2021 AmCham Q2 Policy Review by American Chamber of Commerce in Zambia

ISSUE #2

APRIL - JUNE 2021

2021 AMCHAM POLICY REVIEW Q2 In This Issue

Cyber Security & Cyber Crimes, Data Protection & ECT Page 2 Acts National Debt Update

Page 5

Legislation From National Assembly

Page 6

White Paper: Insurance Bill NAB 36 of 2021 Following the presentation of the 2021 Insurance Bill in Parliament on Wednesday, April 21st 2021, by the Honourable

AMCHAM POLICY.

Minister

Finance,

the

American

Chamber of Commerce in Zambia submitted an advocacy white paper on 27th April, 2021, in line with a

p. 260-975-028-026

few articles of concern to private business stakeholders

e. info@amchamzambia.com

in the insurance industry sector. In response to

a. The Works, Latitude 15, Leopards Lane

AmCham’s letter, the Parliamentary Committee on

w. amchamzambia.com

National Economy, Trade and Labour Matters called for a meeting on 29th April, 2021, where the Chamber was allowed to present its submission.

cont'd p6

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2021 AMCHAM Q2 POLICY REVIEW | APRIL - JUNE

A Word from the Chamber President

Dear Esteemed Members, Although Zambia has ended the second quarter of the year with the unfortunate passing of the First Republican President, Dr Kenneth Kaunda, we look forward to honoring the legacy of our founding father by contributing towards the transformation of a better Zambia. It has been a good second quarter at the Chamber marked by important milestones and exciting outcomes. The Chamber successfully hosted its 10th Annual General Meeting and would like to welcome and congratulate Bakertillys' Chama Nkandu, Abbott's Dr John Mapulanga, Bayer's Paul Kapapula and Crowe's Yande Mwenye for assuming positions as Board Directors of the Chamber. The Chamber also congratulates Prudential's Kachiza Kwenda for being successfully ratified as Board Director. While we have made some profound achievements this quarter with the 2021 Insurance Bill white paper submission and the debut of the Doing Business in Zambia 2021 Insights Magazine, there is much more to be done as a Chamber, in order to map a better future for the private sector and the national investment environment. As such, I call upon the membership, new and old, to become active participants in Chamber activities and service offerings, by hosting member engagement events and by joining committees such as the Advocacy Committee and the Thought Leadership Committee. Together, we can work towards creating a more conducive environment for the private sector to thrive. Do savor our advocacy and policy insights in this issue of AmCham’s 2021 Q2 Policy Review Journal. Lowani Chibesakunda, AmCham President & CitiBank CEO 02

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CONTENTS 03 Cyber Security & Cyber Crimes, Data Protection & ECT Acts

05 White Paper: Insurance Bill NAB 36 of 2021

04 National Debt Update

06 Legislation From National Assembly

08 SEC Sandbox Regulatory Framework

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2021 AMCHAM Q2 POLICY REVIEW | APRIL - JUNE

Cyber Security & Cyber Crimes, Data Protections and ECT Acts.

Pictured above; Emmanuel Manda, Senior Associate - Musa Dudhia & Co During the second quarter of the year, AmCham Zambia engaged Musa Dudhia, a top tier law firm, and member of the Chamber, on the potential impact to businesses, of the recent enactment of the Cyber Crimes and Data Protection Acts on 1st April 2021 with reference to relevant Acts such as the Electronic, Communications & Transactions Act No 21 of 2009 (ECT). The ECT Act of 2009 contained various provisions pertinent to cyber crimes, data protection and electronic transactions however, with the recent introduction of the Cyber Security & Cyber Crimes Act No 2 of 2021, The Data Protection Act No 3 of 2021 and the ECT Act No 4 of 2021, the ECT Act No 21 of 2009 has been repealed. On one hand, it is worth noting that the Cyber Security & Crimes Act No 2 of 2021 comprises of similar clauses to the ECT Act of 2009 with few provisional changes. These changes include definitional changes such as additional constraints to what constitutes a Cyber Crime and further addresses issues of harassment, identity theft as well as the progressive changes in the local use of internet. In any case, the legal framework has been maintained for the most part although there has been a public outcry owing to concerns of 04

privacy infringement by the regulators. Despite, the re-categorisation of Cyber Crimes being encompassed solely under in their own specific Cyber Crimes Act, no substantial changes are anticipated owing to operations of business entities. On the Other hand, the Data Protection Act No 3 of 2021 noted substantial legislative changes because only one part of the 2009 ECT Act was pertinent to data protection. For example, where as prior protection of personal information such as legal names and personal identification numbers only required written consent of the information holder for its collection, the manner in which personal information is collected has been changed in the 2021 Data Protections Act. In this years Act, a party wishing to obtain any data is now also required to be registered with the Data Protection Commission, an office pending established under the Act. Therefore, only registered parties can request and collect personal information. Moreover, the data collected may only be processed and stored on servers located with the Nation and may only be transported outside of Zambia subject to approval from the Data Protection Commission.As such the Data protection act may potentially require business entities to appoint data protection officers to ensure that the business entity is in compliance with the Data Protection Act. POLICYREVIEW | ISSUE #2

2021 AMCHAM Q2 POLICY REVIEW | APRIL - JUNE

In February 2021, The Zambian Government officially requested debt treatment under the G20 Common Framework, and began discussions with the IMF on a potential support programme, with the support request being driven by the outcome of a debt sustainability analysis (DSA) prepared by the IMF and the World Bank. With an anticipation of requests of significant policy adjustments from the IMF, Fitch believes that the final approval of a support programme is unlikely before the 2021 general election that is currently scheduled for August. This is because an IMF statement on March 3rd 2021 noted broad agreement on the "nature and cause of macroeconomic imbalances."

National Debt Update By Kenisha Mwangase Policy Research & Advocacy As of April 2021, Fitch Ratings, a global leading provider of credit ratings, commentary and research for global capital markets, upgraded Zambia's Long-term Local-Currency (LTLC) Issuer Default Rating (IDR) to 'CCC' from 'CC' and affirmed Zambia's Long-Term ForeignCurrency (LTFC) IDR at 'RD'. The upgrade of the LTLC IDR reflects that the Zambian government has continued to service its local currency debt, making no indication of plans to include domestic debt in potential debt restructuring. Moreover, the 'CCC' rating reflects a possibility of a local-currency default, given Zambia's weak public finances and tight domestic financing conditions. Zambia's prior LTFC IDR of 'RD' was a reflection of its outstanding Eurobonds, pending restructuring since its failure to pay the coupon due 14 October 2020 on its USD1 billion Eurobond that matures in 2024. The government has continued to service foreign currency-denominated debt to multilateral financial institutions and debt on a few priority projects that have immediate social and economic impact. 05

Source; FitchRatings

However, according to a statement issued by the Government republic of Zambia's Ministry of Finance on Monday 10th May 2021, Zambia and the International Monetary Fund (IMF) have made significant progress, in the policy talks pertinent to the National Debt. During the second quarter of the year, a team from the Ministry of Finance of Zambia, led by the Honorable Minister of Finance, Dr Bwalya Ng'andu and an IMF delegation, led by David Robinson, continued the discussions regarding progressing Extended Credit Facility (ECF). The team referenced, reached a general agreement on macroeconomic parameters, fiscal targets and policy objectives, with particularly substantial progress made, in detailing the policy reform agenda to restore public finance and debt sustainability, while still maintaining Zambia's development objectives and ensuring social protection for the most vulnerable. This allows the authorities to progress in the technical preparation of debt restructuring talks in the context of common Framework, as well as with commercial creditors. It was further agreed that these policy discussions shall continue at an appropriate time in order to finalize the timeline for implementation of the agreed reform package, for the adoption of the ECF supported programme. The Ministry of Finance continues its engagement with creditors, with the hopes of restoring Zambia’s public debt sustainability.

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2021 AMCHAM Q2 POLICY REVIEW | APRIL - JUNE

White Paper: Insurance Bill NAB 36 of 2021 The Insurance Bill is meant to provide for the regulation of the insurance industry and to provide for the supervision of insurers, reinsurers and intermediaries. In executing its advocacy role for its members and the business community, the Chamber made the following submissions to the National Assembly; The Chamber urged the Parliament of the Government Republic of Zambia to consider a revision of Section 2’s definition of an ‘insurance agent’ as the definition stipulated might be considered broad and vague. AmCham recommended that a specified period be stipulated on Section 28, subsection (1), for the ‘prescribed period’ of claim settlement. While recognizing government’s noble efforts to increase local ownership within the insurance industry sector, The Chamber urged Parliament to consider repealing or revising the clauses in Section 49 as it was concerned that these clauses may further alter the already declining investment climate of the nation, and additionally thwart the appeal of Foreign Direct Investment (FDI). In summary, Section 49, says: 06

''A licensed insurer/reinsurer shall not have less than 30 percent of their subscribed share capital owned by citizens; A licensed insurance broker shall not have less than 51 percent of their subscribed share capital owned by citizens; All insurance based companies that were initially licensed in accordance with the repealed act are to comply to Section 49 within a period prescribed by the Minister.'' Lastly, the Chamber requested a revision of Part IV; Sections 61, 62 and 64 of the 2021 Insurance Bill to include further prescriptions of the financial regulations of insurers. This is owing to the concerns that the current stipulations vaguely acquiescence the prescriptions of all further financial regulations. The American Chamber of Commerce in Zambia believes that the Zambian National Assembly’s willingness to take action now demonstrates the Government's dedication to the Economic Recovery Plan and to the creation of a diversified and versatile Zambian private sector.

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2021 AMCHAM Q2 POLICY REVIEW | APRIL - JUNE

Legislation From National Assembly 2021 Acts of Parliament The Electronic Government Act, 2021( Act No. 41 of 2021) Land Survey (Amendment) Act, 2021 ( Act No. 40 of 2021) Lands and Deeds Registry (Amendment) Act, 2021 ( Act No. 39 of 2021) The Insurance Act, 2021 ( Act No. 38 of 2021) The Zambia Correctional Service Act, 2021 ( Act No. 37 of 2021) Acts of Parliament (Amendment) Act, 2021 ( Act No. 36 of 2021) The Narcotic Drugs And Psychotropic Substances Act, 2021 ( Act No. 35 of 2021) The Industrial Hemp Act, 2021 ( Act No. 34 of 2021) The Cannabis Act, 2021 ( Act No. 33 of 2021) Electoral Process (Amendment) Act, 2021 ( Act No. 32 of 2021) The Zambia Institute of Tourism and Hospitality Studies (Amendment) Act, 2021 ( Act No. 31 of 2021) The Chartered Institute of Logistics and Transport (Amendment) Act, 2021 ( Act No. 30 of 2021) The Zambia Institute of Advanced Legal Education (Amendment) Act, 2021 ( Act No. 29 of 2021) The Engineering Institution of Zambia (Amendment) Act, 2021 ( Act No. 28 of 2021) The Zambia Institute of Marketing (Amendment) Act, 2021 ( Act No. 27 of 2021) The Health Professions (Amendment) Act, 2021 ( Act No. 26 of 2021) Urban and Regional Planners (Amendment) Act, 2021 ( Act No. 25 of 2021) The Accountants (Amendment) Act, 2021 ( Act No. 24 of 2021) The Higher Education (Amendment) Act of 2021 ( Act No. 23 of 2021) The Public-Private Partnership (Amendment) Act, 2021 ( Act No. 22 of 2021) The Health Professions (Amendment) Act, 2021 ( Act No. 21 of 2021) The Rural Electrication (Amendment) Act, 2021 ( Act No. 20 of 2021) The National Heritage Conservation Commission (Amendment) Act, 2021 ( Act No. 19 of 2021) The Examination Council of Zambia (Amendment) Act, 2021 ( Act No. 18 of 2021) The Zambia Law Development Commission (Amendment) Act, 2021( Act No. 17 of 2021) The Zambia Institute of Advanced Legal Education (Amendment) Act, 2021 ( Act No. 16 of 2021) The Zambia Revenue Authority (Amendment) Act, 2021 ( Act No. 15 of 2021) The Zambia Institute of Diplomacy and International Studies (Amendment) Act, 2021 ( Act No. 14 of 2021) The Tropical Diseases Research Centre (Amendment) Actl, 2021 ( Act No. 13 of 2021) The Service Commissions (Amendment) Act, 2021 ( Act No. 12 of 2021) The Public Service Pensions (Amendment) Act, 2021 ( Act No. 11 of 2021) The Petroleum (Exploration and Production) (Amendment) Act, 2021 ( Act No. 10 of 2021) The National Institute of Public Administration (Amendment) Act, 2021 ( Act No. 9 of 2021) The National HIV/AIDS/STI/TB Council (Amendment) Act, 2021 ( Act No. 8 of 2021) The Control of Goods (Amendment) Act, 2021 ( Act No. 7 of 2021) The Compensation Fund (Amendment) Act, 2021 ( Act No. 6 of 2021) The Citizen Economic Empowerment (Amendment) Act, 2021 ( Act No. 5 of 2021) The Electronic Communications and Transactions Act, 2021 ( Act No. 4 of 2021) The Data Protection Act, 2021 ( Act No. 3 of 2021) The Cyber Security and Cyber Crimes Act, 2021 ( Act No. 2 of 2021) The Legal Aid Act, 2021 ( Act No. 1 of 2021) The Zambia Institute of Marketing (Amendment) Act, 2021 ( Act No. 27 of 2020) 07

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2021 AMCHAM Q2 POLICY REVIEW | APRIL - JUNE

SEC Sandbox Regulatory Framework

On May 20th, 2021, The American Chamber of Commerce in Zambia and the Securities Exchange Commission (SEC) successfully hosted a Regulatory Sandbox Framework for Capital Markets Webinar. The Regulatory Sandbox Framework which offers room for creative thinking and testing of new products and services was presented by Mubanga Kondolo a member of the Sandbox team at the SEC. SALIENT PRESENTATION TAKEAWAYS A Sandbox is a Regulatory tool/framework that is set up by financial sector authorities, to allow for non-traditional business models, that may not fit in well with existing regulations to be tested, in a controlled environment over a specified period of time. Sandbox addresses regulatory gaps and allows firms to deploy capital markets innovations in a legal and controlled environment. The following are the main principles and benefits of SandboxPromotion of financial inclusion Consumer Protection Transparency Regulatory flexibility Target participants Incumbent SEC licensed Capital Market Operators SEC unregulated firms Foreign licensed Capital Market Operators Any firms deemed fit and proper to participate by the SEC For more information on the Regulatory Sandbox Framework for Capital markets, the eligibility criteria and application procedures please email us; info@amchamzambia.com 08

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2021 Q2 AMCHAM POLICY REVIEW.

Prepared By Kenisha Mwangase (Policy Research & Advocacy), with the support of Daniel Chibutu (Business Development) and Chansa Mwila (Senior Programs Manager)

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