Identifier
Created
Classification
Origin
08LUSAKA849
2008-08-22 10:52:00
UNCLASSIFIED
Embassy Lusaka
Cable title:  

ZAMBIA SUMMER ECONOMIC ROUNDUP

Tags:  ETRD EMIN ENRG EINV ECON ZA 
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VZCZCXRO6477
PP RUEHBZ RUEHDU RUEHJO RUEHMR RUEHRN
DE RUEHLS #0849 2351052
ZNR UUUUU ZZH
P 221052Z AUG 08
FM AMEMBASSY LUSAKA
TO RUEHC/SECSTATE WASHDC PRIORITY 6168
RUCPDOC/DEPT OF COMMERCE WASHDC
INFO RUCNSAD/SOUTHERN AF DEVELOPMENT COMMUNITY COLLECTIVE
RUEATRS/DEPT OF TREASURY WASHDC
RHMFISS/HQ USAFRICOM STUTTGART GE
UNCLAS LUSAKA 000849 

DEPARTMENT FOR AF/S AND EEB/CBA - DENNIS WINSTEAD
COMMERCE FOR 4510/ITA/IEP/ANESA/OA

SIPDIS

E.O. 12958: N/A
TAGS: ETRD EMIN ENRG EINV ECON ZA
SUBJECT: ZAMBIA SUMMER ECONOMIC ROUNDUP

REF: LUSAKA 302

UNCLAS LUSAKA 000849

DEPARTMENT FOR AF/S AND EEB/CBA - DENNIS WINSTEAD
COMMERCE FOR 4510/ITA/IEP/ANESA/OA

SIPDIS

E.O. 12958: N/A
TAGS: ETRD EMIN ENRG EINV ECON ZA
SUBJECT: ZAMBIA SUMMER ECONOMIC ROUNDUP

REF: LUSAKA 302


1. SUMMARY
-- Inflation Continues to Rise
-- GRZ Increases Pharmaceutical Import Fees
-- ZESCO Makes Plans to Recapitalize
-- GRZ Issues Copper Mining License
-- Aviation Sector Expands
-- GRZ Achieves IPR Enforcement Success


Inflation Continues to Rise


2. According to the Central Statistics Office, Zambia's year-on-year
inflation rate for July rose to 12.6 percent, marking a one-half
percent increase from the June inflation rate. Bank of Zambia
officials attribute the rise to higher energy prices.

GRZ Increases Pharmaceutical Import Fees


3. The Pharmaceutical Regulatory Authority (PRA) increased its
pharmaceutical registration and import fees by approximately five
hundred percent. Local importers have decried the new rates.
According to the Zambia Pharmaceutical Business Forum report, local
distributors have reduced their imports by 40 percent already. The
report also states that pharmaceutical registrations have fallen
from 1,400 in 2007 to 929 in 2008.

GRZ Assists ZESCO


4. ZESCO, Zambia's parastatal electricity company, announced on July
11 that the Zambian Government (GRZ) has provided USD 50 million to
rehabilitate and upgrade ZESCO equipment in order to increase
ZESCO's installed capacity. ZESCO acknowledged the need for
additional investment and hinted at possible rate increases.

GRZ Issues Copper Mining License


5. The GRZ has granted a copper mining license to African Eagles
Resources and CGA Mining. Production will commence in mid-2010 in
Mkushi to extract an estimated 18.5 million tons of low grade (0.83
percent) copper. According to African Eagles Resources, the GRZ's
new mining tax regime does not detract from the project's economic
viability. The company plans to invest over USD 60 million to
produce between 36,500 and 39,000 tons of copper concentrate per
year.

Aviation Sector Expands


6. Zambia's aviation sector expanded on July 15, when start-up
carrier Zambezi Airlines launched its operations. In direct
competition with Zambian Airways, Zambezi Airlines offers daily
domestic flights from Lusaka to Kitwe, Ndola, Livingstone, and
Solwezi. It also plans to introduce flights to Lilongwe,
Lubumbashi, and Harare by the year's end. The fleet currently
consists of one Embraer aircraft. General Electric Commercial
Aviation Services will lease a Boeing 737-300 for its international
routes.

GRZ Achieves IPR Enforcement Success


7. A Lusaka Magistrate found two Indian businessmen guilty of
counterfeiting Unilever products. Magistrate Joshua Banda fined the
two men K 30 million (about USD 9,000),called for their expedited
deportation, and forfeited the counterfeit products to the GRZ for
destruction. The Intellectual Property Unit of the Zambia Police
Service also succeeding in making numerous arrests in July related
to intellectual property rights infringement.

KOPLOVSKY