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Friday, 31 July 2009

Corruption Watch (Ministry of Health)

Another scam related to the Ministry of Health. The police have launched investigations over the K100 million plus meant for health programmes which allegedly been misappropriated at Mungwi District Health Office in the Northern Province. ZANIS sources reveal the funds were supposed to be used for HIV/AIDS activities and other health programmes in Mungwi District. The audits carried out at Mungwi Health office, revealed that the health funds were diverted for personal gain at the expense of the intended projects.

A Motion for An Indigenous Knowledge Policy

An important motion advanced last week in Parliament on "Development of An Indigenous Systems Knowledge Policy". The House of Chiefs has three blogs on this :

Ministerial Statement : Budget Performance / Inadequate Resources

Ministerial Statement made to Parliament on 31st July 2009 by the Minister of Finance and National Planning, Hon. Dr Situmbeko Musokotwane, MP, on the budget performance for the half of the year and inability of the treasury to release adequate resources to ministries, provinces and other spending agencies.
Ministerial Statement from the Minister of Finance on budget performance & inadequate resourses

The Non Governmental Organisations Act 2009

I was planning to review this new proposed legislation that has caused much consternation, but fortunately this new piece broadly highlights the key areas of concern:

On 16 July, Zambia joined a growing list of countries seeking to restrict civil society through controversial legislation. Since the beginning of the year, numerous governments have sought to introduce restrictive laws to curb the ability of civil society organisations and NGOs to critically examine their policies and question their record on good governance.

Earlier this month, Ethiopia introduced an anti-terrorism law with provisions ambiguous enough to label peaceful blockade of public services or incidental damage to public property during protest demonstrations as terrorist acts.

In June, after much protest from civic groups, Azerbaijan's parliament deferred its decision to pass restrictive amendments to a law limiting the ability of NGOs to access much-needed funds from international donors to sustain and support their activities.

Nicaragua also has a pending draft manual on international cooperation that seeks to impede rather than promote cooperation through provisions that restrict international civil organisations' involvement in or financing of activities deemed to be of "partisan political nature".

In February, a restrictive NGO bill was introduced in the Kyrgyz parliament to prevent civil society organisations from "participating in political activities and processes of the popular vote" with wide implications for election monitoring activities.

While in some instances NGOs have been able to build enough pressure to prevent restrictive pieces of legislation from becoming law, it remains a matter of deep concern that these initiatives are being undertaken in the first place.

Although absolute dictatorships are gradually giving way to elected governments, use of public resources and government powers to marginalise political opponents remains rife in many parts of the world. With opposition parties effectively silenced or marginalised through coercive means in transitional democracies, NGOs have often had to single-handedly perform the task of exposing official malpractices and hold governments accountable for non-fulfilment of electoral promises. This often leads to accusations in government circles about NGOs meddling in politics and abandoning their non-partisan principles. Government/civil society relations in transitional democracies are further strained by the competition for development aid that many foreign donors seek to channel through NGOs. Often, the result is the introduction of a restrictive NGO bill, as in Zambia's case.

Although one of the stated objectives of the Zambian bill is to enhance the transparency, accountability and performance of NGOs, questions regarding the motives behind this push by the Movement for Multiparty Democracy (MMD) government, which has held power in the country since 1991, are being raised. Key provisions of the bill restrict the independence of NGOs and subject them to excessive and unwarranted controls.

Despite existing international best practices that the decision to register should be the prerogative of an individual NGO, the bill requires all NGOs to subject themselves to compulsory registration within 30 days of their formation or adoption of a constitution. No time limit is prescribed for the processing of a registration application, which could keep some NGOs in a prolonged state of uncertainty regarding their legal status. NGOs can be denied registration in the "public interest", a term not defined by the bill. This allows decision-makers to make an assessment of an NGO's merit at their discretion. The bill also ignores the principle of perpetual succession for legal entities, by requiring NGOs to re-register every three years, creating additional bureaucratic hurdles and an opportunity to harass organisations that are critical of official policies.

Furthermore, the bill vests the government-dominated NGO registration board with far-reaching powers that could have serious negative implications for the independence of the NGO sector. Three functions of the NGO board are particularly problematic:

1) The power to approve the area of work of NGOs, which allows the government to determine their thematic and geographic areas of functioning and exercise control over their affairs;

2) The power to provide policy guidelines to harmonise the activities of NGOs with the national development plan, which coopts NGOs into assisting in the fulfilment of the political priorities of the government reflected in the plan;

3) The power to advise on strategies for efficient planning and coordination of activities of NGOs, which treats NGOs as government subsidiaries as opposed to independent entities free to formulate and execute their action plans in line with identified priorities.

Government domination of NGOs is further reinforced through provisions that empower the office of the registrar to demand information from NGOs about their accounts and office-bearers at will and within an unspecified time frame. Registration of an NGO can be suspended or even cancelled for a minor infraction of the bill's provisions, with no distinction made between first-time and repeat offenders.

The bill also imposes forced regulation and peer monitoring on NGOs by forcing them to draw up a code of conduct requiring approval by the government-dominated NGO board, and monitored by a 12-member NGO council. Although members of the council are to be elected by NGOs themselves, its overreaching mandate could have serious repercussions on the autonomy and independence of individual NGOs, who may not subscribe to the majoritarian position adopted by the council. The council is legally obligated to influence the activities of its peers by playing a monitoring and coordinating role over the NGO sector.

A number of civil society organisations in Zambia and abroad have made submissions to the government and parliamentary bodies in regard to the bill but have not received substantive assurances that it will be dropped or at least that its more restrictive aspects will be amended. Passage of the bill in its present form will constitute not only a serious setback for good governance and democratic initiatives in Zambia but is also likely to spawn a spate of restrictive legislation in the region, as attested by recent experiences from Latin America and central Asia, where governments have introduced mirror legislation to roll back civil society space.

Thursday, 30 July 2009

Bankrolling Mugabe

Dispatches investigates how Robert Mugabe's ZANU-PF party are still clinging on to power in Zimbabwe, focusing on the businessmen who are benefiting from or supporting his campaign of political violence. The stuff was pretty ordinary, until "Billy" showed up, grabbing land from black Zimbabweans. It certainly turns the Mugabe spin on its head :

Another day, another party, 2nd Edition

Yet another party formed, this time by the ex- PF MP for Kasama Central Saviour Chishimba. The new party shall be known as United Progressive People (UPP) and will be officially launched on the 3 August in Ndola. The only difference I can see is that if Mr Chishimba is telling the truth, and we have no reason to doubt him, this appears to be diaspora sponsored party. My view on these parties is set out in the first edition.

Mine Watch (Mazabuka)

China's largest nickel producer Jinchuan Group Ltd has now firmly agreed to take over Munali nickel mine next month after the operations were suspended in March due to low nickel prices. According to Mines Minister Maxwell Mwale "Jinchuan will become the majority shareholders with above 70 percent of the shares...Officials from Jinchuan will be coming to Zambia next week to finalise the take over arrangements and we are hoping that they will take possession of the mine by the end of August." We have tracked the local reactions on the House of Chiefs - see here and here.

Wednesday, 29 July 2009

Better Policing (Corruption), 2nd Edition

Yet another entry for our "corruption watch" thread. The Government claims to have apparently "unearthed a scam" involving the Zambia Police to the tune of K8bn. Article reproduced below from the Daily Mail (link may disappear):
Government has unearthed a scam in which billions of Kwacha were misapplied in the purchase of police escort vehicles. Minister of Home Affairs, Lameck Mangani said in Lusaka yesterday that investigations are already underway in the scam suspected to involve about K8 billion.

He said some tender procedures were allegedly flouted during the purchase of the police vehicles. Mr Mangani said Government is now owing billions of Kwacha in unpaid monies to a South Africa-based motor vehicle supplier. He said there is need to verify details surrounding the vehicle transaction.

Mr Mangani said culprits will be taken to task once found wanting. The transaction involves the purchase of latest BMW motor bikes and saloon cars used for VIP escorts.
The level of scams that are being unearthed is truly staggering. At what point should we ask the obvious question - Is there a section of our Government [Executive, Legislature and Judiciary] that is not corrupt? This website certainly has enough stories in the archives that demonstrates that each of the three branches of government have shown evidence of either open corruption or deep susceptibility to being lobbied (a much worse form of corruption - since detection is hard!).

Whether corruption in Zambia has got worse is an open question! I think if corruption is defined ex-post (i.e. after detection) then corruption in Zambia is getting worse because whilst detection may have improved, as one friend repeatedly argues, its appears to be having no effect in reducing cases being discovered. The counter argument of course is that there's a "lagging effect". In other words, the fight against corruption is working, but we wont see its fruits until 2010, 2011, etc. But this begs an obvious question : when did such a fight against corruption begin?

VP George Kunda : Africa Business Forum 2009

An interesting speech by Vice President Kunda at the Africa Business Forum in London, sings praises of the mysterious "great strides" of the MMD led government over the last 20 years, and of course defends Chinese investment.

Part 1 :

Part 2 :

Part 3:

Foes Reunited?

The BBC / CNN and Zimbabwe have reached a deal that will apparently allow "the BBC and CNN will be able to report freely from Zimbabwe for the first time in eight years after restrictions were lifted by the country's government".

In Praise of Iranian Patience (Guest Blog)

Back in the Cold War Decades, when Revolution was a game played by the $billion, and the main trick was to find people willing to die for some local cause that could be perverted into a chess pawn to be deployed opposite the similarly recruited pawns of the other superpower. Only rarely, as in the Soviet invasion of Afghanistan or the U.S. deployment in Vietnam, did the superpowers make the mistake of placing their own soldiers as the designated enemy of such locally motivated and globally supplied insurgent revolutionary forces. The superpowers' own domestic populations could never accept the same level of casualties for "foreign adventures" as the locals would accept fighting for their own autonomy. For example, the Vietnamese General Jiap (multiple spellings) is reputed to have staged the first few encounters with US forces in order to systematically assess their firepower and reinforcement/air support timings, similar to tactics used against the British by Cetiwayo (multiple spellings), sending token attacks in a measured sacrifice to gain crucial information on an unknown enemy. His conclusion was that for as long as Vietnamese forces were only losing 10 men to every American they killed or incapacitated, they would win.

For the most part around the world during the Cold War decades, locals died in local causes fighting other locals, only the outcomes were changed as a result of practically unrelated global superpower agendas. As history has now taught us, these disputants found many nations post-WWII, in colonial and post-colonial Africa alike, to be fertile ground for exploitable conflicts. Combined with the relative indifference of their own populations to the resulting suffering of civilian African populations, where isolated pockets of attention would only be further exploited for propaganda purposes to fuel the home fires of nationalism and maintain astronomical rates of spending on giving substance to the myth of "Mutually Assured Destruction".

It was conceived by planners on both sides as a sort of slow-motion war of attrition, and it is now generally accepted that the Soviets broke under the strain first (I won't go so far as to say that anybody won much of anything, other than respite). Of course the extensive propaganda systems of both countries had to effectively declare victory for their respective countries' somehow, the Russians by adopting a fast-track privatisation policy which effectively transferred power from a political elite to an economic one (often the same individuals) and announcing that the People had Won "Democracy". Meanwhile the Americans declared a "Peace Dividend" and managed for a decade to ignore the fact that if they had really won, then they would have had to keep spending in order to consolidate and ultimately hold their "gains" like any other colonial power. Instead they held a big domestic party that created a lot of domestic jobs and various equity stock bubbles, and the media played up the idea that "now that capitalism won, you can all get rich," but as we have now seen in hindsight they were not well positioned for the actualities they would confront in the 21st century.

I would hope that with two seemingly unclosable military interventions currently raging in the region, the American voter would at last realize that the resistance provoked by invasion is counterproductive, and the fact that the US still has a massive military doesn't mean that it is actually useful to have one. The current circumstances in Iran, despite the desperate propaganda efforts of the ruling party there to shift blame to outsiders, is a fight between the various factions that kicked the outsiders out in the first place. All of the principle players on both sides have long, patriotic Iranian records, are well respected, and not a one of them would require any sort of disclaimer were the clerical theocracy behind them. None of them have been living in exile, none of them have any primary ties to any other nation besides Iran. What they have done is use the blogosphere, which repeatedly demonstrates that it is beyond control of any government (c'mon China, show us what you got!), in spite of what international corporations will do to earn a buck (looking at YOU Nokia-Siemens! You picked the wrong side in this fight. Your competitors have won my business by default. Ask DOW, we haven't forgotten Union Carbide and Bhopal!). Entertainment companies are spending a mint to try and contain bit-torrent direct linkage sites, mainly hosted in scandinavia due to local speech laws, what makes these fools think that they can stop samizdat tweets?

This goes for the oppressive measures too. A samizdat network is based on friendships, trusted individuals who communicate often. Each person may only communicate with two or three others, who in turn have a separate circle of two or three, which promulgates outward. This grew out of Soviet restrictions on how many non-family members could be in the same place at the same time without drawing conspiracy charges and being shipped to a Gulag for political incorrectness. It nevertheless was embraced by millions, and was capable of sharing news across half the globe in remarkably short periods of time, and with uncensorable penetration rates. That the government spies would inevitably report back the content of such messages is irrelevant, the point is that total propaganda systems break down when forced to react or counter external information sources. (They succeed wherever they can maintain virtually sole control over exposure to information on the part of the population to be controlled. This can be quite sophisticated, as with some religious "cult" organizations such as Lord's Resistance Army.)

Governments are faced with a choice, either to accept that the international blogosphere is now a force in setting the subjects and terms of discourse and in effect do their best to capture our loyalty, or to whine about how unfair it is for their country to be included in anyone's definition of "the World" when it would be so much more convenient if they could proceed without anyone looking, or to actively oppose and censor and fight what amounts to an international media machine larger than any single traditional press organ in the world. Twitter works because of hyperlinks. Of course the Iranian revolution is not being organized 140 characters at a time. But 140 is more than enough to trigger pre-arranged sequences, and plenty for high encryption even with intercept. This is why the Iranian government first tried jamming, and why the opposition is patient. Within a few days the government realized that shutting down electronic communication required shutting down trade, and the protesters would win that battle of attrition. They have now shifted to a trace and capture strategy, trying to pinpoint opinions by reviewing ALL electronic messaging, imprisoning and in some cases executing the alleged non-patriots, and hoping that fear will cow the rest (capability thanks to Nokia-Siemens, hoping donor governments who recently suspended health aid are paying non-hypocritical, but perhaps a bit of hippocratical attention).

What is frustrating this enforced propaganda aim is Iranian patience. Every night across the capital (hard to get regular news from anywhere else with the clampdown, but the samizdat messaging is getting through eventually), in small groups on rooftops the simple cry of "Allahu Akbar" ("God is Great") echoes through urban canyons. Each person that disappears from a samizdat network slot is known, cared about, not expendible. They are reported missing, if they are in custody and this is revealed (as is common practice), then charges against them are demanded. People outside the networks see someone they care for hurt simply for communicating, and they talk to those they know and trust about their feelings and frustrations, and instantly the samizdat network has not only healed, but by the nature of the injury it has grown. All that is required is patience and the social nature of humans.

The modern blogosphere was not created for revolution, but sure, it is also very useful for such purposes. This is what happens with invention. Wilbur and Orville Wright offered the patent on the airplane to the US Government and William Howard Taft (the Sec. of Defense, later President) turned them down. They were forced to offer it to Russia and Germany and France instead, which in retrospect considering how they used it was not such a good thing for all concerned (except Siemens! Regretting helping Iranian Intelligence yet?). There is nothing inherently anti-government or anti-establishment about blogs or twitter or any communication technology, but there is something inherently democratic about such forms of communication. Therefore, if you are working for a government, and you perceive that you have a problem with some aspect of these modern communication systems, I would caution against anything but the most targeted, researched, variably phrased and otherwise thoroughly defensible press release you have ever made in your life. Boring is your friend, if you can't simply be friendly. The last thing you want is to get the spotlight as an "anti-blog" authority figure. The math is harder, but it is still democracy, and if you measure the fractal properly, there is nothing monolithic about it.

Convince, don't Censor.

(Guest Blogger)

ZIPPA on "Diversification", 2nd Edition

ZIPPA return to the theme of diversification - previous journal can be found here. I have not read the latest piece yet, but will extract one or two pieces for specific commentary when I get the chance.
ZIPPA Journal : July - September 2009

Tuesday, 28 July 2009

Cultivating a positive image of Zambia

I was reading this fascinating new paper on “punishment – and beyond which discusses the role of punishment and some of the limitations it has in reducing crime. Most of the discussion I have heard before but what struck me was this paragraph from a section on “projecting a lawful society”, which I believe holds broader lessons for the benefits of projecting a better Zambia :
Consider the case of taxation. If the government constantly keeps informing the public that there are individuals cheating on their taxes, people start to believe that cheating on your taxes is an important issue and that a large share of the population is involved. According to the broken windows theory, this induces honest taxpayers to try to cheat on their taxes. This may start a downward spiral of ever-increasing tax evasion. However, in actuality, only about 5 percent of taxpayers are cheaters...If, on the other hand, the government projects the image that most people are honest taxpayers, individuals become aware that they live in a law abiding society. This environment provides them with the motivation to follow the others and to pay their taxes honestly.

The possibility of framing the state of the society by the government as a law abiding society depends a lot on the media. Following the early insights of Lippmann that what people know about the world around them is mostly the result of secondhand knowledge provided by the media (in his time, it was newspapers and radio). Thus, people “often respond not to events or social trends but to reported events”. More recently, the views of the public are strongly influenced by what appears during the evening news on television.

Experimental evidence also suggests that “people who were shown network broadcasts edited to draw attention to a particular problem assigned greater importance to that problem—greater importance than they themselves did before the experiment began, and greater importance than did people assigned to control conditions that emphasize different problems”…While the news media have considerable influence over what and how they report, public affairs news nevertheless is significantly affected by governmental agencies. Indeed, it has been argued, “in most matters of public policy, the news agenda itself is set by those in power” …While the government cannot simply project an image of a society obviously at odds with what people experience, framing the state of a society as law abiding rather than lawless is likely to systematically affect the behaviour of individuals.
I couldn’t agree more with the author, and the article holds positive lesson here for those of us who are keen to see Zambia develop. The power of “projections” is clearly important and in the internet age, a negative thing we say about nation or some article we inadvertently promote could have broader repercussions for investment, especially tourism. Although the article focuses on the role of Government in cultivating images, I think for a nation such as Zambia, where institutions are fairly weak, citizen "projections" take an even more important role. I accept that the incentives for citizens to assume this role are fairly weak, but I do hold out hope for the possibility that the more patriotic among Zambians would see the broader picture and fill in where government lets us down.

In this vein, this is probably a good opportunity to express my utter shock of how some Zambians have promoted this bogus article which has been circulating round the internet and our mail boxes. When the article was first brought to our attention for it to be published, we refused for two fundamental reasons :

First, such articles should never be promoted as they do great damage to the projection of Zambia and its people , with associated economic costs [we are sharing it here mainly because the damage has already been done already and it allows us to make a broader point]. I see no benefit to Zambians from the author's arrogant conclusion that we are a backward and prideless nation whose existence is unwarranted and is better annexed by some outsiders. Even if these conclusions were true, which clearly I disagree with, I cannot understand how patriotic Zambians could encourage public promotion of negative stereotypes. If projecting a positive image is important as suggested in the quote above, then we are not helping our nation in any way by promoting these sort of ignorant articles.

I am particularly appalled (and ashamed) that Zambians in the Diaspora, who are meant to be more educated on average than Zambians at home, have been at the forefront of distributing and defending this useless piece of writing. It is now discussed at every opportunity and in forums where non Zambians listen to. Such discussions do irreparable damage to our great nation.

We need to change and begin to see things in new light. It's okay to discuss it among ourselves but not in newspapers online, blogs or radio shows. We are meant to be ambassadors for our country not detractors!!!! I put this behavior down to the fact that many Zambian commentators usually fail to differentiate between the State of Zambia and the Government of Zambia. In this respect they have fallen foul of the Government owned press stately confusions, albeit for different reasons. I have to admit that at times I have felt like letting rip and just have a tirade at our people who have failled to hold our leaders to account for pillaging our institutions and running down our treasures. But from the beginning, I have always said that if blogging or debate was going to denigrate Zambia, then it is not worth it. The moment I reach a point where I promote such attitudes, I'll quit blogging. Zambia must always be lifted high even as we hold our government to account.

Secondly, perhaps what makes this even more shameful is that some Zambians have jumped on an article whose authorship is clearly in doubt. I have to admit that I find it difficult to afford intellectual space to an article that is patently bogus. It is hard to de-link the veracity of it's critique from it's authenticity. Much of the empirical force it carries rests on it being a genuine historic account of the author’s supposed experience in Zambia. If it was written as a basic assessment it would clearly not command debate because many of the issues it raises have been heard before. From Zambians being viewed as backward to the goodness of forgiving national plunderers. What is really new in that article based on substance alone? It strikes me that often would-be Zambians commentators abroad are ever so willing to lower the intellectual bar for articles that are negative and but never willing to engage in serious positive dialogue. This surely must stop, if Zambians abroad are to gain the respect of those at home.

I write this not as a general rebuke and but as a positive encouragement for all of us to develop a correct balance that cultivates a positive image of Zambia, even as we rightly hold the government of the day to account. I am not saying don't criticize Zambia, I am simply saying if you do, have some responsibility to do it without damaging the country in the process. And by all means call a spade a spade as far as our leaders are concern. I have to say "hand on heart", this is something that regular contributors / guest bloggers on the Zambian Economist continue to do, and long may it continue!

Aid for better connectivity..

The World Bank is bankrolling the implementation of Malawi’s component of the Regional Communications Infrastructure Project (RCIP) which entails the construction of infrastructure linking Malawi to the coastal landing stations of submarine fibre-optic cables expected to be operational by 2010. The Malawi government and the World Bank hope that the project will improve productive capacity and reduce the cost of doing business. 
This is yet another positive use of aid. More detail via Nyasa Times.

Monday, 27 July 2009

Broke institutions (ECZ), 2nd Edition

It appears after highlighting this issue exactly one year ago, the Electoral Commission of Zambia is still crippled by poor funding :
Justice Mumba explains that despite the law allowing the for continuous voter registration being in place since 2001, eight years down the line, the law has still not been implemented mainly due to lack of funds. She says in 2002, the commission submitted a budget of k52 billion of which only k300 million was approved, k962 million in 2003, while no funds were allocated in 2005 and 2006. Justice Mumba adds that in 2007, a budget of 199 billion was submitted to the ministry of finance and national planning and only k84 million was approved, with no allocation being provided in 2008. She says government has only allocated K5billion in this year's budget while the commission requires k48 billion to commence the exercise.
As we have said repeatedly in our "broke institutions" thread, the problem in Zambia is not that we don't have good laws, we do, the problem is lack of enforcement. There's a lack of political will in many areas. How else does one explain why the National Constitutional Conference (NCC), making new laws gets more money (and smoothly), than an already legal office like the Electoral Commission of Zambia, obliged under law to fulfil its duties? It begs the question of why we are bothering with the NCC if one is unwilling to enforce existing legal provisions. Of course we understand why the ECZ is underfunded and the NCC delegates are fully endowed - I touch on this under Satanomics, 2nd Edition.

Malaysian powered MFEZ?

Malaysia's Kulim Hi-Tech Park is apparently planning to invest to US$1 bn as part of the Lusaka South Multi-Facility Economic Zone(MFEZ). According to Trade Minister Felix Mutati, Kulim Hi-Tech Park was part of the team that engaged in 2007 to develop a master plan. Difficult to know how much of this is politics, as we have yet to hear from Kulim Hi-Tech Park. More detail via this Daily Mail article.

Debt for homes

The US plans to loan Angola $400m to build homes for the poor in the next five years. The details are sketchy, but this is the sort of infrastructure aid (debt) approach which is worth undertaking because it's easier to monitor delivery and the benefits are both direct and catalytic.

Sunday, 26 July 2009

Foreign aid for mobile clinics

“These [mobile] hospitals will not be funded from the budget. If we were going to be getting funds from the budget in order to introduce mobile hospitals, the argument the opposition are raising will have been valid. But this is a programme a foreign government is prepared to fund and it’s their suggestion..."
President Banda explaining why the Government has embraced the concept of mobile hospitals which would cost the "foreign government" [China?] around US$50m. The President is effectively saying the money is "free" and has also promised that as well as accepting this "free aid" Government will continue its own efforts to build new clinics and hospitals. That should put a lot of minds at rest, but it still begs the question : should the government have persuaded this "foreign government" to simply give us $50m and spend it on something more beneficial? Or was it the case of foreign aid imposed?

What is clear is that the President is convinced that if the money was funded by Zambian tax payers, this would not have been the best choice. So why is it different if it is being bankrolled by Chinese tax payers? We need to be as responsible with money given to us, as we are with money raised by our taxpayers. The fact that it is "free" does not exonerate us from ensuring it is being spent wisely. It is incumbent upon us to convince the Chinese that it can be spent in a better way. If they refuse, then we know their motives are not genuine.

Saturday, 25 July 2009

Quote of the week (Wilbur Simuusa)

"People expect MPs to dish out money. They expect MPs to assist during funerals and sometimes even to top up their own money to complete certain projects…So in my case, I am sure that even if I get that [gratuity] money, most of it will be used in my constituency..”

Friday, 24 July 2009

A privatized ZAMTEL

The President announced today that government has resolved to sell 75% shares of the Zambia Telecommunications Corporation (Zamtel) to a private equity partner and retain 25 % shares to enable the company operate profitably. ZAMTEL needs about US$200m to recapitalize and the President said he has no money, given other priorities. The plan is for government to "hold the 25 percent and possibly later sell them to the public through the Lusaka Stock Exchange". The privatisation of ZAMTEL will also entail the "liberalization of the International Gateway".

At the surface this looks like the "decoupling approach" we have advocated and backed by Parliamentary Committee on Transport and Communication, but it remains to be seen what is done about the IGW itself - we have recommended to Government directly this model. (Yes, really we wrote to them and they responded saying "ZAMTEL does not need space age solutions, it just needs new money".....but we knew they had no money and sooner or later they would realise that!)

Towards the vanquished windfall barrier ?

Copper prices have been on the rise for the last six months and will soon break the $2.5/lb barrier that would have triggered the windfall tax that has now been abandoned. The windfall tax was designed to match rises in the price of copper: it was set at 25 percent while copper sold for $2.50 per pound, 50 percent for the next 50 cents and increased to 75 percent when copper fetched above $3.50 per pound.

Ministerial Statement : Agricultural Season 2009/10

Ministerial Statement made to Parliament on 23rd July, 2009 by the Minister of Agriculture and Cooperatives, Hon Dr Grig. Gen. Brian Chituwo (RTD), MP, on the Crop Production and Marketing Arrangements for 2008/2009 Agricultural Season and 2009/2010 Marketing Season. Statement also embedded below :
Ministerial Statement from the Minister of Agriculture on Crop Production and Marketing

A new government bank for farmers, 3rd Edition

We first discussed this proposal here advanced by Ben Kapita and then Caleb Fundanga dismissed it here, due to “moral hazard” concerns. Well that idea has substantially grown legs as evidenced by recent exchanges in Parliament, presumably championed without Caleb’s support. As my view is well established on this one, I’ll step aside and hear new voices:
Mr Kakusa (Kabwe Central) asked the Minister of Agriculture and Co-operatives when the Co-operative Bank would be reopened to support farming investments.

The Deputy Minister of Agriculture and Co-operatives (Mr Mulonga) : Madam Speaker, the Co-operative Bank will reopen as soon as the Government pays the outstanding K30.1 billion out of the initial K60 billion owed to the Zambia Co-operatives Federation (ZCF). The settlement of the K30.1 billion is awaiting the verification of the figure by the Auditor-General and clearance by the Attorney-General.

Dr Scott (Lusaka Central): Madam Speaker, I think virtually all agricultural credit institutions which this country has ever put in place, whether it is land bank, call it organisation of Zambia, Lima Bank and Co-operative Bank, have all gone bankrupt because they have lent money which is not being, essentially, repaid. What medicine, magic and juju does the ministry now have that will make it reopen the Co-operative Bank of this town? A co-operative bank that can flourish.

The Minister of Agriculture and Co-operatives (Dr Chituwo) : Madam, the role of agricultural credit banks needs to be appreciated. From history, we have learnt very good lessons with regard to instilling discipline in our citizens who get credit. Since our motivation is to empower a small-scale farmer and prioritise agriculture as the vehicle for socio-economic development, we cannot give up, but try to find a remedy for those bottlenecks that have been identified from our history. Our history shows that we do not have a good lending culture. Thank you, Madam Speaker.

Mr C. K. B. Banda, SC: Madam Speaker, regarding the fact that this bank closed more than a decade ago, may the hon. Minister tell us whether it will take another ten years to verify Government’s indebtedness to the Zambia Co-operative Federation (ZCF)?

Dr Chituwo: Madam Speaker, I am convinced, it will not take a decade to have this bank reopened. As a matter of fact, the Attorney-General is already verifying this credit that we have. If the hon. Member for Chasefu can bring another question in terms of the details, we will be able to provide the answer. Thank you, Madam Speaker.

Mr Matongo (Pemba): Madam Speaker, it is always exciting to have a revival of the Co-operative Bank debt. There is K30 billion at stake as of now. Somebody must pay the K30 billion in order to revive this bank. Could the hon. Minister be a little clearer so that we can give him advice on how to handle this money and come up with the management and board for the bank, thereafter? Will the bank be ran strictly under the Financial Services Act? I need clear answers.

Dr Chituwo: Madam Speaker, this bank is under liquidation and so what we are doing is paying the liquidator. When that is done, then certainly the normal procedures of reopening a bank will be followed. Thank you, Madam Speaker.

Mr Kambwili: Madam Speaker, both the hon. Deputy Minister and of course the hon. Minister in their answers alluded to the fact that they are waiting for the clearance of the Attorney-General. Since when did this Government start taking the Attorney-General’s advice seriously since in a recent case, we were told that his advice is not mandatory?

Dr Chituwo: Madam Speaker, I think the hon. Member for Roan is getting a bit confused.

Mr Kambwili: No. It is you who is confused.

Dr Chituwo: I have provided the answer as requested by the hon. Member for Kabwe Central and there is no ambiguity in it. Therefore, bringing in an unrelated matter is not necessary. As far as we are concerned, we continue to receive expert advice from the Attorney-General’s Office and that is how it will be. Thank you, Madam Speaker.

Mr Kambwili: When it suits you. .

Thursday, 23 July 2009

Irregularities galore..

A new report by the Auditor General reveals some staggering irregularities, similar to those we discussed here.

According to a statement released yesterday in Lusaka by Office of the Auditor General....irregular financial findings in the report of parastatal bodies amount to K264,486,618,109 with transactions which did not follow tender procedures incurring K84,484,225,085. The parastatal bodies audited include Development Bank of Zambia, Indeni Oil Refinery Company, MOFED Tanzania Limited and Patents and Companies Registration Office.

The report on Indeni Refinery revealed that instead of paying K91,950,000,000 towards the re-capitalisation of the company, Government paid K97,750,000,000 resulting in an over-payment of K5,800,000,000. As of December 2008, the money had not been refunded to government.

During the period November 2006 to January 2007, the government released amounts totaling K97, 750, 000, 000 to Indeni Refinery for the rehabilitation of the plant, but it was observed that K48, 250, 000, 000 was allegedly misapplied on repayment of debt to Total Outre Mer SA.

Contrary to procurement procedures, the company procured various goods and services in amounts totaling K84, 262, 186, 109 without following tender procedures. The report states that rehabilitation costs in amounts totaling K79, 818, 077, 918 incurred between 2005 and 2007 were not supported by completion certificates.

And contrary to the conditions of service, between March 2006 and December 2007, a total amount of K57, 600, 290 was paid as DSTV subscription for senior members of staff. According to the report, stores items costing K1, 297, 861, 132 procured during 2006 and 2007 had not been supplied as of July, 2008.

The report on MOFED Tanzania Limited revealed that during the period from June 2005 to December 2007, no board meetings were held to enable the company pass and review decisions. It was however observed that amounts totaling K47, 592, 055 (US$11, 473) were irregularly incurred as board expenses.

In the report of the Patents and Companies Registration Office, it was revealed that during the period July to October 2006, K39,912,000 was misappropriated by a cashier at the Ndola Office. And according to the report, contrary to financial regulation number 45, there were 93 payments in amounts totaling K571, 882, 169 made during the period May 2003 to March 2007 which were inadequately supported in that they lacked receipts, invoices and acquittal sheets. And contrary to financial regulation number 96 (1), imprest in amounts totaling K59, 187, 110 involving 34 transactions issued to 10 officers during the period May 2003 to March 2007, had not been retired as of December 2008.
As usual we are chasing access to the detailed electronic version. We'll upload as and when we get them.

Parastatal Madness, 6th Edition

Further evidence of "parastatal madness". ZESCO this week cut electricity supply to an entire police compound in Itezhi-tezhi in a bid to recover billions of kwacha owed to ZESCO by the Ministry of Home Affairs.

Wednesday, 22 July 2009

The economics of impeachment..

The Post are reporting the Opposition has now formally written to the Speaker with notice of impeaching President Banda. What is particularly striking is that there indeed does appear, if the Mr Kabimba is stating facts, some clients among MMD parliamentarians :
The Patriotic Front (PF), United Party for National Development (UPND) and client MMD members of parliament have notified the Speaker of the National Assembly over their intention to impeach President Rupiah Banda from office. In a letter dated July 21, 2009, and addressed to Speaker Amusaa Mwanamwambwa, W.M. Kabimba and Company writing on behalf of the PF, UPND and client MMD members of parliament stated that the parliamentarians want President Banda impeached because of various breaches of the Republican Constitution from the time he acted as president.

W.M. Kabimba and Company stated that the motion to Speaker Mwanamwambwa for presentation by the parliamentarians would be forwarded to him within 14 days. “RE: NOTICE OF MOTION FOR IMPEACHMENT OF THE PRESIDENT. We act for the Patriotic Front (PF), United Party for National Development and MMD members of parliament in respect of the above quoted matter. We would like to inform you that we have been instructed to peruse and advise our clients from the three named political parties the various breaches of the articles of the Republican Constitution by the President of the Republic of Zambia, Mr. Rupiah B. Banda for presentation of the motion for impeachment to your office......These breaches cover the period August 2008 when Mr. Banda was acting as president of the Republic of Zambia following the demise of President Levy P. Mwanawasa in Paris, France todate. We shall forward the motion to your office for presentation by our clients within 14 days from the date hereof.”
The possibility of MMD MPs rallying behind the impeachment is something that I had not anticipated in earlier musings via Twitter. My view then was that the probability of a successful impeachment were no more than 30%. The reason is simple : weak incentives. In the event of an impeachment Parliament has to be dissolved with a new general election held. There's a reason why previous presidents have kept that provision - precisely because it raises the cost of reneging within the ruling party. Basically, it makes it difficult for those within the ruling party to remove a sitting President, because doing so would automatically send the whole party to a general election. No serious MMD MP wants to go and face an electoral vote with an uncertain outcome. So by ensuring that impeachment triggers general elections, the sitting President is immune from pressure from his party, thereby providing further opportunity for centralising his authority. A president who is immune from being removed because the cost is too much is guaranteed to remain in power throughout the term of his office.

Mr Kabimba's motion, has certainly given pause for thought, but has also given way to natural questions. Is there a deal between the Opposition and the MMD parliamentarians that has somehow strengthened the very weak incentives ensured by the existing constitutions? What would be the nature of that deal, that would ensure that the Opposition does not renege when, and if it assumed power, post elections?

Bigger than Lumwana? 2nd Edition

A Chinese investment story we discussed a while back, actually also many times on the House of Chiefs (e.g. here, here and here), gained new momentum this week with the formal $3.6bn Investment Promotion and Protection Agreement (IPPA) between Zambia and Zhongui Mining Group. I have not seen the details of the IPPA, perhaps Mr Mutati would be so kind enough to publish it ? Without the details it is difficult to know what Zambia has agreed to.

All I know is that IPPAs usually contain special provisions. They are designed to encourage investor confidence by setting "high standards of investor protection applicable in international law". The elements usually include provisions for equal and non-discriminatory treatment of investors and their investments, compensation for expropriation, "transfer of capital and returns" and "access to independent settlement of disputes". Also they are usually not well received due to their secrecy (e.g. see this Tanzanian case).

Mr Mutati has a website, perhaps now is a good time for him to upload some documents that are actually worth reading. I am not holding my breath though, if the Development Agreements saga is anything to go by.

Stately confusions..

I suppose I can officially blame our resident contributor Frank for fueling the habit of spotting incorrect terminology in the media. It was he that rightly noted the perverse tendency of the Government controlled press to confuse “state” and “government”. Often things done by the "government", nearly always the Executive, are incorrectly attributed to the “the State”. It appears our Ministers are also equally confused over basic structures. As this quote in The Post attributed to the Government spokesman Minister Shikapwasha demonstrates:
"I think it's not for the Government to have a position [on the Chief Justice’s contract], it is for the Judiciary to have a position. And as Government we look to the Judiciary for them to give a position for the rest of the nation. And as government we are on firm ground because we know the division of work: Government, Judiciary, Legislature, [that's] how we work. So that is important and this is why we are on firm ground,"
From what I remember of my Grade 8 and 9 Civics classes at St Clements Secondary School (Mansa) and Butondo Secondary (Mufulira) respectively, the Government comprised of three branches: Executive, Judiciary and Legislature. Has this changed since I left junior secondary?

Tuesday, 21 July 2009

Parastatal madness, 5th Edition

An interesting exchange in Parliament over renting of council buildings by Government, reveals another variant of “parastatal madness”. This time its not ZAMTEL or ZESCO owed billions, it is local authorities who are owed substantial amounts, rendering them virtually broke and ineffective by central government. Is it any wonder that many local roads are full of potholes or many of our areas lack essential services that would normally be delivered by local authorities? In developed countries, councils owe central government money, in our nation it is the other way round. I remain convinced that the problem is not lack of decentralisation, but lack of effective enforcement of existing debt obligations in our judicial system. The councils have money and probably the capacity to deliver their priorities, but are hindered by a central government that fails to honour legally binding contracts.
Mr Mweemba (Magoye) asked the Minister of Local Government and Housing:
  • (a) How many council buildings were being rented by Government ministries in the following towns: (i) Livingstone; (ii) Lusaka; (iii) Ndola; and (iv) Kitwe; and
  • (b) How much money, in rentals, was owed by the Government to the councils in the towns at (a) above from 2005 to-date.
Dr Puma : Madam Speaker, I wish to inform this August House that according to the information we have, there are no properties rented by government ministries in Livingstone, Kitwe and Ndola towns. However, there are thirteen properties rented by government ministries in Lusaka. To-date, Lusaka City Council is owed about K2.5 billion in rentals by various ministries. The ministry has directed Lusaka City Council to write to the Lusaka Province Permanent Secretary indicating the debt incurred by government ministries with the view of asking the Ministry of Finance and National Planning to settle it.

Mr Mweemba : Madam Speaker, experience is the best teacher. I worked in the Lusaka City Council for twenty-seven years in-charge of collecting rates. I would like to find out from the hon. Minister regarding the building along Church Road which the Ministry of Local Government and Housing is renting, the Government has made an extension to it without the authority of the Lusaka City Council, meaning that the rental …

Mr Tetamashimba: Madam Speaker, I want to agree that my ministry rents its offices from the Lusaka City Council. I also want to agree that we made extensions, especially to the offices that accommodate the Minister and Permanent Secretary. I also want to inform the hon. Member of Parliament that there is no building in the country that can be built without getting permission from the council which also gets approval from the hon. Minister. I can, therefore, assure you that even if the extensions have been put up by us, the procedure was followed. In terms of rentals, you may wish to know that my ministry has been very kind to the Lusaka City Council in terms of grants. For instance, last year, I think we gave them over a billion kwacha in terms of grants. Therefore, if you can get more than a billion kwacha of grant funds from your mother, how can you charge your mother K200,000?

Mrs Sinyangwe(Matero): Madam Speaker, I would like to find out from the hon. Minister of Local Government and Housing when he is settling the rental arrears because that was an agreement which has nothing to do with the grants?

Mr Tetamashimba: I can assure you that both the current and previous administrations have been settling the rental arrears that we have incurring by being in that building. However, one thing that I would want to assure the hon. Member of Parliament is that the hon. Minister of Local Government and Housing will be the last person to fail to pay what belongs to Lusaka City Council through rentals.

Mr Ntundu: Madam Speaker, the hon. Minister stated that the K1 billion which they gave to the Lusaka City Council was a grant, I would like him to confirm to this House that, actually, that K1 billion was not a grant, but a debt swap.

Mr Tetamashimba: Madam Speaker, it was not a debt swap, but a grant. What is owed to the council will still be paid by the Ministry of Local Government and Housing.

Dr Scott (Lusaka Central): Madam Speaker, rentals are rentals, but there are also rates and there are also grants in lieu of rates. Last time we were looking at a lot more in the total amount of money owed by the Government to Lusaka City Council than the K2.5 billion. Could the hon. Minister give us the full story for the benefit of the nation and the House?

Mr Tetamashimba: I am surprised that the councillor for Lusaka City Council who is just a stone throw from our office has never had time to come and find out about the rates and other payments that are due to the council. Madam Speaker, it is just fair that we give to the councils what we owe them. We give grants in lieu to councils without considering what we are owed as a ministry. Madam Speaker, I can assure you that even when you look at the budget, you will find a provision for the payment of rentals. However, people must also be aware that the ministry has had problems in terms of finances. This is as a result of the Government deciding to spend more on other priority areas. Are the priorities to pay rentals instead of us buying medicines for the Zambian people? The answer is no. I think that since the payment of rentals is in the budget and money being available, the time will come when we will settle them.

Press Release : ZESCO Tariff Decision

ZESCO Tariff Decision 2009

A wonderful tradition

As Malawi plans the construction of a third government funded university, we are reminded of an interesting Malawian tradition that bears no resemblance in Zambia :
Mutharika, a western-educated economist, is planning to build a university in his home area. Former President Bakili Muluzi – who earlier this year saw his bid to stand for a third presidential term blocked by a court – also plans to build a university, maintaining a tradition in which Malawian presidents have committed themselves to building private educational institutions. The country’s first president – Muluzi’s predecessor Hastings Kamuzu Banda – built a high quality institution, the Kamuzu Academy, nick-named ‘Eton in the Bush’.

Monday, 20 July 2009

Unwelcome Guest

The Post Editorial on the tyrannical rule of Mswati and the hypocrisy that has now become SADC's emblem. In a sort of weird way, it is an echo of this extraordinary attack we discussed a while back from The Herald, which accused SADC nations of double standards with respect to Zimbabwe :
"What tribute can Zambia pay to Mswati for exemplary leadership? What exemplary leadership has Mswati displayed? What social and economic developments have been taking place in Swaziland that Zambia has followed with keen interest? What traditional and democratic governance has Mswati successfully blended through wise leadership? And what elections can Mswati be praised for in Swaziland?

Whilst Rupiah has a right to invite Mswati for a visit, we wish to express our strong displeasure at the presence of the King in our country. We say this because Mswati is running a tyrannical royal dictatorship in Swaziland. And by highlighting this matter, we wish to strongly signal that it is time now for SADC to put serious pressure on Mswati for the democratisation of Swaziland.

The Tinkhundla system based on the banning of political parties and the suppression of freedom of association and political activity that Swaziland has, is one of the most oppressive systems in the contemporary period.

Whilst the Swazi King was entertained to a state banquet here and enjoyed game viewing in one of our national parks in the company of Rupiah, he has subjected the people of Swaziland to hunger and poverty whilst he and his family enjoy a lavish lifestyle.

Millions of rand are being wasted in Swaziland to finance the Mswati dynasty; which includes throwing expensive birthday parties, procurement of luxury motor vehicles and financing personal shopping sprees; whilst the majority of the people do not have access to basic services and the HIV/AIDS pandemic is ravaging the country. For far too long, SADC and the African Union (AU) have turned a blind eye to the brutalities meted out to the Swazi people by Mswati.

Why should Swaziland still belong to some 17th Century archive or political museum, as a source of tourist attractions and academic interests for European anthropologists keen on studying how 17th Century Africa looked, a classical example of backwardness and primitive social relations of the worst order, with no regard for human dignity, of women in particular?

Should it not be of interest to all of us that in our region we have a country that has evaded the powerful media screens, the academic freedom train of political scientists and all the world's watchdogs who should have been ashamed of their witting or unwitting silence and failure to uncover more than 35 years of legalised political fraud in the name of Swazi culture and tradition?

But why should a fast-evolving world of information super highways on a global scale afford to tolerate the longest state of emergency in the region, and most probably on the continent as a whole? These are the questions we should pose to our government, multilateral institutions of governance in our region and continent, as well as beyond. But even more uncomfortably, we must also pose them to ourselves. Should we be pardoned, for we did not know, or we did not see or we just chose silence, for it is golden sometimes and more convenient than the sacrifice that comes with challenging things?"
I have often criticised the Post editorials of lacking depth, especially on economic matters, but not this one. Well worth the read. I suspect the current persecution from Government may well bring the best out of The Post, as many rally to give a helping hand not just financially but intellectually as well. The Post can start to show appreciation by forever abandoning that folly of a subscription system. If recent events tell us anything is that the world is watching and "people protection" for the Post would be greater if they allowed free online access. I am sure the current temporary arrangement is not by accident, but they must keep it going. Much revenue can be made through adverts surely.

You can read the full editorial here.

Gearing up for 2010, 2nd Edition

Botswana is developing new regulations to provide the framework for a liberalised air transport market, which would lead to lifting of Air Botswana's exclusive concession for the operation of scheduled domestic and international air transport services. The move is part of a broader step towards implementation of the Yamoussoukro Decision, but also seen as vital in allowing private carriers to enter into the domestic market and/or regional scheduled service at a time when all eyes are on the region for the 2010 FIFA World Cup. There are chances that some airlines may decide to use airports in the region for parking. In addition, all of the four airports, SSKA, Maun, Francistown and Kasane, are being given a facelift that will bring them up to international standard. Mozambique has been doing its own aviation preparations.

Sunday, 19 July 2009

No right to "self-deception"

I couldn't resist the chuckle when I read the story about government ordering the arrest of American evangelists circulating pamphlets predicting the world will come to an end on 21 May 2011 :
Chief government spokesperson Ronnie Shikapwasha accused the visiting Americans of spreading false news designed to cause panic in the country. “The group is contradicting the bible that teaches that no one knows when the world will come to an end,” Shikapwasha, who is also the Information Minister, told reporters in Lusaka.

The Minister said Zambia as a Christian nation had no room for such “falsehood” and the people responsible should be arrested and deported to their native country, stressing that government has a duty to protect its nationals from receiving falsehood such as the one being spread by the visiting Americans.
Oh dear! Surely people have a right to deceive themselves? Also is the Minister really saying that people are not rational enough to pick up the Bible and check for themselves? In fact I happen to think that such actions cannot even be defended on biblical grounds, but that is another discussion. For the record I do defend Zambia remaining a "Christian nation" - see the post State and Religion. Though in practice, I do not think it carries any significance. Our nation has such wickedness including allowing women to give birth in public and in our jail cells. I defend the declaration simply as a matter of principle because I don't think you can build a viable and cohesive society without any cultural or religious underpinning.

Information and Communications Technology Bill 2009

A number of new bills have been enacted into law, covering some quite important areas we have covered on Zambian Economist. Unfortunately the Legislature is extremely poor at ensuring that the Zambian public are sufficiently plugged in between the time the Executive tables the bill and final enactment. Often we only find out about the bill when it has been passed! That said, I think there's still some merit in discussing some of the already enacted legislation, if only to see where a more reasonable Legislature than the present one may consider further refinements. Also part of the mission of the Zambian Economist is to encourage all Zambians to read and understand the laws that are being passed and how they affect us. So I hope it will encourage all of us to read these lengthy documents, which defines many of our freedoms without our input. In the next couple of posts I'll highlight very briefly some of main provisions in new bills from the Third Session of the Tenth Assembly.

Our first take is the Information and Communications Technologies (ICT) Bill 2009. This bill essentially builds on the bootleg version we discussed back in 2007., with a now non-existent URL linking to the document (CAZ removed the document). The ICT Bill 2009 repeals the Telecommunications Act 1994 and Radio Communications Act 1994. Its therefore a very important piece of legislation.

The Positive

There are certainly some important developments in the latest bill beyond changing CAZ's name to the Zambia Information and Communication Technology Authority (ZICTA). ZICTA is now an Economic Regulator with power to regulate tariffs for "dominant" players and agreements on interconnections. We have previously voiced concern over ZAIN's rising dominance, as well as the ability of ZAMTEL to restrict competition through interconnection and access agreements. A particular important point is the idea of "cost reflective tariffs" for dominant players in both interconnection agreements and internal tariffs. This will go some way to helping consumers. Cross subsidies and discounts are also now effectively eliminated - so no longer will ZAMTEL be able to maintain CELL-Z by making the profits from interconnection agreements with ZAIN and MTN (currently their customers effectively prop an inefficient ZAMTEL).

The Fog

ZICTA is now autonomous, but that clearly has been qualified with significant room for Ministers to dictate many areas that remain undefined and those provided by various sections of the Act.

A key area relates to "access agreements" clearly drafted with the International Gateway (IGW) in mind. The Act clearly implies that although ZICTA would regulate these sorts of infrastructure, how the appropriate gateway tariffs are determined may be dictated by statutory instruments issued by Ministers : "The Minister may, by statutory instrument, prescribe matters and other particulars for inclusion in access agreement". In short not only will how much is charged by ZAMTEL for the IGW largely be dictated by Ministers but also fees to anyone wishing to build another IGW would also be dictated by Ministers. No surprise therefore that while can speak of ZICTA pushing for greater competition and cost reflective tariffs in the area of interconnection and "other dominant" arrangements, with access agreement the wording is full of waffle - some musings about "reasonableness" and "non-discriminatory access".

Linked to the above, is the important point of how fees are set for various radiocommunications and electronic licences. It is part of ZICTA's remit to issue licenses but who determines the scope and levels of fees is not clearly defined. Again this appears to be an area where Ministerial influence may yet play significant role. Incidentally, there's no suggestion that further consultation would be necessary in this area with the public.

Another interesting proposal is the Universal Access and Service Fund which is designed, as the name suggests, for financing of universal access and service. The idea is to promote widespread availability and usage of electronic communications in "under-served" or remote areas. The Fund will be administered by ZICTA but unfortunately the Act does not specify just how it shall be funded! All it says is that the Minister, on recommendation by ZICTA, shall provide regulations which may include "the sources of funding and the manner in which the Fund will be paid" and "the annual contributions payable by any licencee to the Fund, shall not exceed the amount prescribed by the Minister...".

One hopes that Ministers would take the idea of asking licencees to contribute too seriously. I have a natural preference for using the the tax system to raise funds, instead of asking companies to pay more on top of taxes. Either we tax these licensees properly with enough revenue available for the sort of fund in question or we don't bother at all. I am yet to be persuade of the reason for such parallel arrangements (unless we are correcting specific market failures, which is not the case here), which only serve to bring yet more fog to the table.

The Bizarre

Perhaps, the most bizarre element in the Act is the proposed composition of th ZICTA Board. If you have ever doubted the chief lobbyists in Zambia with significant sway on the powers that be, one only needs to look at the proposed representative on the ZICTA Board. Can anyone honestly tell me why an act of Parliament needs to specify current national associations like Farmers Union and Law Association of Zambia (LAZ) to have atleast one representative on the ZICTA Board? What about other associations, present and future? What makes LAZ more qualified to sit on the ZICTA Board than say Economics Association of Zambia or Women for Change or Disabled Association of Zambia? It is foolish to prescribe specific associations to take seats on regulatory boards, at worst it is a clear sign of a corrupt Legislature that panders to lobbyists. Another criterion should have been found. In fact there's no clear discussion of how those Board Members will be vetted once chosen by associations, apart from the Minister agreeing to names or asking for another name! I know the concern was to make the Board sufficiently independent, but we also must guard against the pre-eminence of certain associations in legislation.

Going Forward

In general, the Act does represent a positive step beyond the status quo, especially with respect to economic regulation. But then again, we are starting from a very low base. Whether the provisions of the Act translates in tangible improvement in the sector depends on bigger questions - how robust will the board be? will ZICTA have sufficient resources (it will be funded from fines, license fees and GRZ pot)? how will the IGW question be resolved? how will the Zambia Competition Commission (ZCC) relate to ZICTA's new functions? Will ZICTA have enough courage to impose itself sufficiently, in regulating a Government owned company like ZAMTEL, when itself it is subject to Government Ministerial directions? Much will also depend on the quality of the personnel within ZICTA, and that is related to funding!