A belated edition of the ZDA Spotlight :
ZDA Spotlight : January 2011
Monday, 28 February 2011
Sunday, 27 February 2011
Saturday, 26 February 2011
Friday, 25 February 2011
Thursday, 24 February 2011
The total volume of cheques returned unpaid on account of insufficiently funded accounts increased by 5.4% to 4,428 (third quarter 2010: 4,202) cheques while the value decreased by 8% to K36.2 billion (third quarter 2010: K35.3 billion). The Bank would like to urge members of the public to always ensure that they fund their accounts sufficiently whenever they issue cheques. This will ensure that they do not face criminal charges under the National Payment Systems Act for bouncing cheques dishonestly or with intent to defraud.
Tuesday, 22 February 2011
The two major GRZ maize marketing policies used to date in the 2010/11 marketing year are: (1) setting an FRA maize buy price of K65,000 per 50-kg bag, which is well above maize market prices and roughly comparable to the price of South African maize landed in Lusaka (the import parity price); and (2) progressively increasing the FRA‟s maize purchase targets throughout the course of the Agency‟s buying campaign and ultimately purchasing 878,570 MT or 83% of expected maize sales by smallholder farmers. These policies have resulted in the following outcomes.
First, the FRA has accumulated massive maize stocks that can only be sold domestically or in regional export markets at a major financial loss. Much of the FRA‟s maize is at risk of spoilage due to inadequate storage facilities and poor prospects for exports. At the end of the day, the FRA‟s 2010 operations are estimated to cost the Zambian Treasury nearly K1.5 trillion.
Second, the FRA‟s activities have put upward pressure on market prices for maize but only a relatively small group of well-capitalized farmers have benefited directly from the high FRA buy price and large volumes purchased and/or indirectly from higher maize market prices. Despite the bumper crop, only 36% of smallholder farmers expected to sell maize during the 2010/11 marketing year and just 4-5% of maize-growing households (approximately 49,000 households) are likely to account for 50% of all maize sold to the FRA and private buyers.
Third, higher maize market prices as a result of the FRA's activities have made maize grain and maize meal more expensive for urban and rural consumers than would have been the case in a bumper crop year without such heavy FRA involvement.
Fourth, because the FRA buy price is comparable to or greater than the import parity price once transportation and other marketing costs are added to the FRA price, millers could obtain maize more cheaply from South Africa than from the FRA unless the FRA's sale price is subsidized by the Zambian Treasury.
Fifth, the FRA's progressive ratcheting up of maize purchase targets caused private traders to delay their entry into the market, which in turn limited access to maize markets for farmers that were unable to sell their maize to the FRA.
And sixth, maize bought at the FRA price is not competitive in regional export markets and US$91-177 is being lost on each ton exported. FRA's willingness to export maize at a financial loss and uncertainty over the timing and magnitude of FRA maize purchases and over GRZ export policies have also discouraged private sector participation in formal maize exportation, which could have relieved the national surplus without imposing huge costs on the Zambian Treasury.
Corruption Watch (CDF), 4th Edition
Corruption Watch (CDF), 3rd Edition
Corruption Watch (CDF), 2nd Edition
Corruption Watch (CDF)
Sunday, 20 February 2011
Saturday, 19 February 2011
This week has been quite progressive on the reading front. A number of books which I have been reading in the last month in parallel were completed.
I read Zambian Democracy Betrayed : Patrimonial Corruption in Zambia by Tresphor C Mutale, released in 2008. At 69 pages it read more as a monograph than a serious weighty book. However, from the reaction to some of the quotes from it on Facebook or Twitter, it appeared interesting. In general the book is useful in explaining the linkages between culture and corruption - though I hoped for more. Unfortunately the book is not available online. Its published only with Mission Press (Ndola).
Another book which sparked some interesting discussion was God is Great, God is Good : Why Believing in God Is Reasonable and Responsible, edited by Craig & Meister. The book is essentially a positive apologetic for belief in God. It is particularly aimed at those who have been taken in by the "new atheism" led by Dawkins and others. It tackles a range of topics from psychology to history and explains how these point to God. This is the first time I have read so many important thinkers in one book. Plantinga, Behe, McGrath and many others are represented. I particularly liked Pockinghorne's discussion on physics, especially the multi-verse theory and its flaw. I think what was missing were contributions on mathematics. Would have loved to see Poythress do that. A good read nevertheless. Strongly recommended!
Last year, I began making my way through the four book volumes penned by John M Frame on the Theology of Lordship. These are large books over 800+ pages plus each. The first book dealt with The Doctrine of the Knowledge of God. This week I completed, after 6 months, the second in the series - The Doctrine of God. I enjoyed this tremendously and given its depth and richness it meant I had to read the 860 or so pages much slower. With the second book done, I am now moving onto the third, which I suspect wont be completed until December! It is 1000+ and I will read only 100 pages a month from it.
To keep up with quotes from the many books and large reports (e.g. a recent large report on Zambian prisons), I am reading please follow us on Facebook or Twitter.
Book Reading Goal Review
Books Read So Far : 8 books
Remaining Books to Achieve Target : 42 books
Weeks Remaining to Achieve Annual Target : 45 weeks
Friday, 18 February 2011
"When we introduced the windfall tax in 2008, we experienced a flight in mining exploration and I am sure that if we introduced the tax, we will kill the future of the industry. We are against introducing the windfall tax because we are trying to sustain the future of the mines"
[Bishop Kasonde] said the people that experienced the pollution and failed to sleep due to the mining activities should be the first ones to benefit from the investment. Bishop Kasonde said poverty was the order of the day in North Western Province. He asked the government to help people by seriously investing in the area. “We appreciate what the government is doing but they can do much more. These are very critical issues,” he said.
Bishop Kasonde said a lot more needed to be done to develop North Western Province, especially in the area of empowering locals. He said although some locals had been employed in the mines, people were looking forward to a future where a bigger number would be availed an opportunity to work in the mines. “The literacy levels are quite low and the mines are looking for skilled labour. Most of our people have basic education or no education at all,” Bishop Kasonde said. He said it was, therefore, incumbent on the government to ensure that investment in education was heightened. “It should be real investment. It is not just a question of building infrastructure,” Bishop Kasonde said. “They have built a number of schools in here but I have never heard them building a college for teachers.”
Mining Reflections: Proposition Two (Update), 2nd Edition
Mining Reflections: Proposition Two (Update)
Mining Reflections: Proposition Two
Wednesday, 16 February 2011
An extract from a report by excellent Doreen Nawa on how the people of Mulobezi area in Sesheke district are losing out from foreign exploitation of the timber industry. Illegal export of timber is costing many countries millions of dollars largely through western companies."It is sad to see Sesheke under-developed when it is endowed with natural resources that can be used to accelerate development. We have the Zambezi River, the Livingstone-Sesheke Road which connects Sesheke to Central and sub-Saharan Africa. Sesheke has the timber and other resources that can help develop this district....Unless we have established markets or stable investors in this industry, the country risks losing a lot of money from illegal timber export. The timber which is being smuggled today is costing a lot of money in some of the neighbouring countries and Europe...This sector is rich but at the moment, the few Zambians engaged in this timber industry are small-scale traders who are even exploited because of lack of an established market and certain policies to support their dealings in this industry..."
Tuesday, 15 February 2011
“We need resources and more needs to be done in advocacy; one of the challenges in this sector is that we do not have vocal civil society organisations to speak on issues of the environment. We are not doing enough and I call on civil society to help us do so...."
Miners at Chambishi NFCA mine rioted on Wednesday night burning three vehicles to ashes, looting their canteen and smashing windows on some buildings. The miners’ action is said to have been spurred by their on-going discontent over terminal benefits following their transfer from NFCA mining department to JCHX, a new company that has been formed within NFCA....About three weeks ago, workers at the same mine protested over alleged under-payment of their terminal benefits since their transfer from NFCA mining department to another company JCHX. The angry workers then said it was a mockery for management to pay some of them as little as K500,000 for their terminal benefits when copper prices were so high and production at the firm was good.....
Related Posts :
Mining Reflections : Proposition Three (Update), 2nd Edition
Mining Reflections : Proposition Three (Update)
Mining Reflections : Proposition Three
Media reports that Deputy Minister for Mines Gabriel Namulambe has been allocated more than seven plots by the Mpongwe District Council. The Parliamentary Committee on Land and Development visited the council to find out how the K500 million land development fund meant for opening up land was used in the area. The reports come after similar revelations at various councils, especially Lusaka City Council. More details via The Post.
Monday, 14 February 2011
The constant hubbub over the copper mining windfall tax, coming from opposition leaders and NGOs, must be disturbing to investors in the sector. Yes, they have guarantees from the current government that the dreaded WT will not come back for many years, but what is such a guarantee worth in a country where the government can change overnight (even if the Electoral Commission has zero credibility at present)?
Sunday, 13 February 2011
Bishop Mambo on how the Church has become compromised and are now effectively agents of poverty."The Church has been compromised and some of these new bishops just want to drink coffee with the Republican President. The Church has made things worse by failing to stand for the majority of people suffering in society....The Catholic Church is being called names for speaking out against injustices in society. This should be the spirit of the Church because that is what Christ would do… help the poor in society...The rich are getting filthy rich while the poor have become much poorer. This is not the way the country should be run"
Saturday, 12 February 2011
The latest Lusaka Basic Needs Basket and the associated press release for January 2011 - focusing on the minimum wage. In October the basic needs basket for a urban family of six stood at K3,019,100 (or US$629).
Lusaka Basic Needs Basket - January 2011
Standard Chartered assessment of the economic outlook through to 2012. Nothing out of the ordinary but always useful to have numbers in a single place :
Food, Copper and Kwacha, Amina Adewusi, Standard Chartered Global Focus, Market Intelligence (Subscription required) :
We remain constructive on the Zambian kwacha (ZMK) due to continuing strong fundamentals in Africa’s largest copper producer. Elevated copper prices and a sustained trade surplus backed by record agricultural output should support the ZMK throughout 2011. Notwithstanding elections, due by September 2011, we expect the ZMK to strengthen to 4,500 against the US dollar (USD) by the year-end.
Our forecast is based on a number of factors. First, we expect ongoing support for copper prices this year, underpinned by tight supply and accelerating Chinese demand. The latest data from the Bank of Zambia (BoZ) shows that FX reserves stood at USD 2.16bn in October 2010, up 17% y/y. With copper earnings accounting for around 70% of Zambia’s FX reserves, a further rise is likely, underscoring positive sentiment towards the currency.
I have now finished book two of the four part series on church history by Nicholas R Needham. This week I read 2000 Years of Christ's Power, Part Two : The Middle Ages released in 2000. I found this volume very interesting largely because I have always been fascinated by middle ages history. Naturally the volume covers all the church thinkers during that period, most prominently Aquinas, Bernard of Clairvaux and Ockham, but also its discussion of Charlemagne and other rulers was fascinating. A wonderful read.
Book Reading Goal Review
Books Read So Far : 5 book
Friday, 11 February 2011
Bob Sichinga highlighting a form of "lobbying" that is necessarily corrupt.“There is something wrong in the whole management of this important resource copper...For as long as the mining companies continue to provide pecuniary partisan benefits to the MMD at the expense of the nation, those benefits will continue to sway the minds of the current fiscal managers"
Thursday, 10 February 2011
An industry perspective on recent mining developments. Naturally, a lot of praise for Zambia's low fiscal regime, but also an "insider" hint (?) about a potential new Mining Act. Not sure whether that is intended to a pre-election give away or a post-election reward (as was case in 2008 with the abolition of the windfall tax) :
All jurisdictions have their issues and difficulties that mining companies need to take into account when making their investments. In general, it has become a bit harder to do business as a mining company in many parts of the world. That means those jurisdictions which do provide a reasonably friendly mining policy and regulatory environment give themselves a great advantage over other places where narrower interests hold sway.
It seems Zambia is heading in the right direction, and is giving itself a very good chance to sustain itself as one of the world’s major producers of copper. Zambia’s chamber of mines general manager Frederick Bantubonse recently told my colleague Lionel Williams, who has done the series of articles in this edition featuring that country and mining companies operating there, the signs are good that the Zambian government is about to implement an investor friendly Mining Act. This will open the door to further foreign investment that has been sitting on the fence watching potential outcomes.
Wednesday, 9 February 2011
Tuesday, 8 February 2011
Monday, 7 February 2011
Sunday, 6 February 2011
A nice little response from Daron Acemoglu which reinforce what we have previously discussed. Yes, it matters because economic and political power are interlinked :
Here are three main reasons why society may care about inequality. First, people's well-being may directly depend on inequality, for example, because they view a highly unequal society as unfair or because the utility loss due to low status of the have-nots may be greater than the utility gain due to the higher status of the haves. Second and more importantly, equality of opportunity may be harder to achieve in an unequal society. Many economists have, by and large rightly, focused more on poverty than inequality. Poverty not only causes low standards of living and poor health but damages both individuals and society by preventing those at the bottom from realising their potential, perhaps because they are unable to obtain a decent quality of education to prepare them for competition in the labour market. While poverty is clearly the more important factor in creating a non-level playing field, inequality may also be a nontrivial factor: those with greater wealth provide to their children resources and thus opportunities that the less wealthy cannot, and this may make it more difficult for society to achieve equality of opportunity.
Third and most importantly, inequality impacts politics. Economic power tends to beget political power even in democratic and pluralistic societies. In the United States, this tends to work through campaign contributions and access to politicians that wealth and money tend to buy. This political channel implies another, potentially more powerful and distortionary link between inequality and a non-level playing field. It may also create pathways from inequality to instability, because both the economic and political implications of inequality can create various backlashes.
Saturday, 5 February 2011
I have fount out that although I love Zambia so much, I perhaps love a truthful approach more, because only the latter will make her truly free.
Friday, 4 February 2011
Today, we need to start from scratch, and develop a new economic paradigm. We need a little more humility about the power of policies and markets. We need to better understand the complex linkages between the financial system and the broader economy—and also the linkages between countries themselves. Most important of all, countries need to work together to build a more successful and more stable global economy. This cooperation will be the major legacy of the crisis, and it must not be squandered.
Its election year of course and a lot riding at stake. Investments become real when they actually materialise. This is not the first time we have heard of a proposed investment bigger than Lumwana. We have yet to see the great Zhongui Mining Group project which promised to deliver 34,000 jobs. Caution should therefore be advised.
Thursday, 3 February 2011
COMESA secretary general Sindiso Ngweny essentially repeating what many others have e.g Food Security and Trade Restrictions, Problem of Expediency and A Better Vision for Agriculture."It is quite clear to me that if exports of staple agriculture products are not liberalised, the commercial farmers will only grow crops which they will export because they sell these in forward markets even before they plant...In terms of exports, the paradox is that small-scale farmers are the ones who grow the staple crop and if there is a surplus, then there is an export ban, by the time a decision is taken to allow for exports, the prices will have come down...It is my objective assessment that this situation keeps the small scale farmers in perpetual poverty."
Wednesday, 2 February 2011
It is incredible that in a country called a democracy, the President with a few advisors could conclude an arrangement to spend K240 million of public funds without even a courtsey of laying the terms before Parliament. Not even the Ministry of Finance was legally authorised to supervise the public funds involved. This [elected monarchism] cost Zambia its national sovereignty and plenty of money.
Tuesday, 1 February 2011
Chola Mukanga is the founder of the Zambian Economist which provides independent and non-partisan perspectives on