The researchers, policy makers, the practioners as well as well-wishers of economic development have a lot of interest to learn about the role of MFIs in promoting entrepreneurship. The household liquidity constraints impede to accumulate assets in order to start viable businesses. Our results suggest that the relaxation of such constraints by means of expanding access to finance prompts households to move toward self-employment. Such movement does not take place at a time. Rather, access to credit of the poor households initially brings the non-productive household members into productive sector, mainly in self-employment activity. Such opportunity creates new income opportunity in relative to wage income. The returns to self employment than attract the households to be solely self employed in the long run to receive the windfall gain from self-employment activity.
Tuesday, 30 August 2011
Monday, 29 August 2011
The poor continue to be poor, and the gap between the rich and the poor widens at very alarming rates. The children of the influential, wealth-amassing and greedy few that are in authority have their future by oppression and injustice. Not that the poor man's child is not intelligent, and not that they cannot work, do they continue to remain stagnant economically.The real cause is that while every effort and penny is expended to ensure that the poor man's child is given a future, the opposing forces of oppression and injustice are beyond the mere effort that the poor parent can put in. They do not have legal representation and so many are the cases decided against them. They do not have the political connections that the greedy few have, and so they cannot get the smallest of contracts even through the much-sung about ‘transparent system of public tenders.' They cannot acquire land at a fair price because land deals are controlled by political cadres.
Saturday, 27 August 2011
For a useful insights regarding Zambia's maize policy challenges see the latest ACF-FSRP-MACO presentation - Zambia's Maize Policy Challenges : Issues and Options.
Friday, 26 August 2011
Zambian women have the same rights as men, and running for political office is not an exception. When I took over as minister of finance....Zambia was at its lowest. I remember there was a day when I was required to effect payment for half a million dollars and the government did not have any money. We had to borrow from one of our commercial banks. We were trying to liberalise the economy but we had no income in the country. I was privileged to be one of those who managed to push through the structural adjustment programme. Liberia has had the best leader (President Ellen Johnson Sirleaf) post conflict to manage that economy. And it is not just about the economy, but people’s attitudes as well. I believe that if Africa believed that one of its major assets is women, we would be much better. Look at what is happening in Libya, Somalia and all the carnage… who is making those decisions? The motherly instinct of a woman would not allow such, as mothers our stomachs move when we see such carnage. I believe that with women in charge, we would not be seeing most of the conflicts we are seeing in Africa today.
Thursday, 25 August 2011
Firstly, it is important to note that despite all the successes of China’s SEZs in providing incentives for investments and fostering growth, it has created a vast disparity in levels of development between coastal areas and the interior. The problem of ‘enclave economies’ is pronounced in countries where economic growth is weak outside of the export hubs. If the Zambian state merely collects rents, then, as Leonard and Strauss have pointed out, production will remain “disconnected from the overall productivity of the overall population…thus making the general health of areas outside of the enclave quite secondary”. Utilisation of SEZs needs therefore to be part of a much wider development strategy by the Zambian government if maximum utility is to be made from foreign direct investments. The efficacy of SEZs largely depends on the ability and the will of a government to distribute the proceeds of growth from these areas outwards.
Wednesday, 24 August 2011
A recent World Bank paper on the long term outlook for copper :
Global demand for copper is expected to remain strong. Long-term forecasts are by nature uncertain, but global demand for copper is expected to grow at around 3 percent annually, reaching 25 million tonnes by 2020. Much of the increase in demand will be driven by economic growth and urbanization in emerging economies, especially China and India.
Monday, 22 August 2011
To enable market-oriented economies to operate as they should and can, we need to return to the right balance between markets and provision of public goods. That means moving away from both the Anglo-Saxon model of laissez-faire and voodoo economics and the continental European model of deficit-driven welfare states. Both are broken.The right balance today requires creating jobs partly through additional fiscal stimulus aimed at productive infrastructure investment. It also requires more progressive taxation; more short-term fiscal stimulus with medium- and long-term fiscal discipline; lender-of-last-resort support by monetary authorities to prevent ruinous runs on banks; reduction of the debt burden for insolvent households and other distressed economic agents; and stricter supervision and regulation of a financial system run amok; breaking up too-big-to-fail banks and oligopolistic trusts.Over time, advanced economies will need to invest in human capital, skills and social safety nets to increase productivity and enable workers to compete, be flexible and thrive in a globalized economy. The alternative is – like in the 1930s - unending stagnation, depression, currency and trade wars, capital controls, financial crisis, sovereign insolvencies, and massive social and political instability.
Saturday, 20 August 2011
Rural poverty is increasing. The growth trajectory, while respectable, is not sufficient to reach the government’s objective of achieving middle-income status by 2030. There is an urgent need to increase the productivity of both the formal and informal sectors.Why does this situation persist? Political economists point to many contributing factors: the rent-seeking behavior typical of many land-locked countries rich in natural resources; the legacy of socialism that encouraged over-reliance on the state as the engine of employment and economic growth; the volatility associated with reliance on a single commodity market; high poverty levels; and the lack of a civic voice, especially among the rural poor. Zambia manifests some key features of what has been described as a Limited Access Order (LAO). In the LAO, elites trade economic rents for political support; hence they tend to resist reforms that could detract from their financial and political dominance.To the extent that this is true, then Zambia would seem to be caught in a vicious circle. Rents are important (due to the importance of the mining industry and aggravated by the fact that the country is landlocked), and the lack of economic/trade diversification allows capture and rent-seeking behavior to prosper. This phenomenon perpetuates the status quo (wherein many sectors seem to be captured by monopolies or cartels), which, in turn, limits productivity, economic diversification, and the formation of new businesses.
Friday, 19 August 2011
Wednesday, 17 August 2011
As passenger numbers increase the use of ageing airport infrastructure can distort the dynamic working balance required for modern and efficient airport operations. These factors have catalysed the most significant regeneration of Zambia’s main commercial airports.Ambitious plans have been set in motion to develop a sophisticated airport system in Zambia replacing the colonial infrastructure that is now constrained and outdated.
Tuesday, 16 August 2011
The welcoming committee watched in horror as their "liberators" drove the refugees off the boat, made them kneel on the embankment with their hands behind their heads, and executed over a hundred of them. Many were bludgeoned to death with rifle butts or clubs. A local priest saw AFDL [Kabila's army] soldiers kills an infant by beating its head against a concrete wall. In Mbandaka and another nearby town, Red Cross workers buried some nine hundred bodies. "The alliance fighters told us they only killed former soldiers guilty of mudering many Tutsi people in Rwanda", a Red Cross worker told another journalist. "Yet with my own hands I buried small children whose heads were crushed by rifle butts. Buried those poor little ones and women, too".
Charity Muyumbana, 45, has spent her entire adult life contending with recurrent flooding, poor drainage, and a lack of toilets in Kanyama, the sprawling Lusaka township where she lives. “Most of the people use plastic bags to relieve themselves during the night. They find it more convenient because some toilets are up to 200m away from the house,” she told IRIN.
Monday, 15 August 2011
For developing countries, the manufacturing imperative is nothing less than vital. Typically, the productivity gap with the rest of the economy is much wider. When manufacturing takes off, it can generate millions of jobs for unskilled workers, often women, who previously were employed in traditional agriculture or petty services. Industrialization was the driving force of rapid growth in southern Europe during the 1950’s and 1960’s, and in East and Southeast Asia since the 1960’s.India, which has recently experienced Chinese rates of growth, has bucked the trend by relying on software, call centers, and other business services. This has led some to think that India (and perhaps others) can take a different, service-led path to growth. But the weakness of manufacturing is a drag on India’s overall economic performance and threatens the sustainability of its growth. India’s high-productivity service industries employ workers who are at the very top end of the education distribution. Ultimately, the Indian economy will have to generate productive jobs for the low-skilled workers with which it is abundantly endowed. Much of that employment will need to come from manufacturing.For developing countries, expanding manufacturing industries enables not only improved resource allocation, but also dynamic gains over time. This is because most manufacturing industries are what might be called “escalator activities”: once an economy gets a toehold in an industry, productivity tends to rise rapidly towards that industry’s technology frontier.
Sunday, 14 August 2011
A UNIFEF video presentation on the role cash transfers are playing in Zambia to provide social protection to vulnerable families. Some of the examples given are interesting (education, health) but the jury is still out whether cash transfers can lead to sustained escape from poverty. More discussion on this here and here.
"Multinational corporations’ corrupt practices affect the South (i.e. Africa, Asia and Latin America) in many ways. They undermine development and exacerbate inequality and poverty. They disadvantage smaller domestic firms and transfer money that could be put towards poverty eradication into the hands of the rich. They distort decision-making in favour of projects that benefit the few rather than the many. They also increase debt that benefit the company, not the country; bypass local democratic processes; damage the environment; circumvent legislation; and promote weapons sales. Bribes put up the prices of projects. When these projects are paid for with money borrowed internationally, bribery adds to a country's external debt. Ordinary people end up paying this back through cuts in spending on health, education and public services. Often they also have to pay by shouldering the long-term burdens of projects that do not benefit them and which they never requested".
Saturday, 13 August 2011
Democratic accountability can be further impaired when domestic NGOs line up support from international NGOs, which are usually less well-informed about local trade-offs but are financially and organizationally much stronger. There have been some cases where democratically elected local governments have been thwarted from constructing dams that would have provided irrigation for many small farmers. The activist opponents of the dams, taking up the cause of the displaced, mobilized their international anti-dam fraternity to protest at World Bank headquarters and with US Congressmen, compelling the World Bank president to cancel the previously promised large loans for dam construction without allowing for adequate hearing from the small farmers who might have benefited. Whether the dams should have been constructed is not the point. The issue is one of democratic accountability.
Friday, 12 August 2011
Press Release by JCTR :
Campaigns must focus on issues that will improve living conditions of Zambians :
As the country is preparing for the September 2011 elections, JCTR urges all political parties and electorates to focus on issues that will enhance the quality of living of every Zambian, especially the poor. According to the Jesuit Centre for Theological Reflection (JCTR), a faith based organisation that promotes social justice, “it is imperative that the campaigns and subsequent parliamentary and presidential elections be based on improving household living conditions”. Of utmost importance are the issues relating to availability and accessibility of adequate nutrition and quality social services to the majority of Zambians.
Thursday, 11 August 2011
Wednesday, 10 August 2011
Tuesday, 9 August 2011
MCC requires that countries preparing the Compact undertake a Constraints Analysis (CA) in order to ensure that the projects proposed address critical constraints to growth and poverty reduction. The CA embedded below examined how growth could be translated into increased household incomes, resulting in reduced poverty. It also prioritised barriers to economic growth and poverty reduction and addressed relevant aspects of gender, social analysis and the environment. Further information can be found at their website - www.mcaz.gov.zm
Monday, 8 August 2011
The Consumer Diaries is a Zambian consumer’s mouthpiece written strictly by consumers for other consumers. It contains a compilation of reviews and comparisons of consumer products and services based on reporting and results from consumers themselves. This is done in order to help People have an opportunity to rate product/service experiences that they have had, and also to investigate new products or services in order to make informed decisions.
Friday, 5 August 2011
To say why didn’t Rupiah’s critics bring the issue in 2008 when he stood as a republican president is like putting a theory that; “since I wasn’t caught when I stole last year, so why should I face litigation today when you have suspected me of stealing”.Breaking the law with impunity without being questioned or caught does not warranty you from future prosecution when you are caught or suspected of having committed the same crime as previously. So whether or not no one questioned Rupiah’s candidature in 2008 is immaterial now as long as he has a case to answer....[but] neither is it in the hands of Rupiah to prove that his parents were Zambians because the rules of natural justice demands that he who has a cause against someone, need to prove his case with concrete evidence either beyond any reasonable doubt if it is a criminal case or on a balance of probability if it’s a civil case.
Thursday, 4 August 2011
Mongolian policy makers have created a “human development fund” in large part through prepaid taxes from foreign investors in the Oyu Tolgoi mine, and it doles out 21,000 tugriks ($17) to every Mongolian once a month. Government negotiators are also demanding that the foreign companies that will develop the Tavan Tolgoi mine, which holds an estimated 6.4 billion metric tons of coal, pay their taxes early. Plans call for listing shares of the project in London or Hong Kong, then granting 10 percent of them to the Mongolian people, making every citizen a shareholder.
Wednesday, 3 August 2011
Incredibly struck by the following passage from a recent Post editorial :
There is more to the question of unemployment than just its economic and social costs, severe as they are in our country at present. Even if unemployment did not impact negatively on the economy, and even if it was not a cause of many of our social problems, it would still be a denial of an essential element of human dignity. Through work, we cooperate with the creator in bringing to fulfillment the created world; we exercise our God-given abilities and talents as co-workers with God in the great task of transforming the material world. Work is not simply an honorous necessity, coincidental with our physical existence, a burden which we should try to escape. It is a vital part of our humanity, the manifestation of our creativity, an opportunity for our growth and fulfillment. Indeed, work is nothing less than a constituent dimension of the purpose for which the world was created and for which we ourselves were brought into being. That so many of our people are denied the opportunity to work is a shameful injustice, especially since it is to a large extent the result of excessive pursuit of economic policies which fail to take adequate account of the inherent value and dignity of the human person. Work is indeed a right, a right which, as a nation, we fail to respect at our peril.
The only bit that is unclear is the conclusion. If work is a right, we must surely ask what sort of right is it? One would think they regard it as a "conferred right" based on their appeal to the UN, but then they employ "inherent rights" arguments which ground justice in human worth. So one concludes they employment as an "inherent right". But of what sort? "permissive rights" or "claim rights"? A human right? I don't think having a job is a claim right (something we are "naturally" entitled to) but we have a right to having the right to a job. It is the infringement of the right to having the right to a job, that is the problem not the inability to work. With that resolved, it also becomes clear that having a job can never be a human right because having a job is a permissive right - a right we can claim we are permitted to. At best therefore it is conferred.
As the ECZ has not yet published this 2011 data on their website, and we have got it through non-official channels, it should naturally be treated with caution. We hope this will change as soon as possible.
Monday, 1 August 2011
Under the LPM changes the corporate tax rate for mines was set at 30%, mining royalties on base metals at 3% of gross value (up from 0.6% in most DAs), and withholding tax on interest, royalties, management fees and payments to affiliates or subcontractors in the mining sector were set at a rate of 15%. While many of these measures, especially the increase of royalties had largely been anticipated, the introduction of a windfall tax on base metal revenues and the profit variable tax – took the mining companies by surprise. The windfall tax was to be triggered at different price levels for different base metals. For copper, a price between US$ 2.50 – US$ 3.00/lb attracted a windfall tax of 25%; between US$ 3.00 and 3.50, 50%, and 75% for prices above US$ 3.50/lb. At the time of the changes, copper prices were around the US$ 3.60 level, sufficient to trigger the maximum windfall penalty.
The stories are endless and Vendata is not alone. In January 2008 acid waste from Chingola’s mines reached the ground water at Mufulira, around 40km away. More than 800 people in the township adjoining the Mopani Copper Mines (MCM) complained of diarrhoea, abdominal pain and vomiting. The mine is co-owned by the Swiss group Glencore and the Canadian company First Quantum Minerals (FQM), and the joint venture was set up with the help of the European Investment Bank.
Mufulira’s mining townships for years have borne the full brunt of the environmental damage. Kankoyo, home to 30,000 people, is an eye sore on an otherwise fertile and verdant landscape. Only two things grow in Kankoyo: avocado trees and cactus. In exchange for this damage the economic input consist of open sewers, dilapidated shacks with tin roofs corroded by acid rain, abandoned pharmacies, and grocers’ shops with broken windows. That is the legacy of the mining companies. When the mines eventually close, is this all they'll leave behind?
These issues undermine the argument for low taxation in exchange for new jobs. When the issue of jobs is raised, Zambians must surely ask - of what quality? Our mining workers can now be added to the list of losers from the current mining policy, alongside mining communities and the country as a whole.
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