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Saturday, 28 November 2015

Good news on the constitution

The big news in Zambia this past week is that the Constitution Amendment Bill passed the second reading in Parliament. 106 PF and MMD MPs voted in favour defeating UPND and its small UPND leaning MMD faction. 

This is a monumental victory for the Zambian people. There was no reason for UPND to oppose the Bill at second reading given that the Bill contained exactly the same clauses as the Draft Constitution. 

The Bill now goes to Committee Stage where a simple majority will be sufficient for it to come back to Third Reading. That is when the real hard work begins. And it is at that stage where UPND should have concentrated by positively working to keep the contents, rather than opposing for opposition sake!  

If PF decides to get rid of some clauses and insert their own, then MMD may not support the Bill at third reading which may mean the whole thing collapsing. If ECL and NSM play well and patriotically together Zambians may finally have a better Constitution that has elluded us for two decades. 

The public mood in Zambia is broadly is strongly in favour of the Constitution Amendment Bill. The support among Zambians abroad is overwhelming. Not everything in the Bill is perfect, but it is vastly better than the status quo. 

So we are urging all our readers to get behind this process so we can end decades of constitutional inertia that has only benefited politicians and the so called civil society. Together these two groups have enriched themselves through many allowances in various disguised forums at the expense of the poor. 

Most importantly Zambians have endured a difficult year. The potential implementation of the Constitution Amendment Bill gives us something positive to look forward to in 2016 in the midst of dark times. It will begin a new journey for our country. A new hope for the future. This is the leadership Zambians want from our politicians.

Chola Mukanga
Copyright © Zambian Economist 2015

Friday, 27 November 2015

Zambia suffers mining job losses

Konkola Copper Mines has suspended operations at its Nchanga underground mine in Chingola with effect from Friday, 27th November 2015. The mine will be back in operation "when market conditions improve".

The decision means that all "contracting firms operating at Nchanga will be released". This will result  in immediate loss of around 1,675  contracted employees. A further 825 will be laid off over the next three months. 

KCM has already laid off 150 employees. This brings the total job losses to around be around 2,650. It  has advised that "pensionable KCM employees and permanent staff" from the Nchanga underground will be redeployed within the business.  

KCM's decision comes off the back of Glencore, an Anglo-Swiss commodities company, cutting 4,300 jobs at the Mopani Copper Mine. The Chinese-owned company CNMC Limited has also suspended operations at the Baluba mine in Luanshya, laying off 1,600. 

The jobs losses are now galloping towards 10,000. But as we indicated this week that focusing on that figure underestimates the scale of unemployment. It is not just mining workers being laid off, mining contractors have also already lost a lot of businesses which has resulted in more unemployment in other areas. 

We should also keep in mind that those who are being laid off will in turn lay-off others. Some workers employ house servants. Now that they no longer have a job or contract in mining companies they will in turn not be able to employ other people. 

Most industry forecasts suggest that copper prices will not rebound until late 2016 / early 2017.  It is very sad situation Zambia finds itself in. What is even worse is that it could all have been avoided. 

We have been predicting this scenario for three years now. We strongly advised that there was need to slow down borrowing and ensure sufficient fiscal space to enable more expansionary policies in the highly likely event that copper prices collapsed. We were told that we were foolish!

A nation that imports onions!

Zambia needs to urgently rethink its growth model. It does not make sense to have an urban growth model built on building countless shopping malls stuffed with foreign products. 

In one shopping supermarket we looked at this week, this is one of a handful products made in Zambia. The rest are imported from around the globe.

Monday, 23 November 2015

IMF- Zambia Watch (November 2015)

IMF Staff Concludes Visit to Zambia
Press Release No. 15/531
November 20, 2015

End-of-Mission press releases include statements of IMF staff teams that convey preliminary findings after a visit to a country. The views expressed in this statement are those of the IMF staff and do not necessarily represent the views of the IMF’s Executive Board. This mission will not result in a Board discussion.

At the invitation of the authorities, an International Monetary Fund (IMF) team led by Tsidi Tsikata visited Zambia during November 11–20 to review recent economic developments and discuss the authorities’ policy responses to the macroeconomic challenges currently facing the country.

Sunday, 15 November 2015

On Break!

I am currently taking time off writing to renew my batteries and spend some time thinking around various issues on the ground. Will resume in December.

God willing we will have much more consistency and comprehensive writing than has been possible over the last few months due to limited time on my hands!

Many thanks for your unwavering support!