Industrial production capacity surges: CZI
Thursday, 03 November 2011 00:00
Bright Madera Senior Business Reporter
MANUFACTURING sector capacity utilisation has risen 13,5 percent to 57,2 percent in the 12 months to June 2011 due to an increase in capital investment projects. A Confederation of Zimbabwe Industries manufacturing sector survey for 2011 released yesterday showed that production capacity continued to increase from 10 percent in 2009 in the absence of medium- to long-term funding to re-equip industry.
Investment levels have increased by five percent to 47 percent. In the first six months of the year, capital investment was estimated above US$43,4 million.
Government had a capacity utilisation target of 60 percent and the sector is expected to grow by three percent this year.
The survey, which sampled 120 companies from 13 sectors of manufacturing, showed that capacity utilisation levels vary from lower levels of 30 percent to as high as 74 percent.
Overall output volume continues on the upward trend, increasing by 14,1 percent in the period under review.
The sector has continued on a growth trajectory in the absence of funding from international partners who have not been responsive.
Zimbabwe's manufacturing sector requires an estimated US$2 billion to operate at full capacity.
Vice President, Joice Mujuru, the guest of honour, said Government was committed to source funding for the sector, the cornerstone of economic development.
"The financial sector should put in place strategies to improve lending to the sector and Government will continue to call for the lifting of sanctions to access lines of credit," said the vice president.
She added that erratic power supplies were affecting economic growth and that challenges were opening opportunities to invest across all sources of energy.
CZI president, Dr Joseph Kanyekanye said: "It is also quite evident that the level of external budget that could free resources for lending to industry has not been forthcoming. We ought to come together as Zimbabweans to fight this."
Low production demand, machine breakdown, lack of working capital and lack of raw materials were identified as the major constrains in the sector.
During the first half of the year it is estimated that volumes of domestic raw materials decreased eight percent and that of imported raw materials decreased by 57 percent.
CZI attributed the drop in raw materials to the increase in the cost of raw materials.
The cost of raw materials is estimated to have increased by almost 100 percent.
According to the survey, most companies are still producing for the domestic market. Exporting companies indicated depressed volumes due to working capital to meet orders and unavailability of raw materials.
In addition, the cost of production remained high, with continued rises in the cost of labour and the cost of utilities. High costs of production coupled with low levels of capacity and inferior product quality has largely rendered Zimbabwe's manufactured products uncompetitive on the international market.
The survey also noted that exports from Zimbabwe were confined to Africa, mainly southern Africa, with only two percent exporting to East Africa and another two percent to Europe.
Neighbouring Zambia has emerged the country's biggest trading partner replacing South Africa. Zimbabwe exports about 30 percent to Zambia followed by 16 percent to both Malawi and South Africa respectively.
Zimbabwe's manufacturing sector's contribution to Gross Domestic Product is projected to grow from 10 percent to 30 percent over the next five years.
The growth would be anchored on increased industrial output due to a cocktail of measures aimed at addressing production constraints and deliberate efforts to ensure value addition to local products.
Labels: CZI, EXPORTS, JOICE MUJURU, JOSEPH KANYEKANYE, MANUFACTURING, SANCTIONS, WELSHMAN NCUBE, ZAMBIA
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UPDATE 3-Zambia lifts metal exports ban after two days
Thu Oct 6, 2011 12:02pm EDT
By Chris Mfula and Clara Ferreira-Marques
* Wants guidelines in place to increase transparency
* Ministry initially said ban would last until Oct. 16 (Adds minister comments, analyst)
LUSAKA/LONDON, Oct 6 (Reuters) - Zambia has lifted a ban on metal exports, just two days after imposing it to sort out irregularities and increase transparency in Africa's top cooper producer, a minerals ministry official said on Thursday.
Newly elected President Michael Sata has been concerned -- analysts say with good reason -- that copper exporters are misreporting the amount of ore leaving Zambia. Earlier this week Zambia suspended export permits to put new guidelines in place.
Sata said last week all export payments would need to be routed via the central bank, a move seen as adding more oversight to an industry providing the life blood of the economy.
"The suspension has been lifted. The job has been done. We don't need 10 years to do the job," Godwin Beene, mines permanent secretary, told Reuters.
Information minister Given Lubinda told reporters another reason why the suspension was lifted was because it would take time to come up with new guidelines.
The mines ministry initially said it would need until Oct. 16 to put new measures in place, but mines were able to resume loading trucks on Thursday, logistics sources said.
The chamber of mines, which represents foreign miners, welcomed the lifting of the suspension.
"It was too long and was definitely going to hurt the mining companies. With this reversal the impact will be minimal," said Frederick Bantubonse, its general manager.
"We haven't been given the reasons for the reversal, but we can all guess," he added.
Details of the new procedures were not immediately clear.
"The new measures will come into effect when the Bank of Zambia is ready. For now exports will continue to be guided by the existing Mines and Minerals Development Act," Beene said.
WAIT AND SEE
Copper accounts for three-quarters of Zambia's export earnings, but the mining industry contributes only about 10 percent of tax revenue.
Sata, 74, has wasted no time in removing all vestiges of the administration of Rupiah Banda, whose Movement for Multi-party Democracy (MMD) had been in charge of the southern African nation for 20 years.
He said on Monday he would dissolve the boards of four state-owned companies -- Zesco, National Pensions Scheme Authority, Zambia Revenue Authority and Bank of Zambia.
Last week, he disbanded the board of the Energy Regulation Board, appointed a new head of the country's anti-corruption agency and fired respected central bank governor Caleb Funadanga.
Analysts said some of the drastic moves imposed by Sata's government in only a week may unnerve investors.
"It is fortuitous that since Sata has come in the copper price has dropped like a stone, so there is limited damage he can cause," a London-based analyst said.
Zambia's mining industry aims to double annual copper output to 1.5 million tonnes by 2016, and Sata, who swept to power on the back of voters looking for a bigger share of mining profits, is likely try to wring more revenue from it.
Analysts said foreign firms should brace for labour strife.
"Mining unions will push harder than usual for double-digit raises, albeit from a low base," Philippe de Pontet, an analyst at political risk consulting firm Eurasia Group, said in a note.
In an example of what may be looming for the sector, about 2,000 Zambian workers at NFC Africa Mining, majority-owned by China Nonferrous Metals Mining, went on a strike for higher wages, catching management and their own union by surprise.
Copper producers operating in the country include Canada's First Quantum Minerals , London-listed Vedanta Resources , Glencore International AG and Metorex of South Africa.
Data shows much of the exported copper is destined for Switzerland, but little of it shows up in Swiss customs figures, raising questions about transparency. (Additional reporting by Melanie Burton in London, wriiting by Agnieszka Flak; Editing by Jane Baird)
Labels: EXPORTS, GIVEN LUBINDA, GODWIN BEENE, MICHAEL SATA, MINING, WINDFALL TAX
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Government suspends metal export permits
By Chiwoyu Sinyangwe
Thu 06 Oct. 2011, 12:10 CAT
THE government has temporarily suspended metal export permits in a move meant to introduce measures to effectively monitor the exports, says mines permanent secretary Dr Godwin Beene.
Dr Beene in an interview said the move was not going to hurt the mining industry as it was just aimed at allowing the government to keep a tab on metal exports out of the country's vast mining sector.
President Michael Sata has been concerned - analysts say with good reason - about copper exporters misreporting the amount of ore leaving the country, and last week said that henceforth all export payments would have to be routed via Bank of Zambia.
"The mining companies should not panic as this is just a reaction to what the President Michael Sata directed," Dr Beene said.
"The modalities for the exports are already in place and this is just a temporal ban which would be lifted next week. So there is no need to panic because we can't take decisions that would hurt the industry."
The new procedures are to be in place by October 16, according to the document addressed to the chief executives of miners operating in the country, which include Canada's First Quantum Minerals, London-listed Vedanta Resources , Glencore International AG and Metorex of South Africa.
Separately, Reuters reported that much of the copper exports are destined for Switzerland but little of them show up in Swiss customs data, raising questions about transparency.
Labels: COPPER, EXPORTS, GODWIN BEENE, MICHAEL SATA
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Zambian Exports Must Be Cleared by Central Bank-Sata
TIME PUBLISHED - Friday, September 30, 2011, 1:47 pm
President Michael Sata has ordered that all exports from the country need to be cleared by the central bank. The government, formed this week after Sata’s election win, is seeking more information on what is being shipped out of the southern African nation, Sata said in a speech in Lusaka, the capital, today.
Sata said
all export payments had to be routed via the central bank, including those for copper, its main export.
“Nothing will be exported out of Zambia unless confirmation of payments is received from the Bank of Zambia,” Sata told a news briefing after swearing in his new cabinet.
Sata has long questioned copper export data and some experts say his concerns are legitimate. Copper accounts for three-quarters of Zambia’s export earnings, but the mining industry contributes only about 10 percent of its tax revenue.
Former President Rupiah Banda told Reuters in March audits had revealed that the Zambian mining sector owed up to $200 million in unpaid taxes.
According to Zambian figures, much of the copper exports are destined for Switzerland but little of them show up in Swiss customs data, raising questions about transparency.
The anti-corruption moves follow Sata’s decision to fire his respected central bank governor and the appointment of a new mines minister who may look at plans to boost tax receipts from mining companies.
{Bloomberg,Reuters}
Labels: EXPORTS, MICHAEL SATA, MINING, TAX EVASION
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Chrome ore export ban to stay: Govt
Saturday, 17 September 2011 09:26
By Prince Mushawevato
GOVERNMENT will not be lifting a chrome ore export ban effected early this year, as doing so derails its efforts to boost revenue inflows and employment creation, a senior Government official said last week.
Exports of chrome ore were banned in April this year to promote value addition. However, due to low smelting capacity in the country and low local demand, the mineral stocks have been rising.
Statistics from the Zimbabwe Miners’ Federation (ZMF) indicate that small-scale miners are currently saddled with more than 25 000 tonnes of chrome ore which is not being utilised.
Deputy Minister of Mines and Mining Development Mr Gift Chimanikire told The Sunday Mail Business that Government was not considering lifting the ban.
“We have since concluded that chapter. When Cabinet sits and passes a resolution, we stick to it. The current position is that we are not going to reconsider lifting of the ban on chrome ore exports,” he said.
Added Deputy Minister Chimanikire: “Even if lifting of the ban creates employment, we are not going to consider the move as the selling of unprocessed raw materials results in the country losing a lot of potential revenue and job-creation opportunities.”
Small-scale miners have been lobbying for the chrome ore export ban to be lifted citing that the country does not have the capacity to add value at the moment. However, Government maintains that Zimbabwe has adequate smelting plants throughout the country to refine the ore and produce semi-finished products such as ferrochrome.
According to Deputy Minister Chimanikire, players in the sector should be making efforts to set up smelters rather than fight to export unprocessed chrome ore.
“Effort should be directed by the affected players towards setting up smelters rather than lobby to export raw materials. This is the only way that the country will only be able to realise benefits from its vast mineral resource base,” he said.
There are eight smelters in the country with the one at Zimasco reportedly being the only one currently operational. However, Zimbabwe Miners’ Federation chief executive officer Mr Wellington Takavarasha recently indicated that Zimasco was preoccupied with smelting its own chrome and was buying a few tonnes at a very low price of about US$60 per tonne, while the same quantity on the international market costs US$150. “Zimasco is currently producing about 50 000 tonnes of the mineral and is battling to smelt it, which leaves small miners stranded with their own product,” he was quoted as saying.
Mr Takavarasha also pointed out that unprocessed chrome was depriving miners of much-needed working capital. “Productivity has since gone down due to lack of capital and also because we cannot keep on producing the mineral,” he said.
Last year, 600 000 tonnes of chrome ore was produced in the country but expectations to surpass the figure have since been dashed by the export ban. According to figures from the ZMF, besides major chrome miners Zimasco and ZimAlloys, there are more than 450 chrome miners in the country. Production levels among the miners had since 2009 been improving with the average output being 1 000 metric tonnes per month.
The federation last year launched a drive to mechanise an estimated 10 000 members. Government first considered banning export of raw chrome in 2007 as a loss-control measure. Two years later, a ban was slapped on the mineral in the first nine months of 2009. The ban was temporarily lifted last year and revenue from chrome exports amounted to US$33 million during the first nine months of the year.
Initially the move was an effort to promote small-scale chrome miners to set up more smelters around the country, but it has, however, had adverse effects on the intended beneficiaries. The chrome ore mined in Zimbabwe is high grade (containing about 46 percent pure chrome), which is found mostly in the Midlands province along the Great Dyke.
Major areas where chrome mining is undertaken are Shurugwi, Mutorashanga, Lalapanzi and Guinea Fowl with the smelting being done in Kwekwe. Chrome commands great interest because of its high corrosion resistance and hardness.-The Sunday Mail
Labels: CHROME, EXPORTS, MINING
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Zambia exports $1.8bn manufactured goods
TIME PUBLISHED - Tuesday, April 26, 2011, 8:29 am
THE Zambia Development Agency (ZDA) says Zambia exported US$1.842 billion worth of manufactured products to the Common Market for Eastern and Southern Africa (COMESA) and Southern AfricanDevelopment Community(SADC) regions.
Most of the manufactured products exported from Zambia’s manufacturing sector are food and beverages which have a bigger share of 63 percent of the exports.
“There is vast investment potential for food processing in the country, covering both large and small-scale industries, and most of it includes foods and beverages,” it says in a statement made available to the Mail in Lusaka recently.
“However, the processing of grocery products such as cold meats, biscuits, tinned foods, jam and cheese are largely underexploited and crops such as paprika have been gaining prominence as crops with export potential and have a low capital input requirement to process,” it says.
It says huge investment potential also exists in the manufacturing of electrical appliances such as refrigerators, air conditioners, computers, television sets and fans looking at the high demand for imports of electronic goods in Zambia of about US$40 million per annum.
It says Zambia’s domestic demand for manufactured products exceeds US$2 billion per annum.
And according to ZDA agriculture sector officer Paul Siame, exports of agriculture products from Zambia to the COMESA region are between US$ 125-140 million while the export to the SADC region are between US$140 to 170 million per annum.
Mr Siame said given the vast resources in terms of land, labour and water, Zambia has the potential to expand agricultural production.
Some of the potential priority areas for investments in the agricultural sector are in sugar, wheat, maize, cotton, tobacco, cashew nuts, and cassava, Mr Siame said.
Labels: EXPORTS, GDP, MANUFACTURING
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COMMENT - This is pretty obvious. Most of GDP is driven by the $10,000 per tonne copper prices. Without heavy taxation, there is no economic diversification which means that when copper prices go down, so does whatever minor spillover effects these historic prices have created. It is a crime.
Zambia’s dependence on foreign markets could reverse gains - LuSE
By Chiwoyu Sinyangwe
Wed 16 Mar. 2011, 04:00 CAT
ZAMBIA’S high dependence on foreign markets for investments and high copper proceeds forms risks that could reverse macroeconomic gains, says the head of LuSE audit committee.Timothy Mushibwe, director and chairman of Lusaka Stock Exchange (LuSE), said the current robust performance of the mining sector, buoyed by record international prices was key in the current strong macroeconomic performance.
Mushibwe told company officials on Monday during the Institute of Directors (IoD) and International Finance Corporation (IFC) sponsored seminar of risk management that copper contributed 81 per cent of the export revenues and 76 per cent of all foreign exchange revenues, a huge source of risk for the country.
“This level of dependenceon one source for revenues is risky to say the least,” Mushibwe said.
“Dependence on foreign markets for investment as well as sale of copper proceeds is also risky. As these days no man is an island and so, equally our governments has put in measures to mitigate these risks by embarking on an economic diversification programme.”
Mushibwe said the current robust performance of the local economy was anchored on high metal prices, supported by good weather and donor inflows, among others.
“Currently, Zambia is enjoying rave reviews about our economy because of a combination of weather, fiscal, monetary and base metals and other factors are all working well together,” Mushibwe said. “The performance of copper prices and production is at all time high. The Treasury is relatively well resourced with increasing revenues from the mining sector, donor support is positive, the weather has been good and we have had two consecutive bumper harvests.”
Mushibwe said the capital market's sole dependence on government as a source of companies to list was risky.
“This focus on one door is fine when the going is good,” said Mushibwe.
“When positions change it becomes very difficult to survive. So, we must find ways to mitigate our risks.”
IoD Zambia president Julu Simuule said risk management was important for every organisation.
Labels: EXPORTS, LUSE
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Government gives green light to export of maize surplus of 1.1 million tonnes
Wednesday, June 9, 2010, 18:45
The Zambia Government has allowed farmers and traders to export the maize surplus of 1.1 million tonnes mainly in southern African after a good harvest, but farmers have urged more exports.
Zambia National Farmers’ Union (ZNUF) president Jervis Zimba told Reuters today that farmers also wanted the government to provide tax waivers on maize exports and other incentives to make exports cheaper.
He said they are looking at exporting somewhere around 1.3 million tonnes in order not to have serious carry-overs for the next crop. Zimba said proposals to subsidise exports would also allow excess maize to be removed from the local market and guarantee higher prices in the 2010/11 season, after the government kept this year’s prices flat at K65,000 per 50kg bag.
Zimba said maize output would drop if the government did not facilitate the export of the surplus through an export subsidy. South Africa said in April that it had secured foreign markets to sell its surplus maize of about 4 million tonnes in the 2009/10 season to safeguard maize prices for local farmers.
Zimba said proposals to subsidise exports would also allow excess maize to be removed from the local market and guarantee higher prices in the 2010/11 season, after the government kept this year’s prices flat at K65,000 per 50kg bag.Zambia produced 2.7 million tonnes of white maize in 2009/2010, beating last season’s harvest of 1.9 million tonnes, to leave a surplus of 1.1 million, according to a government crop survey.
Zimba said Zambia’s food balance sheet showed that total maize required for human consumption was 1.3 million tonnes, 230,000 tonnes for industrial use and 200,000 for strategic reserves.
Zambia, Africa’s top copper producer, also relies on copper exports for about 63 percent of foreign exchange earnings.
It has in the previous seasons exported maize to the Democratic Republic of Congo (DRC), Zimbabwe, Namibia, Botswana and Angola.
Exporters said they will target exports to Zimbabwe, after it declared 11 percent of its maize a write-off due to a dry spell, and also to other neighboring countries.
Meanwile, Kenya and Sudan have expressed interest in importing maize from Zambia.
Agriculture Minister Peter Daka says ZAMBIA has the capacity to export Maize and other crops to neighbouring countries and the sub region.
Zambia this year has over three million tonnes of maize following a bumper harvest recorded this year and carry over stock from last year.
Mr Daka said this during a consultative workshop on the development of the Zambia National Rice Strategy in Lusaka on today.
The minister said Zambia could treble its rice production if it develops a strategic plan for the sector.
Zambia currently produces 42 thousand metric tones of rice annually.
Reuters/ZNBC
Labels: CORRUPTION, EXPORTS, JERVIS ZIMBA, MAIZE, PETER DAKA
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Zambia’s export earnings leap by 9.4%
By Fridah Zinyama
Mon 01 Feb. 2010, 04:00 CAT
THE Central Statistics Office (CSO) has revealed that there had been a general increase in the total value of exports between November and December 2009 of 9.4 per cent.
CSO director Efreda Chulu said the country’s ever dominant metal products recorded a higher value in revenue growth of 9.4 per cent in nominal terms between November and December 2009.
“The overall contribution of metal products to the total export earnings was 83.5 and 77.8 per cent in December and November 2009, respectively,” she said.
Chulu however added that Non Traditional Exports (NTEs) had recorded a moderate decrease of export earnings of 24.2 per cent in December 2009.
“In terms of percentage contribution to the total export earnings, NTEs recorded 16.5 and 22.2 per cent in December and November 2009, respectively,” she said.
Chulu said Zambia’s major export products in December 2009 were copper related including copper and articles thereof; ores, slag and ash accounting for 80.3 per cent of total export earnings.
She said the five major destinations of Zambia’s exports in December 2009 were Switzerland (64.4 per cent), China (8.6 per cent), South Africa (7.2 per cent), Democratic Republic of Congo (5.1 per cent) and United Kingdom (2.1 per cent).
“These five countries collectively accounted for 87.4 per cent of Zambia’s total export earnings,” Chulu added.
Labels: CSO, ECONOMY, EFREDA CHULU, EXPORTS, GDP
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Don’t get excited with maize exports
By Editor
Mon 09 Nov. 2009, 04:01 CAT
THE government’s decision to export maize to Kenya needs to be considered carefully to avoid problems of shortages before the next harvest. Government has announced that they intend to export 100,000 metric tonnes of maize to Kenya following a request from that country and they are also expected to donate 9,000 metric tonnes to Zimbabwe as promised by Rupiah Banda recently.
While we support acts of solidarity towards our neighbouring countries such as Zimbabwe where people desperately need more maize, we think that the government should be cautious.
We say this because we have had instances in the past where the government has had to ask the Food Reserve Agency (FRA) to import maize after exporting maize.
We have had to import maize at a much higher price than that of our exported maize. For instance, Zambia’s Crop Forecast Survey (CFS) announced by the Ministry of Agriculture last year estimated the 2008 maize crop at 1.2 million tonnes and experts in the industry warned of the looming deficit of maize on the local market. But there was resistance as some stakeholders felt that importing maize would disadvantage local farmers.
Then agriculture minister Ben Kapita was even hopeful that the maize stocks at the time would suffice through to the next farming season, although he could not state whether the country would need to source maize imports in 2009. Had the concerns of a looming deficit been taken seriously, probably maize could have been imported at that time when the kwacha was trading favourably against other major currencies. Alas, the FRA ended up importing maize at a much higher price later in that year.
We are aware that the crop and forecasting survey for the 2008/2009 season, which was released in May by agriculture minister Dr Brian Chituwo indicated that Zambia produced 1,888,773 metric tonnes with a maize carry-over stock of 62,035 metric tonnes. This is against the total national consumption of 1,747,537 metric tonnes, leaving a surplus of 203,271 metric tonnes.
In essence, when we export 100,000 metric tonnes of maize to Kenya and 9,000 metric tonnes donation to Zimbabwe are delivered, Zambia will remain with less than 100,000 metric tonnes of maize in reserve. And we hope that this will be enough for the country. Zambia has not reached a level of self-sufficiency in food and our members of parliament are always asking for relief food for their people who are starving in their constituencies. There are many places in the country where people are in need of food and government would do well to focus on these areas.
According to the 2009 Global Hunger Index published by Concern Worldwide, International Food Policy Research Institute and Welthhungerhilfe, Zambia has been ranked in the alarming category with countries like Angola, Central African Republic, Djibouti, Liberia and Haiti. The key findings of the report are that the recent global recession, financial crisis and climate change are a deadly cocktail of hunger and malnutrition. Our people lack the basic necessities, and food is one of them. The availability of food or the amount of food that our people cultivate, their physical, economic and social access to food still continues to be a challenge both in urban and rural areas. For those who have a little, the quality or nutritional adequacy leaves much to be desired. They say food security is achieved when all people have physical and economic access to sufficient, safe, and nutritious food for a healthy and active life. This is what we need to work towards achieving as a country.
The government needs to be worried that 45 years after independence, some people in rural areas are relying on relief food and yet the country has so much fertile land and vast water resources which can support agriculture. We need to be worried that we have members of parliament who have to spend their time lobbying for relief food instead of looking at ways in which areas such as road infrastructure, health services and education can be improved for the benefit of the people.
We know that some of the problems related to hunger are caused by natural calamities such as floods and we cannot blame anyone for that. But we need to be ready to come to the aid of the people in these flood-prone areas since this is a perennial problem, which we are aware of. We can do so much with some of that maize that the Ministry of Agriculture wants to sell or donate to help our people. This is the right time to prepare for such problems as opposed to running around when people are desperately in need, the situation has peaked with suffering already high. It will not help to start asking for donations from well-wishers to help us when it is too late and yet the Zambia Meteorological Department has already indicated that rainfall will be normal to above normal in certain parts of the country this seaon.
The food-related problems faced by our people will not go away if we continue to take measures that are not prudent. They will not go away if those in government do not learn to put the interests of people above those of their own pockets.
We need to plan and ensure that the country is food-secure. We should not rush to export just because we seem to have a bumper harvest. It appears we don’t seem to learn from our past experiences as a country. And this is very worrying. There is so much that needs to be done to increase our agricultural output. Our country has so much potential which is not being exploited. There is need to ensure that farming inputs are accessible and affordable. Yes, there is the Farmer Input Support Programme that the government is implementing but this programme has just targeted 500,000 small-scale farmers.
We know that last year the government targeted to help 200,000 farmers and the number was this year increased to 500,000 but the packages were reduced to accommodate more people. There is more that can be done by making inputs readily available and affordable because there are many farmers out there who can produce a lot of food but lack the necessary farming implements. We need to find ways of helping more farmers so that we can even increase our national output. And probably this is where Nitrogen Chemicals of Zambia (NCZ) comes in. One cannot help but wonder why problems at the company cannot be sorted out to enable it to run normally. Again, it is the issue of personal gain that is hindering progress at NCZ. They don’t want this company to fully deal with the issue of fertiliser because they make a lot of easy money from importing fertiliser themselves.
There’s need for the government to pay a lot of attention to irrigation. We rely so much on rain-fed agriculture and we have suffered seriously in times of droughts and probably that is the only time that government sings the song of promoting irrigation. There was even talk of setting up the irrigation fund at one time and one can only hope that the idea is still being worked on because it can help greatly in the agriculture sector. We are also aware of the challenges in the crop marketing system of the country, which leaves a lot to be desired. FRA needs to be adequately equipped to enable them to play their role of creating strategic reserves of food as opposed to the current trend of firefighting at the eleventh hour.
We need to take a more rational approach to solving the problem of food insecurity and subsequently reduce disease and poverty levels, which are currently too high. It is not a secret that the numbers of hungry people are increasing and food security will only be achieved through increased agricultural production.
A shortage of maize will lead to millers not meeting the mealie-meal demand. And such a shortage will certainly lead to increased mealie-meal prices and inflation. This can be a source of political instability if not addressed properly.
The government should be seen to be working towards lifting the poor from the quagmire of poverty as opposed to worsening it. Yes, problems will always be there but we need to find solutions to ease the impact they have on our people.
Labels: EXPORTS, KENYA, MAIZE
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COMMENT - Perhaps it is also time to get off maize and into cassava and sorghum.
ZACA questions govt’s move to export maize
By Fridah Zinyama
Mon 09 Nov. 2009, 04:00 CAT
ZAMBIA Consumer Association (ZACA) executive director Muyunda Ililonga has questioned the government’s decision to export 100,000 metric tonnes of maize to Kenya when it has not yet established reliable strategic food reserve.
But the Zambia National Farmers Union (ZNFU) has said the government consulted widely before allowing the 100,000 metric tonnes of Maize to Kenya.
Meanwhile, Zambia Commodity Exchange (ZAMACE) executive director Brian Tembo said no more maize exports would be allowed once the 100,000 metric tonnes that stakeholders agreed upon is met.
Zambia, in the 2008/09 farming season produced about 1.9 million metric tonnes of maize, whilst its consumption is about 1.6 million metric tonnes of maize annually.
Stakeholders have expressed concern over the government’s decision to allow maize exports because there are fears that if the 2009/10 farming season does not go well, the country would be required to spend huge sums of money to import maize to meet local demand.
In an interview, Ililonga advised the government to learn from past mistakes as it was earlier this year when the country had to import maize to meet its local demand.
“Previously, we exported maize to Zimbabwe, only to start importing when we had a shortfall on the local market,” he said. “The Zambian consumer was made to pay heavily for this mistake and we would not like a repeat of the same next year.”
Ililonga said much as government had other obligations to help its neighbours, its first priority was its own people.
“We do not want to end up with another deficit with which the Zambian people will be made to pay heavily again,” he said.
And ZNFU executive Ndambo Ndambo said the government had met with stakeholders in the maize sector to consider what decision to make on the surplus maize in the country.
“As farmers, we had been asking the Food Reserve Agency to increase the floor price so that farmers could get a good return on their product as prices had crashed due to excess maize supply on the local market,” he said.
Ndambo explained that stakeholders in the Stock Monitoring Committee met and looked at local consumption which is now standing at about 1.6 metric tonnes and realised that there was a surplus of 300,000 metric tonnes.
“Once this was done, everybody agreed that the country could afford to export 100,000 metric tonnes of maize,” he said. “This was done to help farmers get a favourable price for their produce which had really crashed due to maize surplus on the market.”
Ndambo said traders were using the surplus to get very low prices from the farmers and this prompted the Food Reserve Agency to also get onto the market to help push up prices for farmers.
“As you well know, prices are determined by the law of demand and supply. If there is more supply on the market, prices are automatically pushed down and the farmers lose out,” he explained.
Ndambo said farmers were also allowed to export maize but could not take advantage of the allowance in maize exports as it is very costly to export maize from Zambia.
“Transport costs incurred are very high, hence anyone else who could afford to export was allowed to do so,” he said.
Ndambo said Zambia was a small market which could not manage to absorb any excess maize at a good price for the producer.
“If the agriculture sector is to grow, farmers should be allowed to export any excess product so that they can get good prices for their products and produce more,” he said.
And Tembo said no more maize exports would be allowed once the 100,000 metric tonnes are met, unless the government announces anything to that effect.
The Stock Monitoring Committee consists of different stakeholders like farmers, millers, traders and the Ministry of Agriculture, who met to decide what, should be done with the surplus maize on the market.
“Anyone right now can get a permit to export maize,” he said. “But exports have been slow due to the unique conditions in Zambia.”
Tembo said transportation costs are very high in Zambia, as it costs the same to transport maize from Mkushi to Lusaka and from South Africa to Congo.
“Our transport sector is not well developed and the costs of production are high for farmers hence making Zambian products uncompetitive in the region,” he said.
Tembo further said the Ministry of Agriculture was having a more holistic approach to the whole maize issue.
“All the stakeholders met and decided on the maize export issue,” said Tembo. “The stakeholders are providing government with adequate information, hence helping government in its planning and implementation process.”
Labels: EXPORTS, KENYA, MAIZE, ZACA
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China permits Zambian products
By Business Reporter
China has allowed at least 440 Zambian finished products to enter the Chinese market duty free and quarter free, director of industry at the Ministry of Commerce, Trade and Industry, Siazongo Siakalenge has said.
Mr Siakalenge said the Zambian Government has since received a list of duty free and quota free products from the Chinese government which will find their way on that country’s market.
The move follows the Chinese government’s invitation to Zambia to enable the country’s products to be marketed in China.
Mr Siakalenge said this in Lusaka yesterday during a postmortem meeting of the just-ended Zimbabwe International Trade Fair, where a number of Zambian companies participated.
“It is now up to the private sector in Zambia to start addressing the supply side of their operations in order for them to become competitive on the Chinese market,” he said.
Commerce, Trade and Industry Deputy Minister, Richard Taima said the Government was considering to participate in trade fairs in the Sothern African Development Community and Common Market for Eastern and Southern Africa regions as well as in countries such as Japan and China.
“We would like to participate in as many trade fairs and shows as possible within the region to promote and attract investment and job creation,” Mr Taima said.
He said that 30 Zambian companies participated at the just ended Zimbabwe trade fair hosted in that country’s capital, Harare last week.
Mr Taima said the Zambian Government spent about US$15,000 to prepare for the exhibition in Harare.
The 30 exhibitors were from the mining, manufacturing, clothing and textile, food processing, pharmaceuticals, information, communication, technology and other service provision sectors.
Mr Taima described the Zimbabwe Trade Fair as a great success because many Zambian companies that took part made big business deals.
The deputy minister said it was not the issue of how much the Government had spent in the fair but the level of business deals that were made.
Labels: CHINA, EXPORTS
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Zambias NTEs soar to dollar 900m
By NKOLE CHITALA
ZAMBIA’s non traditional exports (NTEs) are projected to reach US$900 million this year, from efforts of its diversification from over dependence on copper earnings, amidst a slump in metal prices due to the global financial crisis. Bank of Zambia Governor Caleb Fundanga said NTEs were expected to reach US$900 million against the US$1 billion projected earlier.
He said although the central had hoped the sector to hit US$1 billion, it would at least reach US$900 million. Zambia has been on a European Union-supported Export Development Programme to diversify its export since the mid 1990s, driven by the Export Board of Zambia, (EBZ) which was formed in 1987 through an Act of Parliament made in 1985 and amended in 1994.
NTEs have been slowly growing and contributed about 30 per cent of NTEs two years ago before the boom in copper prices made metal exports grow substantially again.
The EBZ is now part of the Zambia Development Agency.
Dr Fundanga said already the NTEs sector had grown to reach the value exceeding the
total value of exports recorded in 2000 which was about US$900 million.
Dr Fundanga said Government should continue to put in place policies that would encourage production in other sectors such as uranium and oil on which Zambia could anchor its national development.
Meanwhile Zambia is likely to have a sovereign credit rating next year, BoZ has said.
And BoZ has projected that Non Traditional Exports (NTEs) would reach US$900 million by the end of this year from about US$700 million last years.
BoZ Governor Caleb Fundanga said Zambia could be rated once the national budget was presented next year.
Dr Fundanga said the delay in rating Zambia was mainly due to unfortunate situations the country had found itself in over the last few months of the year.
“Once the Minister of Finance and National Planning is done with the budget, one of the issues to be focused on is ensuring that the country is rated,’’ he said.
He was speaking during the cultural remodeling programme aired, on Zambia National Broadcasting Corporation on Sunday night organised by the Ministry of Finance and National Planning.
Dr Fundanga also explained that the process of the credit rating had started well with Government selecting J.P Morgan to provide financial advisory services and prepare a detailed analysis for consideration.
“But you know we had to go to elections so everything was delayed because of the unfortunate situation the country found itself in,” he said.
The credit rating is envisaged to open up the country to global financial markets.
A sovereign rating is an assessment of the risk and credit worthiness of a country and it is used as a reference point by would-be investors.
In February, expressions of interest were advertised for a rating agency in the media and closed on March 14, 2008.
Six companies submitted their bids and were evaluated on March 31, 2008.
Two companies, J.P Morgan and Citi Group were short listed and requested to submit their financial bids by June 30, 2008.
Labels: CALEB FUNDANGA, EXPORTS
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ZEGA urges Africa to exploit world trade
By Fridah Zinyama
Friday August 15, 2008 [04:00]
ZAMBIA Export Growers Association (ZEGA) has urged other African countries dealing in horticulture to take advantage of world trade which has increased five fold over the last 20 years. According to ZEGA chief executive Luke Mbewe in a presentation at the Common Market for Eastern and Southern African (COMESA) business forum,
Africa’s share of world trade has virtually halved from 4.5 per cent to 2.6 per cent over the period.
However, he noted that Asia’s share in world trade had however increased significantly over the period. Mbewe said production for vegetables in Zambia has been growing with the increase in participation of small-scale growers.
“But most farmers still have a long way to go since there are a lot of requirements which have to be met before their products can enter certain markets,” he said. “Issues of quality play an important role and most of the horticulture markets have set stringent measures in place for all exports entering their markets.”
He said countries in the region could take advantage of the increase in world trade despite the many challenges which have to be faced.
“Most countries which most African countries export to like Europe and the United States have stringent standards to fulfil,” Mbewe said.
He said there was also discriminatory enforcement of standards by application of higher standards on imports.
Mbewe added that most of the countries would have to improve the quality of their products if they are to enter some of these markets.
“But in improving quality, the farmers will have to incur the high cost of training and certification which is quite expensive for them,” said Mbewe.
Labels: COMESA, EXPORTS, HORTICULTURE, LUKE MBEWE, ZEGA
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Zim exports to SA grow to 26,8pc: Survey
Business Reporter
SOUTH Africa is now the biggest destination of Zimbabwean manufactured goods after exports into that country grew from 19,6 percent in 2006 to 26,8 percent last year. According to the Confederation of Zimbabwe Industries Manufacturing Sector Survey for 2007 that was released week, South Africa replaces Zambia, whose exports declined 23,2 percent in 2007 from 26,2 percent a year earlier.
Mr Cliff Dube of the CZI who was part of the co-ordinating committee of the survey said the status quo could be a result of the fact that the companies visited could be predominately exporters to South Africa.
The survey, which took into consideration views of different companies operating in major cities, showed a decline in exports to most regional countries.
However, the survey noted that exports to Mozambique were on the increase as they jumped from 5,4 percent in 2006 to 7,1percent in 2007.
Exports to Botswana fell from 17,6 percent in 2006 to 12,5 percent in 2007 while those into Malawi fell from 12,5 percent in 2006 to 10,7 percent last year and exports into other regional countries fell from 12,5 percent to 7,1 percent.Exports to the rest of the world jumped to 12,5 percent in 2007 compared with 3,6 percent the year before.
According to the survey the decline in overall exports was due to the country’s export uncompetitiveness, which was prompted by absence of local credit due to the closure of international credit lines.
The situation resulted in companies, which were classified as unreliable on the international market recording a decline in exports. "Consequently, loss of confidence from foreign clients due to failure to deliver has found replacements from the East.
"Rapid depreciation of the local currency against its major trading partners has made foreign currency expensive thereby rendering exports highly uncompetitive on the international scene," read part of the report.
The survey noted that non-tariff barriers contributed significantly towards the non-performance of exports in the sense that a lot of the exporters have suddenly discovered that the previous clients on the international market are no longer accepting their products simply because of the source country.
It also pointed out that exporters were being put off by the unreliability of availability of Foreign Currency Account funds. Most exports have taken a stance against exports, for they are unable to access foreign currency earned from their FCAs.
The survey indicated that exports had remained low during the period under review due to foreign currency shortages the controlled exchange rate and raw material shortages.
Labels: EXPORTS, SOUTH AFRICA, ZIMBABWE
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Boon for Zim exporters as exchange rate is floated
New Ziana.
Harare. — Zimbabwe Stock Exchange listed export-oriented companies stand to benefit most from the recently floated exchange rate not only through improved income but also a surge in share prices, analysts said on Tuesday. Two weeks ago, the Reserve Bank of Zimbabwe allowed the local currency to float freely, which immediately saw a huge jump in the exchange rates for most hard currencies.
For example, the local dollar was previously fixed at $30 000 to the US greenback, but this has since shot up to above $200 million to one US dollar.
Analysts said exporting companies, which had for a long time cried foul over the unviability of the fixed exchange rate, were expected to announce improved earnings as early as the next reporting season.
These include heavy exporters such as the Cotton Company of Zimbabwe and most mining companies.
Tourism counters such as African Sun and Rainbow Tourism Group were also likely to benefit from the floated exchange rate, as they earn significant income from foreign-currency paying travellers, and were managing a number of hotels outside the country.
Analysts said the increased earnings potential of the companies had already begun to whet the appetite of the investing public, expected to lead to a rally in their share prices.
An analyst with Interfin Securities told New Ziana that the floated exchange rate "was definitely going to have an impact on the share prices of listed export companies".
"Already we have seen an upward movement in the share prices of some agro counters and mining firms such as the Cotton Company of Zimbabwe and Interfresh because of the export factor," he said.
Zimbabwe Allied Banking Group research analyst Mudzingwa Nhewatiwa also concurred, adding that use of the inter-bank exchange rate meant that export companies would now get value for their money.
"This is going to boost their earnings as well as their performance. There is now an incentive for them to actually increase their production as some had reportedly scaled down," he said.
He said the fixed exchange rate grossly impacted on the companies’ earnings as there was a widening mismatch between income and operating costs.
The inter-bank rate, he said, was responsive to inflation. — New Ziana.
Labels: EXPORTS, ZIMBABWE, ZIMBABWE DOLLAR, ZSE
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Kwacha’s gain to render agric exports non-viable
By Joan Chirwa
Thursday May 08, 2008 [04:00]
COTTON and other non-traditional agricultural exports will cease being viable in Zambia if the local currency appreciates further against foreign notes, Zambia Cotton Ginners Association (ZCGA) chairperson Nigel Seabrook has said. And the Cotton Association of Zambia (CAZ) has launched the Credit Management Database (CMD), a latest initiative aimed at building up the industry’s credit history among farmers.
During the launch of the CMD in Lusaka, Seabrook said the weakening dollar and the strong kwacha were a disastrous combination for the industry – affecting both the farmers and the ginners.
“This season, the industry again faces a difficult time. As we all know, cotton is an export crop with US dollar income flows and predominantly all costs in kwacha,” Seabrook said. “Should the situation continue with further kwacha appreciation and ongoing domestic inflation, then cotton, along with other non-traditional agricultural exports will no longer be viable in Zambia.”
Seabrook, who is also Dunavant Zambia Limited managing director, said the current situation in the cotton industry could drive many rural households deeper into poverty.
“This will have very serious implications on the country’s rural economy and could eliminate any opportunity that the country has to achieve its Millennium Development Goals in respect of the rural population,” Seabrook said. “The cotton industry plays a vital role in Zambia’s agricultural development and rural poverty alleviation.
Currently, about 200,000 smallholder farmers directly depend on cotton, making it by far their most important cash crop.”
Seabrook further said the Zambian cotton industry required genuine investments for its enhancement.
“This industry needs genuine investors who wish to expand cotton growing and not just exploit the existing, indeed currently shrinking, farmer base,” Seabrook said. “It is apparent that in the last two seasons, due to a number of reasons, those ginners who have pre-financed, have had poor input recoveries. If those ginners were to reduce their future pre-financing as a result of this, it would have a disastrous effect on national cotton plantings and could destroy the, already struggling, industry.”
And CAZ, with the assistance of the Zambia National Farmers Union (ZNFU), the government and USAID has launched Credit Management Database, whereby the industry would build up a history and type of credit reference bureau to identify not only the farmers with excellent loan repayments, but also those farmers with poor loan repayment histories.
Labels: COTTON, EXPORTS, KWACHA
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Sampa calls for wider export base
By Florence Bupe
Friday January 11, 2008 [03:00]
FINANCIAL Markets Association president Miles Sampa has said Zambia needs to increase its export base in order to cushion the economy against the impact of the expected weak dollar this year. And Sampa said the expected weak dollar will lead to higher international oil prices, thereby adversely affecting Zambia’s economic growth. In an interview, Sampa said the country needed to enhance trade with countries other than the United States where there were stronger currencies.
“There is already talk of an economic recession in the United States, and this means there will be reduced global productivity,” Sampa explained. “In the short term, this means the US will import less copper, which is our major export, and the effects will eventually trickle down to Zambia.”
Sampa observed that the country was likely to realise less revenue from exports as a result of a weaker dollar on the global scene.
“Once the dollar depreciates, it will mean the country will not be able to earn as much from its exports. In order to mitigate the impact of the weakening dollar on the country’s economy, there is need for the country to increase its export base and reduce reliance on importation,” he said.
Sampa advised that government needed to substitute imports with local products, as well as enhance trade within the region.
And Sampa projected that the weakening of the dollar would lead to further increases in the price of oil on the international market.
The international oil price is currently US $100 per barrel.
Zambia’s main import is oil, which is also essential. The main oil producing region is the Middle East, and if the dollar weakens, the impact on Third World countries will be negative,” he said.
Sampa said the development could also work against a stable inflation rate, as the country would be importing inflation.
The World Bank early this week projected that the dollar would weaken, leading to reduced export revenues and capital inflows for developing countries, and reduce the value of their dollar investments abroad.
The bank stated that the reserves and other cushions that developing countries have built up in the past years might have to absorb unexpected shocks.
Director of the World Bank Development Prospects Group and International Trade Department Uri Dadush warned that the economic growth of developing countries might be slowed down by the dollar trends.
Labels: ECONOMY, EXPORTS, MILES SAMPA
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Pannar Seed begins exports to Mexico
By Joan Chirwa
Friday October 19, 2007 [04:00]
PANNAR Seed Zambia Limited has successfully penetrated the Mexican market for maize seed exports, with an initial 30 metric tonnes of the commodity earmarked this month. And agriculture and co-operatives minister Ben Kapita said the seed industry in Zambia had responded positively to the policy of liberalisation as pronounced in the National Agriculture Policy.
This is the first time that Zambia is exporting maize seed to Mexico, after the country's already established market within the continent.
In an interview after the opening of a Pannar Seed processing plant in Lusaka on Wednesday, managing director William Rutherford-Smith said the company had achieved one of its targets for this year by exporting 30 tonnes of locally produced maize seed to Mexico for the first time in Zambia's history.
"This maize seed we are talking about was grown in Mkushi and it is very good news for Zambia because it is the first time we are exporting to countries like Mexico," Smith said. "We have been exporting to a number of countries in the region and all this is because of the growth of the seed industry in the country."
Smith further said the opening of a Pannar Seed processing plant in Lusaka was as a result of the government's good investment policy on agriculture.
"Our intention is to continue to invest in and expand our research and seed production capabilities in Zambia as needed, thereby contributing on an ongoing basis to food security, economic growth, training and employment in this country," Smith said.
"Through its interaction with Pannar Group companies in other countries in Africa, Europe, the US and South America, Pannar Seed Zambia is well positioned to access and incorporate excellent high-yielding and adapted genetics and the latest in cutting-edge technology into the varieties that we breed for and offer to both small-scale and commercial farmers in Zambia."
Pannar Seed also has its presence in Kenya, South Africa, Swaziland, Malawi, Mozambique, Lesotho and Zimbabwe, with about 30 years of testing and product selling on the Zambian market.
And Kapita said the policy framework on the seed industry had provided a fertile ground for private seed companies to transact.
"The subsection on National Research and Seeds Policy of the National Agriculture Policy advocates for the separation of responsibilities between private and public sectors," said Kapita.
Labels: EXPORTS, MAIZE, PANNAR SEED ZAMBIA LTD
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Rwanda miller sees 2008 sugar output growing 25 pct
Tue 18 Sep 2007, 10:28 GMT
KIGALI (Reuters) - Rwanda's sole sugar miller plans to increase production by 25 percent to 15,000 tonnes in 2008, to beat an emerging deficit in the local market, the mill's manager said on Tuesday. The Kabuye Sugar Works owned by the Madhvani Group currently produces 12,000 tonnes.
"With effect from next year, we will increase our annual production to 15,000 tonnes hoping that at that level, we will be meeting 75 percent of market demand," Rao Mahakali, general Manager for Kabuye Sugar Works, told Reuters in an interview.
Rwanda's current sugar demand stands at an annual 20,000 tonnes and the deficit is largely covered by imports from Zambia, Malawi and Kenya.
Land is scarce in Rwanda and has been the biggest hurdle to increasing the factory's output, Mahakali said, adding that much of its cane is grown in swampy areas that flood.
"Out of the total 3,100 hectares leased to our factory to grow sugarcane, about 1,500 hectares remain unutilised simply because of periodic floods," he said.
The tiny African nation's terrain is hilly and swampy and is susceptible to landslides and floods during the rainy season.
"We are engaging government to find us alternative land to grow enough sugarcane because the question of limited land continues to be the biggest challenge to our production capacity," he added.
Mahakali said his firm was largely dependent on supplies from outgrowers cultivating farms on over 2,200 hectares across the nation. The industry employs about 10,000 Rwandans.
The company intends to set up a second factory in Eastern Rwanda to meet growing demand, once more land is made available, he said.
Rwanda is one of Africa's most densely populated nations with over 300 people per square km.
Labels: EXPORTS, RWANDA, SUGAR CAIN
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