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Zambian government

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Kagem Mining, which operates the world’s single largest emerald mine, has set out its strategy for putting Zambian emeralds at the forefront of the world’s fine jewellery industry.

The company, which is 75 percent owned by UK-listed Gemfields plc, and 25 percent owned by the Zambian government, is pioneering a revolutionary approach to the gemstone sector that integrates world-class mining with a strong marketing strategy and a commitment to local value addition in areas of core competence.

Kagem has now embarked on a new phase of its strategy, after being rescued from bankruptcy in 2008 by Gemfields, which has turned it from a loss-making, debt-ridden shell into a thriving enterprise that now produces approximately 20 percent of the world’s global rough emerald supply.

“Kagem is proud to be partnering with the Zambian government to build the nation’s gemstone sector into a strong vibrant industry that upholds the highest standards of business ethics and also maximises profitability for the benefit of employees, suppliers and shareholders, including the people of Zambia, who own the mine through the government’s stake,” said Kagem and Gemfields Chief Executive Officer, Ian Harebottle.

Worldwide production of emeralds is estimated at US$500 million (ZMW2.6 billion) per year, of which Zambia accounts for around one third – or US$167 million (ZMW860 million). Kagem is responsible for mining approximately 50 percent of Zambia’s emeralds or US$80 million (ZMW410 million) – yet is estimated to pay up to 90 percent of the tax generated from the gemstone sector, added Mr Harebottle.

Kagem, which is based in Lufwanyama, employs 672 staff and contractors in Zambia and has an on-going programme of employee training and development designed to constantly improve the lives of its employees and the local people resident in the communities in which it operates.

On the revenue side, Kagem has helped push rough emerald prices up ten-fold in the last three-and-a-half years thanks to a worldwide focussed and consistent marketing campaign aimed at increasing demand for Zambian emeralds. Kagem’s emeralds are sold to international buyers at world class auction venues overseen by Zambian government officials and with all of the revenue received from these auction sales repatriated back to Zambia, helping boost the country’s foreign earnings, and with royalties paid on the full and final auction prices attained.

In terms of cost, the company has worked on constantly improving efficiency at the mine, where five million kgs of earth and rock are excavated in order to glean just 1kg of gemstones.

The increase in production and price, coupled with the improvement in operational efficiency, has resulted in Kagem being restored to profitability for the first time in its history.

About Gemfields

Kagem Mining in Lufwanyama is part of the Gemfields group of companies, a leading gemstone miner listed on the Alternative Investment Market (AIM) of the London Stock Exchange (ticker: ‘GEM’). Gemfields owns 75 percent of the Kagem mine, in partnership with the Zambian government. In addition to the Kagem emerald mine, Gemfields has a 50 percent interest in the Kariba amethyst mine in Zambia. The company also owns controlling stakes in highly prospective ruby deposits in Mozambique and various licenses in Madagascar including ruby, emerald and sapphires deposits.

Gemfields is the world’s foremost coloured gemstone producer, and is found at the intersection of exploration, mining and marketing.

Natural gems are at the heart of the operation. Its focus – reliable and ethically-produced Zambian emeralds – upholds fair-trade practices while remaining in accordance with the highest level of environmental, social and safety standards. This mission holds true for every gemstone in its portfolio.

Gemfields’ unprecedented mine-to-market strategy through transparent partnerships with the world’s leading coloured gemstones dealers and manufacturers allows it to guarantee the provenance of every gem: Its promise to both the trade and the consumer.

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By NELLA MUKALENGE

MULTICHOICE Zambia in partnership with Zambia National Broadcasting Corporation (ZNBC) has introduced a new pay-television which will allow Zambians to join the digital revolution and enjoy 19 television channels.

The new service called GOtv service is part of Zambia’s goal to migrate from analogue to Digital Terrestrial Television (DTT).

GOtv will offer both local and international channels for Africa at K35,000 per month and a decoder with three months subscription for K455,000.

The service was launched in Lusaka on Tuesday night.

MultiChoice Zambia public relations officer Marlon Kananda said the newly introduced television service will contribute to Government’s commitment of migrating to digital from analogue.

DTT refers to the broadcasting of terrestrial television in a digital format and most African countries are in the process of planning and implementing the digital television which has enhanced pictures and quality sound.

“GOtv will deliver digital television to everyone and will enable them experience the digital television revolution in their homes. It supports the Zambian government’s commitment to migrating from analogue to digital by 2015,” he said.

Mr Kananda said the service has 19 channels which will enable subscribers have access to news, children’s programming, documentaries series and movies, among others.

“Subscribers will benefit from the increased number of channels, as well as improved pictures and sound quality which is synonymous with digital television,” he said.

He said the company will soon introduce the service to other countries around the world and build a strong backbone to ensure GOtv survives.

Commenting on the service, ZNBC director- general Eddie Mupeso said, “In the next few years, the current analogue signals will be switched off and ZNBC will become digital. This means that viewers will need to use a DDT decoder in order to receive a TV signal in future.”

And GOtv spokesperson Lee Nonde said the introduction of the service is the latest digital technology platform, adding that it will be available to customers with only a decoder or a grid antenna.

“The arrival of GOtv marks the introduction of a new service on a technology platform that subscribers can afford. All you need to receive GOtv is a DTT decoder or either a stub or grid antenna,” he said.

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Uganda is borrowing from Zambia’s reform blueprint to raise its doing business ratings in the East African Community bloc and Comesa. This is part of the country’s aspirations to attain a preferred investment destination after years of economic bottlenecks in the energy, transport and business licensing sectors.

Zambia has won admiration in the Common Market for Eastern and Southern Africa (Comesa) bloc and has acquired lower compliance costs.

Zambia’s reforms blueprint among other things has fewer trade licences, integration of regulatory processes, mitigation of revenue losses from non tax sources and faster turnaround times for acquisition of business permits — a situation that has minimised incidents of corruption in the regulatory systems.

Interventions

So far, Uganda’s notable interventions such as the construction of the Bujagali hydropower dam and other smaller power generation projects and upgrading of major highways have brought optimism to the business community.

But glaring hurdles persist in the regulatory chain. Though some gaps have not been addressed, the overall administrative burden exerted on local business has sharply dropped, according to Eva Jhala, a trade consultant attached to the Zambian government.

The relative success of the reforms pushed Zambia’s global business rating to 76, up from 84 according to the World Bank’s doing business indicators for 2010. This achievement has directly boosted foreign direct investment flows and raised its sovereign credit rating to B+, a sign of sound economic capacity necessary for servicing its foreign debt obligations.

In contrast, Uganda’s global doing business rating fell from 84 to 133 in the same period on account of increased hurdles in the registration of new businesses and failure to tackle systemic corruption. However, renewed government attention towards rectifying persistent business constraints has compelled it to adapt proven reform models developed in the country’s favoured trading blocs.

Adoption of Zambia’s reform model also carries a significant opportunity for Comesa member states eager to bridge critical gaps in their regulatory frameworks. “Comesa has been harmonising procurement laws and Uganda’s legislation has proved instrumental in that process. However, harmonisation of Customs laws has proved difficult because of complexities in national rules that have constrained many business people. Streamlining such laws is critical for promotion of trade activities within and outside the Comesa region,” explained Ms Jahla.

Prior to implementation of business reforms, Zambian businesses were subjected to approximately 517 trade licences, with some adding little or no value to local entrepreneurs. The latter were merely used to generate revenues for local authorities desperate to finance administrative operations. Enforcement of such licences proved a drain to local enterprises and consequently hindered business growth. However, vigorous screening of the trade licences revealed only 287 licences were economically justifiable, rendering most of them illegitimate. Another 85 were condensed into 15 licences in an attempt to minimise overlapping risks.

Uganda, on the other hand, is still grappling with severe business hurdles reflected in multiple business licences, enforcement of illegal trade licences and poor regulatory capacity. Some local authorities for instance, require separate licences for construction projects, parking space and garbage collection, all of which apparently compound transaction costs for local business people.

Besides trade licence barriers, huge information requirements enforced by stand alone agencies were also cited as a substantial burden to local businesses, due to prohibitive financial expenses coupled with administrative delays. In response, the Zambian government introduced an integrated documentation system that enabled regulatory agencies access company files for scrutiny without requiring fresh submissions.

Despite direct revenue losses incurred by local governments due to elimination of numerous trade licences, decentralisation of revenue collection is considered a key remedy to the dilemma. “The government commissioned a study on the impact of business reforms on its revenue base. It revealed that revenue losses tied to local governments were projected at about 15 percent which was considered relatively small. Nevertheless, the government adopted a fiscal decentralisation model that allows local governments collect trade licence payments and earn fixed commissions on them, thereby enabling them sustain income streams,” said Jhala.

As a result of extensive business reforms, the number of days taken to register a new business fell to less than a week while the net administrative burden suffered by local businesses dropped by 197 billion Zambian Kwachas compared to 2.2 trillion kwachas ($420million) equivalent to 5 percent of Gross Domestic Product (GDP) prior to the reforms.

Uganda, on the other hand, is still grappling with severe business hurdles reflected in multiple business licences, enforcement of illegal trade licences and poor regulatory capacity. Some local authorities for instance, require separate licences for construction projects, parking space and garbage collection, all of which apparently compound transaction costs for local business people./theeastafrican

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British High Commissioner to Zambia Carolyn Davidson says she is very offended by the Times of Zambia newspaper for insinuating that the British government is funding the opposition and undermining the Zambian government.

And the High Commissioner has warned that publishing unsubstantiated claims by the media puts at risk the relation between Zambia and UK.
In an open letter to the government newspaper, Davidson said it is surprising that a national newspaper such as The Times does not follow the basic standard of professional journalism of verifying stories or claims.
She was reacting to an article carried by Times on Monday 30 May, titled “DFID funding Sata campaign.”
In that article a Mr Gregory Chifire claims that the British Government funding is being used to support the electoral campaign of the PF

“At no point in the article does the Times reporter or Mr Chifire provide any evidence in support of this claim. The response from the Head of DFID Zambia makes clear that there is no substance to this malicious claim and yet the article was given prominence and a misleading headline’, she said.

“Let me therefore take this opportunity to set out what the British Government is funding in connection with this year’s election.
“We have to date invested in excess of £5million to help fund the electoral registration process, train the Zambian police in their election duties and enhance Zambian domestic observation.”
She said that none of these funds have been allocated to assist any political party with its political activities.
“I find the allegations in yesterday’s article (and subsequent articles which have appeared today) that the UK and other donors are engaged in activities to undermine the Zambian Government deeply offensive”, the British government envoy said.

She said the British Government is committed to helping Zambia deliver free and fair elections in which all stakeholders have confidence in the process.
She observed that President Rupiah Banda has also said that he is determined that Zambia should hold free and fair elections.
She warned that the Zambian Government’s efforts to deliver an electoral process which inspires confidence domestically and internationally risk being undermined by unsubstantiated claims such as those Times.
Such claims also put at risk the excellent relationship which the British Government has with the Government and people of Zambia.
“I therefore request that you either issue a correction or give this letter as much prominence as you have given to Mr Chifire’s claims.”

In the picture, the High Commissioner Davidson and her husband with PF vice president Guy Scott in the Middle.

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A new multi-million-dollar mixed-use residential and commercial development, called Roma Park, on Friday officially launched in Lusaka, Zambia.

The 104 hectare development will include mixed-income residential, commercial and industrial properties, featuring a shopping centre, big-box retail space, restaurant and conferencing facilities, warehousing, manufacturing and offices.

The developer behind the project is CDP Properties – a joint venture between CDP Investments and Renaissance Partners, the principle investment arm of Russian-based Renaissance Group.

Charles Davy, managing director of CDP Properties described Roma Park as the first development of its kind in Zambia and said it is expected to attract local and foreign investment. “By using Zambian and international architects and experts for its design and construction, Roma Park will create a residential and corporate address of international standards, with long-term investment value,” he noted.

The project, situated six kilometres from Lusaka’s central business district, will be developed in two phases over five-to-seven years. According to the developers it will be home to between 500 and 1,000 residents.

The development is the first private commercial property to be zoned as an Industrial Park in Zambia, under the Zambia Development Agency (ZDA) Act of 2006. The act is aimed at promoting the manufacturing sector, in particular, in an effort to diversify the country’s economy. Roma Park is also being backed by the ZDA and the Zambian government

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LAP Green shares frozen
By DARLINGTON MWENDABAI

ZAMBIA has frozen LAP Green Network’s 75 percent shares in Zamtel in conformity with the international community’s decision to freeze all assets belonging to Libya following the unrest in the Arab country, Zamtel managing director Hans Paulsen said in Lusaka on April 15.

The international community has been freezing some Libyan assets dotted across the globe. Mr Paulsen said Zamtel will not be affected by the new development and there is no need for customers to worry.

He said Zamtel will continue to operate normally and Government will oversee the affairs of the telecommunications company. Lap Green held 75 percent shares in Zamtel while the Zambian government is a minority shareholder with 25 percent.

Mr Paulsen was responding to questions from journalists during a media breakfast at which the company unveiled a new Zamtel brand and logo dubbed Live Life Today at the Taj Pamodzi Hotel in Lusaka.

“I can confirm that Lap Green’s 75 percent shares in Zamtel have been frozen, just like the Minister of Finance and National Planning [Situmbeko Musokotwane] intimated to Parliament recently. This means Zamtel will not have to touch the shares for now,” he said.

He said no dividends will be paid out at the moment until such a time when the matter is resolved but he was, however, optimistic that Government, which owns 25 percent in Zamtel, will help to ensure that the company’s operations are not affected.

He said the continued unrest in Libya will not have an impact on the operation of the company and its market share.

In a ministerial statement last month, Dr Musokotwane said the UN Security Council resolutions 1970 and 1973 were likely to affect Lap Green’s shareholding in Zamtel but would not affect the operations of the company.

Dr Musokotwane assured the nation that freezing Libya’s stake in Zamtel would not affect the operations of Zamtel but the shareholder, Lap Green.

“There is a likelihood that the shares in Zamtel held by Lap Green are covered by the UN Security Council resolution 1973 and those shares are likely to be frozen,” DrMusokotwane told Parliament then.

“My Government will ensure compliance in the management of these assets in line with the UN resolutions in the same manner as set out in connection with the shareholding in Zamtel,” he said.

In a ministerial statement last month, Minister of Finance and National Planning Situmbeko Musokotwane said the UN Security Council resolutions 1970 and 1973 were likely to affect Lap Green’s shareholding in Zamtel but would not affect the operations of the company.

Dr Musokotwane assured the nation that freezing Libya’s stake in Zamtel would not affect the operations of Zamtel but the shareholder, Lap Green.

“There is a likelihood that the shares in Zamtel held by Lap Green are covered by the UN Security Council resolution 1973 and those shares are likely to be frozen,” DrMusokotwane told parliament then.

“My Government will ensure compliance in the management of these assets, in line with the UN resolutions in the same manner as set out in connection with the shareholding in Zamtel,” he said.

And Zamtel has launched a new brand logo dubbed, “Live Life Today” which replaced old brands Cellz and Zamtel on-line effective on April 15.

“Zamtel has three brands that required supporting in the market namely Cellz, Zamtel and Zamtel on-line. As you know, supporting multiple brands effectively in a market is costly as opposed to having a monolithic brand,” he said.

Mr Paulsen said to achieve that, a market study last year was conducted by Steadman Group, in which customers referred to the old Zamtel brand as poor, old, boring and tired.

He said the old brand prior to the privatisation of the company lacked customer appeal and resonance and needed a visual revamp and repositioning.

“The company is here to stay and will give the Zambian populace the best telecommunication solutions. In the next five years, the company will grow its market share to 25 percent,” he said.

Currently, the company has remained with 20 kilometers to finish putting up a fibre network heading to the Southern Province, following the completion of similar works on the Copperbelt.

Once the fibre network has been laid down, subscribers will continue to enjoy telecommunication services immediately, at affordable rates as the new brand states.

And Zamtel has launched a new brand logo dubbed Live Life Today, which has replaced old brands Cellz and Zamtel on-line effective yesterday.

“Zamtel has three brands that require supporting in the market namely Cellz, Zamtel and Zamtel on-line. As you know, supporting multiple brands effectively in a market is costly as opposed to having a monolithic brand,” he said.

Mr Paulsen said to achieve that, a market study last year was conducted by Steadman Group, in which customers referred to the old Zamtel brand as poor, old, boring and tired.

He said the old brand prior to the privatisation of the company lacked customer appeal and resonance and needed a visual revamp and repositioning.

“The company is here to stay and will give the Zambian populace the best telecommunication solutions. In the next five years, the company will grow its market share to 25 percent,” he said.

Currently, the company has remained with 20 kilometres to finish putting up a fibre network heading to the Southern Province following the completion of similar works on the Copperbelt.

Once the fibre network has been laid down, subscribers will continue to enjoy telecommunication services immediately at affordable rates as the new brand states.

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