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Wednesday, 29 October 2014

President Sata is dead

Government has announced the death of President Michael Sata. Below is the address to the nation by the Secretary to the Cabinet Roland Msiska :
Fellow country men and women.

As you are aware, His Excellency Mr. Michael Chilufya Sata, President of the Republic of Zambia has been receiving medical attention in London, in the United Kingdom. He left Zambia with the first lady and other close members of the family on October 20, 2014.

However, it is with a very heavy heart that i address you today, to inform the nation that our beloved President and Leader, His Excellency, Mr Michael Chilufya Sata has passed on.

The head of state passed on, on October 28, 2014 in London at 23:11 hours Zambian time at King Edward VII Hospital Beaumont, Central London. His spouse, the First Lady of the Republic of Zambia, Dr Christine Kaseba-Sata, his son the Mayor of Lusaka, Mulenga Sata and others were present at the bedside at the time of his passing on.

President Sata was born on July 6, 1937. Mr. Sata became the fifth president of Zambia on September 23 2011 after a popular poll.

President Sata’s demise is deeply regretted. During this difficult period, I urge all of you to remain calm, united and peaceful during this very difficult period. The nation will be kept informed of other details regarding the funeral and burial arrangements.

God bless Zambia

Dr. Roland Msiska
Secretary to Cabinet
May God strengthen Dr Kaseba Sata and the all the family members. Very sad news indeed for them and the whole country. May God also give Vice President Guy Scott and the Cabinet all the necessary wisdom as they rule the country for the next 90 days. It is a weighty situation for Dr Scott, but every tragedy is also pregnant with opportunity to refashion the country positively.

The demise of Mr Sata inevitable leaves PF without a designated successor. It is very unlikely that Guy Scott would stand. Therefore PF will need to quickly move to identify a party president. That process is fraught with difficulties because we are dealing with at least four bases of power : the Cabinet members; Members of Parliament; Members of the Central Committee; and, the party in general. The opposition will of course need to coalesce to stand any chance of an upset. Very interesting days ahead politically. 

Copyright © Zambian Economist 2014

Saturday, 25 October 2014

Zambia's Sovereign Wealth Fund

Alexander Chikwanda in the Budget 2015 announced that Government is establishing a Sovereign Wealth Fund [SWF] :
A culture of living hand-to-mouth does not safeguard the interest of posterity. We have the duty and responsibility to secure the future of the next generations. In this regard, I have allocated K100 million for the establishment of a sovereign wealth fund. Going forward, a significant proportion of the dividends from state-owned enterprises that will fall under the Industrial Development Corporation [IDC] will form part of the fund" 
There’s currently no publicly available government policy document that explains the nature, purpose and governance framework of the new SWF. A scan through the revised Sixth National Development Plan (SNDP) mentions the IDC but says nothing on the new SWF. The only information we have is what is stated in Chikwanda's budget statement.

Friday, 24 October 2014

Draft Constitution of Zambia

The Government has now published the draft Constitution of Zambia after persistent demands by civil society and other members of public. There is no roadmap on what happens next. What is clear is that we are not going to have a new constitution before 2016 because the time has run out. The Patriotic Front (PF) may choose to pursue a selective amendment approach if they can reach consensus with the opposition. However, the most optimistic outcome would be a referendum at the same time as the general election. That too is highly unlikely because the current draft is still quite a flawed documents in many parts. And of course PF disagrees with many parts within it. 

Friday, 17 October 2014

Zambia's Sixth National Development Plan

I have been forgetting to share this document, though I suspect many of you may already have downloaded it from other sources. This is the plan that defines what the Patriotic Front are allegedly aiming for in Zambia as they seek re-election in 2016.

Copyright © Zambian Economist 2014

Wednesday, 15 October 2014

A new mining tax regime

Finance Minister Alexander Chikwanda last week delivered the Budget Statement 2015. As the Post newspaper already revealed, government is reducing its share in ZCCM-IH to 60%. Chikwanda also appeared to signal that the contentious VAT rule is here to stay. The big one of course is the redesign of the tax regime for mining operations by replacing the current two tier system with the following mining tax structure:

(a) 8 percent Mineral Royalty for underground mining operations as a final tax;
(b) 20 percent Mineral Royalty for open cast mining operations as a final tax.
(c) 30 percent Corporate IncomeTax rate on income earned from tolling; and
(d) 30 percent Corporate Income Tax rate on income earned from processing of purchased mineral ores, concentrates and any other semi-processed minerals, currently taxed as income from mining operations

Effectively what the measures do is increase underground mining royalties to 8 percent from 6 percent. It has also introduced a 30 percent corporate processing and smelting tax. Another 30 percent tax would be applied to income earned from “tolling”, industry-speak for an agreement to process another producers raw materials.

Sunday, 12 October 2014

2015 Budget in Words

A visual representation of the Budget yesterday as delivered.  I thought it was worth showing how the word "continue" stands out. The main surprise is how often the word governance is used!

Chola Mukanga 
Economist | Researcher 
Copyright © Zambian Economist 2014