Purchase Baking New Cakes By Natasha Mwila

Purchase Baking-new-cakes HERE!!
New Book by Natasha Mwila.
The South African business landscape has had notable innovative contributions from an industry largely wrongly categorised as being too informal to warrant scholarly and public attention. The 'home industry' could not represent a farther reality. The industry represents business undertakings involving home based production of goods. This industry hones the talents and skill of a large proportion of the population and when nurtured is capable of providing secure employment. The unique nature of goods and services supplied by this industry call for an innovative approach to business and with that highly complex management strategies. This book endeavours to explore this industry through the eyes of the most successful player in the industry, Koljander. A case study is developed to trace Koljander's origins, present challenges and opportunities as well as future prospects in the context of continuous innovation within the business. Extant literature is drawn on to provide academic explanations for the inspirational phenomena observed in the business. This book will appeal to students and researchers of business management as well as individuals interested in enterprise development.

Purchase Baking-new-cakes NOW!!

Publishing house:

LAP LAMBERT Academic Publishing

Website:

https://www.lap-publishing.com/

By (author) :

Natasha Katuta Mwila

Number of pages:

208

Published on:

2012-06-16

Stock:

In stock

Category:

Business management

Price:

68.00 €

Read More

Zambia's $750 mil EuroBond :Talk time example

A need has arisen to explain the recent Eurobond issue by the Zambian Government using an example that everyone can relate to and understand, talk time.

Now Airtel, a mobile service provider in Zambia, has a promotion called Siliza. This allows you to borrow air time when you have nothing in your account. We shall use an adapted version of this promotion to explain the Euro Bond.

Now before we begin, we must explain two key terms that are vital to understanding a Eurobond. The first is the Principal; this is the amount that is borrowed to be paid back at the maturity of the Bond which is after the period of the bond has elapsed in this case 10 years.

The next term is called the Coupon Rate; this is a rate of interest Annually. The Coupon rate is calculated as a percentage of the principal in this case the coupon rate is 5.375%.

We can now get to the example that uses talk time to explain the Eurobond. Let us take for example a guy by the name of Chuck Bass who puts K 50, 000 talk time in his phone every day. On one fateful day, Chuck Bass runs out of talk time making a call to his girlfriend Blair, and since he needs to tell her that he loves her he decides to borrow K 7,500 from Airtel like a Eurobond to be paid after 10 days. This is what will happen; since Chuck Bass puts K 50,000 in his phone account every day, and the coupon rate is paid bi-annually, Airtel will take 5% of the amount he borrowed after every day 2.5% after every 12 hours which is half a day(bi annual is half a year).

Now 5% of K 7, 500 is K375, which means Airtel will deduct K187.5 (2.5%) after every 12 hours and  per day Airtel will deduct K375 .This will happen for the next 10 days, after which Chuck Bass will pay the principal (K7,500)through his phone account and the balance would have been cleared.

Now to relate this to the Euro Bond, the principal which is the money that the Zambian Government borrowed is $750 million and the annual budget for Zambia as from last year’s figures is $5 billion.

The coupon rate paid is 5.375% but we round it off to 5%.Now what follows here is important. The money that Chuck Bass borrowed which is K 7, 500 represents the money that the Zambian Government has borrowed which is $750 million. The money that Chuck Bass puts in his phone account every day which is K 50, 000 represents the annual budget of Zambia which is approximately $5 billion.

The 10 days that it takes Chuck Bass to pay back the borrowed Airtime represent the 10 years it will take the Zambian government to pay back the principal and the coupon in Full at maturity.

The same way you would calculate how much Chuck Bass pays Airtel is the same way you would calculate how much the Zambian Government will pay Euro Bond holders.

Note that Chuck Bass is a fictional character; any resemblances in person or by chance are completely unintentional.

A note has to be included on the time value of money as the reason why bonds exist.Inflation reduces the value of money gradually so hence bonds are the best way to prevent loss of value through the time value of money.
It must also be noted that capital projects  go hand in hand with long term bonds like building a hydro power station which have high return afterwards and can pay of its dues effectively.

Thank you goes to Mr Masengo for correcting the coupon payments part of this example.

Kampamba Shula BSc Economics

Read More

Zambia's $750 MIL Euro Bond Explained in Simple English

I was having a discussion with a friend yesterday about the recent Euro Bond that Zambia issued.He didnt seem to understand so I gave him an example with which he could relate to.
My friend is a bricklayer and works peacework sometimes which varies in amounts,but lets put an estimate of K10,000 a day.
Everyday he comes to the bar to have a drink of his favourite brew "shake shake".Now for example assuming one day food runs out at home and he has to spend his last money on food and does exaclty that, leaving him nothing for his favourite brew.
Assuming he still wants to drink,he agrees with the bar tender that he will borrow one packet of brew which costs K2500 and will pay it back like a Euro Bond over 10 days.
Now Follow me, this means he will pay the coupon rate of 5% everyday for 10 days.This means he will pay the bartender K125 (5% of K2500) everyday for 10 days.
At the end of the 10 days he will pay the bar tender the original K2500 for the brew and his debt will be cleared.
Now, the 10 days represents 10 yrs,the K2500 represents a quarter of K10,000 which is the same as $750 million which Government borrowed as a quarter of Zambia's annual budget of $3 billion.The coupon rate is 5.375% to be exact but everything is exactly done in the same way as the example above.
Any Questions???

Read More

Zambia's Inaugural $750 million Bond Evaluated By Kampamba Shula

Zambia has issued a USD 750 Million inaugural International Bond which was over-subscribed 24 times by 425 Global Investors, thereby representing Sub-Saharan Africa’s largest ever book order.
ISSUES TO CONSIDER
1. Conducted 5-day roadshow covering the key institutional accounts in London, Los Angeles, San Francisco, Boston and New York.
2. Inaugural 10-year International Bond Issue.
3. Raised US$750 million at a coupon of 5.375%.
4. Only the second international bond issuance from Sub-Saharan Africa in 2012 year-to-date(first issuance South Africa’s 2024 offering).
5. Testifies to the potential of Zambia’s economy and the strength of international investor interest in the country.
6. The transaction was announced prior to the U.S. markets opening at 5.30am (EST) on 13 September 2012.
7. Order book of approximately US$12 billion from over 425 investors globally.
8. Transaction priced intraday on an accelerated basis within approximately 6 hours of announcement.
9. The transaction boasted the largest orderbook ever and lowest coupon achieved by a Sub-Sahara African debut international bond issue.
10. Transaction primarily attributed to US investors (56%), followed by those in Europe (40%), Asia (3%) and others (1%). The high quality of investor participation is reflected in the broad distribution to various investor types including Fund Managers receiving 85% of allocations, followed by Private Banks / Banks 8%, Pension / Insurance Funds 5% and others 2%.
11. Barclays and Deutsche Bank acted as lead-managers and joint book-runners on the transaction.

Economeka Consulting (Kampamba Shula)

Last year in his budget the Honorable Finance Minister Alexander Chikwanda announced the Zambian Government's plan to go to the International capital market to issue a first sovereign bond in the amount of $500 million.
This route was an alternative source of financing to secure resources for service delivery by the Zambian Goverment particularly for road and energy infrastructure development.
Those expectations where exceeded on 13 september 2012 when the Zambian goverment issued an inaugural 10 year bond issue to the tune of $750 million.This was on account of the exceeding large order book with a total subscription of $11.9 billion, which works out at 24 times over and above the intended amount of $500 million.
This is not only the largest order book for sub saharan africa but also at 5.375% the lowest coupon rate,meaning the most favorable price.
The fact that zambia is able to garner such huge and unprecedented interest from the international investor community is testimony of the confidence the world reposes in zambia.
According to a statement from the minister all borrowings are intended to be spent on growth projects and social sectors of health and education.The minister hinted at a predominance of funding outlays towards the power sector, for instance $186 million will be allocated towards the Zambian Government's equity into the kafue gorge lower hydro power scheme.
The minister said it is important to use this goodwill to get on a sustainable growth trajectory.I concurr with his view.
There are a few recommendations I would like to suggest in the use of these funds.Given that some funding will go to health and education ,clear lines of accountability and responsibility need to be drawn to give clarity on the trajectory.
As the minister noted most of the funding outlays should be directed at the energy sector.My recommendations would be to look at alternative sources of energy.If zambia is to get on a path of sustainable development we cannot ignore alternative energy sources.The reason for this is the unsatisfied need for industry in zambia.

We need energy to supply further mining projects in the country,large scale manufacturing and retail.The current state of energy supply is inadequate for such ambitious ideals.

In the health sector, funding should be availed to create hospitals and clinics especially for rural areas.
In this regard I am referring to creating facilities that would change the health lanscape in rural areas.In addressing the ever present dilemna which is HIV/AIDS, sustainable treatment facilities should be created.
According to Jane Phiri a practising registered nurse “It is undoubtedly true that health in rural Zambia is beset by a plethora of problems that can be summarised into five broad themes; limited access to preventive measures, appalling primary health care, lack of medicines, use of unqualified personnel and poor infrastructure for both patients and staff.”Funding aimed at directly addressing these issues would fit well on a sustainable growth trajectory.

In education, funding should be used to upgrade the standard of education in Government schools by purchasing books,computers and other useful equipment that will make learning more interactive for pupils and teachers.Funding should also be used to improve the sports facilities in learning institutions which have been left unattended to for a while now.
Back to the power sector which seems to be the only sector with which clarity on funding has been availed,my recommendation for alternative power sources would be Solar power energy  and Nuclear power stations.

Below is a link to the Minister of Finance Address
Minister of finance statement on International Bond

The last and possibly most important sector that the Zambian government should invest this EuroBond money is the railway system.The railway sytem has suffered in recent years due to mismanagement of resources or as the Minister Mr Chikwanda put it as "due to high unacceptable levels of derailments, loss of life and property."
This investment will ease pressure on the roads which are not able to handle some of the heavy loads of cargo being moved through them and create the much needed jobs and money in people's pockets.

Read More

Anti Dollarisation in Zambia (SI 33) Complied By Kampamba Shula

The zambian government has recently re-introduced the statutory instrument (SI) No 33 of May 2012 which banned paying,quoting or demanding to be paid in foreign currency in domestic transactions.

SOME landlords in Zambia are in the habit of demanding rental payments in US dollars. It has also been rumoured that some chief executive officers of some major parastatal companies and those of certain private sector companies are paid salaries and/or allowances in US dollars. But are such payments permissible under the Zambian law? Closely related to the foregoing, some lawyers in Zambia are reported to be in the habit of charging legal fees in US dollars, especially when they are dealing with a wealthy client such as some local politician who could have amassed wealth dubiously or when they are dealing with a client who is a foreign investor.

But are demands that legal fees be paid in US dollars permissible under the law? Some Zambian hotels too are said to be in the habit of occasionally accepting US dollar payments. But what does the law say in Zambia?
As Zambia moves towards rebasing the Zambian Kwacha, it should be emphasised that, unlike some neighboring countries that permit the use of different types of currencies as forms of legal tender of payment of money, section 33(1) of the Bank of Zambia Act 1996 permits only the use of the Zambian Kwacha and Ngwee as the legal tender of payment of money in the country.

According to the deputy governor the re issuing of the SI was done to correct a typo where the previous SI referred to the non-exiting BOZ act of 2012 rathher than the correct one from 1996.

All contents remained the same as the previous act.

The truth of the matter is that the previous SI was not implemented effectively.This was the reason that the inclusion of a 10 year jail sentence was explicitly implied in the new SI.

The more important question to ask is what effect does this have on the economy.One clear disadvantage is that money kept in dollars earns a better interest than that kept in Kwacha.Also borrowing in local currency has always been at higher interest rates,the reason for this possibly being a hedge against inflation.

The truth is that dollarisation characterised the zambian economy for a long time with firms freely quoting in dollars.The problem with this is that it increased the incentive to hold money in dollars,so whenever BOZ made an open market operation to buy dollars off the market,it would not be as effective.For example earlier this year BOZ depleted its reserves in an effort to intervene in the forex market where the kwacha had been depreciating uncontrollably against the dollar.The effect of this intervention was weak at the most and failed to yield substantial gains due to the high demand of the dollar for local transactions.The good thing is that foreigners can still hold their money in dollars in their bank accounts but will have to convert them if the wish to transact. However, some critics might be wondering what would happen when it comes to payments in Zambia for intra-regional or cross-border international trade transactions. As long as such foreign-originating payments are being cashed out in Zambia, notwithstanding that the money transfer could have been wired in US dollars and to a US dollar bank account in Zambia, the actual over-the-counter payment should appear in Zambian Kwacha. This argument is in line with section 4(2) of the Bank of Zambia (Currency) Regulations 2012. Section 2 of Zambia’s Prohibition and Prevention of Money Laundering Act 2001 defines ‘money laundering’ as: (a) engaging, directly or indirectly, in a business transaction that involves property acquired with proceeds of crime; (b) receiving, possessing, concealing, disguising, disposing of or bringing into Zambia, any property derived or realised directly or indirectly from illegal activity; or (c) the retention or acquisition of property knowing that the property is, derived or realised, directly or indirectly, from illegal activity. And the term ‘illegal activity’ is defined in the same statutory provision of the Prohibition and Prevention of Money Laundering Act 2001 as any activity, whenever or wherever carried out which under any written law in the Republic of Zambia amounts to a crime.

Although the Bank of Zambia Act 1996 does not criminalise the illegal tendering of payment of money using foreign currency within Zambia, such tendering is illegal because section 4 of the recently promulgated Bank of Zambia (Currency) Regulations 2012 prohibits the tendering of payment of money in Zambia using foreign currency. And section 6 of these regulations criminalises the tendering of payment of money using foreign currency. Viewed from this angle, a client can, and has the right to, refuse to pay in US dollars even after eating a meal at a hotel. Likewise, a tenant can refuse to pay rentals in US dollars. Instead, both the two payees here can opt to either report the matter to the police or simply pay the US dollars equivalent in Zambian Kwacha even though the understanding was that the payment would be made in US dollars.

Long Story short the anti dollarisation is not something new but rather something that was not enforced,It immasculated BOZ forex market operations and generally undermined the Zambian Kwacha.

References on the acts specific laws include Kenneth Mwenda a Senior Counsel at the World Bank in Washington DC, USA, as well as Extraordinary Professor of Law at the University of Lusaka, Zambia

Read More