ZAM calls for liberalisation of fuel sector
By Kabanda Chulu
Tue 16 July 2013, 14:01 CAT
ZAMBIA Association of Manufacturers has advised the government to liberalise the fuel sector and allow oil marketing companies to enter into direct importation of finished products.
But energy minister Christopher Yaluma says OMCs are free to import as long as they meet requirements from the Energy Regulation Board (ERB).
Zambia Association of Manufacturers (ZAM) president Bright Chunga said the government should give up its current monopoly in the petroleum sector.
"Fuel costs may come down if government liberalises the fuel sector and allows OMCs to enter into the direct importation of finished products. By giving up the current monopoly, government would by a stroke of the pen do away with the current five per cent on imported crude as well as do away with the current 25 per cent duty on finished products," Dr Chunga said.
He also advised the government to withdraw from the direct importation, distribution and marketing of fertilisers.
"The adage that government has no business in business makes sense in this case and government should encourage competition amongst commercial fertiliser importers, blenders and their agents to play a greater role in the fertiliser market." said Dr Chunga.
But Yaluma said there were no restrictions on importing finished oil products.
"OMCs are free to import so long they meet requirements from the ERB, and the reason why government is active in this sector is to ensure availability of fuel, which is important to the economy but government will reduce its participation once bulk fuel reserves are built," Yaluma said.
"It is not true at all because OMCs have been co-opted to import various petroleum products in the country; we have Puma and Total importing Jet A1."
However, an industry expert noted that the government does restrict OMCs through taxes, which Indeni Refinery does not pay.
"Without taxes, Indeni will not be able to compete with OMCs. There are several taxes that limit the participation of OMCs," said the expert.
Labels: BRIGHT CHUNGA, CHRISTOPHER YALUMA, FUEL, MANUFACTURING, NEOLIBERALISM, OIL, ZAM
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Address high cost of doing business, Zam Tells govt
By Kabanda Chulu in Kitwe
Tue 23 Mar. 2010, 04:01 CAT
ZAMBIA Association of Manufacturers (ZAM) has challenged the government to urgently address the high cost of doing business so that local industries are not jeopardised through the flooding of cheaper imported products under the free trade regional integration markets.
And ZAM chief executive officer Roseta Mwape has advised the government to reinstate the 25 per cent duty that has been reduced on imported finished products under the common external tariff (CET) for the COMESA Customs Union.
But commerce and trade minister Felix Mutati said the government is ready for continuous dialogue with all stakeholders to address their concerns.
In an interview last week, ZAM vice president for the northern region Eugene Appel said the coming of CK regional markets would result in mass production of goods that would see Zambian producers disadvantaged due to the high cost of borrowing that hindered their capacity to expand.
“Producers exporting into Zambia borrow funds at lower interest rates in their countries hence whatever they produce will be cheaper so our goods will not compete favourably and this will negatively affect local industries,” Appel said. “So government should urgently address the high cost of doing business in the country otherwise benefits of regional integrations will by-pass us just because we cannot borrow to invest and expand since interest rates are too high.”
He said the Citizens Economic Empowerment Commission’s financing to Kechas General Dealers for iron sheet manufacturing was a good initiative that would result in a positive impact on the economy.
“But this financing facility should be done on a large scale and we need to see such financing being available to many projects because it shows that economic development is possible when funds are readily available,” Appel said.
He said it was encouraging to see the government talking about joint ventures with foreign investors especially those from the Asian block.
“But this has not materialised into actual and meaningful partnership because certain mechanisms are not in place hence government should ensure that guidelines are there and should be implemented,” said Appel.
Mwape said ZAM would like the government through the Ministry of Commerce, Trade and Industry to consult widely on all products manufactured in the country so that the manufacturing sector was not disadvantaged following the launch of the Common Market for Eastern and Southern Africa (COMESA) Customs Union.
She said Zambia had a low manufacturing base that needed to be revamped to facilitate and promote competitive industries on the local market.
“In addition, promotion of value addition to primary goods and transfer of appropriate technology is instrumental to increased productivity and competitiveness especially with the advent of the COMESA Customs Union and the Economic Partnership Agreements (EPAs),” Mwape said.
“But the removal of duties on products has affected the performance of local manufacturers and we implore government to reinstate the 25 per cent duty on finished products for those that have been reduced under the CET for the Customs Union.”
She said COMESA was offering a large market that Zambia lacked as a country, but that there was need to identify products that could be sold under the Customs Union.
“There is need for an aggressive programme on export facilitation since currently there is a lot of red tape bureaucracy in exporting and this has led to most products being manufactured to be consumed locally with very few exports and with the coming of the Customs Union under COMESA and the planned SADC Customs Union, the onus is on us to identify products that we can sell since value addition is key to diversification from raw copper,” Mwape said.
She further said there was need for deliberate policies to promote partnerships that could be split between local and foreign investors.
Mwape proposed that the government should put in place deliberate policies to promote partnerships that would encourage more local shareholding than foreign ownership.
“The main problem we have in the manufacturing sector is that there is no direct policy that spells out how the sector should operate and how market access for industries whether locally or abroad should be addressed hence the need to have deliberate policies to promote partnerships which should be split 70 and 30 per cent for the local and foreign investor respectively,” said Mwape.
“We are calling on government to seal the existing loopholes in the current policy so as to protect the local industries and that majority shareholding should be by local Zambian companies.”
But Mutati said the government was addressing various concerns from many stakeholders and continuous dialogue was important.
He said it was important for stakeholders to engage the government on national issues and challenges facing the people.
“We cannot be left behind on economic issues about world trade because if we do not participate we are going to sink as a country but we are addressing those issues so that we can also enter into trade agreements that will benefit us as a country,” said Mutati.
Labels: CEEC, FELIX MUTATI, ROSETA MWAPE, ZAM
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Set compliance guidelines on tax relief, ZAM challenges govt
By Kabanda Chulu
Wed 13 Jan. 2010, 04:00 CAT
THE Zambia Association of Manufacturers (ZAM) has challenged the government to set compliance guidelines whenever tax relief is given so that investors can be obliged to pass on benefits to consumers.
The government has given various tax incentives to foreign investors, especially the mines and companies intending to operate in the proposed Multi Facility Economic Zones (MFEZ), ranging from tax relief on capital equipment, increased number of expatriates, extended periods of when to start paying certain taxes, among other incentives.
But ZAM has argued that there must be compliance guidelines in place since investors did not pass benefits to local people despite producing goods and services at lower costs due to the incentives given.
“There must be an effective system to monitor whether foreign investors are passing on benefits to consumers or not since they have tax relief and various incentives aimed at producing at lower cost,” stated ZAM. “So government should establish compliance guidelines whenever tax relief is given so that businesses are obliged to pass on something to consumers.”
Despite embarking on various reforms aimed at reducing the cost of doing business that have also resulted in Zambia improving its rankings by 10 on the World Bank Doing Business Index, Zambia still remains an expensive country to operate from in terms of producing goods and services.
Labels: MANUFACTURING, MFEZ, ZAM
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Agricultural subsidies are uneconomical, says Magande
By Joan Chirwa
Saturday September 27, 2008 [04:00]
FINANCE minister Ng’andu Magande (right) has said high agricultural subsidies are proving uneconomical considering the low crop yields being recorded in the country. And Magande said the private sector in Zambia is unwilling to mine phosphates which could provide a cheaper source of agricultural inputs.
During an extraordinary meeting of the Zambia Association of Manufacturers (ZAM) in Lusaka on Thursday, Magande said farmers need to work on their productivity beyond the current 1.3 metric tonnes per hectare recorded in the last farming season.
“Zambia utilises 200,000 metric tonnes of fertiliser, and now we have increased subsidies for farming inputs to the farmers which will see government paying 75 per cent of the total cost while farmers will pay only 25 per cent.
But despite this, yields per hectare are still very low,” Magande said. “We produce around 1.3 metric tonnes of maize per hectare currently. We have to be a little more productive and increase the yields per hectare to around three to four metric tonnes.”
And Magande said Zambia’s high phosphate and lime deposits need to be exploited for the agriculture sector.
“In Zambia, we have high deposits of phosphates but very few of the private sector want to exploit that because they want government to do so,” Magande said.
“The price of fertiliser has gone up in Zambia because the ammonium nitrate being used is made out of petrol. But if we are able to produce the phosphate and adequate lime in the country, then productivity of the farmers will be enhanced because inputs will be cheaper.”
Labels: FARM SUBSIDIES, MAGANDE, ZAM
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Motorists association urges quick reduction of fuel prices
By Kelvin Tembo
Wednesday September 17, 2008 [04:00]
ZAMBIA Association of Motorists (ZAM) President Chazura Zulu has asked Vice-President Rupiah Banda to show his effectiveness by reducing fuel prices in the country. In an interview yesterday, Zulu said the government should work very fast in ensuring that it reduced fuel prices since crude oil prices have declined on the international market.
“The Vice-President does not need to promise the reduction of fuel; he needs to show that he is effective by reducing the fuel prices because he holds the instruments of power,” Zulu said.
He complained that politicians usually concentrated on campaigns during elections even when there were other important national issues to be handled.
Zulu said the high fuel prices affected every sector in the country, including agriculture.
“Government should look at how the high fuel prices are affecting businesses in the country. Government should look at truckers, the people in newspaper business, the railway companies, farmers and others. These are the drivers of the economy,” Zulu said.
He said the Vice-President Banda, who is the MMD’s presidential candidate in the October 30 by-election, should not only make promises to the people because it was election time but work on improving people’s lives.
And Zulu also said the poor state of the roads in the country had led to the loss of life among members of the association.
“The association has lost a lot of members in accidents caused by the bad roads in the country,” Zulu said. “These are the issues that politicians should address as lives are being lost.”
Labels: CHAZURA ZULU, FUEL, INFLATION, ZAM
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