodity prices or increase in output."
Analysts say the empowerment laws, mainly targeting foreign-owned mines and banks, are holding back investment into the country and restraining economic growth.
Mugabe has however vowed to press on with the policy, which he argues is necessary to address imbalances created by colonialism. Critics have dismissed the policy as a political ploy to harness support ahead of elections.
The veteran ruler, in power since independence from Britain in 1980, wants elections this year to end a fragile three-year power-sharing government he has frequently described as dysfunctional.
However, Tsvangirai and regional leaders who brokered the power-sharing deal insist fresh elections can only be held after the adoption of a new constitution as well as broad electoral and media reforms.
A referendum on a proposed new constitution is expected sometime this year after a long-drawn-out process of drafting the charter which has suffered countless delays due to lack of funding and constant wrangling between the coalition partners.
Labels: AfDB, NEOLIBERALISM, TENDAI BITI
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EU banks refuse loans to firms doing business with Africa
ED CROPLEY JOHANNESBURG, SOUTH AFRICA - Nov 30 2011 11:12
Some European banks are now refusing to lend to firms trading with Africa, threatening growth in the world's poorest continent, a senior official of the African Development Bank (AfDB) said on Tuesday.
The AfDB is looking into ways of providing trade finance to firms doing business with Europe, where an inter-bank credit squeeze has driven up the cost of funding when it is available at all, chief economist Mthuli Ncube said on Tuesday.
The reluctance of some banks to make Africa-related loans as Europe's own debt crisis turns them increasingly risk-averse is an ominous sign as it repeats one aspect of the 2008 credit crisis.
"With the crunch in Europe the cost is creeping up and the willingness of the banks to extend the credit in the first place is also an issue," Ncube told Reuters in an interview.
In 2009, the Tunis-based AfDB clubbed together with the International Monetary Fund and South Africa's Standard Bank to provide commercial guarantees to keep imports and exports flowing smoothly.
Since then, the AfDB has received a massive $100-billion capital injection, most of which has been earmarked for infrastructure investment rather than trade finance. Ncube said that emphasis was likely to shift.
"With the credit crunch in Europe we maybe need to look at providing credit more directly," he said. "Trade finance is an area where we will intervene more visibly. It's something that we have not done a lot in the past but that is going to change."
Exports
Africa's trade with Europe was the only affected route, Ncube said, with the resource-rich continent's exports of minerals and hydrocarbons to the likes of China, India and North America flowing as normal.
He was unable to quantify the extent of the impact on European trade, but any sort of financing hiccup is likely to hit countries such as South Africa and Kenya, for whom Europe is the biggest trading partner.
CONTINUES BELOW
A European economic slowdown is already hitting demand for African exports. South Africa, the continent's biggest economy, sends a third of its exports to Europe, and Kenya more than 25%.
In 2008, Africa was largely insulated from the first round of the credit crisis triggered by a collapse in the US housing market, but felt the heat subsequently as commodity prices fell, direct investment dried up and Western aid budgets were trimmed.
Ncube said those latter situations were likely to happen again, while remittances from Africans abroad, which totalled $40-billion a year before the crisis, could drop if Europe slid into recession.
"As the economic slowdown continues, Africans working abroad will lose their jobs or become less secure, and so will send less home," he said. -- Reuters
Labels: AfDB, FINANCIAL CRISIS, GREAT DEPRESSION II
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Africa may be key to global economic hues, says AfDB
By Kabanda Chulu
Fri 28 Oct. 2011, 08:50 CAT
AFRICA is a land of opportunity and it can
help the global economy return to increased economic growth, says Africa Development Bank (AfDB) president Donald Kaberuka.
Speaking ahead of next month's Group of 20 industrialised countries to be held in France, Kaberuka said Africa had over the past decade made a great leap forward, and had left behind the stagnation of the past.
"The agenda of the French presidency of the G20 can contribute to this momentum and unlock the potential of Africa and all developing countries, not just for the good of Africa but also for the good of the world," Kaberuka stated.
"Africa is a ‘bearer of good hope' because of the support of the continent's partners, its demography that includes a host of talented young people and entrepreneurs together, and the economic reforms that Africa has undertaken over the past years."
Kaberuka, however, stated that there were still some problems to be dealt with in the economic and political spheres and in the management of Africa's natural resources.
"We remain cautious and vigilant in dealing with both internal and external risks and we should continue to build and develop infrastructure in Africa to maintain economic growth so that the private sector can be attracted to such projects," he stated.
Kaberuka emphasised the importance of having an inclusive economic growth that all people should share in the prosperity that economic success brings.
"Today, more than ever, the world needs a new growth momentum in order to deal with the multiple problems we face such as unemployment, deficit, debt and global poverty. Africa and its institutions are keen to play their part in that renewed growth momentum which the world economy needs at this time," stated Kaberuka.
Labels: AfDB, DONALD KABERUKA, GREAT DEPRESSION II
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US dollar 'poses credit challenges': Ncube
04/07/2011 00:00:00
by
THE adoption of the US dollar as a base currency in Zimbabwe has been positive but also challenging, Mthuli Ncube, chief economist and vice-president of the African Development Bank (ADB) has said. Zimbabwe adopted the US dollar in 2009, shortly before the establishment of the establishment the coalition government.
But Ncube said on Monday morning that, while the dollarisation in Zimbabwe had been positive by stopping inflation "dead in its tracks" and improving growth, it had also increased the cost of doing business and reduced the availability of credit.
"It [dollarisation] has slowed down the availability of credit in the productive sector but, secondly, just made the cost of doing business very high," said Ncube who ran Barbican in Zimbabwe and was the Dean and Professor of Finance at Wits Business School before moving to the ADB.
"But I guess that's the pain that needs to be undertaken in order to get things straightened out there," he added.
The African Development Bank forecast Zimbabwe's growth at about 8% for 2011.
Meanwhile Ncube said the turmoil in North Africa has hit growth across in the region which is now forecast to reduce this year to 0.7 percent from 4.7 percent last.
Overall, Africa's growth is estimated at 3.7 percent in 2011, down from 4.9 percent last year.
Further south, Ncube said economies have been affected by a drop in money sent home by Africans from elsewhere on the continent who had been working in North Africa.
Niger, for example, had 200,000 citizens working in oil-rich Libya, according to ADB statistics.
Another knock has come from the reduction in sky-high Libyan investment as well as declining tourist numbers from that country, Ncube said.
Though the events of recent months in North Africa have clearly had an economic impact, Ncube said the political changes have not just been isolated to the region.
He noted that Senegal's longtime president has canceled a proposed legislative change that would have made it easier for his son to take charge of the west African nation.
"It was really the North Africa effect," Ncube said. "The youth will not tolerate any behavior they don't perceive as democratic."
Labels: AfDB, DOLLARISATION
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African States urged to massively develop their infrastructure
Thursday, April 7, 2011, 7:25
African Development Bank (ADB) has called for a massive infrastructural development on the continent. ADB Resident Representative for Zambia , Freddie Kwesiga says African States Should put in place measures to improve on road and other infrastructure development in order for Africa to have a medium to long term development thereby contribute towards poverty reduction.
Dr. Kwesiga said infrastructure development plays a key role in achieving economic development and fight poverty in Africa.
“ Major areas which needs attentions include transport, Information Communication Technology (ICT), agriculture, and social infrastructure, “ he said.
The 2011 World Bank study indicates that Zambia’s economic performance which has reached 7 percent growth rate needed to make a significant impact on poverty reduction. However, according to ADB representative , the Southern African country’s economy can improve to a middle income country if it invests in infrastructure.
Dr. Kwesiga said this in Lusaka today at the Expert Group Meeting which is reviewing the handbook on Infrastructure Statistics in Africa.
He has further called on donors and members countries to scientifically measure and quantify the contribution of infrastructure towards overall economic development.
He said the bank has started the process of developing an African specific index for measuring the progress towards the development of key infrastructure which is known as the Africa Infrastructure development index.
Labels: AfDB, FREDDIE KWESIGA, INFRASTRUCTURE
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COMMENT - Formalization of the SME sector to this present crop of politicians will only serve to make them an easier mark for the taxman. As long as the MMD protects the mines from taxation, they have no business 'broadening the tax base' by sucking more money out of the economy through taxation of SMEs. They are already contributing more to the economy than the goverment is, and unlike Foreign Direct Investment, they don't expatriate their profits, but spend them in Zambia. So no to 'broadening the tax base' by having more workers pay taxes, until the mines are paying every cent they are owed or are nationalized.
Formalising SMEs will reduce lending rates - AfDB
By Mutale Kapekele
Fri 25 Feb. 2011, 04:00 CAT
THE African Development Bank says formalising the small and medium enterprises will drastically reduce lending rates. According to latest figures, the SME sector boasts 90 per cent of Zambia’s commerce.
In an interview, AfDB resident representative Dr Freddie Kwesiga said
when SMEs, who operate informally, are formalised, the number of people seeking finance will increase which will result in cost sharing that will reduce the rate of lending.
He said with the AfDB general capital increase to US $100 billion for Africa for the next three years, his bank was working towards improving access to money for the private sector and had developed a programme that specifically targeted the SMEs.
“We would like to get the SMEs to formalise through registration and good corporate governance so that they can also contribute meaningfully to the national economy,” said Dr Kwesiga.
AfDB has partnered with the International Trade Center to train counselors and bank lending officers in financial management to provide the service to the SMEs who will benefit from the latter’s credit facility that is being implemented by Zanaco and Investrust banks.
Commenting of the exercise, Zambia Development Agency director for micro and small enterprise division Windu Matoka said the training will improve competitiveness of the SME sector and improve their access to finance.
He said 100 companies stand to benefit from the funding of the AfDB credit facility to the SMEs.
Matoka urged other international organisations to consider developing financial and non financial products in the country.
He said the AfDB project will target women owned or managed groups in tourism, agriculture and agro-processing, construction and micro finance.
“This is exciting to ZDA as the SME sector is a key pillar in facilitating development and it has come at the right time when the Micro, Small and Medium Enterprise Development Programme is being implemented,” said Matoka.
Labels: AfDB, FREDDIE KWESIGA, SMEs
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Enact debt contraction law, JCTR urges govt
By Kabanda Chulu in Kitwe
Wed 09 Feb. 2011, 04:00 CAT
GOVERNMENT should urgently enact the debt contraction legal framework aimed at increasing transparency, accountability and participation of all stakeholders in the contraction and utilisation of debt resources. This is according to the Jesuit Centre for Theological Reflections (JCTR).
Currently the finance minister is empowered to borrow on behalf of Zambians and this position might result in another debt trap since there has been no transparency and accountability in acquiring debt resources.
Releasing the findings of a case study for Central Province eight water supply and sanitations project which the Zambian government funded through a US$36.9 million loan, acquired from the Africa Development Bank (AfDB) aimed at financing rehabilitation and extension of water supply and sewerage systems as well as ensuring 24-hour water supply availability, JCTR debt resource monitoring project officer Sydney Mwansa said the project had failed despite the huge investments.
“Majority of Kapiri Mposhi residents still have no access to safe drinking water as they still rely on water wells. This is evidenced by the number of wells found in the residential areas where almost each household has a well and a latrine which are placed close to each other thereby increasing chances of contamination and incidences of waterborne diseases,” Mwansa said.
He challenged the government to sit down with all the stakeholders in view of the projects’ failure to improve the living conditions of the people of Kapiri Mposhi.
“There is need for enactment of a debt contraction framework to increase transparency, accountability and participation so that intended beneficiaries have a say on how the project should be undertaken and this legal framework should include Parliament giving approval of all loans to be contracted by government,” Mwansa said.
He said after reaching HIPC completion point, which saw part of Zambia’s external debt cancelled and reduced from US$7.2 billion to US$500 million, it became imperative for the country to ensure that debts remained at a sustainable level.
“However, the country has continued to borrow (current foreign debt stands at over US $4 billion) from international community without legal binding framework of approval from Parliament since CAP 366 of the Laws of Zambia allows the finance minister to borrow on behalf of government,” said Mwansa.
“This lack of legal framework means prudence in loan contraction lies with one individual and Zambia is likely to fall back into the debt trap if this trend continues.”
Labels: AfDB, DEBT, JCTR, SYDNEY MWANSA
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AfDB notes importance of irrigation in doubling yields
By Moses Kuwema
Tue 12 Oct. 2010, 14:00 CAT
IRRIGATION in the agriculture sector is key to doubling yields if it is put in the hands of smallholder producers, African Development Bank (AfDB) resident representative Freddie Kwesiga has observed.
In a statement, Dr Kwesiga stated that raising productivity required that government continues to invest in improved water storage and irrigation as a means of adaptation to climate change.
“Improved crop storage at household, community, regional, national and border points, is perhaps the most important investment that government and the private sector have to undertake in order to safely store the current bumper harvest and the predicted future bumper harvest when Zambia will be able to reach 10 million tonnes to cater to human, livestock feed and value addition,” Dr Kwesiga stated.
He stated that properly targeted economic policies for smallholder farming could raise yields, adding that West Africa had witnessed increases in farm yields and incomes from cereals and root crops.
Dr Kwesiga stated that high dependence on farming on highly unreliable rainfall was risky.
“Zambia irrigates less than five per cent of irrigable land of 1.4million hectares, yet it holds over 40 per cent of water resources in the southern African region. This is an area of growth and competitiveness,” he stated.
He stated that Zambia could easily achieve more than 10 million tonnes per year of maize just by raising its average productivity to about five tonnes per hectare.
Dr Kwesiga also observed the need for Zambia to invest in exploitation of local phosphates and lime deposits for fertiliser and allow for specific blends.
He also emphasized the need for more investments to expand hydro power, solar, bio-fuel, wind and other energy sources, which he noted were very critical especially in the rural areas and neighbouring states.
Dr Kwesiga stated that the Bank’s agriculture sector strategy focuses on building agriculture infrastructure and supporting renewable natural resources management.
He stated that the Bank’s agriculture infrastructure interventions focus on building and rehabilitating rural and community feeder roads that lead to local markets, and on main trunk roads that provide access to national markets.
Dr Kwesiga stated that under the renewable natural resources component, the Bank supports sustainable and resilient agriculture infrastructure in view of climate change, continued scientific research and capacity building.
Labels: AfDB, FREDDIE KWESIGA, IRRIGATION
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'Fishmongers Group' sets up in Harare
by Staff Reporter
27/07/2010 00:00:00
THE African Development Bank is re-opening its Zimbabwe branch “to take a lead in and manage” a multi-donor trust fund set up by the so called Fishmongers Group – a controversial outfit of foreign donors who say they can raise between US$1-1.5 billion annually to stabilise Zimbabwe’s economy.
The bank’s vice president Nkosana Moyo -- a former Zimbabwe cabinet minister -- said the office would be opened “in a couple of months”, revealing that the AfDB would be taking over the Fishmongers’ account currently with the World Bank.
“Our board approved last week the re-opening of an office in Zimbabwe. It is primarily to manage a multi-donor trust fund targeted at specific areas to work with the government of Zimbabwe,” Moyo told an infrastructure development and investment conference in London last Friday.
“This trust fund which we have been entrusted to manage, essentially to take a lead in ... all of the donors, the so-called Fishmongers Group, they have committed to put money in. This trust fund was actually housed at the World Bank and we were asked to take it over in order to manage it and specifically try to see if we can help Zimbabwe to address some of the rehabilitation issues.
“Water, sanitation and power -- that’s where it’s going to be targeted. We expect it to be effective within a couple of months if all goes according to plan.”
Moyo saiod the fund would also “address the issue of institutional capacity building”, but added: “Personally as a Zimbabwean, I do not believe Zimbabwe needs that but when you are asking for money from other people, if they say so, you go along and do what is necessary. That’s one of the things you learn when you are a banker, you have to learn to meet your bankers halfway.”
The Fishmongers Group’s intentions in Zimbabwe have split the unity government formed in February 2009 by President Robert Mugabe, Prime Minister Morgan Tsvangirai and Deputy Prime Minister Arthur Mutambara.
Mugabe’s Zanu PF party says the Fishmongers – named after the Harare restaurant where the fund was first mooted – are “working overtime to destroy the economy, mutilate the Zimbabwe dollar, foment civil unrest and then dangle a rescue package to win the support of gullible politicians.”
At its December 2009 Congress, Zanu PF passed a resolution which said: “Congress further notes, with grave concern, the continued efforts by Britain and its allies to undermine the Global Political Agreement and the inclusive government through the continuance of sanctions, coordination of politically motivated humanitarian support and investor resistance through the so-called ‘Fishmonger Group’ as well as the West’s unrelenting efforts to shrink Zimbabwe’s diplomatic space.
“Congress, therefore, resolves to direct the Party to pursue prudent and innovative diplomacy which seeks to retain its existing friendships and cultivate new ones in all regions of the world based on equitable partnerships, mutual respect and sovereign equality.”
Labels: AfDB, FISHMONGERS GROUP, NKOSANA MOYO, ROADS
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Increase in general capital will strengthen bank’s capacity - AfDB
By Kabanda Chulu
Thu 27 May 2010, 04:00 CAT
AFRICAN Development Bank (AfDB) vice-president for finance Thierry De Longuemar yesterday said the increase in general capital will strengthen the bank’s capacity to fulfil its development mandate and meet the level of future demands.
Releasing the financial statements for the past year ahead of the 2010 annual meeting that begins today in Abidjan, Cote d’Ivoire, De Longuemar stated that apart from retaining its AAA ratings in 2009, the bank achieved an increased pricing on its US $1 billion three-year global bond.
“The AfDB continued its strong run in the dollar market and its bond attracted demand of US $1.44 billion and with 75 per cent of orders from central banks, and the book was closed ahead of schedule to avoid allocation problems,” De Longuemar stated.
“And the bank’s risk bearing capacity remains sound and that the increase in general capital will strengthen the bank’s capacity to fulfill its development mandate and meet the level of future demands.”
He stated that the AfDB approved US $6 billion for the provision of modern and affordable infrastructure in regional member countries in 2009.
“This amount represents 52 per cent of the approvals by the institution during the year and the key infrastructure projects approved in 2009 included airport projects in Morocco and Tunisia, national road projects in Burkina Faso, Cameroon, Chad, Ghana, Guinea, Mali, Sierra Leone, Malawi, Rwanda, Senegal and Uganda,” stated De Longuemar.
“The others are multinational road projects connecting Cameroon - Nigeria, Cameroon - Gabon, Kenya -Ethiopia and Mozambique –Malawi - Zambia and the bank also approved power projects in Botswana, Kenya, Lesotho, Nigeria, South Africa and Tunisia and water sector projects in Tunisia, Morocco and Egypt.”
On regional integration, the Bank committed US $685 million which covered projects in regional infrastructure development and institutional capacity building, close collaboration with the African Union, Economic Commission for Africa , African Peer Review Mechanism, Budget review and public procurement.
Labels: AfDB, THIERRY DE LONGUEMAR
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AfDB willing to assist Zim
Business Reporter
The African Development Bank said it is willing to give financial aid to Zimbabwe given the improvement noted in areas such as agriculture, tourism and mining since the implementation of the Short-Term Emergency Recovery Programme (STERP).
This came after a 14-member delegation from the AfDB met Finance Minister Tendai Biti in Harare yesterday to discuss debt reduction strategies and other ways of assisting Zimbabwe’s economic recovery.
Addressing a press conference in Harare, AfDB representative Mr Hassan Kadir said his organisation was willing to help Zimbabwe.
Mr Kadir said he expected a significant improvement in agriculture, mining and tourism this year given the reflections on economic performance on the ground.
"We are happy about the new initiatives on the political front especially in the constitutional area, although there are still some divided opinions. People in Zimbabwe must start feeling a difference in their way of life and anticipate a rise in employment opportunities from AfDB’s full fledged financial support," said Mr Hassan.
AfDB would engage Zimbabwe on its core areas of reconstruction and infrastructural development.
Speaking at the same occasion Mr Biti said he had briefed AfDB on problems affecting the fiscal system in Zimbabwe.
He said the absence of fiscal space was a critical problem that needed attention.
"65 percent of our revenue goes to wages and this means we are left with no fiscal space," he said.
He also said there was need for AfDB to assist Zimbabwe through lines of credit to induce liquidity in the market.
Labels: AfDB, STERP, TENDAI BITI
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AfDB to double investments
Written by Kabanda Chulu
Monday, September 21, 2009 4:45:03 PM
AFRICAN Development Bank (AfDB) president Donald Kaberuka has said in response to the global financial crisis, the bank will double its investments this year with commitments amounting to US $11 billion from the US $5.8 billion in 2008.
He stated that the investments in various member countries including Zambia would go towards budget support operations, infrastructure projects, liquidity programs and a US $1 billion trade finance facility.
"At its Annual Meetings this past May, AfDB Board of Governors passed a resolution to initiate plans to triple the Bank's general capital to nearly US $100 billion so that it will have sufficient resources to allow it to cope with the global financial crisis," Dr Kaberuka stated.
"The AfDB will convene a meeting of its shareholders at the end of next week to review the adequacy of its capital, which it uses to make loans through its non-concessional lending window for middle income African countries and the private sector."
He stated that the Bank was considering the possibility of an early replenishment to its concessional lending window, the African Development Fund (ADF), which is funded primarily by donor country contributions.
"Donor countries will meet in Helsinki, Finland in October to discuss options to increase resources for the ADF, which offers loans and grants to poor countries. Some advocates argue that resources will be better spent if targeted to poor countries through the ADF replenishment, as opposed to a capital increase," stated Dr Kaberuka.
"The proposed capital increase and ADF replenishment are expected to improve the Bank's lending and financing capability and allow it to play a more important role in helping regional member countries cope with the financial crisis."
Labels: AfDB, DONALD KABERUKA, GREAT DEPRESSION II
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AfDB will double investments this year, reveals Kaberuka
Written by Kabanda Chulu
Tuesday, September 15, 2009 6:14:31 PM
AFRICAN Development Bank (AfDB) president Donald Kaberuka has said the bank will double its investments this year with commitments amounting to US $11 billion from the US $5.8 billion in 2008 in response to the global financial crisis.
Dr Kaberuka stated that the investments in various member countries, including Zambia, would go towards budget support operations, infrastructure projects, liquidity programs and a US $1 billion trade finance facility.
“At its annual meetings this past May, AfDB Board of Governors passed a resolution to initiate plans to triple the Bank's general capital to nearly US $100 billion so that it will have sufficient resources to allow it to cope with the global financial crisis,” Dr Kaberuka stated.
“The AfDB will convene a meeting of its shareholders at the end of next week to review the adequacy of its capital, which it uses to make loans through its non-concessional lending window for middle income African countries and the private sector.”
He stated that the Bank was considering the possibility of an early replenishment to its concessional lending window, the African Development Fund (ADF), which was funded primarily by donor country contributions.
“Donor countries will meet in Helsinki, Finland in October to discuss options to increase resources for the ADF, which offers loans and grants to poor countries. Some advocates argue that resources would be better spent if targeted to poor countries through the ADF replenishment, as opposed to a capital increase. The proposed capital increase and ADF replenishment are expected to improve the Bank's lending and financing capability and allow it to play a more important role in helping regional member countries cope with the financial crisis,” stated Dr Kaberuka.
“This would be crucial for the AfDB to sustain its current lending levels, as it has nearly exhausted its resources and would otherwise have little to lend in 2010. The financial crisis has had a greater impact on the continent than earlier feared. As a result, African countries and many projects which have had their original financiers pull out due to the crisis, are looking to the AfDB to get much needed financing and mitigate the effects of the crisis.”
Labels: AfDB, DONALD KABERUKA, INVESTMENT
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