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Wednesday, 17 September 2014

Cash transfers

Community Development Minister Emerine Kabanshi recently announced that the Government plans to extend the cash transfer scheme to cater for up one million households. Government has sensed that it is onto an election winner.

GRZ is currently running two cash protection schemes that gives support to the vulnerable in the community : social cash transfer and social protection fund. The cash transfer is a bi-monthly cash allowance of $25 and $50 dollars for vulnerable households and households where there are people with disabilities respectively.

Monday, 15 September 2014

Zambia's chaotic land administration

By Bruce Chooma

Zambia is in a bizarre position when it comes to land administration and management. No one knows how much land is available for various purposes. For over 20 years the Zambian government has insisted that only 6% of land in Zambia is state land the remaining 94% is customary. The truth is that a lot of land has since been converted from customary to state land across the country but without any reliable system of records at the Ministry of Lands.

Zambia has a dual system of land tenure of customary and leasehold tenure. The land is vested in the President on behalf of all Zambians. However, the issue of vestment is one that lacks widespread consensus particularly among the traditional leadership.

Friday, 12 September 2014

Sell them!

“It is our hope also that the government will help companies like Times of Zambia where workers have gone for three or four months without getting paid. Workers have been patient, we have met the labour and information ministries but the request we made to the Ministry of Finance is still pending and they are the ones who hold the key...If this money is paid, then the Times of Zambia can also manage to pay the workers"

(Source: The Post)
We keep going in circles on this one. How long will government continue to bail out these newspapers? We should sell all state newspapers and ensure no more money is wasted on producing propaganda that no one is interested in. At the very least one of them must be sold urgently. You don't need both.

Wednesday, 10 September 2014

Infrastructure and development

A recent World Bank blog piece  about infrastructure and development makes the following interesting comment :
"Will public investment in infrastructure be sufficient for unleashing faster economic growth in Sub-Saharan Africa? The evidence, both academic and empirical seems to say not necessarily. We see from the works of Rodrik, Hausmann and Velasco (2005)  that developing economies face multiple constraints to growth, and that public policy should focus on removing the binding constraints that really matter. However, that requires an accurate diagnosis of the binding constraints to growth" 
It is not sufficient just building infrastructure we need to be clear whether it is a binding constraint. And the good news is that in Zambia's case it is one of the binding constraints. The last constraints study actually suggested that the key binding constraints to inclusive growth are low investment in human capital, low infrastructure services and coordination failures.  In fact Zambia is addressing the first two except the last one - governance remains very poor and we can only hope that the recent political changes will now move the country forward in a better direction.

Monday, 8 September 2014

Judicial system and growth

A recent IMF working paper has an interesting summary of the latest empirical evidence on the channels linking the judicial system and growth :
Development of credit markets and cost of credit. Weak contract enforcement raises the cost of borrowing, and shortens loan maturities (Bae and Goyal, 2009; Laeven and Majnoni, 2003), with a detrimental impact on investment, the depth of mortgage markets, and GDP (Bianco et al., 2002; Laeven et al., 2003; Djankov et al., 2008).

Thursday, 4 September 2014

Ebola and growth prospects

A fascinating comment in Business Week on the potential of the ebola virus on the West African region :

"Sierra Leone’s prospects were bright before the worst-ever outbreak of the virus. The economy was expected to grow 14 percent this year, almost three times faster than the average for sub-Saharan Africa. In neighboring Liberia and Guinea, rich iron-ore deposits were luring billions of dollars in foreign investment and fueling growth. Then, in December, the first case of Ebola appeared in Guinea. Its emergence at first was seen as a short-term outbreak with limited economic impact. The disease now threatens to cripple three economies with a combined gross domestic product of about $13 billion. Commodity companies are slowing production, and airlines are shutting routes. In Liberia, the government says the epidemic threatens to derail progress made since the end of the civil war in 2003. Sierra Leone has canceled its first sale of bonds open to foreigners"
Things have a way of falling apart in Africa. If it is not wars then its nature. Given the regional turbulence in West Africa Ebola is the last thing the region needed. One can only hope that the region's government have sufficient fiscal space to boost demand post Ebola.