Purdah

A word we need to get acquainted with. The British House of Common's defines it as follow :

The period of time from when an election is announced until after the election is held has been known as ‘purdah’ but is now more often referred to as the pre-election period. Guidance has been issued to civil servants before general and local elections, and to local authorities on their activities during the period before local elections.

External Costs of Free Education

Among the popular calls for government intervention is free secondary education free. But as this recent IPS article demonstrates, free education without a corresponding increase in capacity can have external costs that undermines the provision of free education. An "external cost" is a cost not borne by the producer or consumer of a good or service. In this context the student gets the "free education", but in the process of doing so they impose further costs on society.  The excerpt below demonstrates :

An absence of boarding facilities for high school pupils in Zambia's northern province of Luapula is forcing children to share lodgings with their peers - unsupervised by adults - leading to teenage pregnancies and HIV/AIDS infections.

A Poverty of Rule of Law

A recent editorial in the Post contains some important reflections which we touch in our forthcoming monthly essay on the judiciary :

Rupiah Banda and George get the judgements they want from our courts. In a word, justice in this country is a presidential prerogative, which Rupiah, with the assistance of George, carries out through his appointed officials or justices....As we have stated before, as long as judges are appointed, paid, promoted or dismissed by persons or bodies controlled directly or indirectly by the president or the executive, the judiciary’s independence in our country will continue to remain more theoretical than real.

Is President Banda ripe for impeachement?

"Unless President Banda succeeds in shirking Ambassador Phiri’s serious allegations, he is in office illegally and in wanton disregard of the country’s basic law and must be shown the door to answer criminal allegations in court....given the serious nature of the allegations, which border on violating the Constitution, and the fact that they are levelled against the Head of State, I find this deeply troubling. President Banda should be the first one to know that as President, he swore to uphold the Constitution. By that Constitution, therefore, he could be removed from office if it is proved he violated it. This offence carries the possibility of seven years imprisonment without an option of a fine.”

Prof Michelo Hansungule argues that unless President Banda clears himself of the false parentage declaration in the 2008 he has committed perjury (lied under the law) and violated Article 37 of the Constitution. More on this via The Post. The allegations are certainly very serious and we all await to see how the Chief Justice, who hails from Banda's village alongside the Deputy Chief Justice, deals with this. What is important is that the rule of law should prevail and the judiciary asserts its independence much more than we have seen in recent past. 

Functions of the Republican President (Guest Blog)

In a news article entitled “RB Should Be Left to Decide Election Date,” which appeared in the Lusaka Times of 12th May 2011, comrade Ronnie Shikapwasha was quoted as having said that there was nothing wrong with President Rupiah Banda’s delay in announcing the polling date, and that he should be left alone to decide as the President has every right to do so. He was further quoted as having said that those calling for early polls are doing it out of ignorance and are not following the constitution as it states that the country’s leader has the power to announce the election date at whatever time he feels the nation is ready.

Well, I have thus far combed through the 1996 Republican constitution for an Article or Clause which gives President Banda the “constitutional right” to decide on, and announce, the date for the general elections, but have not found any!

For the benefit of those who do not have time to skim through the 1996 Republican constitution, here is a summary of the functions of the Republican president which are stipulated in the constitution:

The Illusion of Free markets

Dani Rodrik on the outdated economist’s illusion of free markets :

Raised on textbooks that obscure the role of institutions, economists often imagine that markets arise on their own, with no help from purposeful, collective action. Adam Smith may have been right that “the propensity to truck, barter, and exchange” is innate to humans, but a panoply of non-market institutions is needed to realize this propensity.

Debt Watch (China), 2nd Edition

More debt from China, this time to "to upgrade a road that should help boost trade with Africa's Great Lakes countries". There's nothing with borrowing for infrastructure but when you have no nationally agreed debt acquisition policy it is worrying.

Corporate Fraud

The world is drowning in corporate fraud, and the problems are probably greatest in rich countries – those with supposedly “good governance.” Poor-country governments probably accept more bribes and commit more offenses, but it is rich countries that host the global companies that carry out the largest offenses. Money talks, and it is corrupting politics and markets all over the world. Hardly a day passes without a new story of malfeasance. Every Wall Street firm has paid significant fines during the past decade for phony accounting, insider trading, securities fraud, Ponzi schemes, or outright embezzlement by CEOs. A massive insider-trading ring is currently on trial in New York, and has implicated some leading financial-industry figures. And it follows a series of fines paid by America’s biggest investment banks to settle charges of various securities violations.

From Jeffrey D. Sachs’s recent article The Global Economy’s Corporate Crime Wave.  The bad news is that “the close connections of wealth and power with the law, reining in corporate crime will be an enormous struggle”. So how then do we rein in leviathan? Sachs hopes that “rapid and pervasive flow of information nowadays could act as a kind of deterrent or disinfectant. Corruption thrives in the dark, yet more information than ever comes to light via email and blogs, as well as Facebook, Twitter, and other social networks”. That means in a country such as ours where these mediums are yet to find a home, and public media is effectively shackled, it’s a hard road fighting corporate fraud. In Zambia of course we have other bigger problems – that is the huge capture of political players through “campaign finance” and other forms of corruption. We touch on this in the monthly essay - Understanding Corruption in Zambia. 

Book Reading Goal : Week 21

Read three interesting books since the last update. The first was a compendium of essays by my favorite moral philosopher Nicholas Wolterstorff - Hearing the Call : Liturgy, Justice, Church and World. I have been trying to read everything Wolterstorff has written (and is writing). It was great to pick up some papers I had missed! I am eagerly awaiting his next book on Love and Justice.

I have been fascinated by issues surrounding the digital explosion especially after reading the The Shallows : What the Internet is Doing to Our Brains by Nicholas Carr.  I was therefore delighted to pick up another book that addresses these issues from a Christian perspective - The Next Story : Life and Faith after the Digital Explosion by Tim Challies. A great read and I have already shared some quotes from it on our Facebook page. Speaking of the page, be sure to sign-up, we are currently reading an important book together there - Getting Better : Why Global Development Is Succeeding and How We can Improve The World Even More by Charles Kenny (I am review this for a  magazine, but hope to share it when it is published). 

The final book I read was Preaching for God's Glory by Alistair Begg. I occasionally get to preach at my local church, so this was useful reading on handling God's word with care. In fact, after reading this I have become enthralled with Begg's ministry and keen listener of the Scotman's exhaltation. 

A word on reviews. We have somewhat slow down on reviews due to other commitments - also no new books have come out that I have really thought offered a fresh perspective and may be of interest to readers (I always emphasise quality over quantity). But I am hopeful that over the summer we can review  some books on Zambia, history and economics. I am making heavy use of Kindle at present, so very much constrained to e-books. 

Book Reading Goal Review

Books Read So Far : 15 books

Remaining Books to Achieve Target : 35 books

Weeks Remaining to Achieve Annual Target : 31 weeks

How is development achieved?

"Development depends not on the abstract national goals of, and the more or less enforced decisions by, a cadre of planners, but on the piecemeal adaptation of individuals to goals which emerge but slowly and become clearer only as those individuals work with the means at their disposal; and as they themselves become aware, in the process of doing, what can and ought to be done"

Herbet Frankel in his Quarterly Journal of Economics article published in 1952. In other words, it is slow and hard work and will take individual effort to bring it about. That of course does not mean government cannot create the conditions for which people flourish, but in Mr Frankel's view their government is no saviour neither are external players (your FDI chariot riders). 

The Biggest Problem In Africa

"The biggest problem in Kenya - and across sub-Saharan Africa - is not poverty but inequality. Many African countries are growing at rates of 7%-8% a year, but this is destabilising if it is not accompanied by equity. In highly heterogeneous societies, structural inequality is easier to politicise, and you do that by ethnicising it - as happened in Kenya in 2008. And then you militarise these conflicts using party youth militias. That combination fundamentally undermines democracy because it leads to mobilisation along ethnic lines, and that becomes toxic. You can blame an entire group for your woes..."

John Githongo, the Kenyan anti-corruption campaigner who once served in the Mwai Kibaki administration and was exiled to London for speaking out. I am not sure it is the biggest problem, but it is up there with other huge problems like absence of rule of law. At this point it helps to distinguish, as we always admonish, between "proximate" and "ultimate" causes. Inequality is clearly a proximate cause. For further discussion of the problem of inequality see here, here and here. 

How poor are Zambians?

"The bright spots [in Africa] are tiny. Botswana and Mauritius have both posted impressive GDP per capita growth rates for extended periods but have a combined population of about 2.5 million people. More representative of the region's performance is the fact that the average rural Zambian will enjoy a lifetime income of about about $10,000, compared to a lifetime of around $4.5 million for the average resident resident of New York City..."

From Charles Kenny's new book Getting Better. We are reading this book together on our Facebook page. Follow along!

The government's case for low mining taxation, 2nd Edition

The Minister who speaks for Mining Companies is back with the government's strategy which appears to be built around job creation. We have dealt with every single reason the Government has ever dreamed of under Eight Reasons for Rejecting Higher Mining Taxation.

Linking Zambia (People's Pact)

The People's Pact have now got a new website. I continue to be impressed with how the People's Pact are using  new media so effectively. See www.peoplespact.org for their activities. 

The Real Truth About The PF Manifesto (Guest Blog)

The Patriotic Front (PF) - the largest opposition party in Zambia - has adopted "change" as their core theme for their campaign this year. Indeed, their recently unveiled manifesto promises a significant departure from virtually all policies implemented by the ruling part - the Movement for Multi-party Democracy (MMD) - in the last 20 years. This essay offers an analysis of the promises contained in the PF manifesto and attempts to assess whether they represent genuine, viable change and an alternative to the current policies of the MMD.

In the balance of this assessment is a host of critical questions: PF proposed approach to converting Zambia's vastly improving economic growth forecasts into meaningful and sustainable economic development (that creates viable jobs and consequently reduces poverty); policy on how to handle revenues from mining operations (the single most important sector in the Zambian economy); and finally, constitutional (as well as institutional) reforms that Zambians hope can advance their young democracy, help curb corruption and foster a sense of responsible governance.

PF Utopia - The Promises

Beginning with the foreword by the PF president, the promise of the PF manifesto is a Zambia where jobs are plenty, individuals (and companies alike) pay low taxes (even lower for families with children), while the value of incomes and savings is protected by a low inflation rate and a fixed exchange rate. For those that want to borrow, there will be government assured low interest rates.

Are the Chinese in Zambia misunderstood?

Chinese companies operating in China have been criticized for poor labor conditions and bad pay. Controversy grew in October 2010 when two Chinese managers at a privately owned mine shot and wounded 11 Zambian miners after a dispute over working conditions. Charges against the two managers were dropped in April this year and the men were allowed to return to China.

Sautman argued that China’s socialist legacy means Chinese managers are more willing to pitch in with manual work when necessary. However, this willingness to “push wheelbarrows” has been misread by local opposition politicians who believe Chinese workers are taking Zambian jobs. This lack of division between Chinese engineers and African workers appeals to many miners who previously worked for Western companies as they enjoy the absence of the “white boss complex.”

Barry Sautman (Hong Kong academic) reckons that Chinese mining companies in Zambia do not deserve their negative reputation as their operations are no better or worse than Western companies. You can read the rest of the piece here.

New farming methods for biofuel in Zambia

Why I am Endorsing PF

By Kaela B Mulenga

A special paper on the endorsement of the Patriotic Front.
Why Pf is a Better Choice Than Mmd - An Address to Doubting Thomases

MMD Manifesto: Electoral Reforms

Electoral reform is one of the key issues facing Zambia. We have long argued that for Zambia to develop it needs to devise systems that diminishes the role of leaders to act as rent seekers. Currently many of our leaders govern purely to enlarge their pockets. Until we introduce processes that prevent them from doing so we won’t see meaningful development. Related to that it needs institutions that allow ordinary Zambians to be able to kick out incompetent and shallow leaders. These requirements are best fulfilled through development of contestable and credible electoral arrangements. Until the electoral machinery is more contestable and leaders can be hired and fired easily, corruption and malpractice will continue unabated. It is therefore very important that not only do we continue to strive for a better voting system, but also ensure that that what ever system is in place, it is managed properly and without malpractice. For these reasons, we regard proposals in this as extremely vital.

What are the main specific policy proposals?

The MMD has no specific policy section on “electoral” reforms. However, it has a small section that mildly touches on this:

“The MMD government will ensure that the process started in 2007 to review and enact a new constitution and reform the electoral system is brought to its logical conclusion. This will culminate in the enactment of a new constitution, necessary supportive legal and institutional frameworks and ensuring that elections continue to be held in a free and fair atmosphere”. (Section 7.1)

Scattered elsewhere is self congratulatory message on how the MMD has increased “voter participation by eligible Zambians” by adopting the “the Electoral Act 2006 recommendation by the Electoral Reform and Technical Committee for the continuous registration of voters and use of transparent ballot boxes”.

What is the rationale?

No problems have been identified.

What is our main assessment?

The MMD’s only promise is that “elections [will] continue to be held in a free and fair atmosphere”, whatever that means. The manifesto has absolutely no new policies whatsoever. MMD evidently has no plans to reform the nature and administration of elections. It does not acknowledge any deficiencies with the current electoral process. The electorate therefore cannot be sure of what MMD intends to do in this area. It has no commitments. Right now MMD is not pledging anything that you could hold them to.

No policy diagnosis. No commitments. No vision for the future.

Related Posts :

PF Manifesto : Electoral Reforms

Zambian Economist is currently reviewing manifestos of leading political parties in Zambia. All posts in this ongoing review can be found at Manifesto Analysis.

PF Manifesto: Electoral Reforms

Electoral reform is one of the key issues facing Zambia. We have long argued that for Zambia to develop it needs to devise systems that diminishes the role of leaders to act as rent seekers. Currently many of our leaders govern purely to enlarge their pockets. Until we introduce processes that prevent them from doing so we won’t see meaningful development. Related to that it needs institutions that allow ordinary Zambians to be able to kick out incompetent and shallow leaders. These requirements are best fulfilled through development of contestable and credible electoral arrangements. Until the electoral machinery is more contestable and leaders can be hired and fired easily, corruption and malpractice will continue unabated. It is therefore very important that not only do we continue to strive for a better voting system, but also ensure that that what ever system is in place, it is managed properly and without malpractice. For these reasons, we regard proposals in this as extremely vital.

What are the main specific policy proposals?

The main PF proposals in relation to electoral reforms are:

• Amend the Electoral Act (1996) to ensure members of the Electoral Commission of Zambia (ECZ) are appointed by Parliament and not the President; and, ECZ is representative of political parties in parliament.
• Political Party Registration: new legislation to allow for the registration of political parties with the ECZ and not the Registrar of Societies.
• Political Funding Reform: PF plans to “introduce legislation to allow for government financing of political parties with representation in parliament”.

There’s also a general commitment to “review the recommendations of the Electoral Reform Technical Committee and implement those recommendations which are progressive in achieving democratic elections”. However, this is too generic for our purposes.

Is corporate social responsibility associated with lower wages?

Yes. According to a recent paper by Nyborg & Zhang that draws on Norwegian evidence :

If workers prefer socially responsible employment, all else given, then irresponsible employers must pay more to recruit equally qualified employees. Combining survey data on firm reputation with official register data on demographic and labor market variables, comprising wage observations for more than 100,000 full-time employees, we do find a negative, substantial, and statistically significant association between wage and CSR among Norwegian firms. However, this effect is mainly observed for men. This is partly, but not fully, explained by a high correlation between firm’s CSR and gender equality policies......Hence, we conclude that firms associated with CSR do indeed have a cost advantage in terms of lower wage payments as compared to other firms. One implication is that even if social responsibility is associated with higher costs, for example in terms of higher emission abatement expenses, responsible firms may survive market competition – even in the absence of ethical consumers or investors. Since labor costs constitute a major cost component for most firms, this might well be of substantial importance when it comes to firm profitability.

The result is hardly surprising, it makes sense that there would be a trade-off between corporate social responsibility (CSR) and employee wages for so many reasons - and not least because they both cost money. More interesting is the policy implication. It is understandable that the authors are keen to make the "environmental point"  (it's the easiest way to get your paper noticed these days), what is actually useful for our Zambian context is that there is a trade-off between CSR and wages. 

This issue matters to us because we have seen mining companies answer the call of government ministers to do more CSR projects. First Quantum Minerals  has previously rehabilitated roads in Ndola.  Konkola Copper Mines is working to empower the Luano Community in Chingola through an innovative goat draft project - an interesting alternative to microfinance. Lumwana has also got into the act with the past pledges to spend K4bn on the local area, including plans to launch a multi-million Kwacha programme to diversify its local economy in Solwezi away from dependence on mining.  As we have noted in the past, these projects are at best distortionary second best scenario. The ideal scenario is that government should tax mineral resources sufficiently in a way that profits local people and does not impact negatively on the environment and safety of workers.   In true CSR “social projects” are nothing short of "bribes" to keep local people quiet. Firms do not engage in "social responsibility", they practice "shareholder responsibility". The CSR projects are a small price that mining companies pay to local people in case they become agitated at the lack of development in the area and demand the government to do more to tax the companies (or in election time switch to the opposition). 

What is more interesting is that if we take the Nyborg & Zhang evidence seriously, there appears another serious problem. CSR may actually simply be a "fools game" where locals are conned into believing that they are gaining a school when in actual fact they are getting poor wages in return. The obvious way to prevent this of course is through some form of minimum wage or better still state mandated "reinvestment projects" tied to a stronger planning and local taxation policy. 

Election Polling Misunderstood

UPND's Charles Kakoma on CPD's presidential opinion poll :

Is the opinion of 1,000 people representative of more than 4,000,000 registered voters? That is a joke and his sampling techniques are questionable and too biased. He has not been to all parts of Zambia. How does he know what the entire voting population is saying?

There are many reasons to question the recent opinion poll but the sample size is not one of them! What he should be asking are things like : what was the question asked? how was it worded? what is the sampling error? how representative was the sample? Was there any selection bias? Have they taken into account the "fear factor"? Zambians who plan to vote for the opposition may be unwilling to disclose their intentions for obvious reasons. This is what Mr Kakoma should be focusing on. Quite clearly UPND are not doing any internal polling otherwise he would have understood the main questions around polling. They are going into this election blind!

Zambian Matrix Reloads on New Poll

Dr Neo releases a new poll, but Banda (the other Banda) is having none of it :
 

I must speak to the Doc for more information, but without seeing the write up, the most fascinating part of the poll is the conclusion that the landscape has not changed. That is both good news and bad news for Patriotic Front. Good news because with the new register (5.2m voters), more than 50% of the voters are in  PF strongholds (Northern, Copperbelt, Luapula and Lusaka). Since new voters are more likely to actually vote than old registered voters, this bodes well for them. The bad news, and we must check with Dr Neo's on this, is that it would appear Western Province is static. We were led to believe that things are much more fluid there. So perhaps MMD is holding the fort. But we have atleast 3 more months of unofficial campaigning and the MMD to spend, spend and spend (and use the public media).

Also let us remember that we have seen other polls fail - see A New Presidential Poll.  And of course there was the problems with the poll that never was in 2008. 

Michael Sata - Special Lecture at Oxford University

We are delighted to make available this week's lecture by Mr Michael Sata (President, Patriotic Front) at Oxford University. (Huge thanks to folks at Oxford University for forwarding this to us).

Michael Sata Paper - How to Be a Successful Opposition Leader in Africa

The Impossibility of Opposition in Zambia

“The intimidation is incessant and has major effects; Law enforcement agencies including the Zambia Revenue Authority (ZRA), the police, the Drug Enforcement Commission and the intelligence are used to curtail the freedom of assembly and association, police arrests and intimidation against the opposition, the public media are used as vehicles of personal slander and hate speeches...Government programmes are abused for campaign purposes even before the commencement, before announcement of election date. And of late, government and ruling party-induced physical violence is used to disrupt operations and programmes of opposition parties. Recent cases bear evidence of this. All these methods which are against the electoral legislation are used to cripple the opposition especially their leadership.”

Another revealing response from Mr Michael Sata at Oxford University. It is all too easy to criticise our opposition for failing to score points in some areas, but we must always maintain perspective. In Zambia, and much of Southern Africa, the ruling party uses all the machinery of government and directs its at the opposition. There's a good reason why one must stretch their memory far back to remember the last time an opposition party triumphed in the SADC region. 

How does PF reconcile low taxation with high spending?

Mr Michael Sata answered the question at Oxford University yesterday:

I have often been challenged on how PF will enable citizens to have more money in their pockets while lowering taxes. My simple answer to that is that we shall achieve substantial revenue increase by stamping out corruption, misuse of funds, streamlined government operations costing-saving schemes, reducing cost of doing business...I believe that the foregoing measures shall lead to higher employment levels, achieve savings for government and business, and improve performance and efficiency. Our economic policies shall be based on smart partnerships to achieve mutual benefiting position for investors and the government providing appropriate resource....There can be no justification why Zambia should have one of the highest taxation levels while at the same time industries that are making the most profits, such as the mining industry should hardly pay taxes, yet they exploit a non-renewable national resource...

So low taxes for everyone then? One is tempted to think PF will increase mining taxes but with the current government entering new Development Agreements (DA) every minute (do you really think Trident is not underpinned by a DA?) any future government's hands are tied. We'll come back to this as part of Manifesto Analysis.

Diversification Misunderstood

Fredrick Mutesa (former UNZA academic) on a strategy for diversification:

"If we have a strategy of diversification that is dependent on external investment, the local people will not benefit much and the local economies will not benefit much. We have seen it in the mining sector (in Zambia) where copper prices are high but the government is getting very little while local suppliers and contractors are getting raw deals...We need a strategy that will embrace local enterprises. We need to look at how we can empower local farmers to expand their production..We need to find ways of how we can help small businesses to expand their businesses.."

A poor and but all too common misunderstanding of diversification. There are many ways in which diversification takes place and the source of investment is not really the problem. What Zambia needs to do is work on attracting the right foreign investment and put in place policies that encourage spillovers from new foreign investment to domestic firms. These spillovers are critical for long-term diversification, but are not inevitable. The right conditions need to exist for them to occur. More discussion of these issues in the monthly essay - Five Questions on Zambia's Diversification. 

Mobile Hospitals—A Gigantic Policy Blunder! (Guest Blog)

A news article which has appeared in the Zambian Watchdog under the title “Each Mobile Hospital to Gobble K450m per Trip on Allowances,” if its content is authentic, is one of the many good reasons why President Rupiah Banda’s decision to buy the controversial mobile hospitals will be recorded in our beloved country’s history as having been a gigantic policy blunder.

In the article, it is revealed that each mobile hospital, which consists of 7 trucks, will require more than 36 personnel per visit of 2 weeks in any given rural area, including medical doctors, nurses, clinicians, laboratory staff, surgeons, pharmacists, and support staff.

And it is estimated that K450 million will be spent in allowances on EACH of the 36 or so mobile hospital personnel over a period of 2 weeks, an amount which does not include expenses on fuel, oil, spare parts, maintenance of the 7 trucks, and so forth, especially after the two-year initial contract with the Chinese supplier of the mobile hospitals. Also, the amount does not include the monthly salaries of the 36 or so mobile hospital personnel expected to serve on EACH of the 9 mobile hospitals.

Understanding Corruption in Zambia

By Chola Mukanga

A key feature of discussions about corruption is the tendency to treat corruption as a uniform phenomenon. Commentators often veer unconsciously from one form of corruption to the next without clarity. It is common to read a commentator say, “corruption is on the increase”, without explaining what is actually meant by the term “corruption”. 

The failure to distinguish between the many forms of corruption inevitably impacts on the quality of the public debate. In particular, it prevents accurate retelling of history and undermines the search for effective solutions. For example, until we understand the multi-faceted nature of corruption we won’t be clear whether corruption is worse under the Banda administration than it was under the Kaunda presidency. We also won’t be able to understanding the extent to which the supposed on-going fight against corruption is succeeding.

The Laws of Zambia (ACC Act No 42 of 1996) defines corruption as “the soliciting, accepting, giving or offering of a gratification by way of a bribe or other personal temptation or inducement, or the misuse of abuse of a public office for private advantage or benefit”. This is a broad definition, with several vices falling under the term “corruption”.  This short essay examines five of these vices as reflected in our society: bribery; public theft; political corruption; wilful mismanagement; and, nepotism.

A culture of bribes 

The most well known form of corruption in our society is bribery. Bribes are offered to facilitate transactions between parties. Politicians are often derided for suggesting that tackling corruption must start with each and every Zambian. What they usually mean is that corruption is a moral evil that can be prevented by anyone with a free will. Every Zambian is free to refuse paying / accepting bribes. That Zambians engage in bribery points to the moral bankruptcy of the nation as a whole. Bribery in Zambia is therefore not fundamentally a political problem but a social one.  We are a corrupt people. That is not to say that politicians have not played their role in creating and maintaining this bribery culture. Although bribery has always been with us it has undoubtedly got worse in the last 20 years under MMD rule. The culture of free market liberalism and emphasis on personal enrichment coupled with signals of public theft by the elite has ushered in the so called “Sangwapo” culture. Bribery is now not just accepted it is assumed. 

The precise scale of private bribes is always difficult to gauge. We know that one cannot get anything done in Zambia rapidly without some form of underhand payment, but how many bribes are paid annually? Data collection in this area tends to focus on public officials.  For example, in 2007, surveys showed that 1 in 5 businesses expected to make informal payments to public officials, while 1 in 3 expected to make gifts to secure government contracts. Those figures only apply to public officials. It excludes bribes paid to other businesses, non-government organisations and most importantly chiefs, who are undoubtedly the largest non-official recipients of bribes.

But are bribes damaging to the economy? The empirical evidence is mixed, but it certainly rules out the idea that bribery is beneficial. While bribes in a very narrow sense can speed up things and help entrepreneurs get on with wealth creation, in a broader sense, these bribes are obstacles to development. This is because the cumbersome procedures that bribes are supposed to help overcome are usually created and maintained precisely because of their corruption potential. Substantial resources are devoted to contesting the associated rents, which in turn leads to pure waste and misallocation of scarce resources.

Given the opportunistic nature of bribery the appropriate policy response is to remove the “opportunity” to bribe. At the practical level it means that if we want to stop police officers from taking bribes, we must move to eliminate the pointless road blocks that permeate our society. Similarly, we must remove excessive legislation that provides opportunities for businesses to bribe. Empirical evidence appears to show a strong relationship between bribery and various measures of excessive.

Robbing the poor

A key challenge in tackling bribery of course is detection. The same cannot be said for the other form of corruption – public theft. The general public may not know which official has greasy fingers until they are caught, but they can sense when public money has been stolen. We have come to call this public theft “grand corruption”, to reflect the often larger amounts of money stolen.

The Task Force on Corruption was predicated to investigate the alleged grand theft committed by the MMD administration between 1991 and 2001. The “grand” in the end has not quite fitted the original billing as the main suspect, Second President Frederick Chiluba, was subsequently acquitted of all criminal charges.

In recent months the theft charges have shifted to “administrative robbery”. Scandal after scandal appears to have once again caught public imagination. The list runs long, including the Ministry of Health “Kapoka scandal”[i], Road Development Agency[ii], Zambia Wildlife Authority[iii], Zambia Police[iv], High Court of Zambia[v], Zambia Revenue Authority[vi], Ministry of Local Government[vii], Lusaka City Council[viii], Legal Aid Board[ix] and Water Affairs Department[x] . These and other cases have highlighted significant levels of administrative theft perpetuated by supposedly loyal civil servants.  Indeed, even the Task Force on Corruption was allegedly corrupt[xi]. Like the society at large, once again we find that the there’s a corrupt culture at every tier of government administration. 

Public theft cases continue to be met with uproar from the general public, much more than the systematic bribery which occurs at an equally larger scale. Whilst this may be due to poor detection of bribery, the inner sense of injustice offers a likely reason. Zambians may be willing to accept / pay bribes because they have erected a corrupt culture over the last two decades, but explicit public theft appears to run counter to the principle of natural justice. It violates access to goods and services which are inherently their right. By stealing, the official is robbing money away from the poor in a more explicit way than other forms of corruption. It is this aspect of public theft that causes much consternation across Zambian society.

Not all theft causes significant national damage, at least, in the short term. In most cases, money is merely misallocated and redistributed within the economic system. The most damage is done through capital flight, when money is stolen and siphoned out of the country, resulting in a drain from the economic system. Addressing this form of corruption requires a concerted approach among countries. Unfortunately, many developed countries have little economic incentive to prevent capital flight because they are content to see such money lodge within their banking systems. If all stolen money from Africa was returned many western economies would collapse.

Corrupt politicians

Not all stolen money is whisked abroad. Usually such money goes towards supporting political corruption. Since 1991, with the dawn of multi-party politics Zambia has witnessed an unprecedented rise in political corruption. Increased electoral competition has given many social actors especially chiefs’ unparalleled opportunities to emerge as "kingmakers". Their place in society allows them to trade (tribal) voting blocs in exchange for significant sums of money, investment in chiefs’ places, new vehicles and other things designed to capture their support.

During the 2008 presidential bye-elections, Chief Mwene Kahare was rounded up with other Nkoya chiefs to meet the then MMD presidential candidate Rupiah Banda. Unfortunately, the chief found himself lodged in cheaper accommodation than he expected, which prompted him to voice his disappointment : "Those who are always flying, the MMD, had to dump us in those lodges in Kaoma and we were even starving....In the morning, it was just an order from the District Commissioner's office that 'you take them back'. I feel that was very disappointing".  But it’s not only chiefs who are bought. Mr Rupiah Banda achieved fame in Katete not for co-opting chiefs but for alleged “food based corruption”. There was general public condemnation when pictures surfaced showing Mr Banda distributing food to potential voters.  

The Katete incident now stands as the high point of exposing political corruption. Generally, buying the electorate either through chiefs or directly has not attracted public disgust as other corrupt vices. A key reason is that political corruption is seasonal. It tends to occur only when an election is called. This effectively turns it into a “one shot game”, with little incentive for people to report. People usually prefer to “eat” since the opportunity does not arise often. The other reason of course is that even when people detect political corruption, the lack of enforcement mechanisms acts as a huge disincentive to report such activities to authorities. As a general rule detecting and reporting corruption suffers from a free riding problem.  Why report something that will bring you into conflict with the powers that be?  

Lobbying for poverty

A key determinant of successful electioneering is campaign finance which is usually sourced from multinational companies that lobby policy changes. In its purest form lobbying is perfectly legal as it simply seeks to influence legislators to see the merit of a given policy proposal. We all lobby politicians all the time. The problem is the specific form of lobbying which allows people with particular interests who represent a minority to gain special access to government, and through monetary contributions and favours, develop controversial relationships with government leaders or institutions. This constitutes a form of back door corruption, which is very prevalent in Zambia.

One of the interesting historical questions is the extent to which the assumed reduction in public theft under the Mwanawasa administration was merely substituted by foreign lobbying. Recent empirical evidence[xii] shows that there's certainly influence peddling going on in Zambia by many multinational firms, which has affected industrial competition and productivity. There’s no better example of this than the government failure to effectively implement a fiscal regime for the mining industry, in face of very strong arm twisting[xiii]. Mining has always been a sphere of intense lobbying at much expense to the poor. Report after report[xiv] catalogue the clouds that still hang over the now abolished Development Agreements (DAs), which to date has not been lifted through a credible public inquiry.

DAs sympathisers would of course say that the problem was not lobbying, but poor mismanagement on part of government. The argument is that often public officials suffer from significant asymmetric information which puts them at a disadvantage when negotiating a deal. Edith Nawakwi typifies this posture when she appealed to ignorance in justifying the sale of mines at giveaway prices, “We were told by advisers, who included the International Monetary Fund and the World Bank, that not in my lifetime would the price of copper change. They put production models on the table and told us that there was no copper in Nchanga mine, Mufulira was supposed to have five years life left and all the production models that could be employed were showing that, for the next 20 years, Zambian copper would not make a profit. [Conversely, if we privatised] we would be able to access debt relief, and this was a huge carrot in front of us - like waving medicine in front of a dying woman. We had no option [but to go ahead]”. No one seriously believes Nawakwi’s poor attempt to shift the blame on the IMF / World Bank, but it does illustrate that often those in government are only too ready to plead incompetence rather than the more serious charges of conniving with foreign forces to defraud the State of Zambia.

In recent times, similar challenges have emerged for external observers or law enforcement agencies in being able to distinguish between corruption and pure mismanagement. In 2009, the Auditor General revealed that, “the Zambian mission in Brussels [in 2007] spent over K1 billion on school fees, but the payments were not supported by invoices and receipts”. Is this a case of not following proper management practices or theft of public funds?

Another celebrated case relates to the famous purchase of hearses, which were allegedly bought at an inflated price of $29,000 per hearse when the actual price was only a third of the amount quoted. The late Minister Tetamashimba after much political pressure declared: "I believe that there were irregularities in the transaction and if it is proved that the price of the hearses was not inflated and that the terms of conditions were adhered to, I will resign as minister on principle". The case has now gone quiet and the public still waits to understand whether it was a simple oversight by civil servants or a more elaborate plan to defraud the Zambian people.

A renewed enemy

Financial reward is not the only motivation for corrupt activities, other considerations usually come into play – as is the case with nepotism, the favouritism granted to relatives or friends, without regard to their merit (tribalism, regionalism and other isms probably also fall within the scope).

Town clerks are not headline makers, but Livingstone Town’s George Kalenga hit news headlines in 2007 when in a letter to all heads of departments at the council, warned : “I have observed for quite sometime now that the phenomenon of employing relations in this council, especially those falling in the category of ‘casual’ is on the increase….This sort of scenario is to a greater extent contributing to the poor performance by the said category of employees who are supposed to carry out specific duties because of our personal attachment to them”. What followed was a surprisingly intense debate on the scourge of nepotism. Until recently nepotism was rarely discussed in the press. Everyone knew it was there but it was not a feature of political dialogue. The traditional nature of our society is one where family relations often dictate economic and social arrangements in our villages. We might even go further to say that the prevalent nature of nepotism may well be a function of undeveloped impersonal forms of exchange. The market has not fully taken hold at every level of our society and thus instead of competing on merit in every sphere, we are tied to relying on family members, etc.

In the broader scheme of things, Mr Kalenga’s sentiments appears to coincide with a growing realisation in the Third Republic that the destruction of the “One Zambia, One Nation” motto under the Chiluba Administration, was giving way to an undercurrent of growing regionalism which appears to have culminated in the emergence of the so called “family tree” under the 3^rd Republican President Levy P Mwanawasa. Mr Mwanawasa achieved some positive things during his tenure, but undoubtedly many will also remember his legacy, rightly or wrongly, as nepotistic. A fact he never run away from. When quizzed publicly over his nepotistic tendencies, President Mwanawasa’s rehearsed rhetorical response was: “do you guys expect me to appoint or help my enemies?”  No, Mr President, but the public expects you to appoint people on merit.

In many ways nepotism is worse than other forms of corruption for three reasons. First, as we saw under the Mwanawasa era it can give rise to worse evils. It was during the Mwanawasa tenure that the concept of “Lambaland” emerged which has led to rival identities developing (e.g. Bembaland, Tongaland and Barotseland). Nepotism, regionalism and tribalism are now prevalent and are threatening to tear Zambia’s nationhood. Nepotism unchecked therefore is an existential threat. Secondly, nepotism substantially weakens lines of authority and promotes incompetent people over those who are better qualified, inevitably turning the institutions of government into personal toys. Finally, it does not just misallocate resources but it also inevitably discriminates against capable individuals, in favour of less competent family or tribal relations. Unfortunately, its ‘quiet’ nature also makes it much more challenging to tackle. This must change if Zambia is to make substantial headway and preserve the unitary state.

So what are we to conclude? As one reflects between the many vices of corruption, it becomes readily clear that as a nation we face significant challenges in eliminating corruption. The rise of the political and economic liberalism in 1991 has spawned a new culture of corruption which has been overseen by those in power. The new politics brought new electoral competition which led to greater political bribery and intense lobbying from foreign investors and other groups.  Privatisation led to culture of irresponsibility with significant public theft which continues to persist. It has taken two decades to build a culture of corruption it will take longer to destroy it. Culture is resilient.  We should be upfront that corruption will always be here. Nepotism, public theft and other banes will always exist. The question is one of scale. In our reading of history and the quest to develop mechanisms for combating this social evil it is vital that we deepen our understanding of the complex issues involved. Blanket assessment of corruption makes headlines, but it does not help move the country forward. This essay is an attempt to broaden this understanding and steer discussion in the right direction. We have become a corrupt nation, and only with understanding can we begin to reverse the corrupt culture.

Chola Mukanga is an economist and founder of the Zambian Economist which provides independent economic perspectives on Zambia's progress towards meaningful development for her people

Copyright: Zambian Economist, 2013
www.zambian-economist.com

Facebook Page:
www.facebook.com/zambian.economist

---

[i] http://www.zambian-economist.com/2009/05/corruption-watch-ministry-of-health_30.html

[ii] http://www.zambian-economist.com/2009/09/corruption-watch-rda.html

[iii] http://www.zambian-economist.com/2009/06/corruption-watch-zawa.html

[iv] http://www.zambian-economist.com/2009/07/corruption-watch-zambia-police.html

[v] http://www.zambian-economist.com/2009/12/corruption-watch-high-court.html

[vi] http://www.zambian-economist.com/2009/11/corruption-watch-zra.html

[vii] http://www.zambian-economist.com/2009/06/corruption-watch-ministry-of-local-govt.html

[viii] http://www.zambian-economist.com/2010/07/corruption-watch-lusaka-city-council.html

[ix] http://www.zambian-economist.com/2009/05/corruption-watch-legal-aid-board.html

[x] http://www.zambian-economist.com/2009/10/corruption-watch-water-affairs.html

[xi] http://www.zambian-economist.com/2010/05/corruption-watch-task-force-3rd-edition.html

[xii] http://www.cgdev.org/files/14517_file_Influence_Peddling.pdf

[xiii] http://www.zambian-economist.com/2008/11/state-vs-mining-companies-part-5-new.html

[xiv] http://www.zambian-economist.com/2007/10/undermining-zambias-development.html