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Friday, 31 May 2013

Lessons from Borno

"The most important thing in Nigeria is about the last election and the next election, the only thing that is agitating our minds is how we can perpetuate ourselves in power. How much we can steal, how many mansions we can buy in Florida, Dubai and London, this is what agitates the minds of the elites of this country."
- Alhaji Kashim Shettima (Governor, Nigeria's Borno State)

The governor who has lost defacto control of the Northern Nigerian state to the Islamic militant group Boko Haram - blames the whole chaos on the current mindset of Nigeria's political ruling class. And it is a good thing that Shettima says "we" for he is not blameless.

Most importantly this recent statement does hold truth about the state of politics in Africa in general. We have politicians whose only preoccupation is their belly. But of course it's not just Africa. World over the politician is only as good as the people who elect him. The people do not know their true power. Perhaps, then Shettima has not gone far enough. Surely, the problem is with the people?

Copyright © Zambian Economist 2013

Thursday, 30 May 2013

7 Things Government Has Done Well

Bad news always gets more hearing than good news. Which means we must work extra hard to hear and absorb good news. To ensure a balance in assessment, and recognising that often affirmation is more effective in provoking positive change than constant criticism, I asked our Facebook readers in April, “What are some of the good things currently happening in our economy and governance that has impressed you?". Here are the common seven things that they highlighted. [I emphasise that these are their answers - I have merely summarised them]: 

(1) Zambianisation is back - in one phrase, Government policy was described as “pro Zambian”. There has been enhanced empowerment and preferential treatment of citizens in many key areas, especially construction where suppliers and contractors are now getting a larger chunk of projects. Readers applauded the 20% mandatory sub-contracting of citizen firms on all large value building and road projects and the requirement that road contracts below KR30m and building contracts below KR20m are reserved for Zambian contractors and suppliers. Some noted that the policy of industrial clusters and the new focus on a Zambian led industrialisation strategy bodes well for broader Zambian centred economic model that is not always reliant on foreign direct investment. They were optimistic that the rural areas may just roar back into life in the near future.

Wednesday, 29 May 2013

Unfinished Business

Zambia Agricultural Commodities Exchange (ZAMACE) Limited recently urged GRZ to implement the Agricultural Credits Act, 2010 to enable rapid development of the commodity exchange. The 2010 Act introduced a legal framework for the operation of the warehouse receipt system in Zambia which is vital for ZAMACE. But for three years the Act has still not been implemented.

A warehouse receipt is a document which proves title to and deposit of a specific quantity and quality of a stored commodity in a specific "certified storage" location. It can be used by the holder to access financing against the deposited commodity from a financial institution. The "certified storage" operator can be any private entity which invests and manages grain storage (charging appropriate storage and handling fees).

Tuesday, 28 May 2013

Energy Watch (Western Province)

Western Power Company (WPC) plans to set up a hydropower plant at Ngonye Falls (Sioma, Western Province) which is expected to generate up to 80 megawatts of power. The project will be partly funded by the Development Bank of South Africa. The project is expected to help increase electrification of Western Province and boost tourism in the area. The project has been endorsed by the Barotse Royal Establishment.

Copyright © Zambian Economist 2013

Monday, 27 May 2013

Mining Watch (KCM, FQM and Berkeley)

Three important recent stories on the mining from for KCM, Berkeley and FQM:

Vedanta Resources Plc’s Zambian unit plans to cut 24 percent of its workforce after costs rose and the copper price dropped. Konkola Copper Mines Plc will reduce the total number of employees at its operations in Africa’s biggest producer of the metal by 2,000 from 8,263, the Chingola, Zambia-based company said in an e-mailed statement.

Copper for three-month delivery has slumped 8.3 percent to $7,273 a metric ton over the past 12 months in London trading. KCM says labor and electricity, its two key costs, have been “increasing constantly and substantially. It says “KCM needs to make business changes to remain economically viable..Regrettably, this means reducing staff numbers as many of the upgrade and expansion projects come to an end.”. 

I have previously discussed the Zambia's vulnerability to the slow down in China here and here

On a more positive note, First Quantum Minerals (FQM) has revealed that it has so far employed around 2000 Zambians at its Sentinel Mine at Kalumbila, 120 kilometres west of Solwezi. A further 400 Zambians are expected to be hired when the construction of a smelter in Solwezi starts soon. Sentinel Mine is the first of the three mines at the largest mineral project ever undertaken in Zambia known as 'Trident'. FQM is expected to boost its copper production to 700,000 tonnes per annum by 2015 with the completion of Sentinel Mine and increased output from expansion of Kansanshi Mine.

Separately, Berkeley Minerals Resources Plc (BMR) plans to reopen the Kabwe lead and zinc mine, which was closed in 1996. BMR also owns Bwana Mkubwa Copper Mines and several other mineral assets in Zambia. It appears the environmental issues have been sorted out with GRZ. The mining operations in Kabwe are expected to start before the end of 2013. BMR plans to employ "former ZCCM Kabwe mine workers".

Copyright © Zambian Economist 2013

Minority Shareholders on ZCCM-IH Mismanagement

ZCCM-IH miniority shareholders have made available this open letter to Vice President Guy Scott which raises concerns about "bad governance and ineffective management of the ZCCM-IH". The Open Letter has been submitted via Zambian Embassy in Paris. Their main target is the ZCCM IH Chairman Willa Mungomba and it centres around his alleged unwillingness to nominate a representative of minority shareholders to sit on the Board. 

They also allege that : the chairman and directors' remuneration are hidden; there has been no legal procedure brought against looters for fraud e.g. Mopani/Glencore; that the management has not brought sufficient pressure against FQM to pay US$550m of minority interest from Kansanshi; and, questions around how the valuation of ZCCM-IH assets and clouded plans to convert debt in equities.  These are important questions which ZCCM-IH must move to address swiftly to ensure that tax payers money is being safeguarded and the company is run with utmost transparency. 

Copyright © Zambian Economist 2013

Friday, 24 May 2013

Aid Watch (European Union)

The European Union (EU) recently signed a €44 million agreement with the Zambian Government to support mother and child health issues, as part of the Millennium Development Goals (MDGs) push. The project, which would run for four years, would be funded through a contribution fund with UNICEF and would be implemented in 10 districts in Lusaka and Copperbelt provinces.

Copyright © Zambian Economist 2013

Thursday, 23 May 2013

Learning from Chinese entrepreneurs in Africa

A fascinating piece from Mothusi Turner (Think Africa Press) on how the Chinese (from China’s Fujian province) succeeded in Lesotho may hold for our own entrepreneurs:
Rather than being in some way tied to Chinese state assistance to Lesotho then, migrants come to Lesotho under their own steam, lured by rumours of easy profits. But they do not arrive as hostages to fortune, without a plan and alone. Rather, given that kinship networks are the main pull factor behind Fujianese migration to Lesotho, new arrivals usually have links to one of the local Fujianese business associations before they even land.

These commercial networks link Fujianese traders across Lesotho with wholesalers in neighbouring South Africa and suppliers in Mainland China, and help new arrivals in number of ways. The presence of Fujianese merchants in villages that, at first glance, seem too small or remote to support a retail business, is testament to the success these associations have had.

To begin with, these networks direct new migrants towards niches in the market and away from areas already saturated by Fujianese businesses; in this way, they create a centrifugal force, pushing new arrivals into remote corners of the country.

Fujianese commercial associations also give advice and provide start-up loans and insurance for new ventures. In fact, Fujianese traders typically spend their first couple of years in Lesotho paying off debts to these associations and to the migratory agents who facilitated their entry into the country. This is part of the reason Fujianese businesses have a reputation for being open 24 hours a day, seven days a week – their owners must work extremely hard and live very frugally simply in order to pay their initial debts.

Start-up capital, hard work and frugality are central to Chinese traders’ success. Also crucial, however, is the ability of Chinese businesspeople to undercut their local competitors. This is made possible by using local Chinese business associations to buy and ship goods in bulk. This helps lower wholesale costs and, additionally, given that the many of the goods sold by Chinese businesses are non-perishable, they can also be stored on site for long periods of time to save on transport costs.

All these factors help make the Chinese community in Lesotho commercially successful.
In short the Chinese entrepreneurs key features that makes them successful in Lesotho are simple: they forge formidable kinship networks; tap into commercial networks for knowledge and start-up capital; do not compete with one another – more collaboration as they seek to make money for themselves; and work very hard!

Unfortunately, instead of the locals trying to emulate these things they have resorted to vilify them. By the time they realise these lessons the Fujian may have become rich and possibly move back to China or some other richer parts of Africa. And there will be nothing left or worse, they may be replaced by another wave of foreign merchants – if not from China, then from West Africa or elsewhere in the global South. And one cannot really blame the Chinese for that!

Copyright © Zambian Economist 2013

Wednesday, 22 May 2013

Implications of China’s New Path for Zambia

Martin Feldstein has some interesting reflections on China’s new strategic direction under leadership of President Xi Jinping , Premier Li Keqiang  and Finance Minister Liu. He observers that recent appointments signals a shift that may be less favourite to slower growth which in turn would reduce demand for commodities :
Taken together, these appointments demonstrate the new Chinese leadership’s emphasis on pro-market reforms and a shift from heavy industry to greater reliance on consumption and services. That shift is likely to mean a slower rate of GDP growth than the annual rate of nearly 10% that China achieved during the last three decades. But a slowdown to 7% annual growth would still double China’s GDP over the next decade.

More consumption and less heavy industry will also reduce China’s demand for raw materials, dampening global commodity prices. Even more significant, shifting income from state-owned enterprises to middle-class workers and increasing consumer spending will reduce China’s enormous saving rate. Since a country’s current-account surplus is the difference between its national saving and its national investment, China’s current-account surplus is likely to continue to shrink in the coming years. That is consistent with the Five-Year Plan’s goal of basing GDP growth more on domestic demand and less on exports.

Since China’s external surplus is already down to less than 2% of GDP, a decline in domestic saving could result in China beginning to run a current-account deficit. In that case, China would no longer be a net buyer of foreign bonds and other assets. If China wanted to continue to invest in foreign businesses and natural resources, it would have to become a net seller of bonds from its portfolio.
I have previously touched on potential vulnerability to Zambia's economic growth of a Chinese slowdown here. What is interesting of course is that Xi Jinping appears to have propriotised Africa since he took power. Tanzania was his first foreign visit and of course our own President Sata has already made a state visit there. China clearly has Africa at the centre of its economic strategy, but Fieldstein is spot on the broader implications of a slow down. It is up to Zambia and other African countries to factor that in their plans.

Copyright © Zambian Economist 2013

Tuesday, 21 May 2013

Removal of Fuel Subsdies (Guest Post)

By Gabriel Pollen

In discussing the question of fuel subsidies, we first need to explicitly define what a subsidy is. A subsidy is an amount paid by government to keep prices below free market. The amount is equal to difference between the consumer pump price of fuel versus the total actual cost of producing or importing.

Arguments against fuel subsidies are based on the understanding that fuel subsidies cause distortions that result in huge economic costs such as rent-seeking behaviour and smuggling . Proponents for the removal of fuel subsidies argue that several studies in recent years have quantified fossil fuel consumption subsidies and examined whether they are effective tools for poverty alleviation. Generally, lower-income populations only receive a tiny share of the benefits and fossil fuel consumption subsidies are not an effective strategy to protect “real” incomes of poor households, since they involve substantial leakage of benefits to higher-income groups.

Aid Watch (Saudi Arabia)

Finance Alexander Chikwanda recently announced that the Kingdom of Saudi Arabia has pledged to provide assistance to the Zambian government in the health and agricultural sectors. Around US$15 million will support the rehabilitation of the country’s main referral hospital. The two countries are also exploring the cooperation in the area of localized fertilizer production, particularly the possible revitalization of the Nitrogen Chemicals of Zambia (NCZ) plant in Kafue.

Copyright © Zambian Economist 2013

Monday, 20 May 2013

We Must Do Better (Guest Post)

By Mutota N. Mulumpa

Allow me to quote an excerpt from Amanda Nelson's article on the 'Effects of European Colonialism in Africa' :
“Racism, poverty, and ethnic violence are the most prominent impact colonialism had on the continent of Africa. Of course, the European influence was not entirely without benefit; indeed, colonialism introduced modern education systems, medicine, and infrastructures such as roads and electricity to Africa. However, it can be assumed that without colonial interference, the continent would have developed its own unique education system, medical treatment, and systems of government much more suited to the culture of individual ethnic groups. Perhaps a unified continent without strife or racial tension could have developed, with a strong economy and peaceful government. Now that Africa has its independence, the long journey toward healing begins"
The question is: are we ready to begin this journey towards healing? This process starts by altering our mindset. To begin to think more critically, dream and innovate. To create and trust that our creation is worthy of recognition.

This journey begins by priding ourselves in our country and resources God has given us. Politics will never change a single thing, except inter-change of promises and ideas. Politicians will remain politicians, no amount of debate will add value to the lives of people. We should begin to propose than oppose, suggest than castigate.

Among many forums on the Internet on Zambia, only the Zambian Economist (ZE) is highlighting economic areas of weakness in our country. It is facilitating a debate and suggesting better means of achieving certain goals. We must all join in press forward with this agenda. Let find solutions to our key questions :

Who is going to invent irrigation systems that are cheap and affordable to the Zambian populace? Who is going to develop a government system that is more suited to our culture or an economic system that can address our problems adequately? Who is going to develop a unique education system that equips Zambians with knowledge and skills that equip and model Zambians to be innovators, inventors and business owners?

If we sit and wait to count how many jobs the government has created, I am afraid that’s all we will ever be - mere “educated critics.” Intellectuals swelled up with things to say but no end product. Let us work together and put Zambia first in all we do.

We won’t achieve this if all we do is create a multiplicity of web media and forums that are entirely based on gossip and slander. Mere campaigns to change political parties won’t do us much good, but rather let’s do our part even in a small way to transform our nation. Zambia can and will flourish - if we work together.

Copyright © Zambian Economist 2013

Search for Better Prosecution

Government has now operationalised the Directorate of Public Prosecutions (DPP) into a National Prosecution Authority (NPA). All criminal prosecution functions would now be vested in the NPA as set out in under the National Prosecution Authority Act, 2010.

Justice Minister Wynter Kabimba recently appointed the the NPA Board with an impossible mandate of achieving “90 per cent court success rate”. The Board will be chaired by DPP Muntembo Nchito.

Prior to the NPA Act, the DPP used prosecutors from other law enforcement agencies to prosecute criminal cases in subordinate courts at district level. Now the NPA will establish the office of the District Attorney in all the districts in order make prosecution of cases more efficient and improve standards. This is expected to create over 1700 jobs. There are also promises of more legal aid in criminal cases. 

Friday, 17 May 2013

Toyota Zambia's Calculated Folly

Government has rejected calls by Toyota Zambia to limit the age of second hand vehicles entering the country because it may "disadvantage the majority of Zambians who cannot afford to buy brand new ones". Toyota wanted Government to limit the age of second hand vehicles entering the country to four (4) years for cars and pick-ups and five (5) years for trucks in order "to improve safety conditions on roads". 

Transport Minster Christopher Yaluma says vehicles are unsafe on roads due to lack of maintenance rather than their age. Also most cars entering the country are in good condition. Limiting the age of motor vehicles will only benefit players in the local industry and not necessarily benefiting the ordinary Zambians because vehicles would be beyond the affordability of most citizens.

Zambia has in recent years seen an influx of second hand vehicles most of which come from Japan with an age average of about eight (8) to twelve years old.

I agree with the Transport Minister. We need to target policies at the distortion. If the issue is safety, come up with safety related measures. Minister Yaluma has clearly seen through the greed of Toyota Zambia. To create an "import" restriction would just drive up car prices for both old and new actually (not just old). Also it would not solve the problem since all cars grow old! Unless they banned use of old cars period. Which is clearly foolish and unthinkable.

Copyright © Zambian Economist 2013

Thursday, 16 May 2013

Minerals Development Commission

Government has created the Minerals Development Commission (MDC) that will independently verify production figures submitted by mining companies (and presumably chase up those who never submit). It will be led by mining expert Pius Maambo.

Mines and Energy Minister Yamfwa Mukanga says the MDC comprises of officials from Bank of Zambia, Ministry of Finance, Ministry of Mines, Chamber of Mines, UNZA and CBU.
"These are key stakeholders in the development of the country and we want to see how best we can reconcile figures by knowing how much copper is coming from the mines on daily, weekly and monthly basis..this way it will be easier for us to tell whether the levels of taxation are enough or not rather than just talking so we need to know actual production figures from the mines. At the moment, we rely on figures from the mines and ZRA has been looking at those but what we are trying to do is for the committee to come up with independent data for the sake of transparency and accountability."
This is desperately needed. It is an excellent development. I like the composition of the committee. Good see both academics and the industry on their as well. Sanity is being restored to this critical sector. In the long term the MDC could be transformed into a commission that does more than check figures. It could be an independent outfit for developing mining policies. Or alternatively an independent regulator of mining activities in general. 

Copyright © Zambian Economist 2013

Wednesday, 15 May 2013

Investing in Policing

Government has partnered with the United States to set up the first forensic laboratory in Zambia. The overall value of the five-year Public-Private Partnership (PPP) is estimated at US$10m. The lab will be ready for use in August this year.

The PPP includes GRZ, US government, and the private sector partners Georgian Foundation, Sorensen Forensics, and Zambia Society for Child Protection. In the first year, the GRZ government will provide the largest contribution of nearly US$2m.

Home Affairs Minister Edgar Lungu says the lab will help save money and enable security officers to successfully prosecute criminal cases. The Government has spent billions of Kwacha on DNA and other tests undertaken outside the country due to lack of DNA forensic lab. The forensic lab will greatly help our officers to thoroughly investigate and gather evidence at scenes of crime. This will also make it easier to connect offenders to crimes

This is a great development. It is long overdue! It forms part of much need "targeted resourcing" in key specialist areas. 

Two additional things that would be good to see : (a) Criminal Justice Inspectorate should be established to provide regular reports to Parliament on the state of policing and criminal justice system in the country; and, (b) Government research centre on corruption sponsored by the ACC & police focused on generating practical solutions to reducing corruption.

Copyright © Zambian Economist 2013

Tuesday, 14 May 2013

Another day, another party, 11th Edition

Two recent parties actually. First up is the Catholic priest Frank Bwalya who recently announced he is forming a new party. Frank Bwalya says President Michael Sata has lost it and that time has come for Zambians to look to him for direction. His decision apparently came to him as "part of the visions that God has been showing him". He has a vision for a Zambia which will have not street kids among other things.

He is promising to introduce a new type of politics and has already launched a yellow card campaign against the PF government for "failing to keep mealie meal prices low" and "its selective prosecution". The name of the party is secret until such a time when it is right to announce it. He says this is to void the hijacking of the name of his yet to be launched political party.

Peter Sinkamba has also formed a new political party . It is called the Green Party of Zambia. According to Sinkamba the new political party will bring ideology-based politics to Zambia. The party will launch officially on June 5.

He is currently the executive director of Citizens for a Better Environment (CBE), an environmental watchdog. But he is most famous fir being the national coordinator of the People’s Pact Forum. The pact rose to fame during the 2011 elections having heavily endorsed PF, and then evaporated afterwards.

Sinkamba explains the aims of the new party as follows : "Our aim is to enhance the effectiveness of the Zambian people in creating a green society by providing an evolving social-economic and political structure that embraces and supports green values. We offer ourselves as a voice of the masses in Zambia and for the broader global green movement worldwide".

Copyright © Zambian Economist 2013

A new national carrier?

GRZ is allegedly in talks with three airlines about taking an equity stake in a new national carrier Air Zambia Ltd. and expects it to make its debut flight by the end of the year.

Transport PS Muyenga Atanga says, “We are 60 percent advanced in all our preparations. We are quite confident that before the end of the year we should have a national airline.” 

The Government is bent on start a national carrier as part of its efforts "to boost tourism and restore national pride". Zambia Airways, the most recent government-owned airline, went bankrupt in 1994. 

Zambia already has various international airlines operating including British Airways, KLM, Ethiopian Airlines and others operating. 

I still think is misguided and money can better spent on other areas. But I suppose now its a case of "let us wait and see" how this deal is structured. 

Tough questions must be asked going forward: Where is the money to invest in this equity going to come from? More borrowing? A Chinese loan? These are the questions people should be asking. What will be sacrificed to make this happen?

Copyright © Zambian Economist 2013

Monday, 13 May 2013

An Enterprise Map of Zambia

An important new free book - 'An enterprise map of Zambia' by IGC's John Sutton. The book provides a detailed account of Zambia's current industrial capabilities. From mining-related industries through general manufacturing, agribusiness and construction, it describes the structure of each of the country's major industries. Please share with friends and don't waste your money on the one in shops. It is embedded below, but you can also download it here. John Sutton is the current Sir John Hicks Professor of Economics at the London School of Economics).

Copyright © Zambian Economist 2013

Sunday, 12 May 2013

Has the era of subsidies ended?

Finance Minister Alexander Chikwanda recently said government will resist the “cheap popularity” that subsidies provide because it is too costly :
“Whether it’s fuel, whether it’s electricity, whether it’s anything; no subsidies...It’s not good for the Zambian people. Government is not here to preside over fiscal irresponsibility. We have so many huge tasks before us but the resources are very limited."
It is certainly a brave statement. Whether there's a genuine ideological shift towards greater fiscal prudence and less populism, only time will tell.

The big one clearly is the agriculture subsidy in form of the FRA. It is costing us trillions. If they restructure that we will save a lot of money. ZESCO will be very tricky!

We need to move away from subsidies. Let Government focus on putting in place direct cash transfers  to low income households and cut taxes. That's probably a much better way to tackle poverty and grow the economy than subsidies.

Copyright © Zambian Economist 2013

Friday, 10 May 2013

Inequality of Education

It is clear that the poor are failing to access higher institutions. The issue therefore is not merely making basic education free, active policies are need to widen access in high schools and especially colleges and universities. Unless this problem is urgently addressed,  inter-generational inequality will continue to be reinforced. Many of our children have a bleak future based on the above figures. 

From the the recent report - Using safety nets to accelerate poverty reduction and share prosperity in Zambia. It is quite clear that many students are failing to break

Copyright © Zambian Economist 2013

Thursday, 9 May 2013

Manganese in Zambia

A useful survey of the state of manganese mining in Zambia. It brings together many of the issues we continue to discuss here.

The landlocked African nation of Zambia is best known for its copper. In 2012, it produced 675,000 metric tons (MT) of the metal, good for seventh on the US Geological Survey’s (USGS) list of leading copper-producing countries. However, the country is looking to lower its reliance on copper by encouraging the development of other metals, including coal, uranium, iron ore and manganese.

Wednesday, 8 May 2013

Human Rights Report 2012

The Zambia 2012 Human Rights Report as produced by US Government. I should add that not everything in this report is sound but its worth a read. Incidentally,  I think the term "human rights" is much abused and certainly not properly anchored philosophically and culturally.

Copyright © Zambian Economist 2013

Tuesday, 7 May 2013

Levy Stadium Funding Problems

Financial challenges have hit Levy Mwanawasa stadium. Mwape Kasanda  (Levy Mwanawasa Assistant Director) recently revealed :
“We are faced with financial challenges in maintaining the stadium because the funds that we are given monthly are not enough for us to maintain this facility. We therefore call upon you Members of Parliament (MPs) to push for the increase of budgetary allocation to the stadium so that we can manage the facility with efficiency it deserves.."
The stadium needs KR211,000 every month for effective maintenance works to be carried out. Of that amount KR83,000 is funded by a government grant. An additional KR100,000 is raised every month from hiring out the stadium for functions. Which has left a shortfall. Which is likely to rise over time as maintenance costs increase over time. Kasanda wants MPs to push for the increase of budgetary allocation for the stadium in the 2014 national Budget. He also needs more money for maintenance equipment.

We are currently pushing forward more stadium constructions. The challenges facing Levy Mwanawasa is food for thought on whether these modern stadiums provide value for money in the long term, given the huge infrastructure costs upfront and associated maintenance. The problem is that Zambia does not have high quality sports events that people would pay for regularly to be hosted at Levy Mwanawasa. Indeed when other stadiums are built (Lusaka is already finishing the second stadium) Levy may even struggle more. And there's talk of Mongu getting a stadium - again more competition. 

Copyright © Zambian Economist 2013

Monday, 6 May 2013

The Unemployment Problem

Photo: What does this graphic tell us?

There are two key conclusions we draw from the above chart. First, that unemployment is largely concentrated in urban areas. Secondly, that young people are particularly affected. What is interesting though is that poverty levels are lower in urban areas compared to rural areas, which probably suggests that potential policy prescriptions for poverty reduction may not necessarily be the same as policies for reducing unemployment - at least at the national level. But there's a huge caveat here : "rural employment" includes a high degree of seasonal "self employment". Further complicating the policy response. 

Copyright © Zambian Economist 2013

Friday, 3 May 2013

Bold Leadership on Fuel Prices

By Chola Mukanga

The government this week announced that fuel prices will go up by 21% after removing the subsidies. The removal of subsidies is an excellent development despite its short term costs. Zambians were always paying twice. Consumers paid high fuel prices and taxpayers paid for subsidies to keep an inefficient system in place.

A Shameless Enterprise

The recent National Constitution Convention adopted Article 88 (g) in the Draft Constitution for Parliament to enact legislation to provide for funding of political parties. All the NGOs joined the political bandwagon to support this most reckless and shameful of proposals.

Foundation for Democratic Process (FODEP) executive director MacDonald Chipenzi said “funding of political parties is not a new phenomenon because several political parties across the world are funded and this can help our political parties to foster democracy and multi-partyism”. Eddie Chombani from Anti-Voter Apathy Project (AVAP) said funding would assist political parties to establish themselves valuably and be able to compete favourably while championing democracy.

Unsurprisingly MMD chairperson for women affairs Faustina Sinyangwe supported the clause, saying political funding was an essential component to empower most of the political parties with effective financial capacity.

Thursday, 2 May 2013

Bank of Zambia (Monitoring of Balance of Payments) Regulations, 2013

The much anticipated new Statutory Instrument 32 of the Bank of Zambia (Monitoring of Balance of Payments) Regulations, 2013. This was issued this week and comes into force on 16 May 2013. Huge thanks to the reader who made this available to us.

Updated (6 May 2013) : Media Statement has now been released.

Copyright © Zambian Economist 2013

Reversing A Corrupt Culture

By Chola Mukanga
Vice President Guy Scott recently observed  that the key challenge we face in rooting out corruption is that it is cultural: “We are a country of thieves; people steal money meant for development….honest in public administration is needed in this country not where big people are eating and yet you poor people are suffering. We have to clean up this culture of thieving…".
It is important to realise that when we speak of corruption and general public theft we are talking about a cultural phenomenon. 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.
Everyone is free to refuse to steal public money or engage in bribery. That Zambians engage in these activities points to the moral bankruptcy of the nation as a whole. Public theft and bribery is therefore not fundamentally a political problem but a social one. We are a "country of thieves" and therefore we have the country we deserve.

Wednesday, 1 May 2013

Debt Watch (China)

The Zambian Watchdog revealed recently that Government has borrowed US$19.5 million from China to resume "making bombs, bullets and gunpowder at a military location in Serenje district". It quoted Defence Deputy Minister Davis Mwila during his tour to Brazil who said that the government is "recapitalising Mupepetwe, an ammunition manufacturing facility located in Serenje District.’ The site was allegedly created by Kenneth Kaunda’s UNIP during the independence struggles in the region.... to produce and supply bombs (landmines) and bullets to liberation movements in the region". But after it was eventually scaled down. More detail via Zambian Watchdog. 

Copyright © Zambian Economist 2013