September 2007


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zambia_01.jpgDid anybody remember what today is? It is September the 28th and the smart people of the Zambian Enterprise went to the polls a year ago.

It was a frenzy day, all the candidates had put in their very best, and their machineries were sitting at the edge.

The air was ecstatic, some tempers high in certain places and the world was watching … No one knew for sure who that actual victor would be … it ended up being the incumbent recapturing the crown.

We were the first ones to congratulate the president for his sweet victory even if our candidate of choice was HH for stood under UDA auspices. We are the first ones today to wish the president God speed on this first anniversary of his sweet victory in consolidating his party’s lead offering the much-needed leadership.

We have watched the president grow in eminence and grow comfortable in the job … Meanwhile, according to ZNBC 250 members of the ruling Movement for Multi Party Democracy (MMD) who include the entire district committee in Chongwe in Lusaka province, have defected to the opposition UPND. 

Nevertheless, MMD chairperson for elections and chief government spokesperson Mike Mulongoti said while the cadres are exercising their right to join a party of their choice, the ruling party will probe the cause of their defections. 

Former Chongwe District MMD Chairperson Willie Shaila led the defectors. Mr Shaila said the ruling party was dead in the district hence their decision to defect.  And receiving the defectors at Chongwe grounds, UPND president Hakainde Hichilema said the opposition party is committed to poverty eradication.

Mr Hichilema said the UPND has room to accommodate 12 million Zambians. When contacted for a comment, Mr. Mulongoti wished the defectors good luck saying it is their democratic right to do so. 

Mr. Mulongoti said the defections are not good riddance, as the ruling party will investigate why some of its members have defected to the opposition. 

Mr. Hichilema has been doing a lot of things right since the last election and like president Mwanawasa has grown on the job, we continue to see him growing into a formidable “politician” – it is not enough to be a good leader with weak political acumen. 

He recently donated vehicles to continue mobilizing and growing his party. He continues to grow more and more comfortable being a leader of party with fresh growth coming up and come 2,011; we see an appealing contender with the ability to be the next president and that is this week’s memo from us at the Zambian Chronicle … thanks a trillion.   

Brainwave R Mumba, Sr.

CEO & President – Zambian Chronicle  

Copyrights © 2007 Zambian Chronicle. All rights reserved. Zambian Chronicle content may not be stored except for personal, non-commercial use. Republication and redissemination of Zambian Chronicle content is expressly prohibited without the prior written consent of Zambian Chronicle. Zambian Chronicle shall not be liable for any errors, omissions, interruptions or delays in connection with the Zambian Chronicle content or from any damages arising therefrom.

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Thu 27 Sep 2007, 12:44 GMT

By Shapi Shacinda

LUSAKA (Reuters) – The International Monetary Fund (IMF) has backed Zambia’s plans to raise mineral royalty to 3.0 percent from 0.6 percent and urged the government to limit its external commercial borrowing, a senior Fund official said.

The IMF, which concluded its fifth review of Zambia’s economic performance on Wednesday under the poverty reduction growth facility (PRGF), a three-year lending programme, said it was satisfied with macroeconomic performance.

“The IMF mission supports the authorities’ efforts to obtain greater revenue from the mining sector through the renegotiation of the fiscal terms of existing development agreements,” Francesco Caramazza, IMF mission chief for Zambia said in a statement released late on Wednesday.

“In this regard, efforts should be bolstered to increase revenue, through both tax policy measures and improved administration, shift spending to high priority areas, and raise the efficiency of public expenditure,” Caramazza said.

Zambia plans to raise corporate tax for the foreign copper mines to 35 percent from the current 30 percent while other taxes such as land rates could also be increased.

Finance Minister Ng’andu Magande said in August that Zambia would engage foreign consultants to help it renegotiate mining development agreements.

The Treasury awarded concessions on taxes to foreign mining firms after a near collapse of the vast copper mines in the early part of this decade.

Copper mining is Zambia’s economic lifeblood and remains a major employer in the country of 11.5 million people, where analysts say IMF-driven economic programmes have largely been successful.

“Recourse to external borrowing on commercial terms should be limited and only be made in the context of a sound debt management strategy and only for projects that are clearly economically viable,” Caramazza said.

Caramazza said Zambia’s fiscal management had been significantly strengthened, which, along with prudent monetary policy and the appreciation of the exchange rate, has caused inflation to fall sharply.

“The Zambian economy has performed well in recent years, reflecting strengthened macroeconomic policies, a marked improvement in the external environment, and extensive debt relief,” he added.

Caramazza said debt relief under the Heavily Indebted Poor Country (HIPC) Initiative and the Multilateral Debt Relief Initiative (MDRI) as well as the revival of the mining sector have strengthened Zambia’s external position and bolstered investor confidence.

“The mission projects GDP growth this year to exceed 6 percent and to remain buoyant over the medium term,” Caramazza said, reiterating the Fund’s earlier projection.

Fiscal breathing room created by debt cancellation in 2006 should allow Zambia to focus on spending more in education, health care, poverty reduction and infrastructure development, the Fund added.

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From EMMERSON MUCHANGWE in New York

front01.jpgTHE European Union (EU) will not discriminate against any African leader when inviting them to attend the Africa-Europe summit in Portugal in December this year.

This came to light in New York yesterday when President Mwanawasa, the chairman of Southern African Development Community (SADC), held closed-door talks with Portuguese Prime Minister Jose Socrates, the chairperson of the EU, on the sidelines of the United Nations (UN) General Assembly to discuss the EU-Africa summit.

Portugal Secretary of State for Foreign Affairs Joao Gomes Cravinuo said it was unfortunate that the issue of Zimbabwe’s invitation was being given more prominence at the expense of other issues.

Mr Gravinuo said Portugal would not discriminate when inviting delegates to the summit.

“The issue of Zimbabwe’s participation at the EU-Africa summit will not
hinder the holding of a successful summit,” Mr Gravinuo said.

He said the EU and Portugal, in particular, were interested in seeing more cooperation between Europe and Africa.

He said the Portuguese Government felt that it should consult President Mwanawasa on the preparations of the summit because he chairs SADC, “which is a very strong regional grouping.”

Briefing journalists after the meeting, Minister of Foreign Affairs Kabinga Pande said the Portuguese Prime Minister updated Mr Mwanawasa on the preparations for the Lisbon summit.

Mr Pande who was among the senior officials that attended the closed-door talks, said President Mwanawasa was happy that preparations for the summit had reached an advanced stage.

The Lisbon EU-Africa summit will be the second such high-level meeting between Europe and Africa.

The first was held in Cairo, Egypt in 2003.

Earlier, when he met President Mugabe, President Mwanawasa maintained that the official position of SADC was that none of the member countries would attend the Lisbon summit if Mr Mugabe was barred.

Mr Mwanawasa summed up the position of SADC as “No Mugabe, No Summit.”

Meanwhile, the EU Head of Delegation in Zambia, Dr Derek Fee, says the Zambia Daily Mail distorted his statement in which he said whilst he understood President Mwanawasa’s position as part of African solidarity, it had to be understood also that Mr Mugabe and his top officials still faced a travel ban to Europe.

A statement issued in Lusaka yesterday said: “Dr Fee wishes to clarify the remarks in the Zambia Daily Mail edition of Tuesday, September 25th, 2007, under the headline ‘EU blocks Mugabe’.”

“Although the EU travel ban against President Mugabe and his officials is still in force, this may not preclude President Mugabe from attending the summit,” he said.

The controversy was triggered last week after British Prime Minister Gordon Brown said he would boycott the summit if President Mugabe was allowed to attend.

Earlier in the day, President Mwanawasa held a private meeting with Mr.
Jack Greyuberg of Greyuberg Petroleum Company.

The meeting was one of the many lined up for the President to woo investors to Zambia on the sidelines of the ongoing UN 62nd General Assembly which opened on Monday. -ZANIS/Daily Mail

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The Times of Zambia (Ndola)
 

 

Emmerson Muchangwe
New York

President Mwanawasa has arrived New York in the US ahead of a tight programme during this year’s regular session of the United Nations (UN) General Assembly.

Mr Mwanawasa, who arrived on Saturday night via London aboard a British Airways plane, was met at JFK International airport by Zambia’s Permanent Representative to the UN, Lazarous Kapambwe and other senior embassy staff.

The President was driven straight to New York’s Palace Hotel where he is staying.

At the hotel, the President was received by Zambia’s Ambassador to the US, Inonge Mbikusita Lewanika, deputy permanent representative, Benard Mpundu and several other embassy staff.

The President is accompanied by Foreign Affairs Minister, Kabinga Pande, Agriculture and Cooperatives Minister, Ben Kapita, Science and Technology Minister, Peter Daka, Health Minister, Brian Chituwo, Education Minister, Geoffrey Lungwanga, Commerce, Trade and Industry Minister, Felix Mutati, Secretary to the Cabinet, Joshua Kanganja and Foreign Affairs Permanent Secretary, Tens Kapoma.

During his stay in New York, Mr Mwanawasa, who is also Southern Africa Community Development (SADC) chairperson, will take part in various discussions, prominent among which will be one on climate change.

Mr Mwanawasa will start his activities at the UN by attending a reception to be hosted by Secretary General, Ban Ki Moon, for all Heads of State attending the General Assembly.

The President will the be among the other Heads of State and Government who will participate in the opening of the 62nd regular session.

Mr Mwanawasa will also make a presentation on climate where he is expected to give a general view of how the SADC region has been affected by the changes in climate and how the various countries in the region are responding to the challenges of adapting to climate change.

The President will be part of the discussants in the plenary session to look at the issue of adaptation in more detail.

In the second plenary session which will look at the mitigation aspect, the President will be represented in the discussion by ministers of Agriculture and Health, Mr Kapita and Dr Chituwo respectively while in the plenary session on technology, Mr Daka and Professor Lungwangwa ministers in charge of Science and Technology and Education respectively would be among the discussants.

Others expected to partcipate in the discussions are Mr Mutati and Dr Kanganja in the fourth plenary session on financing aspect in relation to climate change.

The President will, among other activities, on Tuesday meet with Mr Jack Grynberg of Grynberg Petroleum Company to discuss various issues pertaining to investment before taking part in the round table discussion on human rights and democracy later in the day.

Mr Mwanawasa will on Wednesday deliver another statement to the General Assembly after which he will attend a general debate on the 62nd regular session of the United Nations.

The President will on Thursday travel to Arkansas State where he will receive an award from the Harding University before returning to New York where he will have several engagements including a meeting with Zambians living in New York on Saturday, at the Zambian mission.

On Sunday, Mr Mwanawasa will travel to Seattle in Washingston State where he will attend a business forum as well as meeting with several chief executives of various companies based in the US.

The President is also expected to attend to a number of business engagements in London before returning home in the first week of October.

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The factors boosting commodity prices such as copper, uranium, gold, cobalt, sugar, etc. are likely to continue, keeping those prices up …

The good times are here to stay in the short to medium term. Sugar is in high demand in the European Union and Nakambala can reap high returns from this. 

The price of gold, South Africa’s biggest export, has surged 16 percent this year, helping to underpin the currency for instance.  Copper has climbed 25 percent, benefiting Zambia, Africa’s biggest producer of the metal.

Overall, Sub-Saharan Africa is benefiting from rising prices of gold, oil and copper, helping the region’s economy expand an estimated 6.8 percent this year, from 5.5 percent last year. The challenge now is for countries like Zambia that are dependent on commodity exports to properly “manage” the commodity boom.

If we respect the truth, then we need to admit that commodity boom phases have not been managed well in the past, and we are at risk of making the same mistakes again. The main factors underpinning commodity prices were strong demand for platinum in devices that cut pollution in cars and rising demand in China and other emerging markets.

Still, commodity prices might drop, hurting growth in some African countries. To assume that current prices and the current boom phase reflects a permanent shift, rather than a temporary opportunity, would be a naive and risky approach to adopt. 

If our analysis is correct, then the slump will come and it will bring with it a significant decline in commodity prices but prudent asset management now would help governments that are diversified enough to transition into manufacturing, construction and service sectors.

 

 

 

However, with norminal GDP rising from $3.24 billion in 2000 to well over $10.71 billion in 2006; per capita GDP income thriving from $303.00  in 2000 to $902.00 in 2006; inflation falling from 26.1% in 2000 to just 9.2% for fiscal year 2006; tourism at its highest peak and a combination of other factors … the Zambian Enterprise is headed for some good times, that’s the memo this week from us at the Zambian Chronicle … thanks a trillion

 

Brainwave R Mumba, Sr.

CEO & President – Zambian Chronicle  

Copyrights © 2007 Zambian Chronicle. All rights reserved. Zambian Chronicle content may not be stored except for personal, non-commercial use. Republication and redissemination of Zambian Chronicle content is expressly prohibited without the prior written consent of Zambian Chronicle. Zambian Chronicle shall not be liable for any errors, omissions, interruptions or delays in connection with the Zambian Chronicle content or from any damages arising therefrom.

Zambian Chronicle is a wholly owned subsidiary of Microplus Holdings International, Inc.  

Copyrights © 2007 Microplus Holdings Int., Inc.  

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KARRATHA, Australia (AP) — For nearly three decades, Chinese peasants have left their villages for crowded dormitories and sweaty assembly lines, churning out goods for world markets. Now, China is turning the tables.

art.china.cars.ap.jpg

Robert Yu, president of Chinese car maker ZhongXing Automobile Auto, presents models in Tijuana, Mexico.

Here in the Australian Outback, Shane Padley toils in the scorching heat, 2,000 miles from his home, to build an extension to a liquefied natural gas plant that feeds China’s ravenous hunger for energy.

At night, the 34-year-old carpenter sleeps in a tin dwelling known as a “donga,” the size of a shipping container and divided into four rooms, each barely big enough for a bed. There are few other places for Padley to live in this boomtown.

Duct-taped to the wall is a snapshot of the blonde girlfriend he left behind and worries he may lose. But, he says, “I can make nearly double what I’d be making back home in the Sydney area.”

The reason: China.

For years, China’s booming economy touched daily life in the West most visibly through the “made-in-China” label on everything from clothes to computers. But now, economic growth is giving rise to something more that can’t be measured just by widgets and gadgets — a shift in China’s balance of power with the rest of the world.

China’s reach now extends from the Australian desert through the Sahara to the Amazonian jungle — and it’s those regions supplying goods for China, not just the other way around. China has stepped up its political and diplomatic presence, most notably in Africa, where it is funneling billions of dollars in aid. And it is increasingly shaping the lifestyle of people around the world, as the United States did before it, right down to the Mandarin-language courses being taught in schools from Argentina to Virginia.

China, like the United States, is also learning that global power cuts both ways. The backlash over tainted toothpaste and toxic pet food has been severe, as has the criticism over China’s support for regimes such as Sudan’s.

To understand why China’s influence is increasingly pushing past its borders, just do the math.

When 1.3 billion people want something, the world feels it. And when those people in ever increasing numbers are joining a swelling middle class eager for a richer lifestyle, the world feels it even more.If China’s growth continues, its consumer market will be the world’s second largest by 2015. The Chinese already eat 32 percent of the world’s rice, build with 47 percent of its cement and smoke one out of every three cigarettes.

China’s desire for expensive hardwood to turn into top-quality floorboards for its luxury skyscrapers has penetrated deep into the Amazon jungle. For example, in the isolated community of Novo Progresso, or New Progress in Portuguese, one of the biggest sawmills was started by the mayor with financing from Chinese investors.

China accounts for 30 percent of the wood exported from logging operations in remote towns across Brazil’s rain forest, where trucks carry the finished product hundreds of miles along muddy roads to river ports, said Luiz Carlos Tremonte, who heads an influential wood industry association. Many Chinese purchasers now travel to Brazil to clinch deals, and are almost always accompanied at business meetings by friends or relatives of Chinese descent who live there.

“Ten years ago no one knew about China in Brazil; then the demand just exploded and they’re buying a lot,” Tremonte said. “This wood is great for floors, and they love it there.”

The Bovespa stock index in Brazil has climbed more than 300 percent since 2002, riding the China wave.

China is buying coal mining equipment from Poland and drilling for oil and gas in Ethiopia and Nigeria. It has poured hundreds of millions of dollars into Zambia’s copper industry. It is the world’s biggest market for mobile phones, headed for 520 million handsets this year. The list goes on.

Along with looking to other countries for goods for its people, China is also going far and wide in search of markets for its products.

In war-torn Liberia, where electricity is hard to come by, Chinese-made Tiger generators keep the local economy humming. Costlier Western brands, favored by aid agencies and diplomats, are beyond the reach of small business owners such as Mohammed Kiawu, 30, who runs a phone stall in the capital, Monrovia.

A used Tiger generator costs around $50, he said over the steady beat of his generator. “But even $250 is not enough to buy a used American or European generator. They are not meant for people like myself.”

The Chinese generators are more prone to break down, Kiawu said. When the starter cable snapped on one, he replaced it with twine. But by making items for ordinary people, he predicted, China “will take control of the heart of the common people of Africa soon.”

China is having to make up for decades of economic stagnation after the communist takeover in 1949.

When Chinese leader Deng Xiaoping began dabbling in economic reforms in 1978, farmers were scraping by. By 2005, income had increased sixfold after adjusting for inflation to $400 a year for those in the countryside and $1,275 for urban Chinese, according to China’s National Bureau of Statistics.

“The Chinese don’t want war — the Chinese just want to trade their way to power,” said David Zweig, a professor at the Hong Kong University of Science and Technology. “In the past, if a state wanted to expand, it had to take territory. You don’t need to grab colonies any more. You just need to have competitive goods to trade.”

If China stays on the same economic track, it would become the world’s largest economy in 2027, surpassing the United States, according to projections by Goldman, Sachs & Co., a Wall Street investment bank. And unlike Japan, which rose in the 1980s only to fade again, China still has a huge pool of workers to tap and an emerging middle class that is just starting to reach critical mass. Many development economists believe China still has 20 years of fairly high growth ahead.

But the transition to a larger presence on the global stage comes with growing pains, for China and the rest of the world.

As Beijing plays an ever bigger role in the developing world, some Western countries fear it could undermine efforts to promote democracy. In its attempt to secure markets and win allies, China is stepping up development aid to Africa and Asia. Chinese President Hu Jintao pledged last year to double Chinese aid to Africa between 2006 and 2009, promising $3 billion in loans, $2 billion in export credits and a $5 billion fund to encourage Chinese investment in Africa. China has also promised Cambodia a $600 million aid package and agreed to loan $500 million to the Philippines for a rail project.

But China also extends aid to states such as Myanmar, Zimbabwe and Sudan whose human rights records have lost them the support of the West. Actress Mia Farrow has labeled next year’s Beijing Olympics — a point of pride for China — the “genocide Olympics” because of China’s support for Sudan, at a time when the West seeks to punish it for its military actions in Darfur. China buys two-thirds of Sudan’s oil output.

“In some ways, it will be integrating us into a new international order in which democracy as we’ve known it or the right to open organized political activity is no longer considered the norm,” said James Mann, author of “The China Fantasy,” a book about China and the West.

China is also facing some of the unease that powers before it have encountered. In Africa and Asia, some complain that massive China-funded infrastructure projects involve mostly Chinese workers and companies, rather than create jobs and wealth for the local population. And Moeletsi Mbeki, a political commentator and brother of South African President Thabo Mbeki, likens the trade of African resources for Chinese manufactured goods to former colonial arrangements.

“This equation is not sustainable,” Mbeki said at a recent meeting of the African Development Bank in Shanghai. “Africa needs to preserve its natural resources to use in the future for its own industrialization.”

The backlash is also coming on the consumer front, with Chinese goods earning a dubious reputation for quality. In the United States, there is a furor over the standard of Chinese imports. In Bolivia, vendors peel off or paint over any indication that their wares were “Hecho en China,” Spanish for “Made in China.”

A woman selling bicycles in El Alto, a poor city outside the capital, La Paz, insisted they were made in Japan, South Korea, Taiwan or even India. With some prodding, she acknowledged the truth. “They’re all Chinese,” she said, declining to give her name lest it hurt her business. “But if I say they’re Chinese, they don’t sell.”

Even those who benefit from China’s growth express some wariness. Aerospace giant Boeing expects China to be the largest market for commercial air travel outside the United States in the next 20 years, buying more than $100 billion worth of commercial aircraft, U.S. trade envoy Karan Bhatia said in a recent speech.

“Right now, we’re hiring every week,” noted Connie Kelliher, a union leader. “Things couldn’t be better.”

Yet Boeing workers remain wary of China’s ambitions to build its own planes. next year China plans to test-fly a locally made midsize jet seating 78 to 85 passengers. It has also announced plans to roll out a 150-seat plane by 2020.

“It’s kind of a double-edged sword,” Kelliher said. “You want the business and we want to get the airplane sales to them, but there’s the real concern of giving away so much technology that they start building their own.”

That’s what happened to Western and Japanese automakers, which made inroads in the Chinese market only to see their designs copied and technologies stolen. Already, China’s vehicle manufacturers are venturing overseas, exporting 325,000 units last year — mostly low-priced trucks and buses to Asia, Africa and Latin America.

“We’re taking a bigger piece of the pie,” said Yamilet Guevara, a sales manager for Cinascar Automotriz, which has opened 20 showrooms in Venezuela in the past 18 months, offering cars from six Chinese makers. “They ask by name now. It’s no longer just the Chinese car. It’s the Tiggo, the QQ.”

China’s biggest car company, Chery Automobile Co., just announced a deal with the Chrysler Group to jointly produce and export cars to Western Europe and the United States within 2-1/2 years.

Given the speed of China’s ascent, it’s perhaps not surprising that China itself is trying to calm some of the fears. Its slogan for the Beijing Olympics: “Peacefully Rising China.”

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$200m sugarcane project launched
By ANGELA CHISHIMBA
 

PRESIDENT Mwanawasa yesterday launched the Nakambala sugarcane expansion project estimated to cost US$200 million. President Mwanawasa said the expansion project had put Zambia in the league of the major sugar producers in the world.

“It is good that Zambia will not only be known by its production of copper but sugar as well,” he said.

The project would expand the country’s sugar exports mainly to the European Union.

He said the project would ensure increased income and creation of more jobs.

The President said the production of ethanol by Zambia Sugar would also help reduce the import bill for petroleum.

He was confident that most of the US$200 million to be pumped into the expansion programme would come from Zambian banks, which would in turn derive profits out of it.

Mr Mwanawasa urged Zambians to position themselves and ensure they benefited from the project.

He appealed to the Zambia Sugar management to continue supporting indigenous Zambians in order to support the Citizens Economic Empowerment Act.

He urged management to assist local people to take advantage of business opportunities that may arise following the launch of the expansion programme.

He was glad that Zambia Sugar Company decided to invest in Zambia at a time when most investors feared to invest in the country.

He said Zambia was an investor-friendly country.

He paid tribute to traditional leaders in Southern Province for releasing land to put up the Albidon Nickel Mining and Zambia Sugar expansion projects.

Mr Mwanawasa also urged investors to pay attention to concerns of local communities.

“Investors should ensure that they take the owners of the land on board,” he said.

President Mwanawasa also held a meeting with the company to discuss labour matters.

He could not, however, disclose what had been discussed.

And Zambia Sugar managing director, Paul de Robillard, said the sugarcane expansion project was approved at a cost of K840 billion on March 28, 2007.

The project is based on a 50 per cent increase in cane crushing capacity of the factory, linked to expanded sugar cane growing and the construction of new canals to deliver irrigation water to new areas of sugarcane development.

The project will also result in Zambia Sugar becoming fully self-sufficient in its own electricity requirements.

Mr de Robillard said the anticipated growth in production would come from a combination of Zambia Sugar’s own estate operations, commercial out-growers and small-scale grower schemes, both new and existing, totalling 10,500 hectares.

He said the first phase of the expansion had started and would be completed in time for the sugar season in April 2008.

Mr de Robillard said as an alternative market, the unrestricted European market access entitlements for least-developed countries (LDCs), including Zambia, to be effected in 2009, would provide a minimum underpin price for the increased production.Under the EU reformed sugar regime, the price for bulk raw sugar would be guaranteed at a level that is 33 per cent lower than the existing price.

Mr de Robillard said the unrestricted nature of this initiative for sugar exporters in LDCs would also enable Zambia access the full value chain existing in the EU sugar market.

This would open opportunities to earn commercial premiums currently not available to exporters due to the EU’s restricted quota system.

He said molasses production would increase to 95,000 tons by the end of the project and at that stage, a feasibility study to investigate the production of alcohol for national fuel pool would be undertaken.

“It is envisaged that if viable, an ethanol plant would be able to supply approximately 10 per cent of the country’s fuel requirements,” he said.

Source: Zambia Daily Mail

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