This is the last week of 2008 and as we proceed into 2009 it will be useful to take some lessons learned from this year as a basis for planning our future from here on.
Early in the year, as a carry over from the previous year, the Government decided to take affirmative action on the Mining Development Agreements (DA’s) in an effort to get the Mining industry to pay their fair share of taxes in the light of unprecedented high copper prices.
Although the case for Mining companies to pay higher taxes than those stipulated in their Development Agreements with the Government was legitimate, the risk of Zambia paying too much attention to the copper mining industry resulted in some mutation of the only too familiar ‘Dutch Disease’. In other words, we placed too much emphasis on the copper mining industry to be our economic rescue line out of poverty, and as the vehicle to propel our economy into prosperity. The copper price slump to below USD3,000 per ton has now brought some realities into our economic development planning strategies.
The Zambia Development Agency (ZDA) was practically launched in 2008 when the first Chief Executive Officer was put into office by Government. This decisive move allowed for a more focused dialogue with the private sector and Government, such that the agency positions itself as the prime mover for investment into Zambia. The various divisions of the ZDA were not completed operationalized by the end of the year, but 2009 promises to prod ZDA into more proactive work with the advent of the Multi Facility Economic Zones.
2008 saw some positive developments in the businesses sector where the primary activity of trading started to evolve with many large companies beginning to invest in factories, hotels and lodges, shopping malls, office blocks, and other real estate investments. This growing transformation was an indication that businesses have started to develop medium term faith in the stability of the economy and therefore look into other avenues of investment beyond trading.
Electricity availability was a major hurdle impeding the growth of the mining sector and the development of new factories. Several factories had to re-schedule their commencement of operations due to insufficient electrical power supply from the Zambia Electricity Supply Corporation (ZESCO). The year was characterized by continuous power outages, load shedding, and blackouts that forced many businesses to invest in energy hungry diesel generators while the general public had to contend with many nights of no electricity. Towards the end of the year ZESCO announced that it was securing a USD1.5 billion loan from the World Bank’s International Finance Corporation to build a new power station to be known as the Kafue Gorge Lower Power Station. This project is likely to take at least five years to complete after the contracts have been signed and pre construction work is completed. This is all on the assumption that we do not do anything to upset the World Bank, International Monetary Fund and other collaborating partners.
Zambia managed to attract several regional banks to invest in the financial sector in 2008 and by the year of this year at least four new banking licenses will have been issued or approved. The impact of more investors in the banking sector suggests that the private sector will have more options to choose from when looking for investment capital for their businesses. An increase in the number of banks in the financial sector also puts more aggressive competition within the banking sector and should result in improved banking services and products in the market.
The Citizens Economic Empowerment Commission (CEEC) was officially launched in 2008 when a Chief Executive Officer was employed and an operational premises and staff complement was inaugurated on Los Angeles Boulevard. The CEEC spent much of the year marketing its programs and activities but one hopes that in 2009 we should see more implementation work being carried out.
Half way through the year we noted that some investors from West Africa had decided to invest in Zambia in a fairly large way. Through this initiative we have seen a large cement investment totaling to USD400 million being developed in Lusaka with the eventual impact of bringing down the price of cement to the construction industry as well as to the region. Zambia could turn out to be the largest producer of cement in the region with a local impact of supporting and facilitating a construction boom in the country.
Zambia had started some work on the Economic Zones in 2007 and spent much of 2008 in various efforts to rationalize the development of the three initial zones namely Chambishi, Lusaka-Chalala, and Lusaka International Airport. Some focus was placed on attracting investors from abroad to build factories in these three zones with very little information being shared with local businesses on how domestic investors could benefit or invest in the Economic Zones. Hopefully, 2009 will see some significant changes to this marketing effort by targeting Zambians more aggressively.
Zambia pondered whether to belong to Southern African Development Community (SADC) or Common Market for East and Southern Africa (COMESA) during 2008 and was further pushed to consider the SADC Free Trade Area (FTA). Both regional grouping are looking to developing a Customs Union (CU) within a few years with COMESA aiming to operationalize its Customs Union by December 2008. The implications and impact to the Zambian economy in respect to FTA’s and CU’s was subject for much debate and dialogue during the year.
The European Union had persuaded Zambia to initial a pre Economic Partnership Agreement (EPA) document at the end of 2007 and the same manner of commitment to ongoing dialogue was agreed in 2008 by Zambia initialing another pre EPA document due to the fact that Zambia is not likely to sign the full EPA by the end of 2008.
In the second quarter of the year some rehabilitation work was started on the Zimba to Livingstone road which had deteriorated to an extent that the 80 kilometre stretch could be covered in no less than four hours by car or bus. These ongoing road works have not yet been completed by the end of the year with the onset of the rainy season. It still remains a road traveler’s nightmare.
Midway through 2008 Zambia suffered a national blow with the demise of the incumbent State President Levy Patrick Mwanawasa. Much uncertainty was introduced into the economy and the immediate effect was for the Kwacha to depreciate against the US Dollar. The subsequent run up to the Presidential By-Elections introduced even more uncertainty such that some investments were put on hold and the kwacha further depreciated.
The inauguration of President Rupiah Banda brought some stability to the country. The Banda Government remained significantly unchanged from the Mwanawasa Government and that sent good messages of confidence to the business community both at the domestic level and the international level.
In the last quarter of 2008 a new bridge over the Luapula River was completed and commissioned as the Levy P Mwanawasa Bridge. This life line crossing between Zambia and the Democratic Republic of Congo via the pedicle access road, cuts travel time to and from the Luapula Province by at least three hours.
The year saw the Global Financial Crises develop and eventually convert into a world recession and economic meltdown in many counties across the world. Major banks, mortgage companies, and insurance companies either ran aground or were speedily rescued by their Governments in an effort to ward of a snowball collapse of the financial systems of ‘strong’ economies.
The last few months of 2008 saw the Zambia State Insurance Company mutate into three separate business entities as a result of a re-engineering process that should see the state enterprise survive and thrive in years to come.
The significant major event of the last quarter of the year was the change of guard at the Ministry of Finance and National Planning. Mr N’gandu Peter Magande was replaced by Dr Musokotwane Situmbeko who is a seasoned civil servant with experiences that span the Bank of Zambia, the National Treasury, State House and the IMF.
What are the major lessons to be learned from 2008? The most important lesson is that Zambia must focus on developing economic activity across the various sectors. 2008 teaches us that we cannot become too complacent when copper prices are good. We must diversify and spread the burden or financing the economy as evenly as possible so that when there is a slump in one sector the other sectors will still hold the country up. Another big lesson is that competition brings down prices and improves quality of services or products. We must encourage competition pro actively for the benefit of our people. A special lesson from 2008 is that proper planning and commitment is essential. We have energy shortages due to poor planning and commitment. We have bad roads due to poor planning and commitment. We have mediocre tourism due to poor planning and commitment. We have a bad railway network due to poor planning and commitment. We have neglected coal resources which could be used for alternate energy, due to poor planning and commitment. We are grappling with the future of the Zambia Telecommunications Company (ZAMTEL) due to poor planning and commitment.
2009 looks encouraging and prosperous, if we work as a team towards developing the economy and opportunities for our people. The partnership starts with the Christmas and New Year’s celebrations where Government officers, business men and women, and the general public laugh, drink and merry make together in sincerity. We must take the season’s spirit into 2009 and into our board rooms and conference rooms so that together we build Zambia. Seasons greetings you all and a prosperous 2009!
Early in the year, as a carry over from the previous year, the Government decided to take affirmative action on the Mining Development Agreements (DA’s) in an effort to get the Mining industry to pay their fair share of taxes in the light of unprecedented high copper prices.
Although the case for Mining companies to pay higher taxes than those stipulated in their Development Agreements with the Government was legitimate, the risk of Zambia paying too much attention to the copper mining industry resulted in some mutation of the only too familiar ‘Dutch Disease’. In other words, we placed too much emphasis on the copper mining industry to be our economic rescue line out of poverty, and as the vehicle to propel our economy into prosperity. The copper price slump to below USD3,000 per ton has now brought some realities into our economic development planning strategies.
The Zambia Development Agency (ZDA) was practically launched in 2008 when the first Chief Executive Officer was put into office by Government. This decisive move allowed for a more focused dialogue with the private sector and Government, such that the agency positions itself as the prime mover for investment into Zambia. The various divisions of the ZDA were not completed operationalized by the end of the year, but 2009 promises to prod ZDA into more proactive work with the advent of the Multi Facility Economic Zones.
2008 saw some positive developments in the businesses sector where the primary activity of trading started to evolve with many large companies beginning to invest in factories, hotels and lodges, shopping malls, office blocks, and other real estate investments. This growing transformation was an indication that businesses have started to develop medium term faith in the stability of the economy and therefore look into other avenues of investment beyond trading.
Electricity availability was a major hurdle impeding the growth of the mining sector and the development of new factories. Several factories had to re-schedule their commencement of operations due to insufficient electrical power supply from the Zambia Electricity Supply Corporation (ZESCO). The year was characterized by continuous power outages, load shedding, and blackouts that forced many businesses to invest in energy hungry diesel generators while the general public had to contend with many nights of no electricity. Towards the end of the year ZESCO announced that it was securing a USD1.5 billion loan from the World Bank’s International Finance Corporation to build a new power station to be known as the Kafue Gorge Lower Power Station. This project is likely to take at least five years to complete after the contracts have been signed and pre construction work is completed. This is all on the assumption that we do not do anything to upset the World Bank, International Monetary Fund and other collaborating partners.
Zambia managed to attract several regional banks to invest in the financial sector in 2008 and by the year of this year at least four new banking licenses will have been issued or approved. The impact of more investors in the banking sector suggests that the private sector will have more options to choose from when looking for investment capital for their businesses. An increase in the number of banks in the financial sector also puts more aggressive competition within the banking sector and should result in improved banking services and products in the market.
The Citizens Economic Empowerment Commission (CEEC) was officially launched in 2008 when a Chief Executive Officer was employed and an operational premises and staff complement was inaugurated on Los Angeles Boulevard. The CEEC spent much of the year marketing its programs and activities but one hopes that in 2009 we should see more implementation work being carried out.
Half way through the year we noted that some investors from West Africa had decided to invest in Zambia in a fairly large way. Through this initiative we have seen a large cement investment totaling to USD400 million being developed in Lusaka with the eventual impact of bringing down the price of cement to the construction industry as well as to the region. Zambia could turn out to be the largest producer of cement in the region with a local impact of supporting and facilitating a construction boom in the country.
Zambia had started some work on the Economic Zones in 2007 and spent much of 2008 in various efforts to rationalize the development of the three initial zones namely Chambishi, Lusaka-Chalala, and Lusaka International Airport. Some focus was placed on attracting investors from abroad to build factories in these three zones with very little information being shared with local businesses on how domestic investors could benefit or invest in the Economic Zones. Hopefully, 2009 will see some significant changes to this marketing effort by targeting Zambians more aggressively.
Zambia pondered whether to belong to Southern African Development Community (SADC) or Common Market for East and Southern Africa (COMESA) during 2008 and was further pushed to consider the SADC Free Trade Area (FTA). Both regional grouping are looking to developing a Customs Union (CU) within a few years with COMESA aiming to operationalize its Customs Union by December 2008. The implications and impact to the Zambian economy in respect to FTA’s and CU’s was subject for much debate and dialogue during the year.
The European Union had persuaded Zambia to initial a pre Economic Partnership Agreement (EPA) document at the end of 2007 and the same manner of commitment to ongoing dialogue was agreed in 2008 by Zambia initialing another pre EPA document due to the fact that Zambia is not likely to sign the full EPA by the end of 2008.
In the second quarter of the year some rehabilitation work was started on the Zimba to Livingstone road which had deteriorated to an extent that the 80 kilometre stretch could be covered in no less than four hours by car or bus. These ongoing road works have not yet been completed by the end of the year with the onset of the rainy season. It still remains a road traveler’s nightmare.
Midway through 2008 Zambia suffered a national blow with the demise of the incumbent State President Levy Patrick Mwanawasa. Much uncertainty was introduced into the economy and the immediate effect was for the Kwacha to depreciate against the US Dollar. The subsequent run up to the Presidential By-Elections introduced even more uncertainty such that some investments were put on hold and the kwacha further depreciated.
The inauguration of President Rupiah Banda brought some stability to the country. The Banda Government remained significantly unchanged from the Mwanawasa Government and that sent good messages of confidence to the business community both at the domestic level and the international level.
In the last quarter of 2008 a new bridge over the Luapula River was completed and commissioned as the Levy P Mwanawasa Bridge. This life line crossing between Zambia and the Democratic Republic of Congo via the pedicle access road, cuts travel time to and from the Luapula Province by at least three hours.
The year saw the Global Financial Crises develop and eventually convert into a world recession and economic meltdown in many counties across the world. Major banks, mortgage companies, and insurance companies either ran aground or were speedily rescued by their Governments in an effort to ward of a snowball collapse of the financial systems of ‘strong’ economies.
The last few months of 2008 saw the Zambia State Insurance Company mutate into three separate business entities as a result of a re-engineering process that should see the state enterprise survive and thrive in years to come.
The significant major event of the last quarter of the year was the change of guard at the Ministry of Finance and National Planning. Mr N’gandu Peter Magande was replaced by Dr Musokotwane Situmbeko who is a seasoned civil servant with experiences that span the Bank of Zambia, the National Treasury, State House and the IMF.
What are the major lessons to be learned from 2008? The most important lesson is that Zambia must focus on developing economic activity across the various sectors. 2008 teaches us that we cannot become too complacent when copper prices are good. We must diversify and spread the burden or financing the economy as evenly as possible so that when there is a slump in one sector the other sectors will still hold the country up. Another big lesson is that competition brings down prices and improves quality of services or products. We must encourage competition pro actively for the benefit of our people. A special lesson from 2008 is that proper planning and commitment is essential. We have energy shortages due to poor planning and commitment. We have bad roads due to poor planning and commitment. We have mediocre tourism due to poor planning and commitment. We have a bad railway network due to poor planning and commitment. We have neglected coal resources which could be used for alternate energy, due to poor planning and commitment. We are grappling with the future of the Zambia Telecommunications Company (ZAMTEL) due to poor planning and commitment.
2009 looks encouraging and prosperous, if we work as a team towards developing the economy and opportunities for our people. The partnership starts with the Christmas and New Year’s celebrations where Government officers, business men and women, and the general public laugh, drink and merry make together in sincerity. We must take the season’s spirit into 2009 and into our board rooms and conference rooms so that together we build Zambia. Seasons greetings you all and a prosperous 2009!
Published 30th December, 2008
Dear Sir,
ReplyDeleteThis is to explore possibility getting information regarding Zambian Cement Industry.
I am trying to explore Cement Industry of Zambia.All that information which i want can be sent to me by any one having relevance to building and construction material industry of Zambia.
Following are salient search points.
Domestic Industry size of Zambia.
No of domestic and importing players in Cement Industry of Zambia.
Logistics and Price position.
Minerals availability with special emphasize on Lime Stone.
Kindly explore possibility of suggesting some one from or related to Zambian Cement Industry.The e mail ID is anilsadevra@gmail.com
Thanks/Regards
Anil Sadevra
Sainikpuri Hyderabad
+91 94907 95064