Regular readers of Zambia Economist will not have missed what appears to a growing movement of local chiefs to secure a share for their subjects (or perhaps just for themselves). Senior Chief Kalilele is the latest to join the ranks (in contrast to Chief Sinazongwe's method):
Chief Kalilele is certainly not alone. A friend of mine recently explained to me how a Chief in Northern Province has worked to develop a "tribal corporation". They have set up a "company" run by the Chief and has his sub-headmen as partners. Their main goal is to encourage self reliance through agriculture and tourism. The ground is good in the area, so the Chief has been soliciting for funds through the company from donors, locals and people in the diaspora, as well foreign investors. At the moment, on the agriculture side, they have establish smaller subsidiaries or enterprises where subjects are able to source for seed and fertilizer. Their produce is first supplied to the locals and the excess is exported. They have also collaborated with a few NGOs. On the tourism side, there is much work required but the plan is to exploit the vast natural scenic locations the area offers from bush to hot springs . The intention is to structure the deal in such away that the locals have control but through the enterprise. This has all been the vision of one Chief in Northern Province, and with no government help! There has also been one or two recent developments where Chiefs have entered into partnerships with foreigners with regards prospecting for minerals e.g. Chief Chizela's deal:
Senior Chief Kalilele of the Lamba people of Solwezi has appealed to the Government to grant him a licence for small-scale mining in his chiefdom. The traditional leader, who has formed a mining company, Fyesu Minerals Limited, said in an interview at his palace that he planned to start mining copper.
“There are copper deposits all over my chiefdom, but people are not mining it because of the difficulties faced in the acquisition of small-scale mining licences,” the chief said.
Chief Kalilele was hopeful that he would be granted a licence two years after Chief Chizela, of the Kaonde in Mufumbwe, became the first traditional leader to get a full-scale mining licence. The chief, who also wants a timber licence, said he needed to earn extra income as money received from the Government was not enough to support his family and subjects.
All of this has led to interesting questions in my mind on why chiefs who clearly have so many advantages in developing their own mining companies and other business have all of sudden just started moving towards that direction. Related to this is the question of what is preventing others. Is it because there's no perceived advantages or simply poor access to funding or lack of technical know how or may be some other unexplained factor ? As I have explained in the past (and other contributors have highlighted) certainly land and other resources is not a constraint. Chiefs also should be able to borrow since they have access to land and their "legal position" should serve them better to influence other players.
"As part of the consideration for the transaction, Mayfair Mining & Minerals, Inc. will pay US$50,000 to Chief Chizela IX within 14 days of the date of signing the agreement. Upon completion of all preliminary due diligence and preliminary geological survey work by Mayfair, estimated to take three months from the date of the agreement, and if Mayfair then decides to proceed with the projects, the Company will loan the Chief an interest-free sum of US$500,000, which will be repaid only from any future dividends paid as part of his 40% shareholding in Mayfair Kalengwa Limited."
The obvious, and most natural, explanation is history! As I note in the blog Traditional Authorities - Part 1 : Chiefs in colonial Zambia , during colonial times chiefs worked well within their constraints and were local engines of growth. Certainly many of the local stores that emerged were led by them. They used the "native treasuries" to their advantage, investing in a lot of profitable activities whose revenues partly funded the independence struggle. After independence, with the One Party state reforms, that entrepreneurial spirit was restricted (the land reforms did not help), and perhaps Chiefs are only again beginning to realise the opportunities that exist within their chiefdoms!
Of course there's the question of whether this resurgency of Chiefdom led capitalism is a good thing. I'll side step that for now, as that will require a blog on its own (a side effect could be the impact on land reform, and the delicate issue of traditional boundaries). For now it suffices to say that those who wish to see the current resurgency not simply fade away face two challenges.
First, the lack of a coherent framework from government that is understood by chiefs, and even one government can encourage them to take up. Secondly, increasing "foreign influence" , as Zambia become more and more open, may leave many chiefs vulnerable, unless government takes the lead in regulating these interactions, and encouraging them in a positive direction.
Government can certainly do more, especially in the area of "market discovery" and reducing other transaction costs. It was quite instructive reading the views of Chief Chibesakunda on the subject - Insights from Chiefs (Chief Chibesakunda). His views appear to be that chiefs are ready to engage and become engines for development, but they need government to do their bit in terms of infrastructural investment. But all of this depends on whether government truly believes, as I do, that there's no coherent rural development strategy that can emerge without dealing with how chiefs can be useful agents for economic change. Crucially, that model needs to first identify how best to widen this resurgence in chiefdom led capitalism.