SCHOOL OF BUSINESS, ECONOMICS AND MANAGEMENT

BBA 140 BUSINESS ENVIRONMENT

CLASS TEST – CONTINOUS ASSESSMENT
Time allowed: 2 HOURS, Answer all questions
QUESTION ONE
Case Study (Energy prospects brightens as Zambezi river flow is up 25%)
Zambia’s energy prospects have rebounded with the Zambezi River Authority – ZRA
announcing that the Zambezi river flow has throughout this week of February continued
to rise quite steadily, rising above last year’s flows during the same time by 25%.

However, this has still been termed below the long-term average of 29%. The Authority
says the flows in the Zambezi River at Chavuma shot up by 73 m3/s between the 5th
and 6th of February indicating intense run-off on the Zambezi headwaters.

Addressing the media in Lusaka on February 7, 2020, attended by the Zambian

Business Times – ZBT, ZRA Chief Executive Officer. Eng. Munyaradzi Munodawara
said the flow is still soaring above the long-term average by 41% and last year’s flows
by 189%. Eng. Munyaradzi said the flow at Victoria Falls is also expected to show
considerable rise towards the end of February 2020 as the flow forecast indicates
possible slight improvement in flows this year compared to last year. Meanwhile, he
added that Lake Kariba has a capacity of about 180.6 billion cubic meters when full at
488.5m but that of this capacity only 65 billion cubic meter is currently available for
power generation due to design considerations.

Eng. Munyradzi said the lake has so far in January 2020 received a total of 3.15 billion
cubic meter as total inflows, compared to 1.97 billion cubic meters received over the
same period last year adding that the Zambezi river is currently flowing at around
663m3/s against a long term normal of 931,3/s. The lake level dropped by 1cm between
the 5th and 6th of February 2020 due to a slight rise in turbine outflows over the past 2-

Page 1 of 4
3 days to around 800 m3/s and that this explains why we are at 5.4 billion cubic meters
or 8.36% usable storage in Lake Kariba as of today February 7, 2019.

Zambia with its geographical advantage has invested heavily in hydro electricity
generation which renders the economy vulnerable to climate change effects of draught.
However, the heavy rains being experienced in most parts of the country with floods in
the Eastern region has brightened the energy prospects for 2020/2021 and this would
now give enough room for development of alternative energy sources such as thermal,
solar and wind to diversify the power generation mix.

Source: ttps://zambianbusinesstimes.com.
Required

(a) Using an industry of your choice, explain how climatic changes have affected
such an industry.
[10 MARKS]

(b) Although the Zambezi river flow has continued to rise quite steadily, rising above
last year’s flows during the same time by 25%, this has still been termed below
the long-term average of 29%.

Suggest measures the government should consider in order not to make the
Zambian economy vulnerable to climate change effects.

[10 MARKS]

(c) Lake Kariba has a capacity of about 180.6 billion cubic meters when full at
488.5m but of this capacity, only 65 billion cubic meter is currently available for
power generation due to design considerations.

In light of the above statement, what advise can you give an entrepreneur
operating a business in Kalingalinga whose major source of energy is hydro-
power?

[5 MARKS]

Page 2 of 4
 [TOTAL: 25
MARKS]

QUESTION TWO

(a) Unemployment is defined by the Bureau of Labor Statistics as people who do

not have a job, have actively looked for work in the past four weeks, and are
currently available for work. Also, people who were temporarily laid off and were
waiting to be called back to that job are included in the unemployment statistics
Discuss the main effects of the unemployment on our society and economy.
[10
MARKS]
(b) Currency depreciation refers to the decline of the price of one currency against
another. Such fluctuations in exchange rates significantly affect a wide range of
companies. The effects can range from mild to dramatic depending on the
product or service supplied by the business and the competitive landscape.
Discuss the effects of the current depreciation of the Kwacha to a US Dollar on a
Farmer exporting Rose Flowers and on Game Stores in the Retail sector.
[10 MARKS]
[TOTAL: 20 MARKS]

QUESTION THREE

(a) Going public refers to a private company's initial public offering (IPO), thus
becoming a publicly-traded and owned entity.

With reference to a Public Limited Company you know in Zambia, discuss any
five (5) merits of going public.

[10 MARKS]

Page 3 of 4
 (b) Using relevant examples, distinguish between a Mixed economy and a Free-
market economy, and provide reasoned arguments why the market system has
proved to be the best.

[10 MARKS]

[TOTAL: 20
MARKS]

END OF TEST PAPER

Page 4 of 4