Executive Issues - June 2009

8/14/2019 Executive Issues - June 2009

http://slidepdf.com/reader/full/executive-issues-june-2009 1/12Executive Issues

Volume 12 - June 2009

Volume 12 May 2009

Contents

To pg 2

Divided They Stand:The Creeping Public Service Strike - Page 3

Passport Jitters in the Diaspora - Page 4Local Authorities: “The LagosScenario?” - Page 5

Debt Contraction Clause Referred toNational Referendum - Page 6

Global Fund Director To Visit Zambia - Page 7

AID: Between A Rock and a Hard Place - Page 8Siavonga Ponders Uranium - Page 9

Orbituary - Francis Xavier Nkhoma - 1

Professional Soccer League Mooted - Page 12

RB Takes Early Lead In MmdSweepstakes

High Court thr ows out applications for judicial review

At least 32 members of staff at the Ministry of Healthheadquarters have been put on forced leave to facilitateinvestigations into a fraud initially believed to have involvedthe sum of K10 billion at the Ministry.

Many of them were subsequently interviewed by the policewho have con rmed recording “warn and caution statements”from some of them. The suspended workers were barred fromentering the of ce premises-Ndeke House in Longacres- asa security operation got underway. The affected workersare mainly from the Procurement, Internal Audit, Accounts,Planning and policy and Human Resources departments.The security crackdown followed closely the receipt of aninterim report on the suspected fraud by PresidentRupiahBanda on May 26, 2009. Investigations into the suspected

32 Banned ss Investigationinto K10 Billion Fraud Intensifes

fraud intensi ed as May drew to a close after having beenrst disclosed May 13, by the Anti-Corruption Commission

(ACC). The ACC disclosed that it had seized and restrictedproperty worth over K3billion from a onetime HumanResources manager at the Ministry of Health who at the timewas working in the same capacity at the Ministry of LocalGovernment and Housing.

The properties seized were suspected to have been obtainedusing the K10 billion siphoned off the public budget. They

included an executive lodge in Roma township of Lusaka, ahouse in Olympia Park, another lodge under construction inthat same area, a Hummer H3 vehicle, a BMW X5 vehicle,two Mercedes Benz cars, two Lexus cars, a 30-tonne NissanTipper truck, a Mitsubishi Challenger vehicle, a Ford Ranger vehicle and a Mazda pickup van. The ACC did not name theof cial nor had they formally arrested him by that time. A week

Six provinces declare for Rupiah Banda as 2011 shapes up as a re-run of 2008

The next Presidential Election in Zambia is not until 2011. But already six outof nine provincial committees of the ruling Movement for Multi-party Democracy(MMD) have rmly indicated that their nominee for party candidate in the 2011Presidential election will be President Rupiah Banda.

There seems to be a growing consensus around that at least in the mainstreamMMD. The Southern province was rst to declare for Mr. Banda. Speaking inthe provincial capital, Livingstone when the president arrived for an of cialengagement, the MMD provincial chairman, the lawyer Solomon Muzyamba said the party in the province wanted Mr. Banda to be the “sole” MMD presidentialcandidate in 2011 and that anyone else in the ruling party who aspired to thatposition should wait until 2016.

“The message is clear. Come 2011, you are the sole candidate for MMD president.We do not want upstarts to disturb, to take us back to the drawing board. We wantto continue on the success of the past, from where you picked up, up to the logicalconclusion,” he said.

The fat now seemed to be in the re! In rapid succession, four other provincialcommittees declared for President Banda. The MMD in Lusaka said there wasconsensus that President Banda should be the party’s candidate in 2011 and thatthe Lusaka committee would spearhead the campaign for his re-election.

“We want Mr. Banda to continue working at improving the economy and wewill therefore spearhead the campaign for his re-election,” declaredCleophasChimembe the provincial chairman. The Central province committee was next.

“President Banda has demonstrated unmatched leadership skills and we aretherefore, con dent that if hecontinues in of ce after 2011, hewill be able to turn around theeconomy of the country,” said

Roy Mulenga the provincialchairman.

Two other provincial committees-Eastern and North-western- alsoannounced they would backMr. Banda. Subsequently, theWestern province declared for Mr.Banda with the caveat that theywill lobby for the Vice-president tobe appointed from the province.

The Lusaka MMD committeereiterated its support for President

Banda at a subsequent pressbrie ng on June 2, 2009. Thecommittee said he has done wellas head of state despite the manychallenges including an oppositiondriven by “sel sh motives and the




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politics of insults and character assassination.” “In the midst of such insults andinsinuations leveled against him, he has not reacted in a negative way but insteadcontinued his agenda of developing the nation… [He] has shamed the prophets of doom by nding investors for Luanshya Copper Mines,” said Mr. Chimembe.

More than half the provinces are for Mr. Banda and he has won endorsementsfrom individuals as well including the Vice-PresidentGeorge Kunda , Labour andSocial Security Minister Austin Liato and MMD Chief Parliamentary WhipVernonMwaanga. For his part, President Banda has said he will run. In response tothe Southern province chairman, he indicated that he will seek the ruling party’snomination at the party convention due next year. Going by these developmentsand the mood in the ruling party, it seems even at this early stage that he will bethe nominee though not necessarily without a challenger(s). These developmentsin the ruling party seemed to slam the door in the face of many “closet” or perhapsfringe candidates within the ruling party. The message was that despite their ambitions, the nomination may not be within reach. That in fact may have beenthe primary aim of the early endorsements-to deliver an early message to “non-starter” candidates and there is quite a sprinkling of them in the MMD.

In the last nomination in 2008 for instance, there were quite a number whogot one vote, theirs! But more poignantly, there are persistent reports of other candidates who by stealth are reported to be trying to inch or buy their way to thenomination. They probably have been emasculated by now. For Zambia what thistrajectory of events does is set it up for a virtual re-run in 2011 of the October 30,2008 presidential by-election at least by candidates and perhaps in every other aspect as well! For, even as the Southern Province MMD chairman opened the

oodgates, the man who narrowly lost to President Banda in the 2008 election,

Patriotic Front (PF) PresidentMichael Sata had already indicated at a rally atSenema near Mansa that he would be the candidate for president in 2011. The PFhas so far held no convention since formation and Mr.Sata has previously stoodwithout going through a convention or any kind of public or transparent party rank

and le nomination. It does seem therefore that by whatever mechanism the partyuses, he will be the party’s standard-bearer despite a whispering campaign insome party circles against his candidature. He still seems secure enough to pulloff the nomination. He has, following the growing consolidation in the MMD, trieto stir up trouble there without much outward success by saying that those in theMMD who thought Mr. Banda would give way in 2011 were duped. But so far onlthe FDD PresidentEdith Nawakwi is reported to have confessed to somethingof that nature.

Sata has also made the now ritual overtures for cooperation among oppositionparties through an electoral/political pact with the UPND. The UPND’sHakaindeHichilema who was the other candidate in 2008 has been increasingly combativeof late. He has since formed an alliance with the PF for 2011. But it is nearlyalways like that with the opposition however such moves rarely bear any fruit.

Something of a re-run of the 2008 election would therefore appear to be in store.Momentum towards the 2011 election is bound to increase when registration of

voters begins later this year. Chairperson of the Electoral Commission of Zambia(ECZ) JudgeFlorence Mumba has recently indicated that her organization isdue to start the registration later in the year and the Ministry of Home Affairshas indicated that mobile issuance of National Registration Cards will commenceshortly. Perhaps that will be the only fundamental difference with 2008, there isbound to be a lot more voters in 2011.

RB Takes Early Lead In Mmd Sweepstakes

later, one Henry Kapoko, a Human Resources Manager at the Ministry of LocalGovernment and Housing led an application in the Lusaka High Court for judicialreview of the actions of the ACC. His application was for the court to declare “nulland void” the seizure of those properties by the ACC. The application sought thatthe action of the ACC to seize all the property belonging to the applicant and toinnocent third parties be declared “irrational and/or unreasonable.” Its thrust wasthat not all properties seized belonged to one person.

The High Court turned down the application. The court seemed dissatis ed with

the applicant’s locusstandi

in the matter and said the application could havebeen better heard if the owners of the seized property had initiated the actionsince they had a clearer interest in the matter. By then there were severalother developments around the issue. President Banda had already directedthe Secretary to the Cabinet as head of the civil service and law enforcementagencies to carry out forensic investigations to get to the truth and emphasizedthat he took no comfort in allegations of fraud in public institutions. “I want a fullreport on these allegations. We cannot condone acts of abuse of public funds,”he said. In a related development, Secretary to the TreasuryLikolo Ndalamei disclosed that government would this year introduce a single account from whichall payments would be made in order to stem recurrent misappropriation of publicfund and that an orientation workshop for controlling of cers would be held in July.“Payments will be centralized and every ministry will have to provide informationon who should be paid and these payments will be done centrally,” he told the

Public Accounts Committee

The President received the interim report on the scam on the same day that heheld closed door meetings with donors, obviously on the same issue.Investigations intensi ed. On May 29, the Lusaka High Court turneddown an application “to stay criminal investigations” against a principalPlanner at the Ministry of Health and her mother. They had a run-in with

From Page 1

From Page 1the Anti-Corruption Commission investigators who froze their personal accountswith at K200 million, restricted the health planner from disposing of her residential

at, her government bonds valued at K368.3 million and restricted disposal of hershares in a number companies. They also seized a total of K55.5 million in variouscurrencies from that her house.

She was granted leave to apply for judicial review but criminal investigations werenot stayed. The applicants believed they were targeted because one of them hasa child with the main suspectKapoko. An interim audit by the Auditor-General’sof ce put the total embezzlement at the Ministry at K27 billion. The formerPermanent Secretary in the MinistryDr. Simon Miti who is now at the Ministryof Science, Technology and Vocational Training was interviewed by the policeand sent on leave. On June 2, the Lusaka High Court again dismissed threeapplications for judicial review in connection with the investigation. Shareholderof the Best Lodge, a Lusaka businessman and resident had applied for judicialreview of the seizure of their properties. The same day, President Banda said thathe would not shield anybody from the investigation saying that he wanted the truthto come out and would not shield anybody. He said the investigations were tooserious to be trivialized or politicized because of the amounts involved.

Subsequently, the main suspectHenry Kapoko, the Ministry of Health HumanResources Manager was formally arrested and charged with one count of obtaining money by false pretences in the sum of K1.9 billion. He denied the

charge and the matter was adjourned to June 17. His application for bail wascontested by the prosecution on the grounds that he had been illusive: “It took10 days for the police to locateKapoko and it is a pity that the defence are notaware of this. The investigating team went to his home in Woodlands but nobodyknew his whereabouts. Even his uncle expressed ignorance,” the prosecutor toldthe court and added that the arresting of cer only traced him when he made atelephone call to his best friend. Ruling was reserved to the next day.

32 Banned ss Investigation into K10 BillionFraud Intensifes




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Few will want to negotiate with unions if their members do not seem torecognize the process.

May saw a rush of strikes in what seemed like a widening spiral of labour turmoilin the civil service. Teachers, hospital staff and other unionized civil serviceworkers staged work stoppages to press for a speedy conclusion of payincrease negotiations between government and public service unions. Unionizedgovernment employees want a 25% salary increase across the board and not the11% which for some reason they fear will be the nal settlement.

In addition, teachers want the payment of rural hardship allowances and liquidationof housing allowance arrears, some of which they say have been outstanding for up to six years! Health workers sound adamant about a K800, 000 increase inhousing allowance. Demanding a “sensible and realistic outcome” and apparentlyexasperated by delays in concluding negotiations on these demands, unionizedgovernment employees led by teachers walked off the workplace in what theysaid was an “ inde nite strike.”

Some said that the delay in concluding negotiations showed that “the governmentwas not ready to listen to the workers.” Assurances of good faith on the part of government by Labour and Social Security Minister Austin Liato did nothing tostem the spiral of “industrial action.” “We mean well,” Liato had said,”the processis still on and I urge the labour leaders in the collective bargaining process to goto the table and conclude the negotiations. The process has not stalled and theycan only call for industrial action when the process has stalled.”

His entreaties came shortly after the General-Secretary of the Zambia Congressof Trade Unions (ZCTU)Roy Mwabahad said the ZCTU would support industrialaction if negotiations were not concluded by May 31, 2009 and warned of anation-wide strike. But before even then civil servants in Livingstone and Monze;teachers in Luwingu, Lufwanyama and the Copperbelt walked out together withnurses and paramedics from the Ndola and Kitwe Central hospitals. The strikespread quickly and so also did the effects.

The Ndola Central Hospital for instance, had to discharge some patients. Studentnurses and senior staff were the only staff on duty. There was a widespreaddisruption of classes as teachers were not available to teach in various andincreasing parts of the country. The exception came May 27, when the ZambiaUnion of Financial Institutions and Allied Workers (ZUFIAW) formally declareda dispute with Finance Bank Zambia over their deadlocked salary negotiations.General SecretaryJoyce Nonde-Simukoko urged members to remain calm asthe parties moved to the next stage conciliation as required by law.

That was a far cry from the situation elsewhere. In Livingstone, union leaderscondemned the Southern Province Permanent SecretaryDarius Hakayobe andMonze District Commissioner Joyce Nondo for saying that the work stoppagewas illegal and those participating risked disciplinary action. They said thiswas intimidation but that it would not work. Unless there was closure on thenegotiations, work stoppage seemed set to spread after May 31.But there wereindications that agreement was imminent. Whether the “ nal settlement” will beacceptable is another matter. Among teachers, it seems that some of them atleast were paid hardship allowances when they were not entitled to. The Ministrywould appear to be recovering from salaries and that has caused quite someanger. These deductions have been described as “illegal and inhuman.”So, therewill continuing anger there. The workers would appear to be in a militant moodand will not stand for interminable negotiations. Industrial action when legitimateis one way to putting pressure.

Legitimate that is, when it is resorted to in line with the provisions of the IndustrialRelations Act. But increasingly and in this case those provisions seem to count for nothing. In fact, the pattern of strikes has tended to call into question the wholesystem of “free bargaining” between unions and employers. Their basic premiseis that the negotiating teams have the con dence, support and mandate of their principals. But the nature of the strikes tends to suggest that this may not be so.Strikes have occurred and continue to occur while negotiations are underway and

on a number of times over demands that are not on the table-new ones! It is alsothe case that strikes have occurred over matters that have already been agreedto. The strike by teachers over non-payment of rural “hardship” allowances andarrears on housing allowances is a case in point.

The strike had festered for some time. By the end of the rst school term in April,there was a rush of strike action by teachers in various parts of the country. Thesecond term opened to a widening strike over basically the same issues. Butnot long after the 2009 budget was approved, the treasury in rapid successiondisbursed funds in at least two tranches to address the issue. Subsequentdiscussions between the government and unions produced an undertaking bygovernment to clear the outstanding K42 billion in housing allowance arrears by August 2009.

The Zambia National Union of Teachers (ZNUT) said subsequently that it wasworking with the Ministry of Education to ensure that all outstanding arrears someof which it said were from six years ago, were paid as soon as possible and that

it had been agreed that K15 billion would be disbursed monthly until August whenthe arrears would be cleared. Even so, sporadic strikes and go-slow resolutionsby teachers in various parts of the country continued. In Choma, a meeting of teachers held the same day as the union attempted to clear the air over the issueresolved on a go-slow and called for a 25% salary increment and not 11%.

What these walkouts do ultimately is raise questions about trade unions. Thereseems to be a widening gulf between the membership and leadership. Hencewhile the leadership is still negotiating members may walk out on strike over the subject of the negotiations and it is not always clear what exactly is beingnegotiated because there are supplementary demands! This tends to reduce thecredibility of union negotiators. For, the only reason to sit down with them is inthe spirit that their position will have come from their membership and decisionswill permeate to the membership. But in this case, union leaders were being cast

as “sell-outs” for having met with President Rupiah Banda at Hippo Lodge in theKafue National Park.

If trade unions do not seem to enjoy the support and con dence of the membership,then the bottom will have fallen off the whole framework of industrial relations.Both employers and trade unions will need to go over this. Members must actin support of the trade union leadership and not pull it down by taking unilateralaction. At the same time employers must realize that solutions must be found ingood time. Organized free bargaining must be preserved and enhanced for thesake of industrial harmony.

Divided They Stand:The Creeping Public Service Strike

Patients need to know what it will cost before travelling there

The Zambian Mission in South Africa has recently warned self-sponsored patientsfor treatment in that country that medical treatment there is expensive. Theyshould therefore make sure that they ascertain the cost of it before travelling or risk being discharged before medication is complete.

The warning came in the wake of a reported increasing number of Zambians whotravel for medical treatment but end up not completing treatment because of ashortage of money to cover the complete course.

“Medical treatment in South Africa is very expensive,” said the statement.

It advised would be patients to ascertain the cost before embarkingon the trip. It was pointless to spend so much on travel and medicalbills only to run out of money and thereby be unable to completetreatment.

ACHTUNG-SA Treatmentnot Cheap




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And indicates the intention to apply for permission to le nal submissionsin another

The Lusaka High Court has granted former PresidentFrederick Chiluba leaveto appeal its decision to reject his application to set aside the registration inZambia of the May 4, 2007 London High Court judgment.

The London High found Chiluba and 19 others liable for defrauding the state in acivil case brought by the Attorney-General of Zambia.

The court ruled that Chiluba had to pay back within 14 days of the judgment,85% of the US$ 25,754,316 that he was adjudged to have misappropriated plusUS$600,000 in damages and do so within 14 days of the judgment.

His co-respondents were ordered to do likewise.

That court found that as President Chiluba earned a maximum US$105,000 over ten years yet a shop in Switzerland was paid US$51,200 for his clothing and thatgovernment funds paid for items of his personal expenditure among them schoolfees for his children, ve star hotel bills, clothing and jewellery.

The London judgment has to be registered in Zambia before it can be executed.Chiluba, who refused to even tender a defence before that court, has challengedits registration and it is in pursuit of that challenge that he applied for and obtainedleave to appeal.

He had applied for the registration to be set aside on the preliminary issue he hadraised of whether the Foreign Judgment Reciprocal Act under which the London judgment is supposed to be registered extended to the United Kingdom as aforeign country.

Chiluba Appeals High CourtRuling in One Case…

The High Court earlier dismissed that application and requested the partiesto le nal written submissions on the case as a whole so it could proceed to judgment.

Leave to appeal in that matter was granted shortly before Dr. Chiluba indicatedthat he would le an application to ask the magistrates’ court to allow him le nasubmissions in another case where he and two others are charged with theft bypublic servant involving US$500,000.

He did not meet that court’s deadline for written submissions. In his applicationfor leave to appeal in the registration case, he contended that the preliminaryquestion he had raised needed to be determined because all the other argumentsdepended on whether the act in question extended to the UK.

Leave was granted and all proceedings were stayed pending hearing and appealof the matter. Judgment in the case had been set for May 29, 2009.

In the second case Dr. Chiluba is seeking the indulgence of the court to le nalwritten submissions after the court’s deadline. He was supposed to have done soby April 24, 2009 and the state to have led theirs by May 22, 2009.

But when it was the state’s time to do so, the prosecution said they were unableto respond because the defence had not led any written submissions with regardto Chiluba.

This is in a case where Chiluba, the former Directors of Access Financial ServicesAaron Chungu and Faustin Kabwe are jointly charged with theft by servantinvolving US$500,000, the property of the Government of Zambia.

Judgment in that plus US$600,000 in damages is set for July 20, 2009.

Zambians abroad have a hard time accessing the new passports

Going by the exasperated inquiries from Zambians in the Diaspora, the issuanceof the new passports would appear to have turned out to be something of a ascofor them.

The validity of the now old passports has of course been extended to August 31,

2009 for them. But they seem good only for ights into Lusaka. Locally, the oldpassport has ceased and issuance of the new ones is proceeding apace.

Home Affairs Minister Dr Kalombo Mwansa recently revealed that at least 62,000new passports had been issued since the exercise commenced although not allhad been collected.

For Zambians abroad the gure is around 4000 new passports issued.

Processing of passports for Zambians abroad would appear to be painfully slowand would in fact appear to have stalled completely in the recent past, if what theyhave to say is anything to go by.

It appears that there had been no movement at all on that front for some time.Many who applied for the new passports at Zambia’s missions abroad turned intheir old ones. If they are to be believed some did so nearly a year ago!

But up to now no new ones have been issued and they are still notin sight. People are genuinely troubled. As foreigners, passports arethe conclusive identity documents for them. There appears to be apaucity of information on the situation as well and applicants seem

Passport Jitters in the Diasporato be largely in the dark. The Ministry of Home Affairs has recently issued publicnotices con rming that the old passports will not be valid for travel from Zambiawith effect from May 31, 2009 but that they will remain valid for travel into Zambia,for Zambians living abroad.

But seeing the way things are going over the new passports, many are beginningto wonder whether that was in fact a veiled invitation for them to travel back home

to obtain the new passports. The passports question is causing many outside thecountry real anxious moments.

But there are anxieties locally as well. In the past few years, Zambia has rapidlychanged from one passport type to another until to the machine read one whichhas just been phased out. The considerations in favour of these changes suggestthat this may not be the end in the quest of better security features.

The more sophisticated, the more they will cost and the cost of the new ones isalready prohibitive by Zambian standards. The cost is quite a formidable barrier tothe enjoyment of the freedom of movement guaranteed by the constitution.

The constant changeovers and recalls also ensure that the Passport Of ceremains “inef cient” because just as they internalize and begin to run the system

more ef ciently, there is a change to a new passport!

This was the case with the machine readable passports. Issuance had becomevery predictable and ef cient-within two weeks it would be ready.

But the introduction of the new one has disrupted this and the system is clearly notcatering for Zambians outside the country suf ciently or ef ciently.




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Installation ceremonies will not address pressing issues on the ground -thesystem must work

The round of mayoral installations has come to an end. By now, most of thenew mayors have been of cially installed. All through May, new mayors for thevarious city and town councils were inducted in formal ceremonies presided over

by ministers and other big-wigs.

The mayors were fully robed, with the chains of of ce on their shoulders and all.Sadly, that is all they seem to have these days. Institutions of local government

have taken a dip and are in a pitiful state. Virtually no local authority today is ableto meet the growing demands on its services. The nancial autonomy of the bigthree- Lusaka, Ndola and Kitwe- that was envisaged as early as the rst budgetof the MMD in 1992 is still a pipedream.

Even the concept of “tripartite elections” has not been kind to local government.Issues failing in that area have been overshadowed. Parliamentary and presidentialcandidates get all the air time to the exclusion of candidates for councilor. It is notclear even whether they really campaign or are elected largely by default!

Yet the real issues tend increasingly to be local and in the urban areas, theyare assuming an urgency that cannot continue to be brushed aside. Solid wastemanagement, water and sewerage issues, housing and general upkeep cry out for solutions. The living environment in the urban areas has deteriorated. Witness:the annual cholera visitations. What were once tarred township roads are todaymainly gravel or a series of ditches right in the residential areas.

In the rainy season the townships are muddy with pools of many times rottenwater. In the dry season, they are mainly billows of dust! Town planning is beingrepeatedly defeated by illegal plot allocations mainly by party of cials. There islittle to indicate that what is received in rates and other local levies is ploughedback into the communities.

Local Authorities: “The Lagos Scenario?”There are no street name plates anymore. Whereas Lusaka for instance waseasily navigable because of street names, it is not so anymore. The biggest let-down has been in the provision of basic essential services such as water. Virtuallyall the new developments in Lusaka for instance are not connected to the maingrid. They have to depend on boreholes so where there are 100 houses there willbe likely that number of boreholes! How that affects the aqua cer is not known

especially in the long –term. It could well turn out that some of these places willhave no water in years to come.

There are some urgent matters in local government and already the urbanpopulation is largely in rebellion partly because of the failure to halt dilapidation inthe living environment. They have more or less given up on the ruling party andwithout a forthright attempt to address the many outstanding issues as continuesto be the case; it may well pay dearly for the neglect.

In the short-term roads and drainage have to be addressed and there is a context.The fuel levy is collected mainly from the urban areas. A proportion-based systemthat would allow a certain percentage of total takings to be spent in the area whereit was collected would get something going. Feeder roads and other roads in ruralareas are of course important.

However, there appears to be little justi cation to spend all the proceeds therewhen the areas from which it is mainly collected are in dangers of running out of roads!

Issues of local government are mainly the basis on which government performanceis judged and going by the situation on the ground, there is cause for concern.This can’t be the time for merely ceremoniously enthroning mayors. It is time tore-activate a functioning local government system that performs and takes thereal issues in perceptive. Without that the “Lagos scenario” will overtake Zambia-Lagos where traf c jams can last days! It hardly a pretty prospect to contemplateyet it can’t be merely wished away. Something has to give and soon.

The estate promises to transform the face of Lusaka in a fundamental way

The Legacy Group has of cially launched its of ce/housing/hotel and shoppingcomplex on the south side of Lusaka around the Eureka Corner. It is perhaps themost ambitious building project to date. When it is actualized, both its scale andquality promise to transform the face of Lusaka in a fundamental way.

The US$150 million development started off as the Southgate Housing Estateand has now been re-christened the “Heart of Africa” and there is something of that in its parameters.

It is dubbed the “Golf and Lifestyle estate.” It is planned to be Zambia’s largestresidential estate with an eventual total of 850 homes positioned around a 70hainternational standard golf course. The residential estate will include a CountryClub with clubhouse and have world class services and technology.

Adjoining the residential estate will be the commercial and retail facilities. Therewill be constructed a lake on whose shores there will be 10,000sqm of of ceparks and 20 satellite of ces of 2,000sqm. The centre’s shopping mall is plannedto be the largest in Zambia and to be “a true” regional centre and destination for all Zambians.

Overlooking the lake will be a square and the ve star Legacy Hotel with thegolf estate in the distance. The hotel will be at the level of the Michelangelo of Nelson Mandela Square in South Africa. “The Legacy hotel on the square will beunparalleled in Zambia and fully earn and deserve its own world class status,”said the Legacy Group Chairman Bart Dorrestein.

The square is planned and will exist as a “meeting place “in Africa. “We are rmlycommitted to this project. The value of this project is not about scal rewards butrather the ultimate growth, development and emergence of Zambia as a dominant

Heart of Africa: Hype or Reality?force in the African market. Legacy believes that it is time that Zambia is giventhe status and prestige it deserves. Heart of Africa is not named by mistake, weare entrenched in our endevour to help Zambia and Lusaka to grow as the veryessence and “Heart of Africa,” Dorrestein has said.

So far, 60 units on the estate are reported to have been “reserved.” Thedevelopers-Legacy Holdings- have a track record in high pro le developmentsamong those they have been involved in are The Lost City, Michelangelo Hoteland Michelangelo Towers in Sandton as well as the Nelson Mandela Square, allin South Africa.

The properties will be for either lease or outright purchase. Construction contractsare now on sale and they are priced from US$50,000. Buyers have the option of using Legacy’s architectural designs to develop their dream home.

That architectural design is described as “African Contemporary.” Buyers will beable to choose from a range of different oor plans and home designs.

An addition to the Heart of Africa project is the Copper elds Village which has atotal of 72 units on offer. “These units will have the characteristic Legacy nishesand quality and are sure to be well received by the public. They offer signi cantvalue for money and present attractive investment opportunities and a quality of life not available anywhere else in Zambia,” the promoters say.

The project was launched May 20, 2009. It has a website:www.legacyzambia.com.It is sure to transform and add value to at least one part of the Zambian capital.Lusaka has quite a name in the region but in recent years, it has mainly been run-down. State of the art developments are few and far between.

Perhaps this is the sort of project that the city needs if for nothing elseto be in touching distance of developments elsewhere.




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Dogged resistance by government threatens parliamentary oversightclause.

The question of whether the National Assembly should have in the contractionof national debt has been referred to a national referendum by the plenary of the National Constitutional Conference (NCC) now in session. NCC chairmanChifumu Banda announced May 21 that since there had been no consensus onthe issue plus the failure by either side to win a two-thirds majority in voting, theissue would be referred to a referendum.

“No agreement was reached over that issue and so it will be determined by thereferendum,” he said.

Article 312 sub-section 3(a) of the draft constitution enjoins the Minister of Financeto refer to the National Assembly terms and conditions of loans which should notcome into operation unless approved by a resolution of the National Assembly.”The clause has been hotly contested and three times, the NCC has beendeadlocked.

Basically the most of the delegates consider the clause to be all-right and thatit should be included in the new constitution. But the government led by Vice-President George Kunda has insisted that debt contraction is a function of theexecutive branch of government and should be left that way. Presumably, tosubject it to parliamentary scrutiny would be to whittle down the territory of theexecutive and the issue has been largely reduced to that-territory!

But it is much larger and more serious than that and in some respects quite simpleas well. The issue has its genesis in the huge foreign debt-US$7.1 billion – thatZambia carried until 2005. Repayments were debilitating and very nearly brokeZambia’s back. The debt was unsustainable and most of the dilapidation and

chronic under-funding of vital public services that have blighted the Zambianlandscape are a consequence of that debt now virtually written off through thetough Highly Indebted Poor Countries (HIPC) Initiative and the Multilateral DebtRelief Initiative (MDRI) of the G-8 industrialized countries.

Studies of how Zambia came to saddle herself with such a massive debt haveraised a number of questions about the contraction process and even thoughZambia undertook not to slide back into debt after the “debt forgiveness,” no solidinstruments have been promulgated to ensure that history does not repeat itself.Mere good intentions will not suf ce. There is nothing to suggest that they wereabsent in the contraction of the unsustainable debt.

Parliamentary oversight is the proposal on the table and it is by no means clear that in the form that it is proposed, it will be effective. It is essentially a rst step butit has caused so much contention. Three times, there has been deadlock in theNCC. The deadlock is astonishing and there is reason to wonder why.

The basic idea is that scrutiny by more “eyes” could help improve the quality of decisions on debt contraction. Zambia badly needs a mechanism to address thatmatter. The costs of” business as usual” on this matter are ghastly as the recentpast clearly shows. The contention is thus rather surprising and so is the decisionto refer such a matter to a referendum. It seems straight-forward-an attempt tolearn from the pitfalls of the past.

The basic thrust is to ensure that there is a mechanism in the future to try andensure that unsustainable debt does not rear its head again. It is of course alsothe case that with greater prudence the executive branch can ensure that by itself.But so far no clear control mechanisms in the light of what has happened beforehave emerged and history is not on the side of the executive at all. They had allthe power to contract debt and do it prudently. But the result- an unsustainabledebt- was appalling and extremely debilitating. Shouldn’t it be once bitten, twice

shy? The proposed clause isn’t just about “taking away from the executive,”

Debt Contraction Clause Referred toNational Referendum

it is rather an attempt to have a mechanism that will manage the matter transparently, in the interests of all. Civil Society which had an input in thedebt-write off campaign that preceded the write-offs has long called for a DebtManagement Act in order to establish a proper control framework.

All manner of things can be said in support of the status quo but the need for better debt management isn’t a hypothetical case. It is real. The bene ts of debtcancellation need to be sustained and current debt management needs to bestrengthened to ensure that legal, institutional and policy weaknesses which ledto the occurrence of the unsustainable debt are eliminated.

Zambia has just emerged from a very dif cult economic situation and most of thepressure came directly from the unsustainable debt. A large part of the resourcesthat the country generated went to repayment and very little remained for development. Without the write offs, the country would still be in the “debt yoke.”But now that she has survived by quite a painful passage and still bears all thescars, it isn’t time to learn?

A common sense solution in the light of the country’s experiences and not onebased on considerations of turf seems the most appropriate.

Government ponders reduction of output from 750 to 600MW as a power outage unsettles the country

The International Finance Corporation (IFC) the lead advisors on the US$1billionKafue Gorge Lower (KGL) Hydropower station have recommended downsizingthe proposed power station’s output from 750Megawatts to 600 for environmentalreasons. At the same time, the existing power station at Kafue Gorge has of latebeen stricken and has been under-generating resulting in an unsettling near-countrywide power outage on June 1.

The recommendation to reduce output by 150MW at the proposed power stationis under study and government will make its position on the matter known as soonas it has fully appraised itself of the recommendation. It does seem however thatthe Ministry of Energy is not too enthusiastic about the recommendation and hadearlier indicated that it may have to seek a second opinion on the matter if needbe.It seems anxious that the full potential of the project should be harnessedespecially as an output of 750MW is feasible.

The project will go to tender only after a decision has been made on therecommendations. But by January this year, 15 companies were reportedinterested in the project and their interest was reported rm despite the globaleconomic recession.

KGL is the biggest of the hydropower stations that Zambia wants to constructto end the creeping power de cit that saw to the unpopular “load shedding, therationing of power in the early part of the year.

Rationing had abated somewhat due partly to reduced economic activity which

resulted at one time into a power surplus of about 200MW.That surplus wasobviously not available on June 1. There was a lengthy and crippling power outage until late in the night.

The problem was identi ed as under-generation at the Kafue Gorge Power Station due to “a massive reduction” in water volume in some of the turbines at

IFC RecommendsDownsizing ofPower Station

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the station. That resulted in a 500MW de cit during pick demand. The station thathas an installed capacity of 990MW could produce only 400MW.

Zambia began importing 250MW from South Africa and Namibia to cover theshortfall and seemed set to continue with imports until the problem at the power station is resolved. The imports cost US$260,000 a day and ZESCO needs towork fast to end that haerrhage of funds.

It is believed that weeds have clogged the inlet into the turbines and ZESCO hiredarmy divers to go under and nd out exactly what is happening “down under.”The ZESCO board of directors recently terminated the employment contract of Managing Director Rodnie Sisala. That was followed with the termination of thecontract of Energy Regulation Board Executive Director Sylvester Hibajeene. Inboth cases no reasons were given for the action.

Energy and Water Development Minister Kenneth Konga who travelled to thepower station demanded a full report on the outage and said that it had damaged

household electrical appliances and negatively impacted industrial production. Hevowed to improve supervision of ZESCO through the board of directors.

Apart from KGL, a power station at Itezhi-tezhi is under construction in a joinventure of ZESCO andTata Africa Group of India . In conjunctionwithSino-hydro of China, ZESCO is increasing output at Kariba NorthBank.

As Zambia wins Vaccine award for the second time

The high-level visit to Zambia of the Executive Director of the Global Fund Professor Michel Kazatchkine was announced in Lusaka, May 28, 2009. The Global Fundis the United Nations-anchored fund that supports health programmes aroundthe world particularly in the areas of HIV-AIDS, malaria and tuberculosis.Prof.

Kazatchkine is expected to visit Zambia between October 12 and 15, this year.

The visit, his third to the region since taking of ce in mid 2007, will coincidewith the Fund’s Regional Meeting for Southern Africa which is aimed at sharingknowledge on the Fund’s programmes within the Southern African region. Thesame meeting will also seek to promote effective programme implementation bybuilding knowledge based systems with the goal of scaling-up programmes andincrease service delivery.

Prof. Kazatchkine’s visit was nalized during a bilateral meeting between theGlobal Fund and a delegation from the Zambian Health Ministry led by minister KapembwaSimbao held in Geneva on May 20, 2009.

According to the yer for the visitProf. Kazatchkine would use the visit as “anopportunity to view rst hand, the exemplary way in which Zambia implements itsHIV and AIDS, Malaria, and Tuberculosis programmes.”

Mr. Simbao had during the meeting given the Global Fund a run-down of some of the country’s successes –the reduction of the incidence of Malaria and prevalenceof the HIV and AIDS pandemic from 16% to 14.3% among the 16-49 years agegroup-that Zambia had recorded through the support of the Fund.

The Executive Director is reported to have “commended Zambia’s achievementin Malaria control and its effective use of money from the Global Fund and other Cooperating Partners.”

He is reported to have said that “the successes attained in Zambia should bea show case in other countries in the African region.” The meeting came as itwas disclosed that Zambia had for the second time won an award of the Global Alliance for Vaccines and Immunization (GAVI).

She was bestowed the award because of her “outstanding commitment to theco- nancing of vaccines for the immunization of children as part of the VaccineIndependence Initiative (VII). Zambia rst won the award in 2007.

That initiative is meant to ensure that poor countries gradually assume nancialresponsibility for meeting their own vaccine needs. GAVI Chief Executive of cer Dr. Julian Lob-Levyt is reported to have said that he was “proud to recognizeZambia and other countries that had received similar awards for their extraordinarycommitment to immunization.”

He said the countries had demonstrated an impressive level of ownership andthat GAVI’s unique co- nancing scheme was proving to be a successful modelfor development aid.

For his part,Mr. Simbao is reported to have thanked GVI for continued fundingand technical support that had helped increase immunization coverage and theeradication of measles in Zambia. He called on GAVI to intensify efforts to nd amalaria vaccine as it was still one the major causes of illness in Zambia.

Financing vaccines and Immunization programmes has pre-occupied healthprofessionals in recent years and it is considered that co- nancing of vaccines for the immunization of children will greatly assist in the sustenance of the nationalimmunization programmes in the light of competing health priorities and needs.

That Zambia has quali ed for an international award in that area is widely seenas an encouraging sign. GAVI has mobilized funds from its donors despite theGlobal Financial Crisis to ensure the continued nancing of vaccines and childimmunization programs and attainment of the Millennium Development Goal onreducing child mortality and is involved in the search for a malaria vaccine. Theother countries to receive the GAVI award were Ghana, Liberia, Rwanda, Malawiand Tanzania.

Global Fund Director To Visit Zambia…

IFC Recommends Downsizing ofPower Station

From Page 6

It goes up by 0.4%

High food prices mainly maintained the pressure on the annual in ationrate in May. In ation increased by four percentage points from 14.3% in April to 14.7% last month.

Food products accounted for 7.9 percentage points.

Food in ation was driven by rises in the price of mealie-meal, cereals andcereal products, meat, sh, fresh vegetables and milk, coffee, sugar, tablesalt and other processed food products.

The price of a 25Kg bag of white breakfast meal rose by 2.2 percentagepoints from K65,543 to K66, 979.

The cost of beverages, clothing and footwear, rent, fuel, lighting, furnitureand household goods went up as well.

But the prices of such food as fresh fruit, shelled groundnuts, maize grain,roller meal, dried beans and sweet potatoes reduced.

Sixty six per cent of total export earnings came from copper.

Switzerland was the largest destination of Zambian exports accountingfor 48.2 per cent.

Other destinations were the Democratic Republic of the Congo (DRC),South Africa, Egypt and China.

Marginal Increasein In ation




Executive Issues

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Even with Zambia initiating the probe, aid was suspended. Had there beenno probe, the same was sure to happen!

One of the immediate fall-outs from the fraud investigation at the Ministry of Healthwas that Zambia rapidly found herself quite literary between the proverbial rockand a hard place. She found herself in a classical Catch-22 situation!

The Netherlands and Sweden suspended nancial assistance to the Ministryof Health pending the outcome of the investigation. The suspension of thataid means that the health programme has come to be short of US$30 millionand Minister of Health Kapembwa Simbao has said the most affected by theunexpected shortfall are the country’s district hospitals. From all accountsthis was an investigation instituted by the Anti-Corruption Commission (ACC),Zambia’s main anti-graft body. But even with that, aid was suspended. Had therebeen no investigation, the same was sure to happen! This situation is what being“between a rock and hard place” would describe.

However, it now seems clear that these suspensions of aid are temporal in nature.Sweden May 27, 2009 stressed that it had not withdrawn but merely ”suspended”support to the health sector pending investigations into the alleged corruption and

this year its assistance to health programmes is of the level of US$15 million.

The Swedish Deputy head of missionCharlotta Norrby said her governmentwas fully aware that withdrawing aid to the health sector would impact the ordinarypeople more and badly and also pointed out that President Rupiah Banda hadheld a ”fruitful” meeting with various donors and the donors had pledged their continued support to the government of Zambia.

So, there appears to be a level at which the matter is being handled rationally.

For in fact, the suspension of aid is itself a rational decision. In the interests of everybody money must be spent on agreed programmes otherwise there can beno end to the misery. Government has responded to the aid freeze by attemptingto cut down expenditure at the Ministry. Non-core activities will be curtailed in order mainly to assure funding to district hospitals whose monthly funding requirementis K16 billion. The nancial management and controls regime is to be reviewedand criminal investigations will proceed apace.

President Banda has made it clear that nobody will be shielded from theinvestigation if evidence points their way. He said he wanted the truth to comeout and would not shield anybody from investigation or prosecution if evidencewas established.

He also said the matter was too serious to be trivialized or politicized becauseof the amounts involved. Zambians reacted to the news with shock and disbelief.Initial reports carried no name(s) of those accused of involvement. There was anabsolute mad rush to nd out who they were and astonished public discussionsof the matter tended to proceed from the premise that a civil servant cannothave such money! Civil servants would appear to have a track record of solidpoverty and they need to watch it because they could be dispossessed of whatis lawfully theirs with everybody watching simply because they are civil servantsand shouldn’t afford it! There have been prejudicial utterances mainly casting theaccused as already convicted felons.

There is also a continuing refusal to accept that those named were the only onesinvolved. Instead the most unlikely of names are being dragged into the scandalin public discourses. There are several versions and a number of names arewhispered to be the real “dons” behind the racket and the list is long, very long!What is totally absent is any approval of what is alleged to have happened. Whatone learns is that there is support in the court of public opinion for any kind of

ddling. Invariably, the most boring and self-serving reaction was that of politicians.They gave the issue the political treatment which in Zambia means completelyunsubstantiated allegations of corruption at the higher levels of government.

Some said the suspension of aid showed that donors had no con dencein the government. Others that it proved what they have always saidthat the government is corrupt! Opposition politics appear to be drivenby desperation nowadays and anything that has the remotest possibility

AID: Between A Rock and a Hard Placeof discrediting the government is seized upon to increase the chances of wrestlingthe power has so far eluded them! Power is the obsession and in this case, theend is seen to justify the means. Thus the more inventive in the opposition havespun quite some yarns around the matter.

It has even been said that the suspended members of staff were prevented fromentering the of ce premises so that investigators would destroy all evidencelinking senior people in government! The opposition has recently been shaken tothe core and has had sleepless nights over the government’s acquisition of 100hearses for public use. They fear that it will be a powerful campaign tool in 2011.

They were even more alarmed when there were reports of government acquiringmobile hospitals from China! They feared that they would nish them off! All sortof incoherent scandals were alleged. What they really feared is of course thatif the two were in place, the argument that government is not doing much willbe hard to sell in areas where it is normally easy to go by that! In fact both thehearses and the mobile hospitals are opposed mainly on political grounds-whichthey may leave the opposition with nothing to say in the 2011 campaign!

Consequently, the bogey of a corrupt and bumbling government is being ridden

to death and there are truly desperate attempts to make it stick! Whether thereis anything to their furry of allegations only time will tell. But it would be better for Zambia if the matter was taken in its real context. Theft and misuse of publicresources has to end and of late, corruption has become the main label for everybody and anybody. The country needs clear proof of it and pointers as howit works out in practice, if it is to be fought.

The investigations at the Ministry of Health provide such an opportunity if it is notsquandered by this increasing tendency to politicize and seek political mileagefrom what is after all an ordinary criminal offence under the penal code.

South African recession to impact Zambia

The recent con rmation that the South African economy-Africa’s largest - is inrecession will put pressure on her major trading partners like Zambia. South Africaaccounts for 43% of all Zambia’s foreign trade.

The Bank of Zambia has recently said that the South African recession couldworsen Zambia’s balance of payments position due to a decline in exports to thatcountry. The South African economy was recently con rmed to have contractedby a higher than expected 6.4%-the rst contraction since the end of apartheid.The mining and manufacturing sectors have been particularly hit.

Zambia’s trade with South Africa for the rst quarter of 2009 was already indecline by an estimated 40%. It was worthUS$578.3 million in 2008 but reduced toUS$346.8 in the rst quarter of 2009. The slowdown in production in that countrycould force Zambia to look further a eld for imports and could lead to reducedexports due to low demand. Investment ows from that country into Zambia arealso expected to slow down. A depreciating Rand would make imports from thatcountry cheaper in foreign exchange terms which could lead to a deterioration inthe terms of trade.

Con rmation of the South African recession came as High Commissioner toZambia Moses Chikane called for increased partnership between businessesin the two countries. Speaking at the end of the Copperbelt Mining, Agriculturaland Commercial Show (CMACS), he called on Zambian companies to participatein South African trade fairs and business exhibitions to forge partnerships. Hesaid South African companies were already taking part in fairs and shows inZambia- fteen exhibited at the just ended CMACS. He revealed that South Africaenvisaged to partner with Zambia in the production of organic foods because of Zambia’s policy of not allowing in Genetically Modi ed Organisms (GMOs) intthe country.

What Goes RoundComes Round


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A new cabinet-level committee to spearhead the search appointed

Zambia is renewing the search for oil and natural gas. A new Petroleum Committeehas been constituted to formulate policies for ” exploration, development andproduction” of petroleum. It isn’t the rst such committee.

An earlier one had been appointed by the late President Levy Mwanawasa buthad to be “stood down” to allow for the promulgation of a more comprehensiveregulatory framework for minerals that have not previously been mined in thecountry.

Prospects for striking oil and natural gas exist. Results of preliminary investigationsfor both in the North-Western, Western and Eastern provinces were encouraging.Those investigations followed complaints by traditional authorities in the Kabompodistrict in 2004 about persistent “mysteriously ignited res” in the area that ragedfor long periods.

Subsequently investigations by the Geological Survey Department in Kabompo,Chavuma and Zambezi districts indicated that there could be natural gas andperhaps oil in the area. In August 2005, soil samples were collected for analysis in

Germany using the microbial method whose accuracy level is said to be 90%.

Out of the eleven samples analyzed, nine tested positive for oil and two for gas. A follow up study in July 2006 collected 31 samples for analysis-twelve testedpositive for oil and six for gas. The resulted were taken to be a strong indication of the presence of oil and gas in Kabompo, Chavuma and Zambezi. Investigationswere extended to the north Luangwa valley in the eastern province and laboratorytests of soil samples pointed to the presence of oil.

Analysis of another 277 samples showed there were high chances of nding oilin Lukulu and Kalabo districts of the western province while there were tracesof oil in Mongu. These preliminary ndings prompted a rethink of the Petroleum(Exploration and production) Act of 1985. It was thought to be no longer appropriate and needed to be amended to provide for two different licences-onefor exploration and the other for production and to establish a stronger frameworkfor environmental protection.

Further exploration was suspended in order to come up with a more appropriateframework.That has now been done and an amended act is in place.

Thus on May 19, 2009,President Rupiah Banda announced the appointmentwith immediate effect of the new committee.It is chaired by Minister of Mines andMineral DevelopmentMaxwell Mwaleand seems to have had meeting at leastonce before it was of cially unveiled. Mr. Mwale has said it is focusing attentionon the bid process and documents to put to tender the detailed exploration andproduction of oil and gas and that this should happen any time now. The operativeword is soon.

Blocks for exploration have been demarcated in the most promising areas andboth international and capable local companies will in the next few weeks beinvited to bid for exploration in those blocks. What is not clear given the prevailinginternational economic climate is how much response the invitations will elicit.Mineral exploration in Zambia has all but shut down. Before the on-set of theglobal economic recession there was feverish activity.

But now except for the Chinese who are still active in Mwinilunga, exploration hasall but ceased including projects that had reached advanced stage like the copper mine at old Mkushi which was being re-developed by the company “AfricanEagle” and was coming up rapidly. Whether the response to exploring for oil willbe different remains to be seen.

THE NEW PETROLEUM COMMITTEE:Maxwell Mwale- Minister of Mines and Minerals Development (Chairperson)Kenneth Konga -Minister of Energy and Water Development (Deputy)Felix Mutati -Minister Commerce, Trade and Industry

Caleb Fundanga (Dr) - Governor Bank of ZambiaAndrew Kamanga Energy ConsultantGuy Phiri Engen Petroleum Zambia Ltd

Renewed Search for Oil and Natural Gas

Farmers insist it is not cost-re ective and that FSP costs should not be the

baseline

The announcement of the anxiously awaited oor price of maize for the 2009marketing season that starts June 1, 2009 met with a heated reaction. It wasgreeted with undisguised anger and disappointment in some circles and remainscontentious. The main criticism of it is that it is not cost re ective and wouldtherefore leave farmers who had to buy inputs at record prices during the lastplanting season without any real return.

But it also met with quiet acceptance as a “fair” price, overall. After extendedconsultations, the Food Reserve Agency (FRA) May 16 announced an 18%increase in the oor price of maize to K65, 000 per 50 Kg bag and a 16% rise inthat of rice which would sell at K60, 000 for a 40Kg bag.

The FRA will not this year buy any Cassava because of the low demand for it.During consultations, President of the Zambia National Union of Farmers (ZNUF)Jervis Zimba had talked of a oor price of at least K85,000 for 50Kgs of maizeon account of the record high price of inputs. Expectations were that it would bein that region.

But when it was actually unveiled it dampened expectations. Medium scalefarmers sounded incensed and were scathing in their remarks. They said thiswas another instance of government’s readiness to pay up to K100, 000 a bagfor imported maize and of its unwillingness to even consider paying anything nearthat to its own farmers. Some farmers on the Copperbelt called for withdrawal of the price altogether because it would only bankrupt farmers.

But there were more moderate voices as well. But even they were not sayingthat this was a great price. Only that it was “fair” in the circumstances. After what seemed a “thoughtful” silence, Agriculture and Co-operatives minister Dr Brian Chituwo defended the price saying it factored in among other costs that theFRA would still have to shoulder that of transporting the maize from remote ruraldepots to the more accessible parts of the country. Subsequently, he seemedamenable to further consultations on the matter.

A point convergence among all who spoke was that this price was good for the200,000 or so peasant farmers who accessed subsidized fertilizer at K50, 000per bag through the government’s Fertilizer Support Programme (FSP) - that the

oor price seemed to have been calculated on that basis in fact and therefore thatthose farmers of who bene ted from it may have something to smile about. Not sothe other farmers who bought fertilizer on the open market. Their position is that

the FSP costs should not be the baseline for arriving at the oor price because theprogramme is accessed by no more than 10% of the farming community.

Fertilizer was the most expensive it has ever been during the last plantingseason. It was imported at a time when the economic cycle that eventually led tothe global economic crash created an unprecedented rise in the price of fertilizersinternationally. Fertilizer according to many medium-scale and commercial farmerswent for as much K275, 000 a bag and even at K300, 000 in some corners of thecountry! Those who bought it from the open market had to dig deeper into their pockets and they are alarmed by the oor price which they say is not re ective of such basic costs of production.

Some among them said government should withdraw the price and think anew.The ZNUF warned of increased bankruptcies among farmers with such a price

and talked of another frustrating season for them. The hubbub came as theresults of the Crop Survey forecast a more than 200,000 tonne surplus in maizeproduction in 2009. Agriculture Minister Dr. Brian Chituwo said the forecastshowed that the maize harvest will be around 1.8 million tonnes compared to lastseason’s 1.2milion. The country’s total annual requirement is estimated at 1.3

Maize Floor Price Uproar

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Obituary

Executive Issues

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million tonnes. When the stocks that are already in the country are factored in, itis expected that there will be a surplus of just over 200,000 tonnes.

The improvement was in yields while the hectrage under cultivation increasedonly marginally by an estimated one per cent. The output for rice and Soya Beansespecially were equally impressive and there is still the unresolved question of what to do with the 65,000 tonnes of wheat from the last crop season whichremain unsold.

Increased food availability in the months ahead should help stem the steep risein the price of food of recent months. High food prices accounted for much of the jump in the in ation rate in April. The staple food mealie -meal was particularlyexpensive, selling at an average K60, 000 for the standard 25Kg bag. Foodin ation was again a factor in the increased rate of in ation in May. The Zambia Competition Commission (ZCC) even suggested the importation of mealie-meal to break the stranglehold on the price and market by local millers.Millers reacted positively to the oor price. How that will play out in practiceremains to be seen. It seems the case however that they will want to buy their stocks at as close to the oor price as possible and that is why farmers insist thatthe price must at all times be cost re ective. When it is not, it impairs their capacityto negotiate an economic price.

If such a oor price was assured farmers would have some bargaining leeway.The FRA will in 2009 buy only 110,000 tonnes of maize which is only about 10%of the crop. Other market players will have to pick up the 90%.

At what price is what isn’t clear and is further clouded by the announcement of an“uneconomic” oor price. However, when he spoke the second time on the issueMinister Chituwo sounded amenable to further consideration of the matter. Hetalked of consultations with cabinet colleagues.

It seems as though the saga of the 2009 maize oor price may not be at an end.

Maize Floor Price UproarFrom Page 10

In 2000, Francis Nkhoma emerged the winner of the contest for UNIP President.He was the rank outsider and the unlikely popular choice for leader of Zambia’soldest political party which at the time looked like i t still could be re-organized andhad some ght left.

His victory was a surprise. Yet Nkhoma seems to have had perhaps a life-long attraction to politics and this was not the rst time that he had “dubbed”into politics. As General Manager of Barclays Bank Zambia, he stood and waselected Member of Parliament for Lusaka’s Matero constituency. He representedthat constituency in the National Assembly from 1978 until 1982.

So perhaps his winning the UNIP presidency was only surprising because he wasnever outspokenly political but nursed political ambitions. It also could well havebeen that at a time of crisis UNIP saw some qualities in him that could redeem theparty. For, qualities he did not lack.

He was rather mild mannered and quiet spoken. For most of his working life hewas a technocrat and quite distinguished-the rst Zambian to be General Manager of Barclays Bank. He was also among the famous 100 graduates at the time of Independence. He was an economics graduate from what was then the UniversityCollege of Rhodesia and Nyasaland, at Salisbury now Harare.

It is said he wanted to study law but it wasn’t easy at the time. He had obtaineduniversity entrance quali cations through private study while he worked for the

Francis Xavier Nkhoma 1937-2009Northern Rhodesia Department of Information and was appointed an InformationOf cer while still at university.

On his graduation and return, he rose through the ranks in the Ministry of Tradeand Industry to be Under-Secretary at the Ministry of Mines before becomingthe rst Permanent Secretary for the North-Western Province when that positionwas created in 1968. He served successively as Permanent Secretary for theMinistries of Trade and Industry and Lands and Natural Resources.

He left the civil service in 1972 and joined Barclays Bank. He was branchmanager, General Manager’s assistant and rose to be the bank’s rst ZambianGeneral Manager in 1975.

He retired from Barclays Bank in 1985 and later served as Managing Director of the Import Export Bank. He was appointed Governor of the Bank of Zambiain 1987 and remained in that position until 1989. For all his dubbing into UNIPpolitics and his last dalliance with the party as President was not the happiest, heremained largely a private sector man and there is a sense in which he was theideal president for a party in these days. But UNIP does not seem to lend itself to any real reform and just the fact of his popular election was the cause of muchlargely pointless wrangling.

He left in unhappy circumstances long before the expiry of his mandate. Hehad been born in Lundazi district in 1937. He had his early education at LumeziMission in the same district and subsequently attended Chassa Upper School andon to what was then Canisius College at Chikuni.

Francis Nkhoma died on May 15, 2009 at the Lusaka Trust Hospital and wasburied on May 18 after a requiem mass at St. Ignatius Catholic Church in Lusaka.

He is survived by his wife Benedicta and four children. Nkhoma was a life-longcatholic and a trail-blazer whose record remains a challenge.

Organizers pleased with the way it went

An estimated 20,000 people visited the 52nd Copperbelt Mining, Agricultural andCommercial Show (CMACS) held in Kitwe, May 27-31, 2009. Attendance waslower by an estimated 7,000 compared to last year.

Seventy-four companies in all-15 from South Africa- exhibited compared to 120last year. The show society estimates to have earned K800 million against anexpenditure of K500 million.

The society has pronounced itself “very pleased with the way it went.”

The CMACS is the rst of three annual trade and agricultural fairs. The ZambiaInternational Trade Fair (ZITF) in Ndola is next in July followed by the Zambia Agricultural and Commercial Show in Lusaka in August.

The ZITF management had scheduled a meeting with exhibitors for June 5, 2009to discuss this year’s event.

SOME CMACS AWARD WINNERS:

Agricultural producers and Suppliers category:ZAMBEEF PlcSuppliers of Goods category:Associated Fire Services LtdFinance Houses: Zambia State Insurance CorporationHeavy Duty and Industrial Equipment:SandvikMotor Vehicle and Transport Category:Toyota Zambia

20,000 at Copperbelt Show


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Chisamba meeting draws up blueprint for professional league by 2012

A meeting of 16 Zambian soccer clubs May 22, 2009 adopted a declaration tointroduce a professional soccer league by 2012 in line with FIFA guidelines for af liates. Held at Chisamba’s Protea Hotel, the meeting was attended by the FIFADevelopment Of cer for Southern Africa,Ashford Mamelodi of South Africa.The meeting appointed an Ad-hoc committee to spearhead the transformationand resolved that the Football Association of Zambia (FAZ) should facilitate theprocess including ensuring that the goals of the “Chisamba Declaration” are met.The meeting decided that the professional league would be independent of theFAZ and would have its own secretariat. The present premier league clubs wouldbe maintained and licenced to the new league over the next three years as itbecomes operational.

Clubs will be expected to comply with the requirements of the licencing system toallow for the smooth running of the concept which has already been implementedin other countries. Under the new league clubs would be allowed 25 playerseach and three foreign players if needed. Foreign players would be subject toscrutiny by a technical committee of the FAZ. Players would be professionally

contracted to the clubs in line with regulations to be agreed. Mamelodi declaredthe meeting a success and commended the participants for their enthusiasm. Hepledged continued FIFA support in implementing the idea. Deputy Sports, Youthand Child Development Minister Christopher Kalila said a professional leaguewas overdue and it was time that professionalism was introduced to the gameof soccer in Zambia. Professional League Ad-hoc committee chairmanKephasKatongo of Roan United appealed for government support to improve playinggrounds since most clubs still used state-owned grounds and said teams wouldneed their own grounds with the advent of a professional soccer league.

“The gathering has been a success, this is a historic ground-breaking developmentfor Zambian football and the clubs have shown that they are determined to make it

a reality,” said Mamelodi. Two things. The idea of professional soccer isn’t exactlynew. Effectively, this is a re-launch. The state-owned Zambia ConsolidatedCopper Mines (ZCCM) had introduced it earlier among soccer clubs of itsaf liates. It worked for a while before it zzled out. It was in fact a factor in the vasimprovement in soccer standards that saw Zambia become one of the consistentsoccer powerhouses on the continent. Soccer has since suffered a slump notleast because of the Gabon crash tragedy which killed two generations of players.Recovery has been slow and a well organized professional league could breathenew life into the attering soccer scene and there is at least some basic localexpertise.

Some of the people who worked on the ZCCM experiment could be roped-in.Their input could be invaluable especially as the reasons for abandonment couldstill be present today. Second, there is a dire need for increased investment insoccer and that is more likely to come about through a “paradigm shift.”Soccer should cease to be seen as merely social. It should instead be seen asa potential business which what it is in those parts of the world where it is at itsmost advanced.

Investors put their money in soccer teams hoping for a return. That has helpedfootball grow. The same is possible in Zambia. There is no shortage of enthusiasmand a good team will have devoted fans ready and willing to pay money to see their favourite team play. There is great potential particularly with astute managementand a good venue. The real reason why soccer teams do not make money islargely because they are considered social and are not organized even to breakeven in nancial terms. They survive by sponsorship which still has a place in thegeneral scheme of things. But teams must begin to seek nancial viability fromgate-takings, merchandising and other “fund-raising” activities associated withsoccer. Unless the teams begin to address the issue of nancing through their own methods, it is unlikely that even the renewed push for a professional soccer league may yield little.

Executive Issues - June 2009

Documents

Transcript of Executive Issues - June 2009