ZGSC ISSUE #001

ZA M BI A G LO BA L SU P P LY CHA IN | ENGAGI N G T H E F U T U R E

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Z A M B I A G LOB A L S U PPLY CH A IN | E N GAGIN G T H E FU T URE

CONTENTS INSIDE THIS ISSUE

EDITORS INTRODUCTION

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AGI STORAGE SOLUTIONS

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ZAMBIA’S EXPORT PROCEEDS TRACKING FRAMEWORK: YUSUF DODIA ECONOMIC ANALYST, ZAMBIA

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A LEADER IN SPECIALISED CONSTRUCTION PROJECTS

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EURO CARGO CEMENTS ITS PLACE IN AFRICA

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INDUSTRY LEADER VIEWS: COLIN RHODA CARGO EXPERT

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NEMERIT CONSTRUCTION

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BORDER NEWS AND UPDATES

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OPM VS OEM AN IMPORTANT DEFINITION

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ZDA INVESTMENT PERFORMANCE REVIEW 2023

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LOBITO CORRIDOR HISTORIC DEVELOPMENT

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ITC PARTNERSHIP FOR INVESTMENT AND GROWTH

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COMESA CROSS BORDER TRADE INITIATIVE

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SHE TRADE HELPING WOMEN IN BUSINESS

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ADVERTISER INDEX

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PUBLISHERS: RAYDANIEL ENTERPRISES LTD. | PLOT 377A MAKENI, LUSAKA EMAIL: zambiaglobalsupplychain@gmail.com PRINTER: NEW HORIZON PRINTING PRESS ADDRESS: Plot No. Lus/9815/H - Kafue Road PO Box 38871, Lusaka, Zambia YEAR: 2024

DISCLAIMER:

While every care has been taken in compiling the contents of the publication from the latest information available, neither publisher nor the editor assumes any responsibility for errors and omissions in the effects there from.

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A NOTE FROM OUR EDITOR:

Dear Reader, The Zambia Global Supply Chain Magazine has been specially designed to be a valuable source of information about the supply chain development for key decision makers across all industries within Zambia. It allows a distribution of ideas and remarks from readership, industry experts and suppliers.

Putting this magazine together has been an exciting and rewarding experience. The team has made sure to provide our readers with sufficient and valuable information to enable you to conduct business more effectively and efficiently.

Zambia Global Supply Chain has focused on problems that are pertinent to the present-day market trends and international obstacles by drawing attention to economic challenges, market developments and future potential.

Furthermore, you will find articles that highlight advice for future investors and business leaders.

We want to acknowledge the contributions of Mr. Yusuf Dodia and Colin Rhoda along with all the other contributors to our feature articles and the advertisers for their steadfast support and faith in the publication.

We promise our readers that we will continue being a valuable source of information concerning the supply chain development for stakeholders across all industries in Zambia.

Thank you for reading Zambia Global Supply Chain Magazine. We are excited about our next edition which will focus on digital trends in the supply chain, where we will test and review various online services in Zambia and also highlight the progress Zambia has made in its migration to becoming an online service provider, with emphasis on the companies leading the way in the private sector.

If you believe that you have worthwhile information to share or an expert opinion then please feel free to contact our editorial team, we would be more than happy to hear from you.

RAYHANA RHODA EDITOR-IN-CHIEF

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ZA M BI A G LO BA L SU P P LY CHA IN | ENGAGI N G T H E F U T U R E

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ZAMBIA’S EXPORT PROCEEDS TRACKING FRAMEWORK 2024

By Yusuf Dodia Economic Analyst, Zambia

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ambia is ranked 108 out of 195 countries in terms of economic well-being, but is arguably the world’s third largest copper producer after Chile and the Democratic Republic of the Congo.

The mining sector in Zambia is reported to contribute around 12% to the Gross Domestic Product of the Country, and is the prime generator of national foreign investment and national foreign currency earnings. Mining exports account for about 85% of Zambia’s exports.

Zambia produces over 20% of the world’s emeralds and opportunities are available for the expansion of production of manganese, sugilite, gold, cobalt, uranium, and other industrial minerals of export value.

The mining sector is also a large contributor to domestic tax collection by the Zambia revenue Authority through mainly Mineral Royalty Taxes whilst additionally accounting for the provision of around 90,000 direct jobs and is the largest sub-contracting sector for small and medium enterprises across the country thereby creating about 10,000 indirect jobs.

There are 94 mining projects running in Zambia which are owned by 7 predominantly international mining companies. The oldest mine in Zambia is the Bwana Mkubwa (Big Man or Big Boss) situated in Ndola which was set up in 1902 and heralded the scramble for then Northern Rhodesia, which in 1964 became Zambia.

In the pre-independence era, mining exports resources from Zambia benefitted the Southern Rhodesian (now Zimbabwe) economy and the South African economy since the main investors emanated from South Africa and chose the 6

Southern Rhodesian capital Salisbury (now Harare) as their operational headquarters until the turn of independence in 1964. This may account for the beautiful development of Harare’s road, rail, and construction infrastructure.

Mining in Zambia, in addition to agriculture, sugar production, and cement manufacturing has developed steadily over the last six decades to account for over 95% of export earnings, and predominantly in the hands of foreign multinational investors.

As a result, Zambia has experienced minimal export earnings returns into the Zambian economy which is expected from investors that have their headquarters located in other countries.

In October 2023, the Zambian Ministry of Finance and National Planning announced a

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new initiative to ensure that the benefits of exports impacts on the Zambian economy. This initiative dubbed as the “Exports Proceeds Tracking Framework” (ExProTraF) was officially pronounced by the Secretary to The Treasury to ensure national clout and subsequently passed on the Bank of Zambia (the Central Bank) and the Zambia Revenue Authority for implementation on 1st January, 2024.

The ExProTraF was designed along some basic good, and common, practice principles which are prevalent in other countries that are export oriented.

South Africa has laws that compel all exporters to receive export earnings in banks domiciled in South Africa to acquit the export permit. This ensures that export earnings circulate in the South African economy and finance domestic growth through abundant availability of foreign currency to commercial banking sector.

Many other developed economies follow this mechanism to recapitalise their banking sector and prevent resources from being channelled towards money laundering, drugs trafficking, arms trading, terrorism support, and financing of conflicts across the globe.

Zambia’s efforts with the introduction of the ExProTraF therefore, follows international best practices and norms more prevalent in the developed economies.

Exporters argue that there are sufficient rules and regulations in place to monitor exports, citing VAT Rule 18 and options to obtain trade and transaction data from authorities in the “importing countries”. They lament that this new ExProTraF introduces unnecessary paperwork and delays in

the export process. They go further to argue that external financiers are likely to be jittery with a situation whereby repayments for loans are shifted from importer’s commitments to assign shipment payments directly to banks and other financial institutions, to receiving loan recoveries from Zambian banks.

These arguments may be sound, but as sovereign economies go, local regulators and authorities should not depend on third party data which may be submitted at discretion, in order to address accountability, transparency, and the Zambia’s commitment to international protocols and conventions.

The debate continues as Zambia is now in the implementation stage of the framework and feedback should be made available to the authorities and the public on progress and what challenges may be faced going forwards.

It is useful to remember that Zambia attempted to a similar initiative in 2013 with the introduction of a Statutory Instrument number 13 which was referred to at the Balance of Payments Monitoring System. The initiative was implemented for a few months after which is was abruptly revoked for no apparent reason.

Zambia is currently burdened with a USD16 billion foreign debt bill and a more than ZMW200 billion domestic debt. All efforts to restructure and liquidate these burdens

seem to draw limited success and some new initiatives need to be formulated hence the innovation of the ExProTraF mechanism.

Opportunities for a stronger local currency, reduced inflation, and reduced cost of financial services depend on amongst other challenges, the need to generate foreign currency to feed this import hungry economy. Almost all goods, except for food products, sold in the retail markets are imported and therefore presents

an economy that is extremely sensitive to exchange rate fluctuations.

The recent experience of a weakening local currency throughout 2023 and more accentuated in the last quarter of the year has put pressure on the Government to find solutions that are sustainable and present a mechanism that will leverage on the country’s most prolific revenue generation sectors.

Clearly, open debate and dialogue on the ExProTraF is necessary to ensure that all stakeholders’ voices and views are heard such that the nation is pointed in a direction which will benefit the economy at large and investors are clear about their options and opportunities for continued investment in Zambia.

The current status whereby Zambia is classified as a low income nation with a GDP per capita of under USD1,000 is no longer tenable. Long term relationships are built on equitable development for all stakeholders in an effort to achieve the proverbial “Win-Win” outcome for all.

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Z A M B I A G LOB A L S U PPLY CH A IN | E N GAGIN G T H E FU T URE

EUROCARGO CEMENTS ITS PLACE AS A MAJOR PLAYER IN AFRICAN AIR CARGO

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uro Cargo Aviation is an inde­ pendent ­Dutch GSA with offices in The Netherlands, Belgium, France, Swe­ den, Norway, Denmark, Finland, Lithuania (Baltics), Germany, Austria, Switzerland, Poland, The United Kingdom, Ireland, China, Hong Kong, The United States, United Arab Emirates and Uganda.

Etablished in 1997, the company can pride itself with many years of expe­ rience in the cargo aviation business. Our aim is to represent leading scheduled and non-scheduled airlines in multiple countries, offering a wide network of destinations. We strive for excellence in service in the field of cargo sales, warehouse supervision, flight operations and after sales.

The airlines Euro Cargo Aviation is actually representing are offering an almost global coverage.

Our staff members are specialized in the re­ quirements for global shipping of cargo. Both published and contract rates are regularly up­­ dated on Cargo Office and Webcargo, with ad-hoc rates being just one phone-call or @mail away.

We are committed to provide excellent service in reservations, invoicing, accounting, ramp supervision and operations in general through our 24/7 flight watch.

OUR STRENGTH: NETWORK AND PARTNERSHIPS Stabo Air is a Zambian registered cargo airline

that offers both scheduled and charter flights from Europe into Africa. The aim and objective is to fullfill the customers’ need and demand to and within Africa.

The scheduled flights are operating from Liége with a B747 full freighter and providing a wide range of African destinations, such as Lusaka, Ndola, Johannesburg and Entebbe.

Stabo Air is also offering beyond destinations ex-Zambia to Lubumbashi and Harare and a wide variation of domestic destinations within South-Africa such as Durban, Capetown and Port-Elizabeth. This is in addition to its ongoing service to Namibia serving Windhoek and Walvisbay. Further more, Stabo Air can offer charter / part charters to any destination on the African continent.

Making Stabo Air Limited a true African airline!

ASTRAL AVIATION has entered into a Global Sales Partnership Agreement with Euro Cargo Aviation in Europe, USA & UAE and Take Off Aviation in South Africa.

Effective 1st January 2024 Euro Cargo Aviation and Take Off Aviation will be respon­ sible for promoting Astral Aviation’s cargo ser­ v ices within the designated regions.

This will involve marketing the airline’s cargo capacity to potential clients, businesses, freight forwarders, and other

relevant entities.

According to Astral Aviation CEO, Sanjeev Gadhia, “We look forward to our partnership with Euro Cargo Aviation who will act as an extension of our esteemed company, representing its cargo services, driving sales, ensuring operational efficiency, and maintaining customer satisfaction for its scheduled and charter network from Europe, USA & UAE which will be directed towards Astral’s strategic hubs in Dubai and Nairobi while Take Off Aviation will promote Astral in South Africa. We are confident of Euro Cargo’s professionalism, expertise and neutrality to represent us in three of the key markets and look forward to a new partnership.”

Euro Cargo Aviation and Take Off Aviation are delighted and immensely proud to represent Astral Aviation as its Cargo GSA. Our collaboration with Astral Aviation marks a significant milestone for our organization as we join forces to enhance our business endeavors, leveraging our collective decades of expertise in the dynamic African market. Together, we are poised to achieve new heights, fostering growth, and delivering unparalleled value to our clients. This collaboration underscores our commitment to excellence and innovation in airfreight services to Africa, and we look forward to a successful and mutually beneficial journey ahead with Astral Aviation.

STABO AIR

TAKE OFF AVIATION

EURO CARGO AVIATION

HEAD OFFICE Plot 1257, Mambilima Road, Rhodes Park, Lusaka, Zambia • +260211235976 • +260966771822 / +260974772373 • stabo@zambia.co.zm

HEAD OFFICE Unit 37, 1st Floor, Foreign Airlines Cargo Section O R Tambo International Airport, Kempton Park, Gauteng South Africa EMAIL: sales@takeoffaviation.co.za TEL: +27 (0) 74 601 7215

HEAD OFFICE Aalsmeerderdijk 158A 1438 AX Oude Meer Netherlands • +31(0) 20 446 0982 • sales.nl@eurocargoaviation.com

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AN INFORMATIVE TALK WITH COLIN RHODA, AN EXPERT IN SUPPLY CHAIN WITH 40+ YEARS EXPERIENCE IN ZAMBIA

ZGSC: Lets begin with some context: Talk to us a bit about your background and experience, working in the Zambian cargo industry.

COLIN RHODA: I come from a purchasing background, graduating into the freight industry in the 80’s, initially based in Ndola and covering the Copperbelt on all aspects of air, sea road and rail freight.

Moved to Lusaka, early 90’s heading up a major freight forwarder with eight branches countywide. Served as a Committee member, as well as a trustee, Zambia Clearing and Forwarding Agents Association.

Late 90’s appointed to head Zega Limited, Lusaka International Airport, principally looking after expansion of perishable exports industry and ground handling operations. During this period Zega was second only to state-owned National Airports Corporation in terms of passenger handling cargo, handling 90% of passenger and cargo airlines operating into the country.

After leaving Zega 2010, moved into airline consultancy working with Eurocargo Aviation, Netherlands and latterly, local airline, Proflight , Zambia.

ZGSC: What are the biggest challenges aviation cargo faces in Zambia today?

COLIN RHODA: The biggest effect is the continued impact of dollar - related aviation fuel price increases, also felt word wide, but particularly hard for land-locked Zambia. This also affects airline ground handling fees and well as airfreight , handling and clearance fees, all contributing to operating costs and all of which inevitably, have to be borne by importers and/ or exporters. This of course contributes to costs which are paid for by their customers, affecting their competitiveness and ultimately, their ability to survive in business.

ZGSC: How can these be addressed?

COLIN RHODA: The upgrading of KKIA (KENNETH KAUNDA INTERNATIONAL AIRPORT) has helped reduce these limitations, whilst the private sector also invested in expanding cargo handling facilities. However, this needs to be

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part of an ongoing process with emphasis on private sector investment, leaving the regulatory authorities to independently oversee the industry.

Consideration also needs to be given to putting in place an aviation fuel system which can alleviate the impact of constant price increases, perhaps spread over a longer period.

ZGSC: What global issues affect air cargo rates and operations in Zambia?

COLIN RHODA: Global health crises, such as the COVID-19 pandemic, can significantly disrupt air cargo operations. Restrictions on international travel, lockdowns, and health safety measures can affect the movement of goods.

Economic downturns or fluctuations in the global economy can impact trade volumes and the demand for air cargo services. Changes in consumer behavior and business activities may affect the type and quantity of goods being transported.

Changes in international trade relations, tariffs, and trade agreements can influence the flow of goods and impact air cargo volumes.

Fluctuations in fuel prices can impact the operational costs of airlines and, consequently, air cargo rates.

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Advances in technology and automation can both enhance and disrupt the air cargo industry.

The adoption of new technologies may improve efficiency, but it can also require significant investments and adaptation by industry stakeholders.

Increasing concerns about environmental sustainability and emissions may lead to stricter regulations on the aviation industry. Compliance with environmental standards can influence operational costs and practices in air cargo.

Changes in international aviation regulations, safety standards, or security requirements can impact air cargo operations, requiring adjustments and investments in compliance.

It’s essential to monitor the dynamic nature of global events and their potential impact on the aviation cargo sector in Zambia. Local

factors, such as government policies, infrastructure development, and economic conditions, also play a significant role in shaping the challenges and opportunities for the air cargo industry in any specific region.

ZGSC: What positives can you see in the industry today and do you see potential for the future?

COLIN RHODA: Zambia is rich in natural resources, including copper, cobalt, and other minerals. The mining industry has traditionally been a significant contributor to the country’s economy We have fertile land suitable for agriculture. The agriculture sector has the potential for growth, contributing to food security and exports.

We have abundant renewable energy resources, particularly hydropower. Investments in renewable energy projects can contribute to sustainable development.

We boast of natural wonders such as Victoria Falls and diverse wildlife. The tourism sector has the potential for growth, attracting visitors to the country’s national parks and cultural sites. We have ongoing and planned infrastructure development projects, including roads and energy projects, aim to enhance connectivity and support economic activities.

Zambia has a youthful population, and leveraging this demographic dividend through education and skills development programs can contribute to economic growth.

Participation in regional and international trade agreements can open up new markets and opportunities for Zambian businesses.

Government initiatives aimed at economic diversification, poverty reduction, and job creation can positively impact various industries.

ZGSC: Could Zambia become an aircargo hub for the region?

COLIN RHODA:Most definitely, given it’s land-locked geographical position .As we speak, private-owned Zambian airline Proflight is in the process of setting up a regional freighter operation which will initially operate between KKIA and ORT, Johannesburg with plans to expand to other regional destinations. The idea is to compete with roadfreight operations to reduce cross border delays and improve transit costs, with particular emphasis on more expensive imports .

Zambia’s central location within the Southern African region could make it strategically positioned as a transportation hub. Proximity to key markets and trade routes is crucial for the success of an air cargo hub.

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Supportive government policies, including trade-friendly regulations, incentives for businesses, and a commitment to developing the aviation sector, are crucial for attracting investments and fostering growth.

Ensuring the security of air cargo is paramount.

Adhering to international security standards and implementing robust security measures will build confidence among cargo carriers and clients.

Facilitating trade and reducing bureaucratic obstacles can attract businesses looking for efficient logistics solutions. Simplifying import/ export procedures and documentation processes is crucial.

It’s important to note that the success of becoming an air cargo hub involves a combination of these factors and may take time. The government, in collaboration with private sector stakeholders, needs to work towards creating an environment that is conducive to the growth of the aviation and logistics sectors. Regular assessments and adjustments to strategies will be necessary to address challenges and seize opportunities. Additionally, the global and regional economic climate, as well as changes in trade dynamics, should be considered in the long-term planning process.

compliance with regulations and assess the efficiency of customs processes to avoid delays in the supply chain.

Establish strong partnerships with local suppliers, distributors, and logistics providers.

Building relationships with reputable local partners can enhance the efficiency and reliability of your supply chain.

Explore any government incentives or investment promotion programs that may be available for businesses in Zambia. These incentives can support your supply chain and overall business operations.

By thoroughly assessing these factors and tailoring your supply chain strategy to the local context, you can position your business for success in Zambia. It’s also advisable to seek guidance from local experts, industry associations, and government agencies such as the Zambia Development Agency (ZDA) to gain insights and support for your investment.

ZGSC: What factors should a business consider when looking at Air/Sea/Road/Rail Cargo?

COLIN RHODA: When a business is considering transportation options for moving goods, several factors come into play. The choice between air, sea, road or rail cargo involves assessing various considerations to find the most suitable and cost-effective solution for the specific needs of the business. The key factors being: • Cost • Speed • Transit time • Reliability and Schedule When deciding on the optimal transportation mode, businesses often engage in a thorough analysis of these factors, considering the specific nature of their goods, destination, budget, and timeframe. Additionally, a multimodal approach, combining two or more transportation modes, may be considered for certain shipments to optimize cost and efficiency. Using a frieght forwarder or agent based in Zambia can make this process significantly easier.

ZGSC: What advice would you give a potential investor before they do business in Zambia as far as Supply Chain is concerned?

COLIN RHODA: Understand the local business environment! Analyse the local business landscape, regulatory landscape and market condition. Familiarize yourself with local laws, trade regulations, and business practices.

Evaluate the transportation and logistics infrastructure in Zambia, including road, rail, and air connectivity. Consider how well the existing infrastructure supports efficient supply chain operations.

Gain a clear understanding of customs and import/export procedures in Zambia. Ensure

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ASPHALT VS CONCRETE ROADS:

CHOOSING THE RIGHT PATH FOR SUSTAINABLE INFRASTRUCTURE The age-old debate between asphalt and concrete for road construction continues to influence infrastructure decisions globally.

Each material offers unique characteristics, making the choice between them dependent on specific project requirements.

Asphalt, a flexible mixture of aggregates, binder, and filler, is renowned for its adaptability to temperature changes. Its flexibility reduces the risk of cracking, making it a suitable choice for regions with varying climates. Asphalt roads also provide a smoother ride, reducing vehicle maintenance costs and fuel consumption. Moreover, their dark surface aids in snow and ice melting, especially beneficial in colder climates.

On the other hand, concrete, composed of cement, water, and aggregates, boasts unpa­ralleled durability and strength. While concrete roads may involve a higher initial cost, they offer a longer lifespan and reduced maintenance needs. Their rigid structure is ideal for high-traffic areas and industrial zones, providing a robust foundation that

withstands heavy loads.

The environmental impact is a significant consideration in the decision-making process.

Asphalt is more eco-friendly in production and allows for easier recycling. Concrete, while energy-in­ tensive in production, is seeing ad­ van­ cements in environmentally friendly technologies.

Ultimately, the choice between asphalt and concrete roads depends on factors such as climate, traffic load, and budget constraints. Striking a balance between flexibility and strength, cost-effectiveness, and environmental impact ensures a road surface that meets the specific needs of each project.

Zambia has an abundance of all the raw ma­terials required to build concrete roads, although cost is and always will be, the most im­portant factor in infrastructure projects for most developing nations; as traffic and industry increases so will the value of longer lifespan infrastructure and this should mean that more projects will consider implementing concrete roads.

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DISCLAIMER: While every care has been taken in compiling the contents of this section from the latest information available, all tariffs and regulations may be subject to change, therefore ESSE Clearing do not assume any responsibility for errors and omissions or changes that may occur in the effects there from.

BORDER NEWS AND TARIFF UPDATES

There are delays with VET permit Control of Goods permits. The Ministry is working to fix the shortage of printed COGA permits.

The VET permit application system will be going online soon. Importers and exporters, please make sure you are ready to comply with the regulations to avoid delays at the border.

We will communicate the official notification and implementation.

IMPORT PERMITS

The procedure of obtaining import and export permits for animals and animal products into Zambia is expected to be made available online at the beginning of this year. It is anticipated that there will be a requirement for strict compliance involving the Control of Goods permits as well as the Customs Excise classifications.

CLEARING AGENTS MANAGEMENT MODULE – USER GUIDE

Changes to Customs Declarations for Importers with Tax Incentives Effective September 30, 2023. Importers who receive customs rebates or incentives are required

to electronically appoint customs clearing agents through the Clearing Agents’ Management Module. This notification is applicable to both beneficiaries of tax incentives and the general

public.

We strongly advise that this is actioned sooner rather than later to: • Protect your TPIN and • Avoid unnecessary delay at the border.

SADC HOLDS STAKEHOLDER CONSULTATIVE WORKSHOP ON KASUMBALESA CHALLENGES

In a successful collaboration bet­­ ween the Southern African De­ velopment Community (SADC) Sec­re­ tariat and Deutsche Gesellschaft für Internationale Zusam­ menarbeit (GIZ), a 3-day stakeholder con­sultative work­ shop was held in Lusaka, Zambia, from November 22-24, 2023. Delegates from the Democratic Republic of Congo (DRC) and the Republic of Zambia, re­ presenting various sectors such as trade, customs, security, in­ frastructure, and more, attended the workshop.

The workshop, convened in response to a directive from the 43rd SADC Summit, aimed to address

challenges faced by transporters and drivers at the Kasumbalesa border post. Mr. Dhunraj Kassee, Director of Industrialisation and Trade Department at the SADC Secretariat, emphasized the strategic importance of the Kasumbalesa border post, situated at the crossroads of key trade corridors in the SADC region. Resolving challenges at Kasumbalesa is crucial for facilitating seamless cross-border movement of goods along corridors such as the North-South Corridors, Dar es Salaam Development Corridor, Walvis BayNdola-Lubumbashi Corridor, Beira Development Corridor, and the Lobito Development Corridors.

The 2024 tax changes are now in effect. To find

2024 details on the amendments to the Customs and BUDGET TAX Excise Act in the budget, you can refer to the 2024 CHANGES Budget Highlights on the link provided, as well as November and December 2024 Newsletters.

NOW IN our ESSE Clearing will continue to provide regular EFFECT updates on amendments and their implications.

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2024 BUDGET HIGHLIGHTS: OVERVIEW OF PROPOSED TAX CHANGES

CUSTOMS AND EXCISE MEASURES EXPORT PROCEEDINGS TRACKING

Effective from January 1, 2024, the Bank of Zambia has implemented an electronic export proceedings tracking framework. All exporters are required to have and maintain an account with a bank in Zambia. The exporter’s TPIN will be linked to the central bank. With this framework, the Bank of Zambia aims to guarantee that all export invoices go through a financial institution, helping the government accurately evaluate the export volume.

ZAMBIA AND DRC SET TO ACTIVATE CHALWE-KABILA ONE STOP BORDER POST

Zambia and the Democratic Republic of Congo have signed bilateral agreement for Chalwe-Kabila One Stop Border Post implementation and operation.

The Chalwe-Kabila One Stop Border Post, a pioneering initiative between Zambia and the Democratic Republic of Congo, is expected to boost economic growth in the region. This border post aims to enhance infrastructure and streamline trade facilitation, potentially opening up new opportunities for trade and development.

NB: This ONLY comes into effect (1) 1st January 2023 and (2) if ratified by Parliament.

Remove customs duty on specific machinery and equipment that are utilized in the exploration of oil and gas.

Remove customs duty on machinery, equipment, and other goods that are specifically designed for geothermal energy activities.

Extend Customs Duty benefits for Multi-Facility Economic Zone developers to 15 years from 5 years, subject to defined circumstances.

Introduce and/or increase Selected Goods Surtax (SGS) on the following products that are locally manufactured: (1) The proposed rate for tiles with H.S Codes 6904.90.10 and 6907 is to be increased from the current rate of 5% to 30%.

(2) Mattresses classified under H.S code 9404.21.00 increase from 5% to 20%.

(3) Introduce a 5% rate for laminated panels used for building and cold storage insulation under HS code

9406.10.10.

(4) Introduce a 5% rate for Glass falling under H.S codes 7005.10.00; 7005.29.00; 7003.19.00; 7003.30.00; 7004.90.00.

(5) Introduce a 5% rate for baby diapers on H.S code 4818.40.10.

Increase of customs duty rate on all imported electrical panels (distribution boxes) of HS Code 8537.10.00 to 25 percent from 15 percent.

Increase the specific Excise Duty on non-alcoholic beverages (including UHT

juices) to K0.60 (60 ngwee) per litre from K0.30 (30 ngwee).

Increase the specific Excise Duty rates for tobacco and tobacco products to K400 per mille from K361 per mille.

Introduce Excise Duty at 5% on Coke and semi-coke of coal, of lignite or of peat, whether or not agglomerated of HS Code 2704.

Change the basis of excise valuation for spirits, liqueurs and other spirituous beverages to be determined on the basis of market price and not the value of the input at importation.

GOVERNMENT UNVEILS GEMSTONE MODULE

TAX CLEARANCE CERTIFICATE SUSPENSION

The Ministry of Mines and the Zambia Revenue Authority (ZRA) have introduced an online module for reporting gemstone production and obtaining export permits. This new system aims to improve the management of

gemstone production reports and compliance procedures in Zambia.

ZRA Commissioner Ge­neral Di­­ ngani Banda has ur­ged the gem­ stone industry players to ensure compliance to avoid penalties.

The Zambia Revenue Authority has issued a cautionary statement regarding the importance of timely filing of tax returns and making payments. It has been emphasized that failure to comply with these requirements will result in the automatic suspension of all issued Tax Clearance Certificates. It is important to file your returns and make payments before the due date in order to prevent any complications.

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OPM VS OEM

AN IMPORTANT DEFINITION O

EM (ORIGINAL EQUIPMENT MANUFAC­ TURER) is a well known term in the equipment industry, but do we clearly understand the meaning when it comes to parts, OEM in terms of parts refers to the parts fitted at the factory in the manufacturing process of equipment. In many cases these are parts produced and manufactured by the OEM themselves but often they are parts supplied by another manufacturer that specialise in those components for example starter motors, alternators or bearings.

Looking for the OPM (ORIGINAL PART MANUFACTURER) can often lead you to the exact same part that is fitted as OEM at the factory only with one major difference; Price!

Because OEM parts often means transporting, repackaging and re-branding parts that are supplied by the OPM they will often charge 50%100% or more than the company that makes the part, without making any changes at all.

Procurement specialty companies such as TUATH Investments based in Zambia source directly from the original part manufacturer (OPM) to ensure you can get the original quality at a fair price.

TUATH INVESMENTS LTD. 16

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ZDA 2023 PERFORMANCE HIGHLIGHTS AND ECONOMIC IMPACT DIRECT EXTRACT FROM: Statement by the Zambia Development Agency Board Chairperson, Prof. Biemba Maliti on the Agency’s Performance in the year 2023 and outlook for the year 2024 Date: 28th December, 2023 As ZDA, we recognise, the media as an important partner and value your role in helping the Agency reach diverse audiences with critical messages around Investments, Trade and Business Development.

OVERVIEW OF THE BUSINESS ENVIRONMENT 2023 The Country’s macroeconomic environment was resilient and relatively stable amidst external and internal.

1. Exchange Rate Kwacha in relation to major convertible currencies averaged K19.76 to US$1.

2. Market Lending Rates The lending rates averaged 25.5% in the period under review.

3. Inflation Rate The inflation average 10.65% in the period under review.

4. Approval of Zambia’s Extended Credit Facility for Debt Restructuring Due to good economic governance and fiscal discipline, Zambia’s official creditors finalised a $6.3bn debt restructuring agreement, which paved the way for the disbursement of $188m from the International Monetary Fund (IMF), a significant milestone towards economic recovery & growth.

Further, Government and the International Monetary Fund (IMF) completed the second review of the Extended Credit Facility (ECF) for Zambia which contribute towards aspirations to achieve fiscal and debt sustainability expected to result in restoration of investor confidence.

The completed second review of the Extended Credit Facility will trigger the disbursement of approximately US$187 million while the World Bank will disburse a grant of US$125 million.

This support will help restore Zambia’s macroeconomic stability, create fiscal space as well as promote private sector led inclusive growth.

PERFORMANCE OVERVIEW The Agency continued to drive its trade and investment agenda by implementing a number of programmes that included targeted trade and investment missions as well as facilitating business development services aimed at enhancing the growth and competitiveness of businesses in key sectors of the economy as follows: 1. Investment Promotion and Business Facilitation • US$39.95 billion worth of committed investments were recorded in 2023 from 379 Investment projects compared to US$ 8.61 billion recorded in 2022 from 359 projects, representing an increase of 364 percent.

• The Manufacturing sector recorded the highest investment worth US$ 19.72 billion followed by energy with US$8.9 billion, mining with US$ 6.04 billion and Transport with US$ 1.65 billion.

• In addition, 160,280 jobs were committed from the 371 investment projects recorded in 2023 compared to 75,320 jobs committed from the 359 investment projects recorded in 2022, representing a percentage increase of 113 percent.

• I am glad to report that the Agency exceeded its target in both committed investments and jobs in 2023.

2. Actualised Investments • The Agency undertakes monitoring and evaluation of enterprises as a way of

ascertaining the level of project implementation and actualisation.

• During the period under review, 232 Investment Projects were monitored in various sectors recording actualised investment of US$ 2.1 billion and 25, 890 jobs.

• The actualised projects are a sample of committed projects registered with the Agency between 2021 and 2022.

• The monitored projects are at different levels of implementation including construction, procurement of machinery and equipment, installation and production.

3. Export Development and Promotion • US$ 11.8 billion total exports were recorded in 2023 out of which USD 7.58 billion were traditional exports while US$ 4.22 billion were Non-traditional exports (NTEs); • Total exports earnings increased by 2.15 percent from US$ 11.65 billion recorded in 2022 to US$ 11.80 billion in 2023; • NTEs increased by 19.9 percent from US$ 3.52 billion recorded in 2022 to US$ 4.22 billion recorded in 2023; • The Agency facilitated market access for 283 exporters to potential buyers in Congo DR, Botswana, Mozambique, South Africa and Angola among others; • 347 exporters were trained in export readiness; and • 726 exporters accessed trade information.

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OUTLOOK FOR 2024 1. Online Applications: ZDA launched the online application Portal enabling both local and international investors from around the world to apply for an Investment License, SME Registration, MFEZ Operator Permit and MFEZ Developer License from the comfort of their homes or offices. With this development, the Agency is phasing out the physical registration and will be fully online before the end of quarter 1 of 2024.

2. Enhanced Investment Promotion: With the promulgation of Statutory Instrument (SI) No. 47 of 2023 which increases the list of priority sectors, the Agency will leverage on the SI to upscale targeted investment promotion programmes and missions (inward and outward missions) in the bid to stimulate and attract investments into the country.

3. Make in Zambia Investment Conference (MIZIC): One of the major planned investment platforms is the MIZIC scheduled to take place in the fourth of 2024.

4. Other focus areas include: • Facilitate development of Special Economic Zones; • Virtual deal room; • Tracking for investments; • Electric vehicle batteries and battery accessories value chain; • Renewable energy; and • Promote Climate Smart Investments.

5. Upscale Export promotion and Development: • The Agency is increasing the number of Trade Missions into the Democratic Republic of Congo (DRC). As you may be aware, DRC is Zambia’s largest market for nontraditional exports; • Participate in trade fairs in regional markets such Angola; • Enhance participation of Zambia in the Africa Continental Free Trade Area; • AGOA market; • China; and • Middle East.

6. Business Development Services: Beef and crop zones Key • Create beef and crop zones for domestic and export markets • Development and promote cotton, leather, and beef value chains • Facilitate product development for domestic and export markets; • Market linkages and facilitation of partnerships and joint ventures; and • CDF packaging of value chains and projects.

7. Decentralization: Opening of new offices in Copperbelt and Northwestern Provinces.

In closing, I would like to thank you all for your attention and encourage you to share this information with the public.

As per commitment, we shall continue to hold Media Briefings every quarter in order to keep the nation informed of the performance and activities by the Agency in its bid to promote and facilitate trade and investment for wealth and employment creation.

Should you have queries or clarifications before these scheduled Media Briefings, please do not hesitate to reach out to our Communications and Public Relations office

For queries or any further information, Contact the Communications and Public Relations Unit, Zambia Development Agency, Nasser Road, Privatisation House, P.O. Box 30819, Lusaka | Email: info@zda.org.zm | Tel: +260 211 220 177

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which is always available to provide you with the requisite information.

God bless you and our great nation Zambia.

Joint Effort in Advancing African Infrastructure:

Memorandum of Understanding Signed for Lobito Corridor and Zambia-Lobito Rail Line REF: MEDIA NOTE | OFFICE OF THE SPOKESPERSON -US DEPARTMENT OF STATE | OCTOBER 26, 2023

I

n a historic development, the African Development Bank and Africa Finance Corporation (AFC) have joined forces with the United States and the European Union to pledge support for the development of the Lobito Corridor and the new Zambia-Lobito rail line.

The collaborative effort was formalized through the signing of a comprehensive Memorandum of Understanding (MoU), involving seven key stakeholders, on the sidelines of the Global Gateway Forum in Brussels, Belgium.

The MoU outlines the shared commitments of the signatories to collaborate across diverse sectors to unlock the full economic potential of the Lobito Corridor. This initiative builds on the earlier Lobito Corridor Transit Transport Fa­ c­ ili­ tation Agency agreement, signed by the governments of Angola, the Democratic Republic of Congo, and Zambia in January.

Central to this collaboration is the ambitious development of the Zambia-Lobito greenfield rail line, designed to connect northwest Zambia to the Lobito Atlantic Railway and the port of Lobito. This venture is hailed as the most significant transport infrastructure development facilitated by the United States on the African continent in a generation, promising to elevate regional trade, growth, and connectivity.

Demonstrating the Partnership for Global Infrastructure and Investment (PGI) in action, this strategic transport infrastructure project leverages both Western and African capital.

It not only facilitates regional trade but also opens avenues for additional investments in crucial sectors such as digital connectivity,

MoU, Africa Finance Corporation will collaborate with all parties involved to initiate feasibility and preparatory studies, crucial steps expected to commence before the end of the year. The project’s commitment to international standards regarding labor, environment, and quality reflects its potential to set a benchmark for future infrastructure development in the region. agriculture value chains, green energy supply chains, and rural health center electrification.

The initiative aligns with President Biden’s vision for PGI, providing a credible alternative for infrastructure development in low- and middle-income countries globally.

Representing the United States, Deputy Assistant to the President for Energy and Investment, Amos Hochstein, and the European Union, Commissioner for International Part­ nerships, Jutta Urpilainen, joined counterparts from Angola, the Democratic Republic of the Congo, and Zambia, as well as representatives from the African Development Bank and Africa Finance Corporation in signing the MoU. This initiative signifies a concrete step towards the realization of the connected, openaccess rail network from the Atlantic Ocean to the Indian Ocean. Following the signing of the

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PARTNERSHIP FOR INVESTMENT AND GROWTH IN AFRICA

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IGA is a partnership of the Government of the United Kingdom of Great Britain and Northern Ireland’s Department for International Development (DFID), China-Africa Development Fund (CADFund), China Council for the Promotion of International Trade (CCPIT) and the International Trade Centre (ITC).

Under this partnership, DFID, CADFund, CCPIT and ITC deliver together a project to increase investment-led exports and local development in two productive sectors, agro-processing and light manufacturing.

PIGA was officially launched on 22 October 2015 in London, on the sidelines of Chinese President Xi Jinping’s state visit to the UK. PIGA, is a component of Invest Africa, a large DFID programme linking private sector investors, buyers, financiers and governments in several African countries to boost manufacturing and create jobs by increasing foreign direct investment (FDI).

PROJECT GOAL To increased exports, jobs and local development through foreign investments and business partnerships in agro-processing and light manufacturing sectors in Ethiopia, Kenya, Mozambique and Zambia.

To achieve the project goal, the PIGA main phase activities are: FACILITATE AND GENERATE BUSINESS PARTNERSHIPS BETWEEN AFRICAN AND CHINESE COMPANIES • Organizing B2B events, investment awareness seminars and visits of Chinese investors to Africa • Building capacities of African companies to

receive FDI and technology transfer • Promote linkages between investors and local suppliers STRENGTHEN CAPACITIES TO DELIVER INVESTMENT SERVICES • Improve Trade and investment support institutions’ (TISI) investment promotion services • Develop investment guides and online investment information platforms for foreign investors • Improve TISIs effectiveness in measuring and monitoring FDI OVERCOME OBSTACLES TO FDI AND ENABLE KNOWLEDGE SHARED (UK-CHINA-AFRICA) • Conduct public-private roundtables at national level to address reported challenges

by investors • Organize Investment Business Summits and workshop for experience and knowledge sharing BRINGING SUSTAINABLE CHINESE INVESTMENT TO AFRICA The Partnership for Investment and Growth in Africa (PIGA) aims to increase growth and job creation in Ethiopia, Kenya, Mozambique, and Zambia by promoting sustainable Chinese investments in the agro-processing and light manufacturing sectors.

Through PIGA, the International Trade Centre (ITC) has: Facilitated seven investment deals worth more than $115 million to four PIGA countries. These investment deals generated 2,989 jobs and more than 14,500 committed to future development.

Organized 20 business and investment promotion events and seven roadshows with more than 1,700 African, Chinese, and UK stakeholders participating.

Developed 35 kinds of investment promotion materials with African Investment Promotion Agencies (IPAs).

Trained more than 800 IPA staff to improve their investment promotion services, and customized and implemented a Foreign Direct Investment tracking tool within each IPA. Source: “ITC, Partnership for Investment and Growth in Africa (Main Phase), https:// intracen.org/our-work/projects/partnershipfor-investment-and-growth-in-africa-mainphase,19/01/24”

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COMESA CROSS BORDER TRADE INITIATIVE:

FACILITATING SMALL-SCALE TRADE ACROSS THE BORDER

ITC and COMESA on Going Project This project is designed to implement selected activities of the COMESA Cross Border Trade Initiative (CBTI) programme, which aimed at facilitating small-scale trade across borders of targeted countries.

The initiative is funded by the European Commission under the 11th European Development Fund. The project will be implemented within the framework of the Co-delegation agreement signed between COMESA and ITC in June 2018.

The project has a general objective of increasing formal small-scale cross-border trade flows in the COMESA/tripartite region, leading to higher revenue collection for governments at targeted borders as well as increased security and higher incomes for small-scale cross-border traders. It has a specific objective of facilitating small-scale cross border trade flows between targeted countries through institutional capacity building and better data collection and monitoring.

SOURCE: “ITC, COMESA Cross Border Trade Initiative: Facilitating Small-Scale Trade Across the Borders, https://intracen.org/our-work/projects/comesa-cross-border-trade-initiative-facilitating-small-scale-trade-across-the,02/01/24”

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SHETRADES ZAMBIA:

INCREASING THE PARTICIPATION OF WOMEN IN TRADE

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he purpose of the SheTrades Zambia project is to increase the participation of women-led businesses in trade by improving their competitiveness and strengthening their market and investment linkages. The project seeks to enable Zambian women to benefit from economic participation, focusing on agricultural and textiles & apparel value chains. Within the framework

of the International Trade Centre’s SheTrades Initiative, the project will work with key public and private stakeholders to address issues that are inhibiting Zambian women from fulfilling their economic potential.

Funded by EIF and ITC, the project will leverage the expertise and networks of ITC SheTrades and EIF to promote the economic empowerment of women entrepreneurs. The

project will be implemented in collaboration with the Ministry of Trade, Commerce and Industry, and the Zambia Development Agency (ZDA) as well as making use of networks of institutional and private sector partners such as the Zambia Federation of Associations of Women in Business (ZFAWIB), Access Bank Zambia, DHL Zambia and Stanbic Bank.

SOURCE: “ITC, SheTrades Zambia: Increasing the participation of women in trade, https://intracen.org/our-work/projects/shetrades-zambia-increasing-the-participation-of-women-in-trade, 05/01/2024” 22 Z A M B I A G LOB A L S U PPLY CH A IN | E N GAGIN G T H E FU T URE

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