Opinion: First Step To Solving Zambia’s Quagmire Of Financial Indebtedness

Blessings Kafwanka (Business & Financial Analyst) Acceptance is the starting point to finding a solution to any problem you may encounter in life. If you refuse to accept that a problem exists, it becomes virtually impossible to find a solution. … Continued

The post Opinion: First Step To Solving Zambia’s Quagmire Of Financial Indebtedness appeared first on Zambia Reports.

Blessings Kafwanka (Business & Financial Analyst) Acceptance is the starting point to finding a solution to any problem you may encounter in life. If you refuse to accept that a problem exists, it becomes virtually impossible to find a solution. The next step is generating or identifying possible solutions. More often than not, there’s always someone who has gone through the challenges you are going through right now. They say “a problem shared is a problem half solved” You don’t have to reinvent the wheel. Learning from the experiences of others will save you the trouble of spending time, energy and resources before you can figure out how to get out of that predicament. After that, you need to take decisive action to address that problem and bear the pain (side effects) that might arise. That said, it takes a lot of courage for political leaders to accept the consequences of their actions. In the last 6 years, Zambia’s debt has ‘ballooned’ by well over 1,000% from about US$500 million in 2011 to US$12.5 billion in 2017 representing 47% of GDP. The worst in the history of our Zambia. Additionally, there’s no clear strategy of how this debt will be dismantled, especially the Eurobonds that will fall due starting from 2022 onwards. It’s great that Hon. Felix Mutati has finally accepted that Zambia’s debt risk has moved from moderate to high. But does this government have the tenacity to take decisive action to correct this position? There are a lot of lessons that can be taken from our history. Not so long ago, late president Levy Patrick Mwanawasa’s government was faced with a quagmire of financial indebtedness similar to the one we are experiencing now. The intensity of the problem may differ, but surely, we can learn something from the way he engaged the International Monetary Fund (IMF) and endured side effects of the conditions given such as wage freeze, employment freeze, zero tolerance to corruption, prosecuting erring officers in public institutions, both past & incumbent office bearers regardless of political affiliation. Late president Patrick Mwanawasa was uncompromising in his fight against corruption to an extent of allowing the prosecution of the man that played a major role in his ascendance to political power. During his tenure, we witnessed several corrupt leaders that were prosecuted and convicted without fear or favor. Today, our leaders have chosen to embrace and work with the very leaders they accused of being corrupt and mismanaging the country’s resources when they were in the opposition. The international Monetary Fund (IMF) only makes loans if deflationary policies are followed. From the inception of the current talks between the IMF and the Zambian government, a number of deflationary policies were proposed by the IMF which include: • Ban on unnecessary travel. This should be restricted to essential travel only • Reduction in government expenditure • Plans to start a new national airline should be will be differed • New infrastructure projects should be halted. The old projects may continue • Review the subsidies on agriculture and electricity tariffs – gradually shift to higher and cost reflective tariffs If receiving the US$1.3 billion concessionary loan from the IMF depends on government’s adherence to the above pre-conditions, what are the chances that the loan will be granted? How have we fared in terms of restricting unnecessary travel, reduction in government expenditure and halting new infrastructure projects? How have we fared in terms of promoting fiscal discipline in public institutions and genuinely fighting corruption? Today, the prospect of clinching a deal with the IMF looks bleak due to the high and unsustainable debt position were are in. Hon. Felix Mutati is right to accept that Zambia’s debt risk is high. But, in as much as acceptance could be the starting point to getting out of this quandary, decisive action must be taken. This might involve political leaders making tough decisions that might not resonate well with the electorate in the short term. But in the long-term, the benefits will certainly be overwhelming. ‘Long-term perspective’ is what differentiates good leaders from bad ones. “Politicians think of the next election, leaders think of the next generationâ€. The post Opinion: First Step To Solving Zambia’s Quagmire Of Financial Indebtedness appeared first on Zambia Reports.

source: Zambia Reports

FQM: High Taxes A Big Challenge To Mining In Zambia

First Quantum Minerals Country Manager General Kingsley Chinkuli has observed that Zambia’s mining industry is failing to compete favourably in production due to high taxes. And Gen. Chinkuli has appealed to government to quickly realise the economic diversification program to … Continued

The post FQM: High Taxes A Big Challenge To Mining In Zambia appeared first on Zambia Reports.

First Quantum Minerals Country Manager General Kingsley Chinkuli has observed that Zambia’s mining industry is failing to compete favourably in production due to high taxes. And Gen. Chinkuli has appealed to government to quickly realise the economic diversification program to reduce pressure on the mining industry. Speaking on the sidelines of the seminar organized by the Chamber of Mines with the Chilean government, Gen. Chinkuli said Chile has managed to grow production in the mining industry due to stable and low tax regimes. He said there is need for government to realise that mining has great opportunities on offer as opposed to taxes only. Gen. Chinkuli said the Mining industry in Zambia has highly been taxed but can as well be used for job creation as well as enhancing economic development in different communities of operation. “Currently the taxes are too high and this is affecting production in the mining industry, we need to get to a round table and see how best we can help one another of these issues, Zambia needs a stable tax regime to help improve production in the mining industry” he said. “There is a lot we can learn from Chile, we have to continue with such engagements, I was once Minister of Mines and we had a lot of interactions to see how best we can help one another in this sector” he added Gen. Chinkuli however said the mining industry I’m Zambia is under serious pressure due to its contribution to the country’s economic growth. “You see Chile only has about 6% of its export earnings from mining that is copper but here in Zambia we are talking about over 70%, this has contributed to so much pressure on copper production”. He said government needs to take advantage of the mining industry’s contribution to help grow other sectors through its diversification program. Gen. Chinkuli said there is need to see the agriculture sector taking centre stage in sustaining economic growth and also help reduce pressure on the mining industry in the country. “We cannot always depend on copper production for our export earnings, we need to look at other potential sector of the economy like our friends are doing in Chile,” he stated. The post FQM: High Taxes A Big Challenge To Mining In Zambia appeared first on Zambia Reports.

source: Zambia Reports

Govt Should Stop BabySitting Mining Companies By Reintroducing Windfall Tax – Prince Ndoyi

Former ZANASU vice-president Prince Ndoyi has taken a swipe at government for treating mining companies with kids gloves. Ndoyi says the government was baby sitting mining companies at the expense of the majority poor Zambians The political commentator has challenged … Continued

The post Govt Should Stop BabySitting Mining Companies By Reintroducing Windfall Tax – Prince Ndoyi appeared first on Zambia Reports.

Former ZANASU vice-president Prince Ndoyi has taken a swipe at government for treating mining companies with kids gloves. Ndoyi says the government was baby sitting mining companies at the expense of the majority poor Zambians The political commentator has challenged government to reintroduce windfall tax as an alternative for Zambians to benefit from their vast mineral wealth. Ndoyi says the refusal by Mopani Mines to pay the revised electricity tariffs was unacceptable and immoral especially that poor Zambians are paying without protesting. He said the crisis at Mopani is the first true test of Copperbelt Minister Bowman Lusambo’s leadership abilities. “Government including some governments in the past have been babysitting these mining companies, treating them with kids gloves for far too long than we can no longer take. ITS TIME FOR WINDFALL TAX, the Copper prices are booming, conditions are ripe. “We must never forget that, anywhere in the world, the wealth in the ground belongs to its citizen. Now that’s a bit mushy for a hard-nosed businessman, but that’s the reality and that’s where the expectations arise. If you may recall prior to the 2011 Election, late PF President Michael Sata a day before elections said that, “after tomorrow, you must say no to poverty, after tomorrow you must say no to unemployment, what we want is Zambia for Zambians, people are making money over our heads.” If these words remain true to the Patriotic Front government then we must strike while the rod is red hot.” He noted that the mines have been abusing the relationship between them and government. “Our relationship with the mines have proven to be abusive as it is a one sided friendship hell bent on exploiting us, even refusing to pay for electricity at competitive tariffs. “These same mines were adequately consulted and now want to embarrass the government, a govt which has upwardly adjusted electricity tarrifs for an ordinary Zambian business owner. My view is as the prices of copper and other metals continue to boom on the world market, the country needs to benefit as well.” He said. Ndoyi adds that the PF was put in office for the poor people and promised to deport abusive foreign investors. “The Patriotic Front (PF) we all know, must put an end to this, they promised during elections to deport foreign investors that exploit their workforce, increasing corporate taxes and limiting foreign ownership of mines, and Zambians spoke clearly and loudly through the elections and they must reflect seriously on our concerns. “Whilst we have made important macroeconomic gains, admittedly the standard of living of the majority of Zambians remains poor, hence we can’t entertain any job losses from the mines. Prior to privatisation of the mines, World Bank and IMF continued to preach to the Zambian Government that, in order to bring in investment, the country would have to make itself more attractive than its neighbours and competitors by developing an ‘investor-friendly’ regulatory regime.” He accused the World Bank and the IMF of using the country’s dependence on the two institutions to pass laws that have weakened government control on the mines “The World Bank and International Monetary Fund have used Zambia’s dependence on them for aid and debt relief to pass laws– principally the Investment Act and the Mining and Minerals Act, withdrawing many of the controls the state had previously established on the behaviour of companies. “While significant investments have poured in since, it is far from clear that all investors have chosen to take note of those of the country’s laws that do still apply to them – or indeed to honour the commitments they make in the Development Agreements. “Some investors have taken advantage of the fact that Zambian state institutions are too weak to effectively regulate their behaviour. The state itself also seems to have developed political relationships with certain mining houses that mean health and safety, labour, immigration and environmental regulations can be ignored with impunity, causing significant resentment for foreign investors.” The post Govt Should Stop BabySitting Mining Companies By Reintroducing Windfall Tax – Prince Ndoyi appeared first on Zambia Reports.

source: Zambia Reports

Opinion: Is The Reduction In Fuel Prices Sustainable?

Zambians have every right to express their dissatisfaction with the reduction of fuel prices that has been made by the Energy Regulation Board (ERB). Petrol has been reduced from K12.5 to K11.67; Diesel reduced from K10.72 to K9.87 and Kerosene … Continued

The post Opinion: Is The Reduction In Fuel Prices Sustainable? appeared first on Zambia Reports.

Zambians have every right to express their dissatisfaction with the reduction of fuel prices that has been made by the Energy Regulation Board (ERB). Petrol has been reduced from K12.5 to K11.67; Diesel reduced from K10.72 to K9.87 and Kerosene reduced from K6.81 to K6.50. The impact that this will have on reducing the cost of doing business is very negligible. From the sentiments that have been expressed from a cross section of society, Zambians expect an adjustment that will lead to a reduction in the cost of living which has risen sharply in the last few years. For a motorist who spends an average of K1,000 per month on petrol, the total saving that will arise as a result of this reduction is only about K66. This is clearly not enough to compensate the sharp increases in the prices of basic food items and electricity that occurred in the first half of 2017. I have no reason to doubt that Minibus & Taxi operators will not even entertain the thought of reducing their fares. However, we should appreciate the fact that this reduction is proportional to the appreciation of the kwacha in the last few weeks against other major currencies. In as much as the reduction is insignificant, it’s only fair that ERB should pass on this little benefit that has arisen. It is common practice by most traders to quickly increase the prices of their products and services when the Kwacha depreciates. However, when there’s an appreciation, they are usually reluctant to adjust their prices downwards. We appreciate the fact that Zambia is a free market economy and government cannot interfere in the pricing of most products. Traders are free to sell their merchandise at any price as long as buyers are willing to pay. The laws of demand and supply influence the prices of most products on the market. However, it’s good business practice to pass on the benefits that might arise whenever there’s a reduction in the cost of inputs. ERB has simply passed on the benefit has arisen as a result of the appreciation of the Kwacha. Any adjustment in the pump price of fuel has a ripple effect that affects almost every aspect of our economy. Therefore, our primary focus as a nation should be finding sustainable ways of strengthening the Kwacha. It is therefore imperative, that government continues implementing policies that will lead to further strengthening of the kwacha. There are several reasons that led to the appreciation of the Kwacha in the last few weeks. The reduced rate of inflation, monetary policy changes by the bank of Zambia and increase in lending rates that have attracted foreign investment have clearly had a role to play. However, this appreciation is mainly driven by the increase in copper prices on the international market. Our government has absolutely no control over metal prices on the international market. This makes our economy vulnerable to depressed metal prices in the future. The government should therefore strive to implement policies that will lead to gains that are backed by increased productivity not just in mining but in other key subsectors such as Agriculture and tourism. This is the only way they can guarantee a sustainable appreciation of the kwacha against other major currencies and a meaningful reduction in the pump price of fuel in the long run. Meanwhile, today, 8th August, 2017, OPEC and non-OPEC officials were holding a second day of meetings in Abu Dhabi to discuss ways to boost compliance with their oil output-cutting pact. The primary objective of these meetings is to boost oil prices that have been falling in the recent past. The Organization of the Petroleum Exporting Countries, Russia and other producers are cutting production by about 1.8 million barrels per day (bpd) until March 2018 to get rid of a glut and support prices. I remain hopeful that the relevant offices here in Zambia are following these developments and making plans on how to mitigate the imminent increase in oil prices in the near future. I ‘am also hopeful that our “able leadership†will not just fold their arms and say “The increase is globalâ€. They will certainly devise mechanisms now, to mitigate the effects of this imminent increase in the not so distant future. Blessings Kafwanka Business & Financial Analyst The post Opinion: Is The Reduction In Fuel Prices Sustainable? appeared first on Zambia Reports.

source: Zambia Reports

Zambia’s ‘Real’ Debt Stands At $30 Billion – Dr. Nevers Mumba

Former MMD president Dr Nevers Mumba says Zambia real debt stands at US $30 billion disputing finance minister Felix Mutati’s projection which is quoted at $7.2 billion. Dr Mumba, who is now one of the prominent supporters of UPND leader … Continued

The post Zambia’s ‘Real’ Debt Stands At $30 Billion – Dr. Nevers Mumba appeared first on Zambia Reports.

Former MMD president Dr Nevers Mumba says Zambia real debt stands at US $30 billion disputing finance minister Felix Mutati’s projection which is quoted at $7.2 billion. Dr Mumba, who is now one of the prominent supporters of UPND leader Hakainde Hichilema, has published an article on his Facebook page backing his claim and challenging the Zambian government to be truthful. “Considering that there is much confusion among Zambians on what the correct debt position is, we did our own research and concluded that the figure of $7.2 billion Mr Mutati gave is simply not true. “Based on evidence gathered from a variety of sources, we have found that the true figure appears to be at least 4 times larger than stated. “Our preliminary figures, based on information in the public domain, show that at a minimum, the true debt position is about $30 billion!!!” he states. BELOW IS THE FULL ARTICLE BY DR MUMBA ZAMBIA’S HIDDEN DEBT CRISIS: THE REAL DEBT IS $30 BILLION! By Dr Nevers Sekwila Mumba, 28th July 2017 On 21st June 2017, Finance Minister Felix Mutati gave a ministerial statement in Parliament in which he said that Zambia’s foreign debt stock stood at $17.2 billion. After much debate and discussion, he clarified later on that he had misspoken and that the correct figure was actually $7.2 billion. This figure was challenged, most notably by Mr Trevor Simumba, a Zambian financial analyst. Considering that there is much confusion among Zambians on what the correct debt position is, we did our own research and concluded that the figure of $7.2 billion Mr Mutati gave is simply not true. Based on evidence gathered from a variety of sources, we have found that the true figure appears to be at least 4 times larger than stated. Our preliminary figures, based on information in the public domain, show that at a minimum, the true debt position is about $30 billion!!! In 2011 when the Patriotic Front (PF) government took office, Zambia’s external debt stood at $3.5 billion (15% of GDP). Using the government’s own figures, it has ballooned to $7.2 billion (34% of an estimated $21 billion GDP) in 2017 and the year is not yet over. But the World Bank as of 2015 put the debt at $8.7 billion (by 2017 it is certainly around $10 billion). Using our computed figure of $33 billion, it is 157% of GDP. 40% is the government’s own acceptable threshold. The list below, which is certainly not exhaustive, does not count other loans for 2017 still in negotiations such as the Lusaka-Ndola dual carriageway which will cost not less than $500 million and it does not factor in local debt ($4 billion) or arrears owed to contractors ($1.7 billion). We have also not factored in an estimate of unknown loans. We estimate that the grand total of all debts is anything from $35 billion to $40 billion. To make our research more complete, we have also taken into account debt servicing. Below the list of loans is the list of debt servicing per year from 2011 to 2015 based on data from the World Bank. We have added our own estimate for debt servicing for 2016 and 2017. Also of note is the fact that the government has this year requested for an additional $8 billion from China to fund infrastructure development! This shall make the debt position far worse than anything imaginable for Zambia. What is clear from all the information available is that Zambia is sitting on a massive debt time bomb that shall explode in a very big way within the next 5 to 10 years. Based on projections of current economic growth rates, Zambia will not manage to pay off those debts in a sustainable way. A sovereign debt default and significant credit rating downgrade is a very real possibility. We do not claim perfection in our research and there is a chance that there could be gaps in our information. We therefore call upon Mr Mutati to issue another ministerial statement and shed light on this matter with the true debt position because it appears the Zambian government is being economical with the truth. Zambians need to know the real debt position so that they can anticipate what is coming ahead of us economically. The IMF is already in negotiations with the government for a $1.6 billion bailout and they also need to know the truth, the whole truth and nothing but the truth in order to determine how much they can lend because they need to know our capacity to repay. LIST OF MAJOR LOANS (2011 – 2017) 1. Kenneth Kaunda International Airport: $360 million (2014) 2. Poverty reduction projects: $13.5 Billion (2012) 3. Poverty reduction programmes: $6.7 billion (2011) 4. 750MW Kafue Gorge Lower Power Plant: $1.7 billion (2015) 5. 360MW Kariba North Bank Power Plant Expansion: $430 million (2014) 6. Lusaka L400 roads: $300 million (2013) 7. Copperbelt International Airport (Ndola): $400 million (2017) 8. Lusaka de-congestion: $286 million (2017) 9. Communication towers: $280 million (2017) 10. Copperbelt C400 roads: $418 million (2015) 11. Chipata-Serenje railway line: $2.3 billion (2017) 12. Mongu-Kalabo Road: $287 million (2011) 13. 2,000 Military Houses: $157 million (2017) 14. Mansa-Luwingu road: $242 million (2012) 15. Water and sanitation programme: $135 million (2016) 16. Mbala-Nakonde Road: $180 million (2011) 17. Lusaka sanitation project: $130 million (2015) 18. Kafubu water and sanitation project: $104 million (2014) 19. National Heroes Stadium: $94 million (2011) 20. Levy Mwanawasa Hospital Expansion: $90 million (2015) 21. Kafulafuta Dam water project: $449 million (2017) 22. Housing project for security wings: $275 million (2015) 23. International Development Assistance programme: $600 million (2017) 24. Rural roads project (World Bank): $200 million (2017) 25. Environmental Remediation and Agribusiness Development: $106 million (2016) 26. Miscellaneous small loans: $300 million (estimate) 27. Debt position of previous government up to 2011: $3.5 billion TOTAL EXTERNAL DEBT: $33.5 billion ANNUAL EXTERNAL DEBT SERVICING 2011: $229.6 million 2012: $230.1 million 2013: $325.9 million 2014: $396.0 million 2015: $507.3 million 2016: $660.0 million (estimate) 2017: $800.0 million (estimate) TOTAL: $3.1 billion ESTIMATED NET EXTERNAL DEBT: $30.4 billion (2017) The post Zambia’s ‘Real’ Debt Stands At $30 Billion – Dr. Nevers Mumba appeared first on Zambia Reports.

source: Zambia Reports

Inflation Drops To 6.6%

The annual inflation rate for the month of July, 2017 has decreased to 6.6 percent from 6.8 percent in June 2017. This means that on average, prices increased by 6.6 percent between July 2016 and July 2017. Central Statistical Office … Continued

The post Inflation Drops To 6.6% appeared first on Zambia Reports.

The annual inflation rate for the month of July, 2017 has decreased to 6.6 percent from 6.8 percent in June 2017. This means that on average, prices increased by 6.6 percent between July 2016 and July 2017. Central Statistical Office Director, John Kalumbi explained during the monthly bulletin presentation that the movement of consumer price indices (CPI) show a steadily increasing trend in the prices of commodities during the period of July 2016 to July 2017. Kalumbi however,says the annual inflation rates over the same period have shown a decreasing pattern from 22.2 percent in July 2016 to 6.6 percent in July 2017. He states that of the total 6.6% annual inflation rate recorded in July 2017, food and non-alcoholic beverages accounted for 2.9 percentage points, while non-food items accounted for a total of 3.7 percentage points. Kalumbi says Lusaka Province had the highest provincial contribution of 1.9 percentage points to the overall annual inflation rate of 6.6 percent, implying that the price movements in Lusaka province had the greatest influence on the overall annual rate of inflation. He adds that Western province had the lowest contribution of 0.2 percentage points. And Zambia recorded a trade deficit valued at K335.2 million in June 2017 from K333.8 million recorded in May 2017. This represents a 0.4 percent increase in the trade deficit. This means that the country imported more in June 2017 that it exported in nominal terms. Source: QFM The post Inflation Drops To 6.6% appeared first on Zambia Reports.

source: Zambia Reports

Antonio Mwanza: Maize Floor Price Killing The Farmer

The floor price of K60 per 50kg bag of maize as announced yesterday by the Food Reserve agency is a devastating blow to farmers, and yet, another testament that PF is indeed Paya Farmer. The flow price has been reduced … Continued

The post Antonio Mwanza: Maize Floor Price Killing The Farmer appeared first on Zambia Reports.

The floor price of K60 per 50kg bag of maize as announced yesterday by the Food Reserve agency is a devastating blow to farmers, and yet, another testament that PF is indeed Paya Farmer. The flow price has been reduced from K85 to K60 per 50kg bag of maize when the cost of production has actually skyrocketed beyond the reach of many farmers owing to the escalating costs of farming inputs such as fertilizer, chemicals, seed and equipment. The cost of transport, packaging, storage, loading and offloading have equally hit the roof, making it more expensive for farmers to market their produce. With the rising cost of production it is only prudent for any decent and caring Government to peg the floor price at a rate that takes into full consideration of the production and marketing fundamentals. Today, a farmer is making losses of K25 and K1000 per every 50kg bag or one tonne of maize sold, respectively. The price of maize per tonne has fallen from K3400 last year to K2400 this year despite the fact that the cost of producing this same tonne has risen to over K3200 per tonne. Equally, the flow price of Soya beans has plummeted from K5 in the last marketing season to K1.50n this season. In short, the announced flow price will worsen the poverty situation in the country which is already hovering at alarming levels of over 75% among our rural population. Agriculture being a high labour intensity venture is the only sure solution to massive job creation and poverty eradication. And any serious government would invest heavily in Agriculture to combat the current high unemployment and poverty levels through improved production and marketing. When it comes to singing, the PF Government has been so good. They have spent 5 years now singing about agriculture and diversification but they have lamentably failed to invest in the sector and implement policies that would make their song of Agriculture and diversification a reality. Moving forward we propose the following: 1. That 20% of the next 5 national budgets must be allocated to Agriculture to ensure the following: a) Mordenised methods of production to improve yields b) Supply of adequate farming inputs on time c) Value addition through agro-processing to increase forex and create jobs d) Serious investment in extenstion activities and information sharing to equip farmers with the knowledge concerning their preferred agro activities e) Increased investment in Irrigation f)Increased investment in fish and animal farming g) Increased investment in other high value cash crops. 2. Government must seriously work on reducing the cost of production by subsidising production and stabilising the general macro fundamentals to ensure low cost of goods and services. If we subsidise production, we will make it cheaper and profitable for farmers to engage in Agriculture. 3. Government must work with other stakeholders to help farmers access markets and make it cheaper and easier for them to trade. Issued by Antonio Mwanza FDD Deputy National Secretary The post Antonio Mwanza: Maize Floor Price Killing The Farmer appeared first on Zambia Reports.

source: Zambia Reports

Opinion: The Impact Of A State Of Emergency On The Economy

By Blessings Kafwanka Our economy has gone through a lot of stress in the recent past. The cost of doing business has risen sharply in the last few years. This can be attributed to the removal of electricity and fuel … Continued

The post Opinion: The Impact Of A State Of Emergency On The Economy appeared first on Zambia Reports.

By Blessings Kafwanka Our economy has gone through a lot of stress in the recent past. The cost of doing business has risen sharply in the last few years. This can be attributed to the removal of electricity and fuel subsidies. It can also be attributed to circumstances that are beyond the control of our government such as the fall in copper prices and the increase of fuel prices on the international market. This has increased the cost of production/service provision for many entrepreneurs and business houses. The Austerity measures that were put in place have also had a role to play in this. The changes in our tax regime i.e. changes in the PAYE bands, the introduction of the 15% excise duty on talk time, introduction of bands to our turnover tax system and many other changes have contributed to this problem. The cost of borrowing has also significantly increased in the last 5 years from about 16% in 2011 to the current range of about 30% to 35%. Business people factor in all of these costs into their cost of production and provision of various services. Ultimately, it’s the consumer that is adversely affected. Everybody, regardless of their political affiliation is affected. With the stress that our economy has gone through in the recent past, the possibility of a State of Emergency being declared will further compound this problem. I do not want to get in the debate of whether there’s tension in the country or not. His Excellency, President Edgar Lungu has clarified that we are not in a State of Emergency. The best legal minds have labored to explain the situation we are in. But what I’m certain about is that if a State of Emergency is eventually declared, it will certainly create a perception that our political environment is very unstable. Political instability can have a significant impact on overseas investment decisions. At a time when the country is struggling to resolve huge current account deficits we have seen over the years, we cannot afford to lose the earnings in form of corporate taxes that comes with Foreign Direct Investment. In his “State of the economy address to parliamentâ€, the finance Minister Felix Mutati disclosed that the country’s current account deficit stood at US$257m in the first quarter of 2017. On revenue collection in the first five months of 2017, Mr Mutati said revenues under-performed by 10% compared to the budget. If a State of Emergency is declared it will become practically impossible for the government to achieve their goal of increasing domestic Resource mobilization and attaining fiscal Consolidation in 2017. Foreign Direct investment (FDI) also contributes to the creation of employment. Unemployment is one of the major challenges that Zambia has been experiencing and successive governments have tried to resolve this issue. Recipients of FDI often gain employee training in the course of operating the new businesses, which contributes to human capital development in the host country. How will the State of emergency impact on government’s goal of creating 200 thousand decent jobs annually? A State of Emergency might come with restrictions on the freedom of movement after certain hours e.g from 19:00hrs to 06:00hrs. This means that traders that make the bulk of their sales after 17:00hrs will be adversely affected by this move. The traffic of customers in supermarkets, shopping malls and other trading places increases after 18:00hrs. This is also a time when Mini bus and taxi drivers compensate for the slow business during the day to make their “Cash-in†for the day. Restrictions on telecommunications companies might be imposed for security reasons. This will not only reduce the profits for the telecommunications. Communication is a very vital component of every business. Small traders that cannot afford to rent office space heavily rely on their phones to communicate and clinch business deals. Social media such as Facebook, whatsap and twitter has become a vital part of our lives not just for entertainment but for cheaper advertising, communication and marketing of products and services. Most students rely on the internet to conduct their research and collect study materials. The internet has also made it possible for people to know what is happening both locally and globally at a click of a button. Gone are the days when people would surround a radio or wait for the main news at 19:00hrs to know what is happening in the country. I believe that we all have a role to play to avoid a State of Emergency from being declared and ensure that there’s peace and stability in Zambia. Our leaders should explore peaceful avenues of resolving the current situation. Our leaders regardless of their political affiliation must realize that no Zambian deserves to suffer in any way because of their political ambitions. No Zambian should lose their life because of the political ambitions of a few individuals. Young people should refuse to be used as tools of violence. BLESSINGS KAFWANKA is a Business & Financial Analyst The post Opinion: The Impact Of A State Of Emergency On The Economy appeared first on Zambia Reports.

source: Zambia Reports

Kabwe Is World’s Most Toxic City – Pollution Experts

By Damian Carrington Environment editor in Kabwe Zambia “I’d like to be a doctor,” says seven-year-old Martin, sitting quietly in his modest home in Kabwe, Zambia. But the truth is that Martin struggles with his schoolwork, and his dream seems … Continued

The post Kabwe Is World’s Most Toxic City – Pollution Experts appeared first on Zambia Reports.

By Damian Carrington Environment editor in Kabwe Zambia “I’d like to be a doctor,†says seven-year-old Martin, sitting quietly in his modest home in Kabwe, Zambia. But the truth is that Martin struggles with his schoolwork, and his dream seems unlikely to become a reality. Kabwe is the world’s most toxic town, according to pollution experts, where mass lead poisoning has almost certainly damaged the brains and other organs of generations of children – and where children continue to be poisoned every day. Almost a century of lead mining and smelting has left a truly toxic legacy in the once-thriving town of 220,000 people in central Africa’s Copperbelt [Central Province], 100km north of the capital Lusaka. But the real impact on Kabwe’s people is yet to be fully revealed and, while the first steps towards a clean-up have begun, new dangers are emerging as desperately poor people scavenge in the vast slag heap known as Black Mountain. “Having been to probably 20 toxic hotspots throughout the world, and seeing mercury, chromium and many contaminated lead sites, [I can say] the scale in Kabwe is unprecedented,†says Prof Jack Caravanos, an environmental health expert at New York University, on his fourth visit to the town. “There are thousands of people affected here, not hundreds as in other places.†The fumes from the giant state-owned smelter, which closed in 1994, has left the dusty soil in the surrounding area with extreme levels of lead. The metal, still used around the world in car batteries, is a potent neurotoxin and is particularly damaging to children. But it is youngsters who swallow the most, especially as infants when they start to play outside and frequently put their hands in their mouths. It was at that age that Martin’s mother, Annie Kabwe, first noticed her children getting stomach pains and fevers, and losing weight. “I thought it might be HIV, but the tests were negative,†she says. Then blood tests revealed very high levels of lead. “I thought they would die,†Kabwe says. After learning about the toxicity of the dust in her neighbourhood and reducing her children’s lead exposure, through frequent washing of hands and clothes, the worst has not happened. “The problem is they are not really learning well in school, so the lead is still affecting them,†she says. Caravanos says lead poisoning stays with you for the rest of your life – it can’t be reversed. Having seen the extreme lead levels measured in children in several townships, he says severe and widespread health impacts are highly likely, including brain damage, palsy and ultimately fatalities. “I am concerned kids are dying here,†he says. Barry Mulimba, who as a volunteer community facilitator has seen many affected children, says: “I feel very, very sad, especially for the children, because we consider the children our future leaders and if they do not get a good education, they will not be capable.†The slow, insidious nature of lead poisoning means careful epidemiological work is needed to distinguish its effects from other causes and reveal the true extent of the crisis. But that work has barely begun. “It is shocking to think that we are here in 2017 and that problem we have known about for decades is still here,†says Caravanos. Lead poisoning remains a highly sensitive issue in Kabwe and people from several organisations refused to speak to the Guardian, while those trying to tackle the problem complain that data gathered by officials is not made public. One local source reports that there are children with brain damage, paralysis and blindness – all classic symptoms of lead poisoning – who have not been tested for lead, and that some children with disabilities are hidden away by families fearing stigma. A second source says that the children in Chowa, the township that once housed the mines and smelter workers, are markedly different from those in less polluted townships: “I do notice a slowness in them and they take much longer to catch on to ideas.†What is clear in Kabwe is the extreme levels of contamination. A large World Bank project that ended in 2011 revealed the problem, though it achieved little in remediating the pollution. In affected townships, the lead in soils is about 10 times the US safety limit and far higher in hotspots. One such hotspot turns out to be the dusty yard of the only medical clinic in Chowa, which serves 14,000 people. Caravanos uses a handheld detector to reveal extreme lead levels in the sun-baked mud, frequently over 10,000 parts per million (ppm), far above the 400ppm limit in the US. The clinic’s head declined to be interviewed by the Guardian. The blood levels of lead in children in Kabwe are also known to be very high – a recent study revealed that every one of 246 children tested were above the safety limit of 5 micrograms per decilitre of blood. The vast majority were over 45 micrograms per decilitre, which causes brain, liver and hearing damage, and eight were over 150 micrograms per decilitre, at which point death is the likely outcome. However, in 2015, 113 years after the smelter first opened, NGOs began to clean up the first homes, funded by Germany’s Terrre des Hommes and delivered by Environment Africa and Pure Earth, using workers from the community. More than 120 homes have had the soil in their yards replaced with clean soil from elsewhere. “It is a drop in the ocean, but we are happy that we have targeted the most polluted homes first,†says Namo Chuma, Environment Africa’s director in Zambia. But Chuma believes that official recognition of the problem is at least finally starting to be seen: “The government does now acknowledge there is a problem.†Paul Mukuka, director of public health at Kabwe Municipal Council, says: “The government, like any other government, is concerned for the health of its people.†He says there is a now a fund of 16m kwacha (about $1.7m) that will be spent on cleaning up Kabwe’s toxic pollution, providing the drug therapies that have been absent so far and repairing the clogged canal that is supposed to channel away the run-off from the mine site. Wilford Chipeta, whose grandson has been poisoned, remains to be convinced: “We were promised that drugs were coming [before], but nothing came. They always talk but we get nothing.†Mukuka was confronted by the lead crisis personally when he arrived in Kabwe a year ago looking for a clean neighbourhood for his family: “I have three beautiful girls at home – where are they going to be playing?†He says the new plan also promises new livelihoods, to draw people away from scavenging among the mine’s dumps. On Black Mountain, bare-foot and ragged-clothed men dig out lead from the huge slag heap, often in long, unsupported tunnels, dug with hand tools and lit only by candles. “When you don’t make them properly, you find they just bury someone,†says Provost Musonda, a young father of three, and people have died in the scarred hellscape of Black Mountain. He earns about 80 kwacha ($8.50) a day, unless his chest pains prevent him working. “If I could get another job, I would go there. But there is no way of sustaining our lives otherwise.†Caravanos uses a portable detector to measure the lead levels on Black Mountain: they are sky high at 30,000-60,000 ppm. “Kids playing here is really unbelievable,†he says, noting the youngsters nearby. black mountain slag heap Kabwe In another part of the mine waste dump, beyond a long breeze block wall emblazoned with large signs reading “Danger keep away!â€, people sit in the dust breaking stones to sell as building materials. Advertisement At one spot, a young woman, Debola Kunda, toils away, with two of her young children lending a hand. The dust sparkles with the metallic glint of galena – pure lead sulphide – and the soil right next to her four-year-old son, Acili, measures an astronomical 37,900ppm – 100 times above the danger level. She is concerned about the health of her children, who have not been tested for blood lead. “But what can we do when there are no others at home to take care of the children? How will we eat if we stay at home?†she says. A new $65m project for Kabwe and three other copperbelt mining areas was approved by the World Bank in December but the Zambian government has yet to give the go-ahead. It could be transformative – but it has yet to happen. “A programme of more than 3,000 children and citizens of Kabwe would be subjected to constant medical surveillance and treatment programmes and anyone who showed a high blood lead level would be subjected to treatment as well,†says Sanjay Srivastava, at the World Bank, who is optimistic the crisis will be at last tackled. “The government finally recognises there is an issue and and they have to address it.†Caravanos, who is also senior science advisor to Pure Earth, says the solution to Kabwe’s toxic trouble is clear: “We have the knowledge – we just have to get the kids away from the exposure. Will Kabwe ever be a lead-free town? No, but it can be a lead safe town.†SOURCE: THE GUARDIAN UK The post Kabwe Is World’s Most Toxic City – Pollution Experts appeared first on Zambia Reports.

source: Zambia Reports

NAPSA PAYS K500 Million In Benefits

THE National Pension Scheme Authority (NAPSA) last year collected over K2.9 billion in contributions and paid out over K500 million in benefits to its members. This is in comparison to 2015 when the authority recorded a reduction of contributions of … Continued

The post NAPSA PAYS K500 Million In Benefits appeared first on Zambia Reports.

THE National Pension Scheme Authority (NAPSA) last year collected over K2.9 billion in contributions and paid out over K500 million in benefits to its members. This is in comparison to 2015 when the authority recorded a reduction of contributions of over K2.5 billion and paid out benefits of over K4.3 million, which reflects a reduction. NAPSA contribution manager Arthur Msusa attributed the increase to efforts made by the authority to extend coverage of social security to all workers. Msusa said in an interview on Wednesday shortly after the Zambia Chamber of Commerce and Industry (ZACCI)-NAPSA employer sensitisation workshop “Last year, we collected contributions worth K2,934,587,755.25 and paid out benefits worth K508,000,668.04 in comparison to 2015 when we collected contributions worth K2,538,654,794 and paid out benefits amounting to K435,879,916,†he said. Earlier, Mr Msusa urged employers to take advantage of the electronic-NAPSA, which was introduced in January, by registering their employees as it is a statutory obligation. He also urged employees to use e-NAPSA, which is an integrated web-based e-service portal, to check personal and beneficiary details and to keep track of their contributions. Msusa said the introduction of e-NAPSA has received overwhelming response from employers and that by the end of the quarter, over 90 percent registered to use the system. The e-NAPSA has lessened compliance burden for employers and once details are submitted online, it is guaranteed that information is safe. Msusa, however, said that the system has experienced some challenges with internet connectivity in some areas. “Although we have 26 offices countrywide, there are places like Siavonga district where we do not have offices and our members there experience connectivity challenges. “To collect contributions, NAPSA travels monthly to Siavonga to set up temporary offices with portable internet devices to also allow members have access to online services,†he said. Similarly, ZACCI board member Laurian Haangala said the countrywide eNAPSA sensitisation workshops will give an opportunity for businesses in far-flung areas to use the system. “It will also help in extending social security coverage to domestic workers by making it easy for households to register and remit statutory contributions for their domestic workers,†he said. Source: Zambia Daily Mail The post NAPSA PAYS K500 Million In Benefits appeared first on Zambia Reports.

source: Zambia Reports