November 2008


 

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Officials from the International Finance Corporation will soon be in the country to finalise financing agreements for the construction of the Kafue Gorge Lower power project.

Commerce Minister Felix Mutati said the construction of the power station will cost one $1 billion.

He also disclosed that the African Development bank and another Chinese bank will give Zambia over $28 million to assist Zambian businesses expand.

He said this in Lusaka when he officiated at the Zambia Association of Chambers of Commerce and Industry Annual General Meeting.

Mr. Mutati also said the government will consider possibilities of reducing the International Gateway fee to make it affordable for the mobile phone service providers.

Although the International Gateway has been liberalised, the cost of using it, is pegged at $12 million which is considered to be out of reach for telecommunication providers.

Mr. Mutati also urged the business community to focus on opportunities that the global financial crisis presents rather than looking at the negative impact.

He said every crisis presents an opportunity which the private sector should be exploiting.

Copyrights © 2008 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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Finance Minister Situmbeko Musokotwane says Zambia’s Gross Domestic Product (GDP) will slow down next year compared to earlier estimates because of the global economic crisis.

Dr. Musokotwane said this is on account of the unexpected slow down in the mining and toursim sectors following the global crunch.

He said this when he issued a ministerial statement in Parliament Friday on the impact of the Global financial crisis on the Zambian economy.

The minister has also warned that low copper prices pose a significant threat to economic growth achieved over the last five years.

The minister however said Government has already initiated dialogue with mining companies to assess how best the impact of the crisis can be mitigated.

He said if the low copper prices continue future investments in copper mining may decline.

Dr. Musokotwane however said the mining sector is still expected to grow next year because production in new mines will start.

Meawhile Dr. Musokotwane said there is a possibility that the financial crisis may affect the 2009 national budget.

 

Meanwhile, the National Airports Corporation plans to spend K5 billion to expand facilities at Livingstone International Airport.

Airport Service Director, Prince Chitimbwe says this will be done to expand facilities at the airport which has seen an increase in flights.

He further disclosed that Lusaka International Airport will also be given a facelift but did not say how much the project will cost.

The facelift will include improving immigration facilities and rehabilitating of shops in the terminal.

He said the corporation can now afford to embark on such projects because the financial position is steadily improving.

Copyrights © 2008 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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The space shuttle Endeavour has returned to Earth after an eventful mission to repair parts of the International Space Station (ISS).

The shuttle’s landing site was switched from Florida to Edwards Air Force Base in California due to bad weather.

The shuttle touched down safely at around 1325 local time (2125GMT).

The mission had been extended by a day because Nasa wanted the shuttle’s crew to make repairs to a machine which makes drinking water from urine.

Lost tool bag

The shuttle, with a crew of seven, was piloted by Commander Christopher Ferguson.

“Welcome back. That was a great way to finish a fantastic flight,” Mission Control radioed.

“And we’re happy to be here in California,” Commander Ferguson replied.

Earlier on Sunday a Russian space vessel docked with the ISS, delivering food, clothes and Christmas presents.Russian flight engineer Yury Lonchakov remotely guided the Progress spaceship to a docking port after an automated system failed.

Endeavour’s mission saw the shuttle and its crew spend 16 days in space.

 

The equipment to provide drinking water from astronauts’ urine had failed several times since it was delivered two week ago.

Astronauts also took part in four spacewalks to repair a mechanism meant to keep the station’s solar panels pointed towards the sun.

The work was slower than expected because astronaut Heide Stefanyshyn-Piper lost her tool bag during the first spacewalk.

Inside the station, ISS commander Mike Fincke supervised work on the malfunctioning water regeneration system which distils, filters, ionises and oxidises wastewater – including urine – into fresh water.

 

Earlier, the system’s centrifuge – needed to separate solid particles from liquid as part of the distillation process – became unbalanced as it spun and shut down before the intended four-hour cycle was complete.

Nasa needs the new system operating before it can expand the station’s crew from three to six people, which is currently scheduled for May 2009.

The extended mission meant Endeavour’s crew celebrated Thanksgiving in space and did not leave the station until Friday.

Endeavour’s mission is the fourth and final orbiter mission of 2008.

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The bullet pockmarks on the wall were crudely patched, and the regular customers were waiting as Leopold’s shutters were rolled up, amid a cheering crowd, for the first time since terrorists opened fire here last week, killing 10 people.

“We need to prove to terrorists that we’ve won and they’ve lost,” says Ferhan Farzad Jehani, the defiant owner of Leopold’s – a favorite among locals and foreign backpackers alike, especially after it got several mentions in “Shantaram,” a popular novel loosely based on the life of author Gregory Roberts.

Leopold’s, located in a teeming market in the heart of Mumbai (Bombay), has been a daily stop for a middle-aged man named Lawrence, who is not comfortable giving out his last name. He arrived at the cafe just minutes after the shootout Wednesday.

“Backpackers come here with dog-eared copies of ‘Shantaram,’ ” says Lawrence. “The attack was meant to shoo them away. But I hope and pray that won’t happen.”

On Sunday, Lawrence returned to Leopold’s, where he ordered a steaming hot chelo kabab, a Persian delicacy made of mutton fillets, served with rice.

 

Although more were killed in the 1993 serial bombings that hit India, the terror attack last week is being touted as “India’s 9/11.”

The style and magnitude of the attack is unprecedented, many say. Mumbai has earlier endured bombings on commuter trains and public places, but this is perhaps the first time that gun-wielding men have stormed streets and posh hotels, indiscriminately opening fire on innocent civilians.

“This is the worst terror attack in India,” says Ram Puniyani, the secretary of the All India Secular Forum, a nongovernmental organization. “There’s widespread shock, but the city is known to bounce back.”

“‘Spirit of Mumbai’ is a used-and-abused phrase,” says real estate agent Lucky Handa. “It’s like lives come cheap in India. There’s attack after attack, and it doesn’t stop.”

Mr. Handa’s mother, Aruna Handa, was trapped for 36 hours on the 19th floor of the Taj Mahal Hotel. One of the 10 places struck by terrorists, the hotel was under siege for nearly 60 hours, before commandos gunned down all terrorists in the building Saturday morning.

Mrs. Handa emerged unscathed after being rescued by commandos, but the nightmarish incident has affected her, she says.

Some parts of this city, still shell-shocked, came to a grinding halt for a few hours on Friday afternoon as a rumor about another shootout unexpectedly rent the air. Shopkeepers closed their doors, cars turned back – jamming traffic – and fear prevailed on the streets.

Calm returned an hour later when, over loudspeakers, the police declared it was a false alarm.

There’s also some anger at India’s ruling political class over their perceived shortcomings in dealing with the repeated terror attacks in Indian cities.

In its dealings with terrorism, says Mr. Puniyani, India often harasses innocent civilians, and other times the response is just too soft.

“Pakistan’s ISI [Inter-Services Intelligence] chief has audaciously refused to come to India to help with the investigation,” says Mr. Handa. “What the heck is India doing about it? Nothing.”

On Saturday evening, after the siege at the Taj had ended, a bevy of angry protesters gathered outside the hotel. One placard held by one of the protesters read:

“Mr. Terrorist: I am alive. What more can you do?

Mr. Politician: I am alive despite you.”

Copyright © 2008 The Christian Science Monitor. All rights reserved.

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By Karamjit Kaur

SINGAPORE has inked two separate open air agreements with Romania and Zambia.The deal with the first allows Singapore carriers to operate an unlimited number of passenger and cargo flights between Singapore and points in Romania, as well as beyond the country to any other city in the world.

The same privileges are given to Romania-registered carriers.

The Singapore-Zambia open skies deal similarly allows both passenger and cargo carriers of Singapore and Zambia to operate any number of flights between and beyond both countries to any other city worldwide.

It is Singapore’s first such air deal with an African country, the Civil Aviation Authority of Singapore (CAAS) said on Friday.

Both pacts were inked during the International Civil Aviation Organisation (ICAO) Air Services Negotiation Conference which was held in Dubai.

The inaugural event which ended on Friday was part of ICAO’s effort to implement a ‘one-stop shop’ platform to improve the efficiency of the bilateral negotiation process through a central meeting place where countries can conduct several bilateral air services consultations with one another.

CAAS director-general Lim Kim Choon said this has provided ‘a convenient platform to facilitate countries like Singapore in pursuing for the liberalisation of air services.’

Liberalisation provides carriers of the respective countries with full flexibility to respond quickly to market opportunities, as and when they arise, he said.

Mr Lim noted that the conclusion of the two agreements is also ‘a clear reflection of the warm bilateral ties that Singapore enjoys with Zambia and Romania, as well as our respective countries’ firm commitment to promote liberalisation in the aviation industry.’

To date Singapore has concluded open skies agreements with more than 30 countries. Copyright © 2007 Singapore Press Holdings. All rights reserved.

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APA-Abuja (Nigera) The global financial crisis has affected Zambian economy to the extent that the price of copper has come down to $3,300 from $8,000 per tonne, Zambian President Rupiah Bwezani Banda told journalists in Abuja on Thursday.

Speaking at a joint press conference with President Yar’Adua, Banda said his government intends to “widen the base of other industries and commodities”.

Banda, who was on his first trip outside Zambia since he was elected in October, called for the strengthening of developmental ties between his country and Nigeria to cushion the effect of the global financial crisis.

“We believe Nigeria is in the position to assist us. You have got the educated manpower, experience over the years for some of the crops we want to introduce in our country as staple foods,” he said.

He said his country was proud that Nigerians have invested in Zambia.

“We have for the first time truly an African bank from Nigeria – Access Bank — and two more banks will be coming to our country from Nigeria,” he said.

He called on Nigeria\’s business to come to Zambia to take advantage of the facilities and opportunities that exist in the industrial, manufacturing and financial sector of his country and to help in producing such crops as cassava, cocoa and palm oil for which Nigeria is “well known as specialist in that field.”

President Yar’Adua said he had discussed with the Zambian leader issues of a bilateral nature, African issues, situation in Zimbabwe and need for Nigeria and Zambia to convene a bilateral commission and to sign the various agreements that will enhance their bilateral relations.

African Press Agency – Copyright upon prior authorization

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THE Government has launched the national Public Private Partnership (PPP) policy that will accelerate development, bring about modern infrastructural development and provide more readily accessible services.

Speaking during the launch at Mulungushi International Conference Centre in Lusaka yesterday, President Rupiah Banda said the PPPs would also strengthen the private sector’s participation in economic development.

The PPP is a new approach under which Government institutions would partner with the private sector in the procurement of works and services for the benefit of the general public.

The policy would facilitate an inclusive approach to the development process of Zambia in which all stakeholders would participate.

In a speech read on his behalf, by Vice-President George Kunda, Mr Banda directed Minister of Finance and National Planning Situmbeko Musokotwane to drive the process and ensure that the PPP unit was set up

He said he expected that the necessary legal and institutional arrangements would be finalised as soon as possible in order to ensure that the rewards of the programme were realised.

Mr Banda urged all Government institutions to identify projects or areas, in which PPPs could be pioneered so that they could be processed.

Mr Banda said the Government was committed to pursuing the reform process aggressively in order to achieve economic growth and create wealth for the people in a shortest possible time.

He said the PPPs would have a tremendous positive impact on the way business was conducted in Zambia.

He said Zambia’s strategic location on the continent made it possible for the country to be a hub for various regional infrastructure links such as transport, energy and telecommunications.

Mr Banda urged the Government ministries and agencies to immediately explore PPP opportunities for implementation in their areas and to market them to potential investors.

Mr Banda said the Zambia Development Agency (ZDA) should make efforts to collaborate with the PPP unit in promoting various projects.

He challenged the private sector to come forward with their money and invest in infrastructure development sector.

“You (the private sector) know as well as I do that by bringing you in, we aim and hope to enhance efficiency, productivity and increased value for money,” he said.

Mr Banda said dialogue between the public and private sectors should continue and improve as they continued to discover common ground and areas of collaboration.

Dr Musokotwane said he accepted the responsibility of ensuring that PPPs were undertaken in a professional and effective manner.

Dr Musokotwane said in a speech read on his behalf by Finance and National Planning Deputy Minister, Chileshe Kapwepwe that the ministry would proceed with relevant measures for the establishment of a PPP unit to manage the process.

He said PPPs had great potential for increasing investment flows in the country despite the dark shadow cast by the global financial crisis.

Works and Supply Minister Mike Mulongoti said the PPP policy was formulated to confirm the Government’s commitment to private sector involvement in the delivery of infrastructure and related services.

Mr Mulongoti said the PPP would facilitate a platform for formal arrangements between the public and private sectors to conduct business in an equitable manner.

Mr Mulongoti said the PPP policy was formulated in a very transparent and participatory manner.

“A very comprehensive consultative process was undertaken in which stakeholders countrywide were involved,” he said.

Commerce, Trade and Industry Minister Felix Mutati said public resources were not sufficient to carry out all developmental projects hence the need for the private sector to come on board.

Mr Mutati said viable projects were better done with the support of the private sector.


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THE World Bank and the International Monetary Fund (IMF) have advised Zambia’s financial institutions to address the high cost of labour and the sector’s weaknesses to reduce the cost of banking services in the country.

A team of experts from the two multilateral organisations, which recently conducted a joint financial sector assessment in Zambia, said the country had made impressive efforts in developing the financial sector since 2004.

“The assessment team suggested several measures to address the high cost of banking services by addressing the high cost of labour and labour market inefficiencies, encouraging more competition in the sector and improving the credit information framework.

“Credit outreach could be improved by encouraging mobile banking and the introduction of low cost basic accounts,” they said.

In a joint statement issued in Lusaka yesterday, the team recommended that players in the sector should improve on the availability of credit information and the financial situation in the banks.

Although robust, the report notes, the financial institutions should provide affordable and accessible services to the people hence the recommendations.

“One of the conclusions of the assessment team is that Zambia still has low levels of financial inclusion, deposit services and transaction accounts are scarce and the high cost of finance is an impediment to future credit growth,” the statement says.

Generally, the team noted that Zambia had made impressive efforts in developing its financial sector since Cabinet approved the Financial Sector Development Plan in June 2004.

The experts said that financial inter-mediation was on the rise and regulatory and supervisory frameworks had been strengthened considerably, and the financial sector infrastructure had improved, thereby attracting even foreign banks to enter the market.

The statement says that banks were currently well-capitalised, liquid, and profitable, lending to the private sector has been rising at a fast pace, and asset quality has improved considerably.

“Stress tests conducted by the assessment team show that the Zambian financial system is robust and can withstand considerable capital shocks given high capitalisation levels,” the statement reads.

The team, however, noted that the on-going global financial turmoil could affect Zambia’s financial system stability through continuing pressure to unwind foreign portfolio investments and the parent-subsidiary relationships of international banks.

It was observed that Zambia’s economy would also be impacted by the macro-economic fall-out of the crisis as already manifested in the sharp drop in the price of copper, Zambia’s key export product.

The assessment team suggested measures to mitigate financial risks arising from potential adverse developments.


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From Juliana Taiwo in Abuja

Zambian President, Rupiah Bwezani Banda, on his first foreign trip since he came into power in October, yesterday requested for Nigeria ’s assistance to  tackle  effect of the global economic crisis on his country’s economy.

This is as President Umaru Musa Yar’Adua said despite the stalemate in Zimbabwe’s peace talk over power-sharing, the progress recorded deserves commendation.

Banda, in a joint press conference with Yar’Adua at the foyer of the Presidential Villa, told State House Correspondents that the global financial crisis has hit Zambian’s  economy to the extent that the price of its main commodity which is copper, had come down to $3,300 from $8000 per tonne.

Banda said, “it has certainly affected us (global economic crisis) and that is why I am standing here with my brother (Yar’Adua), because I believe together we are stronger, on our own it may be difficult to withstand the impact of the melt down, particularly the price of our main commodity which is copper and other metals which has gone down from over $8000 per tonne down to $3,300.”

The Zambian President, whose country’s economic mainstay is mining, lamented that the global economic meltdown had made nonsense of  earnings from the  sector and therefore, appealed to President Umaru Yar’Adua to assist Zambia in carving out another economic route.

“We are affected but what we intend to do as a government is to widen the base of other industries and other commodities that we have to depend upon and we believe Nigeria is in the position to assist us.“You have got the  manpower and experience over the years for some of these crops we want to introduce in our country as staple foods.

“We believe because of our friendship,  we can depend upon one another to face this problems, which have certainly affected us.”

“We are very proud that Nigeria is one of the few countries who have invested in Zambia and shown keen interest to improve these investments.”

We have for the first time truly an African bank from Nigeria – Access Bank, and two more banks will be coming to our country from Nigeria ,” he said, adding that his government was happy that “we have agreed on a major investment in the cement industry from the Nigerian group.

I am taking this opportunity with my brother to call on Nigerian businesses to come to Zambia to take advantage of the facilities and the opportunities that exist in the industrial, manufacturing and financial sectors of our country, and also to help us have additional groups in our agriculture such as cassava, cocoa and palm oil, for which you are well known as specialist in that field.”

He said the bilateral talks became very necessary because “ Nigeria and Zambia have always been very close friends. Although Nigeria is so far away from our region, you will recall that Nigeria was one of the few countries in West Africa and in the rest of Africa we have invited to become frontline state. In other words, you have a lot to do with the liberation of our continent, especially the hard core southern part of the continent.”

Yar’Adua said he was happy with the bilateral talks adding that “this is his first visit since he was elected last October in Zambia . We have discussed issues of bilateral nature, African issues, the situation in Zimbabwe and the need for Nigeria and Zambia to convoke a bilateral commission and for us to sign the various agreements that will enhance our bilateral relations.”

He said discussions were on the political crisis in Zimbabwe , especially the worsening humanitarian crisis and noted that the seeming break down in negotiations in terms of   implementation of agreements signed was a major concern.

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By Ye Xie and Andrew MacAskill

Nov. 28 (Bloomberg) — The euro weakened the most against the dollar in almost three weeks as investors added to bets the European Central Bank will cut interest rates after inflation in the region slowed by the most since at least 1991.

The euro also fell against the yen, the Brazilian real and the South Korean won. Russia’s ruble headed for its biggest weekly decline against the euro in at least five years as the central bank let the currency depreciate and raised interest rates to halt an exodus of foreign capital.

“The ECB has to come to the party, and they have to be aggressive cutting rates,” said Lane Newman, a director of currency trading at ING Financial Markets LLC in New York. “To buy the dollar is the path of least resistance. You’d better be prepared for a worse-than-expected time ahead.”

The euro dropped 1.5 percent to $1.2708 per euro at 11:55 a.m. in New York, from $1.2904 yesterday. It’s down 1 percent this week. The dollar gained 0.2 percent to 95.36 yen, from 95.19 yesterday, and has declined 0.6 percent this week. The euro weakened 1.4 percent to 121.20 yen, from 122.89 yesterday, trimming a weekly gain to 0.4 percent.

The ruble slumped 1.7 percent to 27.8777 per dollar and depreciated 0.3 percent to 35.5023 per euro. It lost 0.9 percent against the dollar and 3 percent versus the euro this week, the biggest decline since Bloomberg began collecting the data in December 2003.

Russia, India

Bank Rossii widened the ruble’s trading band for the second time this week by about 30 kopeks (1 U.S. cent), or 1 percent, on each side, according to Mikhail Galkin, head of fixed-income and credit research at MDM Bank in Moscow. The central bank said today it will raise its benchmark refinancing rate to 13 percent from 12 percent to help stem currency losses.

India’s rupee fell the most in two weeks, losing 1.4 percent to 50.1075 per dollar, after terrorist attacks across Mumbai left at least 124 people dead. Authorities closed stock, bond, commodity and currency markets yesterday. The rupee has lost 1.3 percent this month.

The Thai baht declined for a third day, reaching 35.53, the lowest level since February 2007, as protesters occupied Bangkok’s international airport for a fourth day.

The European Union statistics office in Luxembourg said inflation in the region slowed to 2.1 percent in November from 3.2 percent in October. A separate report showed unemployment in the region rose to 7.7 percent in October from 7.6 percent in September, the highest level since January 2007.

‘Credit Slowdown’

Investors added to bets the ECB will cut its main refinancing rate at least 75 basis points by March from 3.25 percent. The implied yield on three-month Euribor futures contracts expiring in March fell seven basis points to 2.61 percent today. The yield averaged 16 basis points above the ECB’s benchmark over the past year.

The ECB will cut its benchmark lending rate by half a percentage point to 2.75 percent on Dec. 4, according to the median of 53 economist forecasts in a Bloomberg News survey.

“It shows Europe is still inheriting the whole credit slowdown,” said Neil Jones, head of hedge-fund sales in London at Mizuho Capital Markets. “The ECB’s now talking about aggressive interest-rate cuts and that’s going to weigh on the currency.”

The dollar gained versus the euro and the yen today as investors bought the U.S. currency to rebalance their portfolio at the end of the month, said Richard Franulovich, a senior currency strategist at Westpac Banking Corp. in New York.

‘Dollar Demand’

“There’s a lot of dollar demand at the month-end,” said Franulovich. “The market is confident that the ECB will cut at least 50 basis points next week. That’s the recipe for a stronger dollar.”

The ICE’s Dollar Index, which tracks the greenback against the euro, the yen, the pound, the Canadian dollar, the Swiss franc and Sweden’s krona, rose 1.4 percent to 86.73. The index climbed to 88.463 on Nov. 21, the highest since April 2006.

The Federal Reserve said on Nov. 25 it will assign $800 billion in new funding to bolster credit flows to homebuyers, consumers and small businesses and will take on credit risk by buying debt.

Investors should buy the euro versus the greenback because repatriation of U.S. investments abroad and demand for dollar funding is waning, according to Bank of America Corp.

The Fed’s support of financial markets will flood the economy with excessive dollars, creating “additional downside risks” for the U.S. currency, currency strategists David Powell and Robert Sinche wrote in a research note today.

“The recent advance of the dollar rests on a weak foundation,” Powell and Sinche wrote. “The rapid expansion of a country’s monetary base should prove to be inconsistent with a strengthening of its currency.”

The dollar may weaken to $1.4180 per euro, a 50 percent retracement of its rally from a record low of $1.6038 in July to a 2 1/2-year high of $1.233 in October, they wrote.

To contact the reporters on this story: Ye Xie in New York at yxie6@bloomberg.net; Andrew MacAskill in London at amacaskill@bloomberg.net

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