ONE ZAMBIA, ONE NATION

PENRESA FOCUS ON ZAMBIA MARCH 2019 EDITION

Produced in association with

One Zambia One Nation Featuring in this issue:

H.E. Edgar Chagwa Lungu Hon Inonge Mutukwa Wina Dr Denny H. Kalyalya Mr Mateyo C. Kaluba

One ZAMBIA, One Nation

Towards A Smart And Prosperous Zambia Under the stewardship of President Edgar Chagwa Lungu and his Seventh National Development Plan, Zambia continues on its path of economic stability while harnessing its vast natural resources and human capital to foster a new wave of socio-economic prosperity through industrialisation and diversification.

L

ong known as an economy built on copper and cobalt, Zambia is regarded throughout the sub-Saharan region as a beacon of stability, both in peace and macro-economics. The landlocked nation of 17 million people has strengthened its international diplomacy over the past few years to increase its bilateral trade.

The 2018 edition of the World Economic Forum’s Global Peace Index saw Zambia ranked at 48, nine spots higher than the United Kingdom. Despite the achievement, Zambia has faced some crises in the past few years, with poorly performing public sector bodies, slumping copper prices and low rainfall causing power shortages.

These crises were seen as opportunities to President Edgar Chagwa Lungu, who has brought reform and vision to the country through his Seventh National Development Plan (7NDP). A five-year plan (2017-2021),

with a pledge to build a resilient and diversified economy, it indicates the government’s commitment to planning, as the gateway to the Vision 2030 target, to become a middle-income nation.

With an emphasis on industrialisation and diversification, the current administration is harnessing the nation’s land and water resources, while investing heavily in ICT and infrastructure to continue its stable growth and ensure that no one is left behind. The Minister of Information, Hon. Dora Siliya points out, “I think the diversification opens up whole new opportunities in tourism, agriculture, ICT and the energy sector. We know how to invest in ICT technology and we know how to invest in power, so there are a lot of business opportunities in this country.” With the insertion of Multi-Facility Economic Zones (MFEZs) to complement critical elements available in the manufacturing sector, MARCH 2019

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One ZAMBIA, One Nation

“A smart and prosperous Zambia cannot be attained without a strong and growing economy. In this regard, government will continue to put emphasis on macro-economic stability.”

H.E. President Edgar Chagwa Lungu

AGRICULTURE

President Lungu’s ‘green revolution’ is focused on mechanisation, resulting in the offer of significant incentives to foreign partners who can provide productivityboosting machinery. “Agriculture is now identified as the backbone to drive our economy – it contributes now about 70% to our GDP and 10% to our economic growth.

This creates a lot of employment for our women and the youth, especially those living in the rural areas,” states Hon. Micheal Katambo, Minister of Agriculture. “For production to be enhanced, the government is targeting all farmers and trying to get them to access financial institutions, so that they can access loans and buy smallmechanised equipment.” In addition to improving the sector’s resilience to climate change and reducing poverty, Lungu’s government has also set aside one million hectares of farmland for investment, open to both Zambian and foreign investors.

MINING

www.penresa.com info@penresa.com This report would not have been possible without the assistance of the High Commission of Zambia in the UK, notably H.E. Muyeba Chikonde and Mrs. Abigail Chaponda. A big thank you to Mr. Motala for always keeping us connected and in the know.

This report is sponsored and produced by PENRESA and did not involve the reporting and editing staff of any third party.

THIS REPORT WAS POSSIBLE THANKS TO:

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President Lungu also introduced significant investment incentives which compare well to other countries in the Southern African Development Community (SADC) and Common Market for Eastern and Southern Africa (COMESA).

“A smart and prosperous Zambia cannot be attained without a strong and growing economy. In this regard, government will continue to put emphasis on macro-economic stability,” exclaims President Lungu. This emphasis has already bore several fruits.

Zambia’s economy grew by 5% in the third quarter of 2018, compared to 4.5% recorded in the same period in 2017. To add to this, the Zambia Revenue Authority (ZRA) collected a total of US$4.8 billion exceeding its US$3.7 billion for the 2018 financial year by K3.8 billion, which ZRA Commissioner General Kingsley Chanda points out was due to the “increase in the number of platforms we launched through which our taxpayer can pay.”

Private sector-led investments also finished strongly in 2018, as the Zambia Development Agency (ZDA) - the nation’s promoter of trade and investment - recorded US$3.9 billion of projected investments in 2018, in various sectors of the economy. As a result of diversification efforts, the top three performing sectors in 2018 were the energy sector, the manufacturing sector and the mining sector. Of the total recorded projected investment, US$21.7 million was invested in the various Multi Facility Economic Zones (MFEZ) and industrial parks around the country.

In 2018, Zambia mined over 800,000 tonnes of copper. As energy infrastructure is improved, that figure could soon reach one million tonnes per year. In an effort to ensure that Zambians benefit from their nation’s mineral wealth, the Minister of Finance, Hon. Margaret Mwanakatwe, declared “an increase in mineral royalty rates by 1.5 percentage points at all levels of the sliding scale and a mineral royalty tax non-deductible for income tax purposes,” among others to continue promoting value addition in the sector, in a bid to create linkages with other sectors of the economy.

TOURISM

Tourism is one of the key thematic areas in the 7th National Development Plan.

Land of the legendary African walking safari, home of the Victoria Falls and the wild Zambezi River among others. “Zambia has the potential to become one of the five top destinations in the world,” states Hon. Charles Banda, Minister of Tourism and Arts. With more than US$1 billion spent on infrastructural upgrades, “we now see that we are conveniently positioned to be the aviation and tourism hub we want to be,” states Fumu Mondoloka, Managing Director of Zambia Airports Corporation Limited.

“This promises to increase our passenger numbers and improve air traffic across the country, while improving the economy.”

As one of the world’s fastest growing populations, Lungu’s industrialisation agenda remains essential to continue Zambia’s path of macro-economic and peaceful stability while promising a better, bigger and brighter future for its people.

Vice President of the Republic of Zambia

An Agent For Progress And Gender Equality Zambia’s first female vice president sits down to discuss diplomacy, nutrition and female empowerment.

2018 took you on similar missions earning you an ambassadorial role on the development of nutrition within the country and continent.

How did this come about and how can we make nutrition attractive to families and investors alike in Zambia?

The quality of human capital available for Zambia’s development starts with the healthy foods that form one of the most important contributors to a healthy nation. It is, therefore, important that we all pay special attention to food and nutrition at all levels in society.

Without efforts from all fronts simply means that, every minute we fail to address hunger, we are condemning someone, or more people, especially children and adolescent mothers, to intergenerational poverty under our watch.

With food requirements ever growing in most countries, including Zambia, investors should, therefore, see opportunities in the agriculture sector value chain with the view of making profits while taking a responsibility to ending hunger worldwide. In this regard, Zambia is among the most ideal places for food production in the world, hence the Zambia Development Agency is ready to guide all investors to take advantage of the opportunities that Zambia offers.

airline will provide opportunities for Zambian exporters to tap into the wider markets and global logistics value chains.

You recently visited Turkey in an effort to build better relations between the two nations. What has been agreed upon during those visits and how will such visits benefit Zambia?

Zambia has for a long time succeeded in its diplomatic foreign policy until the Patriotic Front party government decided to promote economic diplomacy at bilateral and multilateral levels. Therefore, enhancing relations between Zambia and the Republic of Turkey has tremendous benefits. On the economic front, the commencement of flights

by Turkish Airlines in December 2018, opens opportunities for increased trade in goods and services. Zambia’s tourism sector stands to benefit from inflows of tourists while the

As a citizen and a leader, what does ‘One Zambia, One Nation’ really mean to you and investors out there?

Think of ‘One Zambia, One Nation’ as a motto or slogan that has made Zambia a melting pot of unity, peace and prosperity in diversity. To business people and investors alike, certainty especially of peace, tranquillity and unity in diversity are combinations that make Zambia stand out in the eyes of the commercial world.

Therefore, combining ‘One Zambia, One Nation’ with the abundant natural resources such as water, land and minerals, makes the brand Zambia speak for itself and serve as a guarantee to each local and foreign investor that Zambia is ready and open for business.

You’re one of two female vice presidents in all of Africa, a commendable feat. What advice do you have for young girls who want to follow in your footsteps?

Ralph Waldo Emerson, an American philosopher, once said “what lies behind us, and what lies before us, are tiny matters compared to what lies within us.” The elements within us are strong enough to make our lives more clear and positive towards our goals. Therefore, every girl, like their male counterparts, has the capability to achieve greatness within her - all she has to do is believe in her vision and abilities.

For Zambia to achieve meaningful progress and gender equality in all areas of decision-making positions, it is imperative to motivate young people, especially girls. This is possible by exposing young people to positive role models and mentors who they can look up to for them to make responsible choices as they enter adulthood. The corporate world in Zambia needs to do more because diversity is required at such levels of decision making.

“To business people and investors alike, the certainty of peace, tranquillity and unity in diversity are combinations that make Zambia stand out in the eyes of the commercial world.”

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One ZAMBIA, One Nation

Hon. Inonge Mutukwa Wina

One ZAMBIA, One Nation

Hon Margaret Mhango Mwanakatwe Minister of Finance of the Republic of Zambia

Championing Fiscal Consolidation Through the 2019 Budget, Minister Mwanakatwe discusses her ministry’s plan to enhance macroenomic stability through diversification and solid fiscal planning and policies.

“It is our considered view that in the current circumstances, everything hinges on fiscal consolidation.”

Economic performance in 2019 is expected to remain positive, supported by a stable macroeconomic environment and implementation of various reforms under the Economic Stabilisation and Growth Programme (ESGP).

How does your 2019 budget reflect this?

In my budget address, I indicated that the macroeconomic objectives for 2019 would be to: (i) attain an annual GDP growth rate of at least 4%; (ii) sustain inflation within the range of 6 to 8%; (iii) raise international reserves to at least 3 months of import cover; (iv) increase domestic revenue to not less than 18% of GDP; (v) reduce the fiscal deficit to 6.5% of GDP; (vi) prioritise the dismantling of arrears and curtail accumulation; and (vii) reduce the pace of debt accumulation. Clearly, we want to enshrine and enhance macroeconomic stability through fiscal consolidation. It is our considered view that in the current circumstances, everything hinges on fiscal consolidation.

Exports play a critical role in the rise of foreign currency coming into the country. How are you currently incentivising and encouraging manufacturers to increase exports to ensure a trade balance?

To encourage manufacturing, facilitating the development of Multi Facility Economic Zones for both export-oriented and domestic-oriented industries. All manufacturers operating in these zones receive certain incentives such as zero duty on the importation of their machinery. This is also intended to attract Foreign Direct Investment.

Furthermore, we have proposed to abolish the Value Added Tax and replaced it with a simpler and non-refundable Sales Tax. Despite the government’s current diversification agenda, mining still plays a critical role within the economy, contributing to 80% of foreign earnings.

As a depleting resource how are you improving the mining fiscal regime to ensure that Zambians benefit from the nation’s mineral wealth?

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Zambia is endowed with vast mineral resources, which transcend beyond copper and cobalt. As mineral resources are a depleting resource, it is vital to structure an effective fiscal regime for the mining sector to ensure that Zambians benefit from the mineral wealth our country is blessed with.

The following measures have been put in place to ensure that benefit, including: (i) an increase in mineral royalty rates by 1.5 percentage points at all levels of the sliding scale; (ii) the introduction of a fourth-tier rate at 10% on the sliding scale mineral royalty regime, (iii) mineral royalty tax as non-deductible for income tax purposes; and (iv) introduced an export duty on precious metals including gold, precious stones and gemstones at the rate of 15%.

Energy is a major talking point within the nation, with major reforms within the fuel and electricity sub-sectors. What needs to be done to ensure service efficiency and fiscal responsibility within the sector?

The energy sector is a key enabler for sustained economic growth, diversification and creation of employment. In this regard, the focus in the energy sector will be to continue with the provision of adequate and reliable supply of energy through diversification of energy sources. This will require that investments continue to be undertaken in the sector. Furthermore, migration to cost reflective electricity pricing remains a priority for us in order to promote investment and growth in the electricity subsector.

Why is now the best time to invest in Zambia?

Zambia has a robust investment policy that offers favourable and strong policy environment for investors. This includes no exchange controls, no capital gains tax and a fairly good legal system that protects property rights. As a member of SADC and COMESA, Zambia has easy access to growing consumer markets, which always makes it the right time to invest in our beautiful nation.

Governor of the Bank of Zambia

Promoting A Stable Macroeconomic Environment Bank of Zambia’s monetary policies have contained inflationary pressures and created the space for the private sector to flourish.

Governor of the Bank of Zambia since February 2015, Dr. Denny H. Kalyalya has had a long and fruitful career in the finance industry, including eight years as Deputy Governor for Operations at the Bank of Zambia, a two-year stint as Alternate Executive Director at the World Bank for Africa Group 1 Constituency, followed by two years as Executive Director for the group.

Having taken the role as governor during a turbulent economic period, Kalyalya has since managed to cut down inflation to single digit figures since 2016. President Lungu recently renewed his contract, which will see Kalyalya oversee the nation’s monetary policy until 2023, allowing him to become the nation’s second-longest serving governor. Here, he meets with Penresa to discuss the bank’s mission and objectives.

What is the Bank of Zambia’s role within the country?

Apart from being the monetary authority responsible for price stability, the bank has the financial system stability as its primary objective. By price, we are referring to inflation, obviously. But now, after the 2008 financial crisis, financial stability is equally important.

Therefore, for the bank, price and financial system stability are its primary objectives.

Besides this, the bank is a banker to the government and commercial banks, issuer of currency, custodian and manager of foreign exchange reserves, and implementing agency of the exchange rate policy of government.

President Lungu has started implementing multi-facility economic zones to increase manufacturing, exports and reduce the trade balance in the deficit. How are you working to incentivise manufacturers to help increase forex coming to the country?

Our role is somewhat indirect; ensuring a stable macroeconomic environment is a prerequisite to all these other positive developments.

How is the Bank of Zambia working with SMEs in terms of lending to ramp up social and economic development?

Again, we are working in an indirect kind of way. Our initial action of raising the Policy Rate was driven by the need to get to a point in which we reach our inflation target of, 6-8%, so that we have an opportunity to start easing our policies.

Our idea is that the Policy Rate should serve as a key reference rate for other rates in the market, especially lending rates. In doing that, we will be able to create the space necessary for the SMEs and the private sector to grow.

Financial services contribute 3% to the economy’s GDP. In terms of innovation, what kind of things are you working on with the industry to innovate and increase financial inclusion?

Financial inclusion is one of our strategic objectives.

Now that we have reached our inflation objective, we have the scope to deal with that. There is a lot that we are doing in the industry. We have encouraged the banks to ensure that each one of them has one basic account which is accessible to people without paying any fees and they are responding. So, our target is that, by the end of our Strategic Plan period, we should move the formal access rate by 16 percentage points. We expect that much more inclusion will come because it is something we need: with more inclusion, the effects of the monetary policy will be enhanced. We are also working with the payment systems, such as fintech.

“Financial inclusion is one of our strategic objectives.

Now that we have reached our inflation objective, we have the scope to deal with that.”

A final message of confidence for our readers: why is now the best time to invest in Zambia?

The prospects going forward are huge, supported by the Economic Stabilisation and Growth Programme as well as the 7th National Development Plan. For a long-term investor, the current challenges are transitory; the real benefits are yet to be reaped. Therefore, for an investor looking for good returns, a peaceful and liberal environment, Zambia is the place to be. We have an open current account, open capital account, and a liberal foreign exchange rate system.

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One ZAMBIA, One Nation

Dr Denny H. Kalyalya

One ZAMBIA, One Nation

Financial Sectors

Improving Financial Accessibility And Literacy Across The ‘Air Conditioned State’

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Blending mobile technology and agency banking are some of the applications that Zambian financial institutions are implementing to increase financial inclusion and literacy among its people to reduce unemployment, poverty and achieve sustainable economic growth.

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well-capitalised banking sector is key to any country’s competitiveness on the global market. In 2018, Zambia faced some challenges. Liquidity constraints continued during the year, impacted by a decrease in lending rates even though the Bank of Zambia adjusted the Monetary Policy Rate to 9.75% in November 2018, compared to 10.25% the previous year. The Kwacha was relatively weak but stable in 2018 against major tradable currencies while inflation remained within the target range of 6-8% throughout the year.

With challenges come opportunities and Bank of Zambia’s Governor, Dr Denny Kalyalya, advised banks to take advantage of these openings to contribute to the growth of the economy. The biggest opportunity in Zambia for banks is financial inclusion.

The majority of Zambians live in a rural environment, where mobile technology can directly change how they engage with the rest of society. The increasing use of mobile payments delivers a future in which all transactions will take place without any need for brick-and-mortar branches. “When we talk about financial inclusion,” states Financial Sector Deepening Zambia’s (FSDZ) Chief Executive Officer, Betty Wilkinson, “banks should think about potential clients to grow the banking sector.”

Financial literacy is one of the key factors to achieving universal financial inclusion in Zambia. In November 2017, Zambia launched its National Financial Inclusion Strategy 20172022 (NFIS) and Financial Sector Development Policy to strengthen the development of the financial sector as well as reduce the rate of financial exclusion from 60% to 30% by 2022. “We have what we call the Financial Literacy Week throughout the country and that’s one element in terms of improving financial education, so that people are able to make informed decisions,” states Governor Kalyalya.

The government has spoken and the major players in the sectors are all taking action.

“From a financial inclusion perspective, we have invested in agency banking,” states Simangolwa Shakalima, Managing Director of Investrust Bank. “As we speak today, we have over 500 agents across the country. That breaks the barriers around the limitations of brick.” Atlas Mara is “rolling out 90 brand-new ATMs, which enable our customers to do more than just take money out,” states their Managing Director James Koni, “It will enable us to have a wider reach than any other bank in this market.” Barclays is “using the digital agenda to reach financial inclusion,” states Managing Director, Mizinga Melu while Zanaco’s Henk Mulder states their bank’s strategy “is to further developments in order to enable a cash-light society.”

Zambia’s government must be commended for consistently taking a leading role in driving this initiative and creating a standard that all stakeholders must live up to. A stronger financial sector and more financially literate people will only help bring Vision 2030 that much closer to reality.

CEO of Zambia National Commercial Bank (ZANACO)

A Digital Focus On Every Sector Henk G. Mulder reveals how Zanaco is revitalising its digital strategy to make itself even more inclusive and help promote an increasingly cashless society.

“We do not just focus on the primary sector, but also on the off takes and processing.

The idea is to create more value in the industry and the country.”

How would you describe the Zambian financial service marketing in comparison to others?

Zambia is a relatively large country, with 17 million people, which is in fact not enough people for the country that we have. We have two major sectors, mining and agriculture, but with the expanding retail market, there is an important middle class coming up. Another major factor is the massive youth population, which is related to what we see in the financial industry. Our strategy, as Zanaco, is to digitalise the services for a large number of clients. Our target is to be the top transactional bank by 2020, that means that we have to hurry up, since 2020 is getting closer. It is going well, though.

You have recently been awarded the title of Best Bank in Zambia by Euromoney Awards and a 19% increase in operating incomes.

What initiatives did you put in place to achieve this?

It’s definitely due to the volume of transactions.

We focused on our clients, getting more for our clients in business and transaction. Everything that happens in a bank is a transaction if you think about it.

The current administration is working on liberalising the production of staple crops. There has also been a 0% tax for the first five years in the agri sector. Zanaco has always been keen on the agricultural sector, is that right?

Yes, we are, since agriculture is one of the most important sectors in the country, but we like to think of ourselves as an all-sector-focus bank. We definitely have a warm heart for the healthy part of agriculture, but we now have to look at the whole value chain. So, we do not just focus on the primary sector, but also on the offtakes and the processing after. The idea, which is essential to the country, is to create

more value in the industry. So, we work with the lower level with loans and we also look to expand the sector for the investors coming in.

CSR plays a major role in the banking sector, with a concrete focus on empowering the communities. What are the initiatives of Zanaco that focus on creating employment and social development in the country?

We have several programmes. We do a lot of training on financial literacy. That’s a very important issue: people must understand that taking on debts and borrowing money costs money as well, so, it should not be done so lightly. We are running an important programme for this for different segments in a different fashion. We are supporting a lot in the health and education sector.

Why should investors choose to work with Zanaco over any other bank?

Well, we are the first ones and we are here to stay. I know that a lot of foreign banks say that as well, but we will actually stay because we have nowhere else to go. Secondly, we have the widest network in branches and ATMs and we have 1,500 agents in agency banking. We launched a service called Zanaco Express, essentially pop-up shops where you can do your card transactions. We have our mobile service, our internet service; we are a very modern bank.

Now, a final message of confidence for the readers: why is now the best time to invest in the country?

Well, I think Africa is the first place to be, if you see the upside developments possible.

Focusing on eastern Africa, I think you can see there are amazing developments happening.

This part of the world is actually the best to be in if you have a mid-term vision, for whatever activity. I believe in this country, the workforce is there, knowledge is there, support from the government is there, there is a lot of positive feeling in the government if you bring in new activities. It is not far from South Africa, which is not unimportant, especially if you want to export. The airport will be ready next year. Why should you not want to come?

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One ZAMBIA, One Nation

Henk G. Mulder

One ZAMBIA, One Nation

Barclays Bank of Zambia Deepening financial inclusion within Zambia

One Hundred Years Of Solidarity As part of Absa Group Limited, the bank remains committed to continue building on the strong foundation and proud heritage that it has established in Zambia over the past 100 years.

With operations in Zambia since 1918, Barclays Bank Zambia Plc is one of the nation’s leading financial institutions.

In recent years, Barclays Zambia has arranged financing in excess of US$7 billion in key economic sectors such as: mining, energy, manufacturing, telecommunications and public sector.

“We understand our market, and the key sectors, enabling us to give local and global linkages as well as access to finance,” explains Mizinga Melu, Managing Director of Barclays Bank Zambia Plc. “We promote efficiency and understanding of the different sectors, through strong partnerships and relationship management.”

In July 2018, Barclays Zambia’s parent company changed its name from Barclays Africa Group Limited to Absa Group Limited. However, the Bank continues to trade and operate as Barclays in Zambia and has until 2020 to change its name and brand to Absa.

“We celebrate being in Zambia for 100 years this year,” continues Melu.

“Things continue to be the same, in that we remain firmly committed to Zambia despite changes in the shareholding.

Absa is a big and respectable Bank with a one trillion-rand balance sheet and is listed on the Johannesburg Stock Exchange. As we are rebranding to Absa, we are investing in our technology to make banking simpler and more convenient for our customers.” This promises to be one of Africa’s largest rebranding programmes, with Absa’s brand name valued and estimated,

by Brand Finance, to be worth US$1.4 billion.

As the Bank journeys towards becoming a state-of-the-art banking group, it will strive to provide exceptional products and services for its clients, while preparing the way for the digital era.

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“I think that brick-and-mortar is great, but the bank of the future is the one that understands the client and provides digital solutions.”

Mizinga Melu, Managing Director of Barclays Bank Zambia Plc In June 2017, Barclays Bank partnered with the mobile network operator, MTN Zambia, to launch the groundbreaking Bank2Wallet service, which authorises the transfer of funds from clients’ Barclays accounts to the MTN mobile wallet. In an attempt to deepen financial inclusion, in 2018, Barclays partnered with Fintech Company, JUMO Zambia, to drive the Kongola lending product in the next phase of the bank; with Barclays Zambia providing the financing of loans to eligible MTN mobile money customers and JUMO providing the platform to enable the delivery of the loans. “It’s important for us that we put the customer at the centre of everything we are doing,” says Melu. “For this

reason, we are investing extensively in technology. Over the last three years, we have invested in excess of K40m . That’s a journey that will continue.”

Barclays Zambia’s deep commitment and solidarity to Zambia is also discernible in its corporate social responsibility projects. “We have a programme called Shared Growth premised on shared prosperity between the bank and the community. This is based on three pillars: Education and Skills, Entrepreneurship and Financial Inclusion,” reveals Melu.

“We also sponsor the premium football cup tournament in the country, the Barclays Cup. Through this we are able to reach the broad spectrum of the market and clients including those that that would normally not go to banks.

By participating in the tournament, we are demonstrating our appreciation and support to the community.”

As testament to the Barclays Bank’s pledge to put its customers’ needs first and deliver solutions to meet customer demands, Barclays Bank Zambia Plc, was named Best Investment Bank in Zambia at the EMEA Finance African Banking Awards of 2018. It also won 2018 Best Corporate Bank in Zambia by Global Banking and Finance and 2017 Best Retail Bank in Zambia. “Efficiency means digital, so, the digital agenda for us is important, and it was one of the biggest drivers of these awards we gained,” affirms Melu.

“I think that brick-and-mortar is great, but the bank of the future is the one that understands the client and provides digital solutions. Banking is about providing the right services and products to the client, but also about the right relationship management. It is that relationship management which enabled us to be the best bank in different areas.”

Barclays House 4643 and 4644 Elunda Office Park.

Addis Ababa Round About.

Rhodes Park. Lusaka, Zambia Switchboard:+(260)(211)366150/169 Fax: + (260) (211) 225553

One ZAMBIA, One Nation

Zambia Industrial Commercial Bank (ZICB) Adding value to the banking sector

Stimulating Innovation Within The Zambian Financial Sector Recently launched, Zambia Industrial Commercial Bank pushes its digital banking agenda which dynamically increases financial inclusion while lending support to local businesses.

Established in October 2018, the launch of the Zambia Industrial Commercial Bank (ZICB) will boost the liquidity and participation of local businesses in Zambia’s economic growth. Becoming the fourth commercial bank in which the government has some shareholding, ZICB has bought some of the assets of Intermarket Banking Corporation (IBC), under the Bank of Zambia, and assumed all deposits and certain liabilities.

As a result of the restructuring and launch of the separate entity, a new corebanking system was born to meet the expectations of various stakeholders.

The new core banking system called FLEXCUBE, supplied by Oracle, will be launched in phases. “In Phase One, the system will actually give us capabilities to provide basic banking services, like make deposits, withdrawals and manage cash. Those basic functions were implemented in the period of six weeks. We were able to go down with a pilot using existing customers we inherited from Intermarket,” states ZICB’s Chief Executive Officer, Ignatius Mwanza. “In Phase Two, we have created digital channels, with basic things like the mobile app, internet banking, bill payments, wallets. Phase Three allows us to bring on board other digital channels, that will include payments to the ZRA, NAPSA, e-wallet and many other things.”

The primary mandate of ZICB is to be a financial catalyst that will enable commercialisation and industrialisation for Zambians. While access to finance is somewhat limited for SMEs, ZICB’s entry into the market stimulates innovation. Local businesses now have a far greater 12 | FORBES AFRICA MARCH 2019

“We will effectively be using a mobile strategy to increase financial inclusion. This will cut the cost of doing business, for essentially everyone.”

Ignatius Mwanza, Chief Executive Officer of ZICB opportunity to grow their businesses and increase their contribution to the country’s GDP. “We have a very good understanding of what most banks consider before they can actually lend to SMEs and what their challenges are,” states Mwanza. “We will be rolling out products that are tailored for SMEs, both for working capital and mediumterm finance.”

Beginning with two branches, ZICB’s strategic plan is to roll out nine branches within the next three years. With 10,000 current accounts, the newcomer seeks

to double the number by the end of 2019. Despite this small number, ZICB believes that digital banking, rather than increased brick and mortar banks, will increase their customers in a short period of time. Along with agency banking, “we will essentially be using a mobile strategy to increase financial inclusion.

This will cut the cost of doing business, for essentially everyone, small-scale farmers, students, pensioners and so forth,” states Mwanza. “This will let anyone, even people who live in rural areas have access to banking services, as long as they have got access to digital channels.”

With the ZICB on board, Zambians have a greater occasion of playing a significant role in the local economy.

“We are grateful to our clients for their show of confidence by staying with us. The best way to repay them will be to offer them products that will be relevant to them and will answer their everyday needs,” posits Mwanza. “Secondly, we will offer them security and safety of their deposits.”

Possessing a well-balanced mix between supporting trading activities and value addition projects, ZICB will add significant value in promoting transparent and effective corporate governance standards. Being the new kid on the block has its advantages, as ZICB is in the fortunate position of pursuing a full digital banking agenda without overhead. This presents a chance for them, and Zambia too, to enter into a period of exponential growth.

P.O. Box 30228 Farmers House/Central Park Corner of Church Rd & Cairo Rd Lusaka, Zambia www.zicb.co.zm

Banking on digital transformation

Rebranding For A New Era In Banking Atlas Mara Bank’s unremitting rapid growth is secured through its new brand which positively impacts, through the leverage of technology, innovation, capital and expertise, the running of dayto-day business and services offered.

Atlas Mara Bank Zambia Limited is a sub-Saharan African financial services institution, licensed by the Bank of Zambia, and listed on the London Stock Exchange. The product of merging Finance Bank Zambia Limited (FBZ) and subsidiary African Banking Corporation Zambia Limited (BancABC Zambia) in 2016, Atlas Mara Bank Zambia has a combined abundance of 90 years in banking history experience. James Koni, Atlas Mara Bank’s Managing Director, states: “It has been a very exciting time merging two operating banks, which is something that has never been done before in this country, we have done it, reflecting the commitment, quality and expertise of Atlas Mara Zambia staff.” With a presence in seven sub-Saharan countries (namely: Botswana, Zimbabwe, Zambia, Tanzania, Mozambique, Rwanda and Nigeria), Atlas Mara Zambia has secured a stronger, bigger, bolder bank, with a footprint of 67 branches and agencies with 176 ATMs in Zambia’s 10 provinces, making it the largest bank in terms of branch footprint.

On the 3rd November 2017, Atlas Mara Zambia’s new brand was unveiled, an act which catapulted its entry into a new era in which banking in the country is reshaped through a combination of global institutional knowledge and extensive local insights. Indeed, over the past fiscal year, Atlas Mara has grown its industry balance sheet 18% to K5.5 billion. “We have grown because we have focused on the client and the client’s needs,” claims Koni.

“In the retail space, for example, we asked ourselves what people want, and what it is that makes us relevant to our customers.

That has enabled us to structure products that speak to the needs of those clients.

“It has been a very exciting time merging two operating banks, which is something that has never been done before in this country.”

James Koni, Managing Director of Atlas Mara Bank Zambia We are investing heavily in our customer care and customer engagement.” Atlas Mara has segmented the bank into various sectors serving their different unique customers’ needs, with a sizeable portfolio of public sector business, be it government or state-owned enterprises, it has set up a separate segment dealing with the public sector as well as NonGovernment Organisations (NGOs). In this way, it aims to anticipate client’s needs and serve them accordingly.

The bank is also focusing and investing extensively in technology in order to

provide innovative and differentiated products, while accelerating financial inclusion across the country. “As we speak, we are getting towards the end of rolling out 90 brand-new ATMs ,” declares Koni. “These machines will enable us to have a wider reach than any other bank in this market. We have also extensively improved our internet banking, to the point that customers are now able to do most of their business from their office. On the retail side, we have developed a state-ofthe-art mobile application that enables anyone to do everything that they have to do: sending money, paying their bills, buying airtime and saving. Soon, we will enable our customers to instantly access small amounts of borrowings based on transaction history.” The Bank has also partnered with ETM Analytics and launched the Atlas Mara research app which aims at providing global financial news and economic analysis to its customers.

“We are uniquely positioned to be the partner of choice through our wide distribution national network, serving every part of the country and in every sector of its economy. The bank is persistently driving innovations and new product development using current and future technology. Our aim is to create a banking experience that is better, simpler and more convenient. We want to offer banking experience that is unique, we will be bold and use technology to positively disrupt the exciting landscape”.

Koni explains: “We have the means to take any investor to any part of the country and introduce them to any sector within our economy. We were set up with a vision and a passion to reach every person in the country and to provide a premium banking service. For us, that’s a passion we show every day.

We put our customers above everything.

We are confident that if we can make money out of doing good, that’s the best thing in the world.”

Atlas Mara Zambia Ground Floor Atlas Mara House Corner Church / Nasser Roads Ridgeway Lusaka, Zambia www.atlasmarazambia.com

MARCH 2019

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One ZAMBIA, One Nation

Atlas Mara Zambia

One ZAMBIA, One Nation

Ecobank Zambia Pan-African partners for success

Removing Barriers And Creating Linkages Through Digital Integration Utilising mobile banking and digitisation, Ecobank Zambia’s strategic mission is to deliver innovative, efficient and cost-effective services to every sector while increasing financial inclusion throughout Zambia.

Having commenced operations in Zambia in 2009, Ecobank offers financial solutions to individual customers, businesses, and governments, operating as a subsidiary of Ecobank Group, a leading panAfrican banking conglomerate with 36 affiliates in Africa. It also has presence in Paris, London, Beijing and Dubai. As such, Ecobank is the only bank that allows customers to transact more easily across borders. In just a decade, Ecobank has already been recognised as the fastest growing bank within the country. “We had a choice to go in and compete head-on with the rest but we carefully chose a niche focus on digital and trade opportunities,” states Ecobank Zambia’s Managing Director, Kola Adeleke. “This strategy was a best fit for our business because being a part of the biggest pan-African group in Africa, we were able to leverage on our group synergies to harness support for the economy through various trade instruments and digital solutions.”

In line with the Bank of Zambia’s mandate to increase financial inclusion throughout the country, Ecobank Zambia has adopted a systematic approach towards digitisation. Ecobank’s digital strategy leverages innovative technology to give Zambians the convenience of 24/7 banking wherever and whenever they want. As a result, Ecobank won the Best Digital Strategy Award at the Retail Banker International’s prestigious awards ceremony in 2018.

“Ecobank takes pride in bringing innovative products for the Zambian customers in line with our strategy for financial inclusion,” states Adeleke. “We have developed this fast, convenient and innovative mobile 14 | FORBES AFRICA MARCH 2019

Kola Adeleke, Managing Director of Ecobank Zambia

banking solution within the lifestyle of our customers and improve the uptake of digital financial solutions by both banked and unbanked in Africa.” Downloaded by 100,000 customers in Zambia, and over five million customers, the Ecobank Mobile App, is a unified banking app serving 33 African countries, enabling 24/7 banking services and transactions in 18 different currencies and in four major languages: English, French, Portuguese and Spanish.

It is no surprise that SMEs represent the key to unlocking socio-economic development within any nation.

Ecobank Zambia realises this as well, exemplified by allocating over 25% of its K500 million total loan portfolio currently to Small and Medium Enterprises (SMEs) to assist them in expanding their businesses.

“It’s actually difficult to quantify the support that we give to our clients,” states Mr. Adeleke. “But we also have other services that help them to grow,

like cash management and trade tools.

Ecobank continues to be relevant in Zambia by providing trade services and translating the local knowledge into business opportunities.”

With the current administration’s drive for diversification and industrialisation under the Seventh National Development Plan, Ecobank has pledged to support its customers in critical sectors of the economy including agriculture, electricity, education, oil and gas, construction, manufacturing and telecommunications. “We continue to leverage on the power of digital platforms to deliver services to our customers in a convenient, accessible and reliable manner,” states Adeleke.

“As a pan-African bank we’re absolutely committed to meeting the rapidly changing demands for convenience and functionality that Africans need and demand. It’s part of our ethos and ultimately our goal is to contribute to financial stability and economic growth.”

Continuing to leverage on the power of digital to grow its business, Ecobank’s innovative payment solution Xpress Cash, a cardless withdrawal solution integrated in the Ecobank Mobile App, has now been downloaded by over 50,000 Zambian customers.

Ecobank’s digital strategy leverages digitalisation for scale and ubiquity and is the key plank in its ambition to be the top consumer financial services franchise in Africa and to achieve its target of serving 100 million customers. According to Adeleke, “we want to be the digital bank of choice for Zambians and all Africans.”

One ZAMBIA, One Nation

Dr Pius Kasolo CEO of ZCCM - Investment Holdings Plc.

Delivering Alpha Returns ZCCM-IH is a diversified investment company with key strategic assets in Zambia’s mining and energy sectors. The company is majority owned by the Zambian government and is publicly listed on three stock exchanges.

“Diversification means de-risking the portfolio so as to optimise portfolio retains.

Our strategic focus is to further increase participation in sectors such as energy, manufacturing and agriculture.”

Under President Lungu’s Seventh National Development Plan, diversification is a main priority. How is ZCCM-IH responding to this call for diversification within the organisation’s objectives?

ZCCM-IH’s overall strategy is in line with the aspirations of the 7NPD, which was launched by the President in June 2017. Due to the exposure of the company to the mining sector, diversification is key, because the industry of minerals such as copper is subject to cycles.

Diversification means de-risking the portfolio so as to optimise portfolio retains. Our strategic focus is to further increase participation in sectors such as energy (we just got 35% of Maamba), manufacturing (we just put a bid on a glass making company) and agriculture.

Nonetheless, the mining sector remains critical to us. Strategically, we are trying to diversify the minerals, including manganese (we got two big projects for manganese, but also for iron and gold). So, we are looking at the long term and we are trying to add value: instead of just selling copper, we are trying to do the cabling, the pipes and so on. We really want to be part of the supply chain.

ZCCM-IH has declared a dividend of US$13 million to its shareholders, recording a profit after tax of 125% at group level, and 251% at company level for FY2017.

The most important factor was improved copper prices during the period, and the reversal of impairment of the copper price participation receiveable from Konkola Copper Mines. There was also an improved performance in the companies, especially in Copperbelt Energy Corporation (of which we own 20%). We restructured the company and took out CEC Africa, leaving only CEC Zambia. That made the company more effective and profitable.

Mining generates 60% of the country’s export receipts and produces 70% of African copper.

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With the mining sector making up the vast majority of your holdings, how will your company be affected by its diversification strategy?

The evolution of ZCCM-IH’s portfolio composition over the strategic period through investments in mineral value addition, manufacturing and agriculture or agri-business will offer a more broad-based portfolio composition. We intend to invest about US$200 million as equity contribution for the purpose of investing in growth sectors, even if some projects go beyond that figure. We are investing about US$480 million in a cement plant. The reason for that is that we invest off our balance sheet, which is more effective and easier to do.

So, we create a Special Purpose Vehicle (SPV), we put in equity, the SPV borrows and becomes an entity that runs on its own and which we just supervise. That is going to be the biggest cement plant in Zambia, which is producing more than 5,000 tonnes of clinker per day, which means producing up to 10,000 tonnes of cement per day. We are also investing in the upgrading of the power plant in Maamba to produce 600 mw, but we are also looking at other power opportunities in the northwest province in solar and mini-hydro power.

ZCCM-IH is listed on the Lusaka Stock Exchange, London Stock Exchange and Euronext. For investors thinking of buying stock, why is ZCCM-IH a good investment?

We are diversified; we are growing and declaring dividends. As a shareholder, what you look for is a company that shares dividends. Our strategic plan sees us investing a lot of money in the growth of the company itself and that means that, at the end of the strategic planning, we want to go up to US$200 million profits after tax. That’s a big jump and confirms that if you have money, you should invest in our company.

As they say, if you want to see elephants, you should go to the elephant country: that’s us.

Zambia’s special purpose vehicle for industrialisation and investment acceleration

A Catalyst For Private-Sector Investment Celebrating its 5th Anniversary, IDC was established to spearhead the development of Zambia’s domestic industrial capacity and play a major role in creating jobs.

Incorporated in January 2014, the Industrial Development Corporation (IDC) Limited is a Government Owned Enterprise charged with the mandate to spearhead the Zambian government’s commercial investments agenda with an objective to strengthen Zambia’s industrial base and create jobs. The IDC was established to create and maximise long-term shareholder value as an active investor and shareholder of successful stateowned enterprises, as well as undertake industrialisation and rural development activities through the creation of new industries. “This was the beginning of IDC’s role in industrial development in the country,” states IDC Group CEO, Mateyo Kaluba.

With the goal to transform State-Owned Enterprises towards commercial viability, and contribute to industrialisation and job creation, the IDC has positioned itself to be government’s principal special purpose vehicle for investment acceleration. “In 2017 we adopted a strategic plan; that at least 50% of the portfolio should be profitable by 2020-2021,” states Kaluba. “We started with just one company declaring dividends in 2015, now two years down the line, we have eight companies declaring dividends, while seven companies that were previously making losses recorded profits at the end of 2017. ” While profit is not the only criterion for company performance under the mandate, the seven fold increase in two years time is an incredible result.

In order to catalyse private sector investment, certain strategies must be implemented to attract the right partnerships. “Mainly in two ways,” according to Kaluba. “The first is inviting bids from the private sector on specific projects that the IDC wishes to undertake. The second is engaging with the private sector directly.

There are some, who are looking for a local

“We are open for business with the private sector; our mandate is not to compete with them, our role is catalytic.”

Mateyo C. Kaluba, Group CEO of Industrial Development Corporation (IDC) partner, and they have confidence in a partner linked to the government so they come and work with us to implement the respective project. We have no set criteria for partnerships. A decision to partner is purely dependent on how strategic the investment is for the IDC. Simply put, we are open for business with the private sector; our mandate is not to compete with them, our role is just catalytic.”

IDC was established to spearhead the development of Zambia’s domestic industrial capacity, and in so doing, plays a major role in creating jobs. Setting the objective

to create one million jobs, IDC is well on their way. According to Kaluba, “Our role is as an investor and as facilitator of private sector investment through partnerships: we have identified manufacturing, tourism, agriculture and infrastructure as key investment areas. The ultimate goal is that one million jobs should be created over the next five years with respect to investment we do directly as IDC and jointly with the private sector.” With a portfolio of 34 companies across 12 sectors, IDC is working diligently to achieve President Lungu’s vision that all state-owned enterprises must ultimately list on the Lusaka Securities Exchange within the next five to 10 years so that opportunities are created for citizens to own shares in these companies.

Industrialisation is indispensable for countries to achieve sustainable economic growth that is sociallyinclusive and environmentally sound.

Therefore, it is the inevitable solution to bring about the much-needed structural economic transformation in Zambia. “Our investments are nationwide. In other words, if any part of the country has a natural resource with an opportunity for value addition or building associated value chains, we invest,” Kaluba states. “We are making sure that the economic growth is widespread, broad-based and sustainable, so that we don’t have one part of the country developing while others remain lagging behind.” Industrialisation-induced structural economic transformation will enable Zambia to diversify its economy, raise productivity, create better and sustainable jobs and increase the country’s competitiveness in the global market.

IndustrialDevelopmentCorporation(Zambia)Limited 61 Independence Avenue, Prospect Hill P.O. Box 37232, Lusaka, Zambia Tel: +260 211 427000 or +260 967 773007 Email: info@idc.co.zm

MARCH 2019

FORBES AFRICA | 17

One ZAMBIA, One Nation

Industrial Development Corporation (IDC)

One ZAMBIA, One Nation

Zambia ICT

Building Excellence Through ICT Under the ‘Smart Zambia’ initiative, the Lungu administration is ensuring that the country emerges as an ICT-enabled economy through the use of innovative technology for e-Government, mobile payments, and IT talent.

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rom mobile transfers to e-vouchers for farmers, an explosion of digital services is transforming Zambians’ lives. Introduced in 2015, President Edgar Chagwa Lungu’s vision to create a ‘Smart Zambia’ sees ICT as a key driver of socio-economic development.

Taking a look at some statistics of the World Bank, a 10% increase in broadband penetration is associated with a 1.4% increase in GDP growth in emerging markets. With regard to job creation, every 10% increase in broadband penetration will lead to 3% increase of employment rate. Similarly, research also shows a 90% correlation between investments in ICT and a country’s success in meeting several key United Nations Sustainable Development Goals. With the vision to become a middle-income country by 2030, ICT is an essential and smarter tool to leapfrog past the countrys competition.

Nowhere is this support for technology stronger than in e-government, where the agenda is aimed at modernising and automating payment and revenue collection processes. The ongoing transformation of public service delivery from the traditional face-to-face to online channels will likely reduce the cost of public service delivery. Hon. Minister Mwanakatwe points out, “this drive is being facilitated by government through measures to increase ICT connectivity in the country.” Digitalisation also presents financial institutions with an opportunity to collaborate with the public sector in the development and deployment of online solutions, which will impact positively on their bottom lines.

But none of this would be possible without the government’s commitment to infrastructure.

The US$280 million project currently underway will add 1,009 communication towers to the hundreds already built and boost mobile penetration rates to 94%, which is great news for major operators. “The government agenda to come up with smart cities is going to help create demand for the ICT sector and is going to transform the culture of the nation in ICT,” states Hai Telecommunications’ Managing Director, Samson Longwe.

Capital expenditures by commercial institutions are being reduced through the outsourcing of some of their ICT requirements,

such as data storage and hosting, by embracing the cloud services offered by the Zambia National Data Centre. Serving as a reliable business continuity partner, the National Data Centre has capacity to operate for several days using its own power sources. Tele and videoconferencing facilities in various government departments are being built to eliminate the costs and time constraints of face-toface meetings while broadband network is also being deployed across the country connecting organisations and households to the National Data Centre. Through this, SMEs will also be able to improve their online presence and competing for market share in the global market space. “That’s the vision we have around ICT: we believe it’s an enabler of business and commerce,” states Hon. Brian Mushimba, Minister of Transportation and Communication. “We want to make sure that our service provision is on the back of ICT.” With massive investments in infrastructure, a base needs to be set among the Zambian population in order to harness this technology.

As a result, the Lungu administration has made it compulsory that ICT is offered in all secondary schools to build capacity at an early age. The establishment of the Zambia ICT Centre of Excellence (ICE) is projected to increase the pool of ICT talent necessary to

modernise the public service and to drive the innovative activities in the economy. “We have a programme called Young Innovators, where we sponsor innovative ICT programmes,” states ZICTA’s Director, Patrick Mutimushi. “Our objective is to guide their entrepreneurial spirit to foster innovation and create jobs. We have been running this for the last three years, and it’s amazing to see their creations.”

As we have seen, the increasing usage of mobile phones has given rise to a uniquely Zambian ecosystem of mobile money services that are boosting financial inclusion. The Zambia Revenue Authority’s online tax filing service has aided revenue collection, while moving from paper to digital has increased transparency in the mining sector plus the distribution of subsidy vouchers for farmers. Improving the flow of information among government departments will enhance revenue collections leading towards a lower fiscal deficit improving the country’s debt sustainability position and investor confidence. Improved FDI flows signify value addition in natural resources, capital formation and capacity building, important factors to create sustainable and prosperous socio-economic growth. “Smart Zambia is not just about the government,” points out ZICTA’s Mutimushi, “it creates an environment open for investment.”

“Smart Zambia is not just about the government, it creates an environment open for investment.”

Patrick Mutimushi, Director General, Zambia Information and Communications Technology Authority (ZICTA)

MARCH 2019

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One ZAMBIA, One Nation

Zambia ICT

One ZAMBIA, One Nation

Hon. Brian Mushimba Minister of Transport & Communications

Land-Linking The Nation Through Rail, Air And ICT Hon Brian Mushimba speaks about how efficient transportation and communication play a critical role in Zambia’s development.

“We feel that if we can continue at this pace, investing even more in transportation and ICT, we can become a hub in the future.”

The World Bank highlights the importance of ICT as a driver of social and economic development.

What challenges is Zambia facing right now in terms of ICT and what are the ministry’s solutions to those problems?

No one can doubt the power of ICT. It’s the fourth Industrial Revolution. We need to make sure that we make ICT available to all our people. We launched the Universal Access Project Phase One, which started putting communication offices across the country. Now we are in Phase Two, which built on Phase One to launch 1,009 communication towers across the country. That means on average seven communication towers per constituency. When we finish that US$222 million dollar project, we will be around 92% in terms of network penetration connectivity.

To ensure the development of secure, efficient and interoperable systems between departments the Zambian government set out plans to build and promote ‘Smart Zambia’. What are the key initiatives undertaken to ensure ‘Smart Zambia’ becomes a reality?

It’s an ambitious programme. We built the National Data Centre and TF3 Data Centres, so that every company in Zambia that needs cloud and database service has it. We also launched the ICT Centre of Excellence, since we recognised the need to educate kids about ICT from early on until university. We also have a Smart City, a sort of an incubation hub, in collaboration with a university.

We will have all these entrepreneurs in a room, teach them the basic programming, then let them programme apps for various sectors. That’s the vision we have around ICT: we believe it’s an enabler of business and commerce.

The CAA has just certified The Kenneth Kaunda International Airport as safe. How will this boost confidence in the country?

The certification of KKIA is a huge boost for us because it sends a message to the outside world that we are investing appropriately in infrastructure and

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we are adopting standards that are internationally recognised. We are trying to change ourselves from being land-locked to be land-linked. We feel that if we can continue at the pace we are moving, investing even more in transportation and ICT, we can become a hub in the near future.

Zambia Railways Limited has grown its business by 22% in five months owing to the Statutory Instrument (SI) on heavy cargo. What else is being done to increase rail linkages within the nation?

This government has made a deliberate decision that we are going to invest more in transportation.

We invested US$20 million of Eurobond in Zambian railways. That has rehabilitated the permanent ways, remanufactured locomotives and improved the speed from 10 km/h on average to 50 km/h. After building that capacity, we signed an agreement to move off-road 30% of our cargoes: now the railways can take it. Now the sector has even started generating its own revenues, even before implementing the law. After implementing it, those revenues will go up, and we will be able to further decongest the roads.

Zambia Airways has relaunched in 2019. What does that signify for Zambians?

The government is saying that we can increase the number of Zambians travelling from 1.5 million to 5 million. In order to do that, we need to restart our international airline, so that we can open more routes in the country with areas that are not being serviced today. We are excited with the return of our airline, which will give an option in terms of air travel and help grow the economy.

Why is now a great time to invest in Zambia?

The environment is very safe. We have predictable policies, a pool of educated workers, our politics are very stable, the economy has been growing with an average of 4% now, so the fundamentals are strong. Many of those things give the confidence that investors are looking for.

It’s the right time.

Working towards a more connected Africa

Our Journey from Cape to Cairo Some ten years in the making, Liquid Telecom’s Cape to Cairo network represents a historic moment for the company and for a more connected Africa.

We believe every individual on the African continent has the right to be connected.

This is the vision that has been driving our network expansion across Africa over the last ten years. High-speed broadband brings many proven economic and social benefits – from providing access to online educational resources to creating more jobs and driving the adoption of new technologies.

Our network passes through some of the most remote corners of the planet and continues to provide new opportunities to connect underserved communities. Where we don’t provide broadband

services directly ourselves, we work alongside local providers to ensure they can provide cost-effective connectivity.

For the first time, Africa will have a direct land-based communication link between Cape Town and Cairo. Stretching over 10,000km, it will be the shortest direct fibre route between South Africa and Egypt. This means we will be able to offer significantly reduced latency between African countries.

To achieve this, our network has overcome some of the most challenging distances and terrains on the continent – not to mention the threat of wildlife, limited power supplies and theft of equipment.

It required some lateral thinking: we established the first fibre links over the Limpopo and Zambezi rivers, built optic networks with repeaters every 400km instead of every 200km and launched awareness campaigns to protect our network from vandalism in rural areas.

Intra-African trade remains low and is estimated to be only 18%, compared to intra-European and Intra-North American trade which stood at 69% and 50% respectively.

Our network has often followed the path of existing infrastructure, with our fibre now found running alongside roads, railways and even power lines. This has helped to form new information corridors that link the region’s major trade hubs. Each country that has been connected to the “One Africa” broadband network has experienced a dramatic increase in data traffic between the other nations connected to it.

With African Union members recently agreeing to a continent-wide free-trade agreement, which creates a market of 1.2 billion people with a combined gross domestic product of more than $3.4 trillion, the timing couldn’t be better: “Where there are improved communications, improved trade follows as well. We need to see more trade between African countries,” says Strive Masiyiwa, Econet’s Founder and Executive Chairman.

Access to high-speed broadband is providing the foundations for digital growth and innovation across the region. Start-ups and businesses in Africa are experimenting with emerging technologies, such as Artificial Intelligence (AI), Internet of Things (IoT), Big Data Analytics and Blockchain that have the potential to solve African problems and improve lives. We are improving cloud capabilities across the region – providing both the infrastructure and tools to accelerate digital innovation.

Approximately 20% of Africa’s population is aged between 15 and 24, marking the region as the youngest in the world. We recognise that the development of digital skills will be critical to both their future and a successful digital economy. We are finding new ways to support Africa’s thriving tech start-up ecosystem, and already provide access to high-speed internet and cloud-based services to many of the region’s innovation hubs, start-up competitions and academic institutions.

The “One Africa” broadband network will be moving further into Central and Western Africa. We are in the process of establishing multiple fibre crossings between East and West Africa. It’s the new vision of Econet’s Founder and Executive Chairman Strive Masiyiwa to connect all the West African countries.

Elunda 2 Addis Ababa Roundabout Rhodes Park. Lusaka Phone: +260 211 374 600. Fax: +260 211 374 622 www.liquidtelecom.com

MARCH 2019

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One ZAMBIA, One Nation

Liquid Telecom Zambia

One ZAMBIA, One Nation

Energy & Infrastructure Sectors

Becoming The Regional Power Hub Formerly dependent on hydropower, Zambia is on a path towards energy diversification to light up the land. With its strategic location and an investment-focused government, Zambia is transforming its power infrastructure to become the interregional electricity hub by 2025.

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ordered by eight countries, Zambia has fortuitous position of being a land-linked nation. Blessed by its sinuous rivers, hydropower has been Zambia’s energy source of choice. Previously accounting for 97% of the country’s energy, Zambia is now focused on diversifying and increasing its energy supply, not only to guarantee nationwide power security, but also to achieve its objective of becoming the biggest exporter in the Southern African region.

“Ideally, we want to be the net exporter of electricity because as a land-linked country, it’s easy for us to import and export electricity,” states Hon. Matthew Nkhuwa, Minister of Energy. “So we want to build interconnectors for our neighboring countries, so in the event that there may be a shortage, power can be tapped from alternative grids. This vision will ultimately benefit us and our neighbors.”

In an effort to create appetite for further investment in the sector, Zambia implemented a tariff that allowed all industry players to recover the cost of doing business while making an attractive return on the investment. As a result, several projects are now underway that will add renewable energy, thermal energy and

more hydroelectricity to the grid. One of these is the Maamba thermal plant, which generates 300 megawatts of power and another is the 60% completed Kafue Gorge Lower Hydro-power Station. Scheduled for completion by 2020, the US$2 billion project will contribute 750 megawatts.

In late 2018, the governments of Zambia and Angola signed a US$5 billion deal to construct an oil pipeline that will pass through the two countries. Currently possessing only one pipeline, this new pipeline will see enhanced trade in oil, development of petroleum refinery infrastructure and capacity building for Zambia. “With no access to the sea, this pipeline will reduce pressure on the roads and ultimately reduce the price of fuel,” states Minister Nkhuwa.

Recently, the World Bank approved a credit facility of about US$26.5 million to help Zambia boost its electricity supply especially in rural parts of the country. Just as electricity access is a prerequisite for socio-economic development, so are roads, which connect all sectors together.

“Our Link Zambia 8000 programme has refined its priorities towards internationally focused links such as the Mbala-Nakonde road, which is now easing trade near the Tanzanian border,” states Elias Mwape, Director of Road Development Agency (RDA). The same applies for the Kazungula Bridge Project at the Botswana border and the Lusaka-Ndola dual carriageway to connect the capital with the Copperbelt and the Democratic Republic of the Congo.

By 2025, Zambia’s vision is to be the interregional electricity hub for southern Africa. With its access to market and currently scheduled plan of projects for infrastructure and energy, there’s no reason why its vision cannot become reality.

Changing strategy in leveraging Zambia’s strategic geographic position

Land-Linking The Nation With Flying Colours Focusing on enhancing safety and achieving international standards of service provision, Zambia Airports Corporation Limited is surging full speed ahead in developing airport and air navigation infrastructure in its contribution to national economic take off.

Leading provider of airport facilities, ground handling and air navigation services, Zambia Airports Corporation Limited (ZACL) was established in 1989, and is a parastatal Public Limited Company with a mandate to develop, maintain and manage Zambian airports including: Kenneth Kaunda International Airport (Lusaka), Harry Mwaanga Nkumbula International Airport (Livingstone), Simon Mwansa Kapwepwe International Airport (Ndola) and Mfuwe International Airport, as well as three strategic and seven provincial aerodromes. With US$1.2 billion governmental endowment being injected into its airport network, ZACL’s focus on improving infrastructure and standards of service provision, as well as creating important passenger and cargo hubs is achieving considerable results. Already, US$60 million has been invested in upgrading and increasing capacity at the Harry Mwaanga Nkumbula International Airport (HMNIA), in Zambia’s tourist capital of Livingstone. In 2018, HMNIA was bestowed the Safety Award for the Best Airport in Africa in the category of 10,000-20,000 air traffic movement by the Airports Council International Africa.

“The accolade works into our aspiration of making Zambia an aviation hub for the sub-continent,” affirms Fumu Mondoloka, Managing Director of Zambia Airports Corporation Limited.

A new Greenfield airport is currently under construction in Ndola, which will replace Simon Mwansa Kapwepwe upon completion while the construction of Mfuwe is still in negotiation. Currently the ZACL is upgrading infrastructure at KKI Airport with

“We have got a strategy to develop our airports around the concept of an ‘airport city’, a hub where you can find a lot of activities, in order to create a real economic destination around the airport.”

Fumu Mondoloka, Managing Director of Zambia Airports Corporation Limited an investment of US$360 million. Jointly financed by the Zambian government and Export-Import Bank of China, improvements include the construction of a terminal building with a capacity for four million passengers per year, six aero bridges and a fire and rescue station, as well as an intransit hotel, a stand alone hotel, air traffic control tower, a standalone presidential pavilion, a cargo terminal and a commercial complex with a shopping mall and airport office park. It is expected to be completed at the end of 2019. “We have got a lot of good ideas around a retail market place that will give comfort, convenience, value and

experience to the passenger in transit,” states Mondoloka.

“We have got a strategy to develop our airports around the concept of an ‘airport city,’ in order to create a real economic destination around the airport.”

ZACL has also announced the construction of a new airport, the copperbelt International Airport, largely aimed to serve the mining and trade industries in the copperbelt and north western provinces, as well as tourism in the region. With an investment of nearly US$400 million, and the expectancy to commence operations in 2021, the airport aims to have a one million passenger terminal building capacity, cargo terminal and airport hotel, amongst other services.

Surpassing all targets, ZACL has reported a positive growth spurt in the third quarter of 2018, with a total of 553,045 general passengers passing through the four main airports compared to 498,239 passengers the previous year, with a 22% increase in domestic passengers and 9.1% increase in international passengers. This has been brought about due to a significant increase in domestic flights to Livingstone, Lusaka and Ndola by Mahogany Air and Proflight Zambia, reduced ticket fare, increased Meetings, Incentives, Conferences and Events (MICE), and the introduction of RwandAir flights on the Lusaka-Johannesburg route.

“Passenger numbers are about airlines, passengers and connectivity,” explains Mondoloka. “In the second quarter of 2018, we saw the launch of a second domestic operator in the country, which came in with some grand initiatives concerning improving passenger traffic and boosting passenger numbers. We are providing incentives and pricing is becoming such that more and more people are opting to fly rather than drive.”

MARCH 2019

FORBES AFRICA | 23

One ZAMBIA, One Nation

Zambia Airports Corporation Limited

One ZAMBIA, One Nation

City Drive Rent A Car Surefire transport solutions for tourists and investors alike

Driving The Direction Of Car Rental Solutions A key player in the Zambian transport and logistics sector, City Drive Rent A Car caters to its clients’ specific needs ensuring that they travel easily, efficiently and enjoyably.

Gregory Chama, Co-Founder and CEO of City Drive Rent A Car

24 | FORBES AFRICA MARCH 2019

City Drive Rent A Car has been delivering innovative and quality vehicle rental solutions since 2009, and is currently one of the nation’s leading players in the industry. Co-Founder and CEO of the company, Gregory Chama states: “Our vision is to become the preferred transport solution provider of choice.” Vehicles include: sedans, campers, 4x4s, minibuses and executive options. “Our model is to use our vehicles and third party vehicles from the public,” explains Chama. “So we have a current online market place, the ‘Vehicle Portal’, where we invite ordinary people from the public to list their vehicles. As a result, vehicle owners get to make some passive income on their vehicles. Our current platform has around 300 vehicles listed.”

City Drive provides personalised attention to client’s specific needs; ensuring ease, security

and comfort in all its transactions. “We care about the client and this is evident in how we manage to segment the market because we understand we have different clients with different needs,” says Chama. “We have people who want to hire a vehicle for a few days or who will use a vehicle for 30 days, months or even a year. We serve insurance companies that want to rent a vehicle for their policy holder, and tourists who are looking for a camping adventure in our national parks.”

A dynamic premier car rental firm, with a dedicated and keen workforce intent on providing its customers with a first-rate car rental experience, City Drive’s vision for the future lies in introducing complementary transport solutions through the development of technological products; enabling the company, and their clients, to safely continue their journeys far and wide.

One ZAMBIA, One Nation

Closing article

On its 55th Anniversary, President Lungu’s administration looks forward to continuing its forward trajectory to maintain Kenneth Kaunda’s vision of unity on an economic front.

On Zambia’s coat of arms is etched the country’s official motto: ‘One Zambia, One Nation.’ In a country where 70 ethno-linguistic groups live side by side, Zambia’s motto was adopted, in 1964, to instill the importance of national unity. It still remains a point of elevated pride to many Zambians, this is a unity that has seen Zambia remain peaceful for 55 years now. While the state-building of Kenneth Kaunda cannot be overestimated, it is time for Zambia to continue its path towards prosperity, through peace and unity.

Looking forward to Zambia’s prospects in 2019, the signs are positive.

With inflation to remain within the range of 6-8% and robust GDP growth of at least 4%, the vision of continued macro-economic stability is projected to be sustained. All in accordance with the Seventh National Development Plan [7NDP], the current administration’s measures for austerity, fiscal consolidation, and economic stabilisation are aimed at creating a strong foundation for improved economic management, sustained growth, and safeguarding the people’s welfare.

While the prospects are bright, it is the fundamentals that always makes Zambia an attractive place to look at. “Zambia has a young and highly-educated population. The growth of the middle sector is getting bigger year after year,” states Atlas Mara’s James Koni. “So, if you put all those variables together, you will see that the macro factors point to a country that is growing, that’s stable, that can make you do business and make money.” Cheap energy, vast mineral resources and fertile

land all point to great potential but one point of pride is the country’s access to market. “If you build a successful business, you will see that it will offer you more return on your investment than expected,” affirms Dr Mohamed El Sahili, ex-CEO of Fairy Bottling Zambia. Zambia is utilising it’s land-linked position to grow its transport and logistical sector to become a hub for the southern African region.

“What seemed to be a weak spot has actually turned out to be a strength. Now we say that Zambia is land-linked,” states Zambia Airports Corporation’s Fumu Mondoloka. “Through Zambia you can get access to all those countries, essentially: we now see that we are conveniently positioned to be the aviation hub we want to be.” For a company with a global network like Bolloré Logistics, “Zambia is a very important part of this network because it is at a crossroad of the mining sector and the ports. Zambia is what we call a land-linked country, which is very different from the idea of a landlocked country: that mindset gives opportunities and hope rather than a feeling of being stuck.” states Bollore’s Managing Director, Olivier Terra.

Fifty five years later, after the ‘One Zambia, One Nation’ motto was coined, Zambia remains a shining example of nation building within the African continent. Looking ahead towards the next 55 years, Zambia works tirelessly towards replicating Kenneth Kaunda’s unified national vision on an economic scale, through the stabilisation and strong growth of all its sectors through industrialisation.

PENRESA FOCUS ON ESWATIN I 2019 EDITION

Produced in association with

We are pleased to announce our next report: ‘The Kingdom of Eswatini: Africa’s Newest Country’, forming part of Penresa’s informative and successful series ‘Africa Undiscovered’, in collaboration with Forbes Africa.

The report will provide an insider’s look at the enormous strides undertaken by the continent’s newest nation to achieve its economic vision.

For more information: info@penresa.com • www.penresa.com

26 | FORBES AFRICA MARCH 2019

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Inside this issue, exclusive interviews with

His Majesty King Mswati III, King of Eswatini Her Majesty Queen Mother, the Indlovukati of ESwatini, H.E. Prime Minister Ambrose Mandvulo Dlamini