Copperbelt University (CBU) Head of Business Lusaka Campus Collins Mudenda has encouraged the Government to continue persuading the International Monetary Fund(MF) on bailout options for the country.

Mr. Mudenda said that talks on the possible bailout package must continue in order for the country to fulfill its various debt obligations.

Speaking peaking in an interview with ZNBC News in Kitwe, Mr. Mudenda urged authorities to engage its bilateral partners such as China for a possible debt relief package such as a complete write-off.

Mr. Mudenda noted that this is the only surest way of ensuring that the cash flow in the economy is stabilized due to a decline in tax collections.

He said Government revenue has drastically declined because activities at various border points have slowed down, further reducing the collection excise duty and other taxes.

This week, the International Monetary Fund has clarified that Zambia long with a few other African countries was not in the priority bracket for accessing debt relief package from the Fund.

Zambia among with Burundi, Zimbabwe and Congo including Cote d’Ivoire are some of the countries that had missed out on the Covid-19 debt relief.

IMF Director of the African Department Abebe Selassie explained that Zambia missed out on the initial list of debt relief beneficiaries because it is not classified as most vulnerable and poorest.

Mr. Selassie was answering questions from Journalists during a virtual press conference when the Fund launched the Sub-Saharan Africa Regional Economic Outlook report recently.

By Dr Richard Mbewe

In the case of Zambia, one of the good consequences is that it has made us seriously look at economic issues facing the country. These are issues like high unemployment, high debt, lack of future economic strategy, lack of export product, virtually non-existence of international trade that is beneficial to our country. To mention but a few.

The fact remains that Zambia will ONLY develop if it can produce other export products than copper. Those products should be coupled with value-addition and innovations that will make Zambia have products that they can export top other countries. However, this is a difficult task for our country to satisfy taking into consideration the country working culture, research culture and approach towards to what is owned by everyone, i.e. the state. The country is riddled with corruption, apathy, laissez faire approach to solving national problems or simply getting things done!

The best way out of this predicament for our country is a two-phase approach:

The first phase is to produce and sell produce that can generate immediate income for the State. The intention is to raise enough income that will help alleviate the country’s immediate social problems: reduce unemployment, generate income for fiscal balancing, act as capital for other income generating projects that will improve the standards of living of the Zambians.

The second approach requires creating Zambian capital based on the positive exploitation of our natural resources. These are both natural and human resources. The activities mentioned above should be strategic in nature. This means that for the first phase, it is necessary that we think strategically based on the current global situation regarding Corona virus. Most of the countries are in lockdown, which means that they do not work or produce anything for that matter. This is the time Zambia should start agricultural activities that are aimed at producing the necessary products that countries will need include our neighboring countries. These are maize, soya, different types of meats: poultry, beef, pork and so on.

The point is for Zambian institutions including ZABS to certify these products as corona virus free. It is this income from the selling of these products that will be used to finance Zambia’s development, for now and in the future. It is important to note that if we believe in the conspiracy theory that China started the corona virus in order to gain global economic domination, and then we as Zambians must just emulate China by starting to produce things we are capable of, based on our capabilities, knowledge and technology. These things will give us a competitive advantage of having products to sell when the World is declared corona-virus-free.

If our business acumen is high enough (in line with Porter’s Diamond), we can generate enough funds that would go a long way in financing debt service, provide capital for investments that are necessary for Zambians and income that can be used to finance economic growth for the second phase of development as described above. Therefore, asking IMF loans or support packages in uncalled for as our country has the capability to finance and sustain its economic growth without external support. This is in line with the economic concept that no country has developed based on foreign aid or foreign debt. Moreover, Zambia will be no exception! Zambia will have to work its way to riches, no shortcuts, please!

Dr Richard Mbewe, MSc., PhD., MBA, is a freelance consultant and lecturer. Previously, he worked as an investment banker, fund manager and lecturer in Poland, Turkey, Syria, Slovenia and Zambia. He specializes in chemical engineering processes, macroeconomics, nation branding, marketing, business case development, business arbitration and corporate strategy. The opinions expressed here, solely represent his opinions and NOT those of entities he co-operates or is associated with.

The Center for Trade Policy and Development says the decision to relaunch Zambia Airways should be “quarantined” due to the increased risk of failure and the need for fiscal discipline.

CTPD Senior Researcher Bright Chizonde says the global tourism and air transport sector has suffered the most direct negative impact of the COVID-19 pandemic.

He says International Air Transport Association estimated that worldwide flights were 70% lower at the start of April 2020 as compared to the first quarter of 2020.

Mr Chizonde said this drop is projected to continue on account of travel slowdown and regional restrictions adding that the CAPA Centre for Aviation projects that by the end of May 2020, most airlines in the world will be bankrupt.

He said it is therefore clear that the environment is no longer allowing for Zambia Airways to be re-launched.

Mr Chizonde said Government should therefore take actions to “quarantine” this decision adding that CTPD believes that any move by government towards the relaunch of Zambia Airways, such as the delivery of planes and consequent commencement of payment towards the lease of these planes, would reflect a serious lack of fiscal discipline.

He has emphasized that government should stop taking steps towards the re-launching of Zambia Airways saying now is the time to focus all the available public resources on fighting COVID-19 and its economic impact through a meaningful recovery program and investing in sectors that can help stimulate economic growth and ultimately contribute towards reducing poverty.

The Zambia Chamber of Mines has urged Government to urgently engage with the sector in order to forestall the negative impact that will arise on the health of the Zambian economy if measures are not taken immediately to address the issues facing the mining sector in the midst of COVID-19.

Over three weeks ago the Chamber of mines submitted a broad three-phase economic plan to Government, to urgently manage the economic impacts arising from the pandemic.

This was with a view to providing some guidance to the government on the critical areas to be urgently addressed.

This proposal included, firstly, immediate relief measures that could be implemented by Government in a matter of days, followed by an emergency support package for which financial support could be sought from the IMF and World Bank, and lastly, a ‘fight back’ fiscal regime to be implemented once the COVID-19 pandemic has abated and investment is needed from which to rebuild the economy.

Zambia Chamber of Mines Acting Chief Executive Officer Talent Ng’andwe says since then all mining industry stakeholders have been hoping that some significant stimulus measures would be instituted, as is being seen across the world.

Mr Ng’andwe says tax relief measures announced by the Minister of Finance on 27th March, such as the removal of the provisions of Statutory Instrument 90 and the suspension of import duties on concentrates and export duties on precious metals, were a welcome first step in the broader relief package which is needed, however even these initial measures are yet to be introduced.

He said in the time that has elapsed since the initial submissions and the 27th March announcements, the industry’s circumstances have become more desperate and the issues being faced at Mopani Copper Mines are but an example of this distress.

“As Zambia, with other countries globally, grapple with the debilitating and public health danger of the COVID 19 virus, the mining industry in Zambia recognizes the catastrophic nature of the public health crisis as well as the untold harm this virus will wreak on the Zambian economy. Several mining companies have rushed to Government’s aid to demonstrate their solidarity with the Government and people of Zambia through various interventions. This is in recognition of the urgency and need to stand shoulder to shoulder with our host communities at this very trying time of need”, he added.

Mr Ng’andwe said as various senior Government Officials have pointed out, COVID-19 represents a very serious public health concern, but of equal concern is the negative impact on the Zambian economy.

He said the Chamber of Mines considers it essential that industry and government seize control of the negative narrative that has taken on a life of its own against the mining sector.

Mr Ng’andwe said this joint effort, the chamber membership stands ready to support government efforts in its engagements with multilateral institutions to obtain assistance firstly in the fight against the epidemic and secondly for the support of economic recovery.

Minister of Tourism and Arts Ronald Chitotela has called on tourism operators to partner with Government to reduce the cost of domestic tourism in Zambia after COVID-19.

The Minister said there is a need for a ‘give and take’ situation if Government is to drop taxes like the corporate tax for the industry to get motivated and the operators should see what they can give to the Zambian people so that domestic tourism can be boosted.

Mr. Chitotela said this would work well as an incentive for local citizens to tour the tourism offing of the country as they stand a chance to pay a half rate in accommodation facilities.

He said he wants the Zambia Tourism Agency to change their marketing strategy by moving away from relying on scheduled international calendar events like expos and exhibitions.

Mr. Chitotela said in an interview that he appreciates the importance of international tourism but that domestic tourism will be key in the revitalization of the sector after the COVID 19 pandemic.

He said this would be the easy way out to set sell what the country has to offer to the international market.

Mr. Chitotela said international tourists would appreciate more about the country and see the need to visit the local citizens can understand and tell them where to go.

The Minister itemized the Liuwa Plain National Park and the Victoria Falls as acclaimed international tourisms that Zambia can easily sell to the outside world if they first visited these places.

Glencore says it will reverse its earlier decision to places Mopani Copper Mines on care and maintenance if it reaches an agreement with the Zambian government.

Glencore’s statement came after the Ministry of Mines said Glencore had “rescinded” its decision to put MCM on care and maintenance following a video conference between Glencore executives and Zambian ministers.

Glencore’s statement struck a different tone to the ministry – emphasising that a re-start of mining operations was conditional on an agreement being reached.

Zambia had earlier said it “applauded” Glencore’s “gesture of goodwill” in rescinding its decision and opting for dialogue.

Glencore said it had submitted a proposal to the government, giving no further details.

“IIf an agreement is reached Mopani will re-start mining operations and issue a notice of its intention to place the mining operations on care and maintenance after 90 days,” Glencore said.

It said it had submitted a proposal to the Zambian government that, if agreed, will see if restart copper production before notifying the government of its intention to mothball the assets.

“During the 90-day period, Mopani will continue to engage with the government on potential solutions to its current challenges,” the company added in a written statement.

The Ministry of Mines said MCM had “sought relief” from government on issues related to tax and, in particular, VAT.

The Ministry said MCM must deliver a “detailed plan” on how it intends to proceed in the 90-day period and “possibly” beyond, adding that MCM would defer some non-production activities and cut capital expenditure in order to unlock cashflow.

The Ministry also said MCM must restructure its cost profile in order to become profitable and start paying corporate income tax.

The Ministry said Charles Sakanya, chief engineer at MCM, has been appointed acting CEO after the government allowed CEO Nathan Bullock to leave the country.

Mr. Bullock had been briefly detained at Lusaka airport on April 15.

MCM, which produced 119,000 tonnes of copper in 2018, is 73.1% owned by Glencore, 16.9% by First Quantum Minerals and 10% by ZCCM-IH.