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Volume 9 - April 2009

Volume 9 April 2009

Mining: Turn of the Tide?


Cautious optimism is returning and the assent is no longer on mine closures, unit producing pyrites for other mining houses with no consequent job losses.
suspension of operations and retrenchments but more on weathering the
storm Further, alternative investors in the closed Luanshya mine should “move on site”
soon as the bidding process for acquisition of the mine has arrived at an advanced
The tide would seem to be slowly turning in the mining industry as cautious stage. Bidding should close by mid-April but already the Chinese company, Non-
optimism begins to return. The centre-piece of plans no longer seems to be mine Ferrous Mining Company Africa (NFCA) has been designated the “preferred
closures, suspension of operations “until further notice” and wholesale labour bidder” with a bid understood to be around US$65 million for the mine’s assets.
retrenchments that seemed a real prospect only a short while ago.
Jinchuan Limited, another Chinese company is in negotiations with Albidon
Instead a quiet reassessment seems underway. The “stun effect” may have worn Zambia Limited, for a financing deal that could see the country’s only nickel mine
out and the assent now seems to be on how best to weather the storm without resume operations after a period of being on a care and maintenance basis due to
closing down and the price levels suggest, it is possible. The worst could well the depressed price of nickel. Though divesting of the Luanshya Mine, the mining
be averted and a level of mining seems assured for the duration of the global company that owned it, Luanshya Copper Mines (LCM) is not leaving.
recession. Mines Minister Maxwell Mwale indicated March 19, 2009 that no
further mine closures were in the offing and disclosed that even Mopani Copper Instead it is in negotiations with a mining company from the Democratic
Mines (MCM) who had revealed plans to close the underground mine at Mufulira Republic of the Congo(DRC), the new Lumwana mine as well as other mines on
and scale down operations at Nkana had now indicated an interest to continue the Copperbelt for a business arrangement that would enable it access copper
as before. Konkola Copper Mines (KCM), the country’s largest mining company concentrates for its operation at Chambishi, the country’s largest cobalt producer
is into the fray. It recently made it publicly known that it won’t be closing down its that was closed down at the same time as Luanshya mine. Those negotiations
Nampundwe pyrite mine as earlier indicated. Instead, it will run it as a commercial have advanced and Chambishi is now expected to resume operations within two
months. At least 600 of the 900

Post Newspaper Wants


workers who were retrenched at
closure last December will have
their jobs back.

Amicable Settlement Though arguably the most hit


by the global recession as it
was only just coming on stream,
As DBZ instructs lawyers to pursue the newspaper and Taskforce on Corruption prosecutor Mutembo Nchito and development at Lumwana mine
JCN in court his brother Nchima Nchito. The law firm, is a partnership is forging stoically ahead and the
of the two Nchito brothers and Law Association of Zambia target of 172,000 tonnes of copper
The Post Newspaper, one of the shareholders of the embattled President Elijah Banda. by the end of the year seems in
and debt-ridden Zambian Airways, has asked the state- sight. There have been reports
owned Development Bank of Zambia (DBZ) for an “amicable According to sources at MNB, the law firm had been retained that the company may be taking
resolution” of the matter of the K14 billion which it allegedly to defend the Post Newspaper and JCN following a Demand on around 1200workers by June.
‘guaranteed’ on behalf of the airline. Letter from DBZ to the two companies demanding the Development of the new town
money which they alleged ‘guaranteed under the ‘Buy-Back around the mine is proceeding
Post Newspapers Limited, through its lawyers MNB, said Equity’ transaction. “Our clients are still open to an amicable apace though there are some
they were still open to an amicable solution to the DBZ claim resolution of this matter,” the letter from MNB read in part. purely local disputes.
following a second demand notice sent to them by Malambo
and Company – lawyers for the DBZ. Malambo and Company The Post and JCN argue that they cannot pay the stated At Luanshya, the preferred bidder
have demanded that The Post Newspaper settles the claim amount because the transaction to swap the DBZ loans into NFCA is reported to be currently
or court action. equity in Zambian Airways was never finalized although they undertaking a comprehensive
had duly signed legally binding guarantees, which DBZ is due diligence study of the closed
MNB is also representing JCN, a company owned by relying on. To pg 2

Contents
Shut Airline Directors Summoned - Page 2 Malnutrition Stalks Under-Fives - Page 7

Magande’s Letter: See No Evil, Hear


No Evil - Page 3 Kuomboka 2009 - Page 9

Zambia Ponders Us$200 Million IMF Orbituaries - Page 10


Loan - Page 4

Skepticism over 5% GDP Growth in End Game in a Doubtful Spat - Page 12


2009 - Page 6
Executive Issues
News Volume 9 - April 2009

From Page 1
Mining: Turn of the Tide?
mine. There are two other bidders, Britain’s Lion Finance, working in conjunction actually happened, it would result in a deficit in world copper supplies resulting in
with a local company, Madini Copper Resources and the Shanduka Group of a higher price for the metal. China’s increased purchases would turn the projected
South Africa. By some accounts, there is a total of six bidders and there could be copper supply surplus of between 350, 000 and 400,000 tonnes into a deficit. He
more before bidding closes. attributed part of the rise in the price of copper to around US$3,862 per tonne to a
55% jump in China’s copper imports in February. This was at its highest price since
Mining sources have indicated that no profit-driven investor can run LCM because November 2008. As the Chinese begin to look increasingly the more likely to at
at current prices its operations have to be subsidized. The Chinese are therefore least help stabilize Zambia’s mining industry, there are also “background noises”
considered the best bet. They have the money and considerable backing from of resistance and even intolerance of Chinese investment. As developments in
their government. But the mine itself isn’t quite out on a limb. It is potentially very the Luanshya mine sale were announced, opposition Patriotic Front(PF) Roan
profitable. A section of it- Mulyashi – which was under development by LCM at a MP Chishimba Kambwili warned of serious unspecified trouble if government
cost of US$350 million before closure, is a very sound prospect. It is estimated did not take into consideration the concerns of residents over the sale.
that if fully developed, it can produce up to 600, 00 tonnes of copper per year by
2010 and has a maximum lifespan of up to 20 years. The Chinese are thought to A so-called “Indaba” of residents on March 22, 2009 resolved that whoever took
have the financial gravitas to exploit its full potential. over the mine needed to be able to take care of the environment, corporate social
responsibility and the health sector. This “indaba” was however boycotted by
Their financial muscle and it must said interest has again seen them favourites officials of the Mineworkers Union of Zambia (MUZ) who said the MP was merely
in the “sweepstakes” to revive operations at the country’s only nickel mine in the against Chinese investment but that this was not their take. Subsequently,
Munali Hills near Lusaka. The Chinese company involved, Jinchuan is the largest Luanshya District Commissioner George Kapu turned down a petition from
shareholder in the mine and is the holder of the life-of-mine off-take agreement pastors on the same issue. “Why are we rushing directly into giving NFCA? We
- which entitles it to most of the mine’s output. Its offer consists of US$1.8 million know the Chinese have all the dollars in the world as at now. But that does not
upfront backed by concentrate production for the months of January and February mean we have to rush into getting any company from China without carefully
2009. In the second tranche, Jinchuan is ready to provide US$7 million through selecting the right investor,” read the petition which was supposed to be relayed
issuance of about 135 million ordinary shares at US$0.052 each. to the President. The DC rejected it saying government had already answered
most of the concerns and that the pastors were being used by politicians to stir
It has also proposed a convertible note facility to fund essential activities. Albidon up trouble in the town.
which already has had to pacify major Australian creditors over its loan repayment
difficulties is mulling over the offer. The Chinese remain keen. The general trend But even as these events were unfolding, Mines Minister Maxwell Mwale had
world-wide has come to be that only China and India have the money to invest March 15, 2009 announced that government was in the process of constituting is
in mining at this time and this is now widely acknowledged. Zambia has not a broad-based technical team comprising experts in various disciplines to look at
succeeded to side-step the trend. It is also from China that the increased demand the affairs of the mining industry and make recommendations on the way forward.
for copper that is likely to revive the price is expected to come from. Perhaps the question of Zambian attitudes towards Chinese investment is one
issue for study. The worst would be to leave the matter to fester. Already some of
On March 19, 2009, Finance and National Planning Minister Dr. Situmbeko the industrial unrest at Chinese enterprises has been informed more by attitudes
Musokotwane for instance expressed optimism for Zambia’s mining industry rather than issues on the ground. With the glimmer of hope now emerging that
following indications by China’s State Reserve Bureau that it would this year the copper mining industry can be salvaged after all, everyone will need to have
increase its copper purchases from 600,000 to one million tonnes. He said if this their feet firmly on the ground.

Post Newspaper Wants Shut Airline Directors


Amicable Settlement Summoned
From Page 1
“In any event, even assuming the document you refer to was binding and our They are alleged to have stolen US$1,793,782 the property of National
client’s position is that it is not, the undertaking referred to at paragraph two Airports Corporation
of your letter was contingent upon the consideration of conversion of the debt
facility to Zambian Airways Limited into shares. Since this has not occurred, that Two directors of the ill-starred Zambian Airways, the local airline that abruptly
undertaking is wholly unenforceable for lack of consideration,” the MNB letter suspended operations in January 2009-Mutembo Nchito and Frederick
reads. Mmembe-were March 28, 2009 summoned by the joint investigating team that
is probing the affairs of the airline made of the Police, Drug Enforcement and
The lawyers for Post further argue that the issue of converting the DBZ debt Anti-Corruption Commissions.
into equity never went beyond negotiations between the parties. “The document
you assert constitutes an enforceable share buy-back undertaking was executed The investigating team recorded Warn and Caution statements from the two in
subject to negotiations, which negotiations as noted above, have never concluded.” connection with the money that the airline that has been firmly on the ground
DBZ is claiming a total of K28 billion ;K 14 billion each from JCN and The Post since January owes the airports operator, the National Airports Corporation Ltd
Newspaper as a result of their having signed an “undertaking to buy-back equity (NACL).
from DBZ” in October 2008.
The investigators are pursuing the criminal charge of theft by agent against the
“We, Post Newspaper Limited, further undertake to hold this undertaking valid and pair, in contravention of Section 272 and 280 of the Penal Code, Chapter 87 of
legally binding on ourselves until the execution of the irrevocable joint and several the Laws of Zambia. .
share buy-back guarantee by all the shareholders of the Zambian Airways,” reads
part of the undertaking. The allegation against the two so far is that being agents of the National Airports
Corporation Ltd in the collection of passenger service charges, the two did steal
Some sources close to the transaction insist that the transaction was US$1, 793,782, the property of NACL.
concluded as DBZ, based on the same deal, relinquished its securities
and debentures on Zambian Airways to Finance Bank after it was clear It is now up to the investigating team to decide whether or not to recommend
that it had converted the loans into equity. prosecution.

Executive Issues
Executive Issues
Volume 9 - April 2009 News

Magande’s Letter: See No Evil, Hear No Evil


Releasing the letter may have been calculated hogwash to keep on side Magande’s suggestion would seem at best to have been misleading and at worst
those who afford the opposition “the oxygen of publicity.” thoroughly useless, certainly as a means of securing the airline’s future. They
did come into play whichever way but still they did not rescue the airline from
Following the so-called 48-hour ultimatum to President Rupiah Banda to reveal the oblivion! Were those suggestions then worth even the paper they were written
contents of a letter written by the former Minister of Finance and National Planning on? In any case, can the truth be arrived at by merely releasing the letter and
Ng’andu Magande to Communications and Transport Minister Dora Siliya asking sanitizing it by insisting that it was about deferment and not forgiveness as those
her to consider deferring certain charges due to the state from the ill-starred who will “see no evil, hear no evil,” would have us believe? Or is theirs merely a
Zambian Airways, Opposition Patriotic Front (PF) President Michael Sata went calculated attempt to plant a simplistic view of the whole issue so as to effectively
ahead to release the letter on March 16, 2009. It is now in the public domain and blur the significance of the letter in order protect those in their camp who may be
the content is known. It is basically that the National Airports Corporation Limited implicated in the event of any “digging deeper?”
(NACL) should consider deferring charges due from the airline for a period of two
to three years in view of the adverse operating conditions occasioned by hikes The letter was highly presumptuous and “up side down” in fact. It makes the
in the price of jet fuel. That, the Ministry of Finance would consider measures to unsubstantiated and highly questionable assertion that: “It is evident that Zambian
cushion NACL from the effects of the resultant loss of revenue. When he did, Mr. Airways has become a major player in the Zambian aviation industry and its
Sata was emphatic about his reasons for releasing it:“People should be allowed contribution to the economy has been tremendous as evidenced by its growth in
to know the truth. Magande is not only an MMD member. He is a national leader. a short time.” This view is just not shared by many who used the service. Many of
So as leaders, there is no need to tell lies, falsehood about each other. We want those who used it resolved never to do so again unless they had to. Many frequent
the truth to be known in this matter,” he is quoted as having said. fliers opted for other carriers. How an airline of such record, could possibly have
“become a major player in the Zambian aviation industry” is difficult to fathom.
Sanguine words, those. With a debt running into millions of dollars in mainly unpaid statutory dues, it is
equally hard to see how it could possibly have made a “tremendous contribution
But what is the truth? Isn’t it that Magande’s suggestions as means of securing the to the economy.” The letter was clearly “up side down” because the recipient
airline were wrong as they would not work? For in the final analysis, Magande’s would have been the most appropriate and rightful originator and the writer the
idea of “deferment” of charges was practically effected even if only by default. right recipient. It dwells on ostensibly the travails of the Zambian aviation industry
Many of the payments due to the NACL were not paid and are among the debt the in the light of escalating fuel costs but in reality it is about those of Zambian
airline owes. Even so, the airline still had to suspend operations! In view of this, Airways. Who in any case would have known better about these than the Minister
of Communications and Transport? Unless the system doesn’t work and the letter

2008 Grade 12 Results Out was an admission of it, the latter would have known better. It is the Ministry of
Transport which was in a position to originate the proposals for the course of
action suggested in the letter because these were matters well within its purview.
A marginal increase in the pass rate at school leaving level
The letter was actually unnecessary! Still, it was written! The unanswered
Twenty-one (21) secondary schools achieved a 100% pass rate in the 2008 question is: Why was it written? Those who have rallied to his cause have so
school leaving examinations. They are mainly Catholic Church-run and private far provided no answers and it is the answer to this question, particularly the
schools. No government school achieved that and curiously, at one private school right one that would be illuminating! Why did he have to entertain a meeting on
nobody passed. In a ministerial statement, Education Minister Professor Godfrey an issue outside his portfolio, an issue on which as his letter shows he was not
Lungwangwa told the National Assembly March 19, 2009 that out of 57,129 even in a position to make a decision? Is this how Ministers should be expected
candidates who took the examination, 34, 894 – 20,668 boys and 14,227 girls- to use their office hours? Mr. Magande was a competent and quite astute Minister
obtained full certificates, representing 61.85 pass rate compared to 60.98% in of Finance and as Minister, he always took an appropriately broad view of the
2007. economy. However, in this particular letter he uncharacteristically but effectively
equates Zambian Airways to the “Zambian civil aviation industry!” What explains
Eleven thousand, three hundred and eighty two (11,382) boys and 9,895 girls this apparent slippage? He certainly would not have been unaware that there
obtained the General Certificate of Education (GCE). A total of 58,769 candidates were other perhaps smaller players but players never the less who would have
had entered the examination, 1,640 or 2.79%were absent compared to 2.26% been entitled to the same concessions as they were facing the same conditions
in 2007. Of those, 957 or 1.68% compared to 1.74% in 2007 failed the exam and the cost in deferments? Why did he seem to forget them and to be fixated
outright. Brother Luke High School in Western Province achieved a record of only on Zambian Airways?
sorts, nobody passed! But perhaps the real failures were the teachers? There
was an increase in 2008 in the number of candidates involved in examination Could it because they had taken the initiative or perhaps that he was aware of “a
malpractices to 285 compared to 116 in 2007 and the predominant malpractice special relationship” as many insist that existed between some of the promoters
was smuggling materials into the examination. Luapula, Copperbelt, North- of the airline and the highest levels of government at the time? Some of them
Western and Western provinces recorded an overall increase in performance clearly would appear to have enjoyed some not inconsiderable political influence
while Central, Lusaka, Eastern, Southern and Northern provinces declined in and leverage! Was he perhaps under instruction from on high or perhaps more
performance. accurately from that shadowy group that had ambitions of taking over the reigns of
power at the expiry of the late President Mwanawasa’s second term and saw in the
SCHOOLS THAT ACHIEVED 100% PASS RATE: mix of Zambian Airways shareholders possible allies for the 2011 campaign and
Lubushi Seminary and St. Francis Secondary School, Malole in the Northern an opportunity to curry favour and cement the connection? Magande was after all
Province, Charles Lwanga Junior Seminary in Luapula Province, Mukasa Minor the anointed successor, wasn’t he now? The letter would seem to point us to a
Seminary and Nakambala Private School in the Southern Province, St. new matrix that would seem to have operated in the later years of the Mwanawasa
Mary’s Junior Seminary , Chongololo School and Sonja Girls High School in presidency and the members and beneficiaries would appear anxious to keep the
Eastern Province, St. Paul’s Secondary School in Central Province. Ibenga Girls lid on the goings on of the time. No sooner had the late president for instance
Secondary School, Fatima Girls Secondary School, Mpelembe Secondary been taken ill than some circles began to identify themselves as possible targets
School, Da-Gama Secondary School, Sathya-Sai Secondary School, St.Johns after his passing. Why?
Convent School, Sacred Heart Convent School, Nsansa International School
and Kalulushi Trust School on the Copperbelt. Roma Girls Secondary School, People must know the truth as Mr. Sata has rightly pointed out. But this cannot be
Matero Boys Secondary School and Kasisi Girls Secondary School in Lusaka. achieved by the simple expedient of making the letter public. The truth
can only be known when the motives and motivation for the letter are
ZERO PASS RATE known. Why did Mr. Magande have to write it? That is the unanswered
Brother Luke High School in thee Western Province. question. He didn’t have to, did he?

Executive Issues
Executive Issues
News Volume 9 - April 2009

Zambia Ponders Us$200 Million IMF Loan


Negotiations remain on track million from the IMF over three years under the PRGF. The loan under discussion
will be in addition to that. “The new funding will be used to increase foreign
Negotiations between Zambia and the International Monetary Fund (IMF), under currency reserves, which currently cover about two-and-a –half months of import
which Zambia is seeking a loan of around US$200 million to tidy her over, are cover excluding the mining industry,” Dr Fundanga was quoted as having said.
continuing. Recent confirmation of that has come from both the World Bank and A decision on the loan is not expected until May and the exact amount still has to
the IMF. Staff – level agreement on additional IMF funding for Zambia was in be zeroed in on.
fact reached in February. What remains to be settled are the exact details and
ratification by the IMF board. What is clear is that while still committed to a liberalized foreign exchange
market, Zambia is having to look hard at the prevailing economic situation and
Both the IMF and the World Bank reaffirmed their support for the negotiations is seeking to increase foreign exchange availability to bolster the Kwacha or at
when they denied press reports that the World Bank was somehow not quite in on least end the extreme volatility it has been displaying lately. It has depreciated
the idea. The World Bank Country Manager for Zambia Dr. Kapil Kapoor said his against the US Dollar more or less continuously since the beginning of the year
organization “strongly “ supported the ongoing discussions between Zambia and and has hit historical lows in the opening months of this year.
IMF and that the Bank was hopeful that they would result in the IMF providing The situation has been a source of anxiety and there is no quick fix in the
additional financial resources to Zambia. circumstances.

The IMF resident Representative Birgir Arnson spoke in the same vein. He said Some measures have been implemented. The BOZ has banned non-residents
the facility under discussion was aimed at providing foreign exchange to the Bank from borrowing the Kwacha for less than one year to help stem the currency’s
of Zambia (BOZ) to give confidence to market participants. He said the IMF was losses. The restriction is aimed at halting “speculation” in the currency by foreign
ready to give the Bank of Zambia the resources it needed to maintain orderly banks. “We faced extreme pressure on the foreign exchange market and it was
conditions in the foreign exchange market. That tallied with what Bank of Zambia necessary to do something.” Dr. Fundanga was reported as having said in Dar-
Governor Dr. Caleb Fundanga was initially quoted as having said at the recent Es-Salaam. Now, with negotiations with the IMF apparently still well on track, it
IMF Africa conference in Dar-Es-Salaam. He is reported to have said that Zambia seems that at least more will be done to address the situation.
was seeking a loan from the IMF to boost its foreign currency reserves.“Our
balance of payments position has deteriorated quite considerably. The IMF was There have been assurances that the new loan will not change Zambia’s debt
in the country and we are discussing with them the possibility of enhancing our sustainability indicators. “We should bear in mind that Zambia’s debt sustainability
current loan facility (the Poverty Reduction and Growth Facility (PRGF). indicators are much better than they were in the past and borrowing an additional
uS$200 million or so from the Fund would not represent a major change in them,”
They are willing to do that because they have seen what has happened to our said Arnason. What remained unclear was whether the loan would actually yield
external sector in the last quarter of the year.” Zambia has already secured US$79 the desired effects without creating new problems and anxieties for the country.

Towards (Up To) Us$700 Million In American Grant Aid


Up to US$69 million will be available for health and education in the next the momentum towards transparency, good governance and anti corruption.
18 months. She needs to continue investing in education, health, pursue liberalized market-
oriented economic policies and protect human rights to remain on side.
Two high ranking executives of the US Millennium Challenge Corporation (MCC),
an aid channel of the US Department of State - Vice-President for Compact What is key for now is to kick-start the process for accessing the funds and it
Development Darius Teter and Senior Country Director for Compact Development has to be a credible one: “But …it is a process and it is a process that includes
Kyeh Kim- were in Zambia during March.Their visit was a follow-up to Zambia’s consultations with some civil society as we define together the key projects for
qualification last year for up to US$700 million in grant aid over five years from the investment. It is a process that will result in some high level engagement between
MCC. Zambia became eligible for that assistance after having satisfied stringent our two parties to ensure that we are working towards the same end and come
developmental, governance and corruption benchmarks. Together with the MCC, up with proposals that are suitable for funding,” explained Teter.
Zambia has now to work out a broad-based economic development programme
to be funded by the MCC. The two-man delegation held preliminary discussions When the American delegation called on him, President Rupiah Banda used the
with government and Civil Society on the development of that progamme to occasion to re-state his government’s commitment to the fight against corruption.
enable Zambia access the funds. In the next 18 months, up to US$69 million in He said corruption had to be eradicated. He praised the achievements of the earlier
large-scale investments will become available to the country for poverty reduction MCC project in Zambia saying it had Speeded up registration of companies and
and strengthening of access to health and education.There is a process. businesses, strengthened the capacity of the Anti-Corruption Commission (ACC)
to prevent administrative corruption and assisted implement the national anti-
Government will have to appoint a coordinator for the programme and set up corruption policy. It had reduced the time it took to register for Value-Added Tax
a team from the public and private sectors and civil society to determine the (VAT) at the Zambia Revenue Authority and had improved border management.
development priorities that need funding. Eligible countries are expected to He said he looked forward to continued engagement.
propose programmes for funding with characteristics that promote sustainable
economic growth and poverty reduction. The Zambian programme will need to The MCC is an innovative aid programme of the State Department(Foreign
identify specific activities, beneficiaries, expected results and implementation Ministry) of the Government of the United States of America(USA) and is
mechanisms. “We look forward to working with all of you to develop a compact designed to invest in selected countries based on a series of indicators. Zambia
that will stimulate economic growth, create jobs and result in real income in is among 19 countries of Africa to qualify for the grant. It followed her successful
people’s pockets. That is MCC philosophy. We focus on growth. Another part of implementation of a US$ 22 million MCC project that President Banda referred
our philosophy is strong belief in country ownership. We expect our development to in his remarks when he met the MCC delegation. The significance of this new
partners to take the lead in their development,” said Teter. phase of the MCC project in Zambia was not from the outset lost on the Zambian
authorities. Not too long after news of Zambia’s eligibility came through,
Those are broad parameters of the sort of programme that Zambia Secretary to the Treasury Likolo Ndalamei said logistics were being put in place
must now work on. Eligible countries have to maintain strong policy to access the funds.
performance such as in the fight against corruption and they risk With the last visit both parties should be better prepared for the launch of a project
discontinuance of support if they falter. Zambia will thus need to maintain that if well managed could bring Zambia some benefits.

Executive
Executive Issues
Issues
Volume 9 - April 2009 News

National Assembly: Skirmishes over


Income Tax (Amendment) Bill
Opposition force division in the House and walk out over bill to end windfall revealed that Norway was funding an audit of some mining companies in Zambia.
tax. The audit would be ready by the end of March 2009 and would help ascertain the
true cost of mining and thereby validate or otherwise what the mining companies
In a reflection of exasperation with the mining companies over projected mine have been saying.
closures, the Income Tax (Amendment) Bill of 2009 had the stormiest passage
through the National Assembly of the Budget Session that adjourned sine die on Only after the audit, would government be in a position to ascertain whether what
March 28, 2009.Among other provisions, the bill abolishes the windfall tax on the mining companies were saying about costs was genuine or not. What was
copper earnings - a 2009 Budget concession to the mining industry. generally true was that underground mining was more expensive than open pit
mining and government considered those factors when awarding incentives. The
But opposition Members of Parliament (MPs) were hostile and would not resistance is connected to the attitude that the government is too generous and is
countenance it. They forced a division in the House at second reading stage and losing a lot of tax revenue in the process mainly to investors especially in mining
only narrowly lost 54 to 63. When it finally went through, many walked out of the who do not show as much loyalty to the country. They will close down at the first
chamber in protest. Throughout, opposition MPs and some from the ruling party hint of trouble leaving everyone high and dry.
sounded baffled that the tax was being discontinued at a time when it had by its
nature already fallen off and there was therefore no basis for it to apply. In the light of the proposed mine closures, there has also come to be a great
deal of skepticism about the figures for mining costs. Mining companies have
Further, they saw no need for legislation since the windfall tax was self-adjusting said it requires a minimum price of US$3,500 per tonne for underground mining
and was triggered off only when the price of copper rose to certain levels. They to be economical and their intentions to close down or suspend operations were
called for the withdrawal of the bill for “further consultations.” Some were of the informed by that calculation. Without being specific, the Chamber of Mines has still
view that the provision for windfall tax should not be outlawed but should instead managed to be pointed in its reaction saying that some of the things that had been
be only suspended at the most, but still remain on the statute book. But they again said by “opinion leaders” about the mines in recent months were “unhelpful.”
didn’t seem to understand the source of concern since it would automatically not
apply if prices were depressed. Government maintained that withdrawing the bill Such utterances only discouraged investment. But the supporters of “more
would derail the 2009 budget and that the windfall tax was essentially a bad tax equitable” taxing of the mines remain equally adamant: “We are losing out. We
because it did not take costs into consideration. It had now become a disincentive are not helping Zambia. Zambia will continue to suffer…,”said an MP.
to would-be investors.
The truth could well be in between the two positions and therefore all parties have
Leader of government business in the House, Vice-President George Kunda every reason to remain engaged.
was at pains to explain that the mining companies had declared a dispute over

March Inflation: Down Nine


the windfall tax and the matter was now up for arbitration and that in any case,
only a handful of mining companies had paid it. He restated the need to keep
investment prospects in Zambia attractive. There had been earlier indications that

Percentage Points
the MPs were in no mood to rubber-stamp the measure which some said was a
betrayal of Zambian interests. There were questions on the discontinuance of
the windfall tax when Finance and National Planning Minister Dr. Situmbeko
Musokotwane appeared before the Parliamentary Committee on Estimates on
February 16, 2009. Inflation slows down to 13.1%

Members Charles Milupi (Independent-Luena) and Jack Mwiimbu (UPND- The Central Statistical Office (CSO) through its monthly survey of consumer prices
Monze) wanted to know whether the government had removed the windfall tax March 27, 2009 announced a reduction in annual inflation by 0.9 percentage
“because of pressure from the mining companies.” Dr. Musokotwane said points. Inflation for the month of March was put at 13.1 per cent from 14.0 per
government would not lose anything by abolishing it because the mines would cent in February.
still not have paid anything given the level of metal prices But the skepticism
in the National Assembly persisted. Secretary to the Treasury Likolo Ndalamei The decline is largely attributed to reductions in the prices of food products such
ran into considerable flack when he appeared before a combative Parliamentary as fish, Kapenta, fresh vegetables, dried beans, tubers and alcoholic beverages.
Committee on Estimates over the same and other 2009 budget-related amendment Of the total 13.1percent annual inflation in March 2009, food products accounted
bills. Committee members were openly skeptical about the substance of the for 6.8percentage points, while non-food products in the Consumer Price Index
amendments and the Secretary to the Treasury had some fire-fighting to do. (CPI) accounted for a total of 6.3 percentage points. Zambia also recorded a trade
deficit of K163.3 billion in February 2009.
Batuke Imenda (ULP, Lukulu East) demanded that Ndalamei and his team
tell the country how much government was losing in revenue by awarding “tax Total value of exports was K1, 128.5 billion compared to K1, 117.9 billion in January
holidays” to investors in mining. Emmanuel Hachipuka (UPND, Mbabala) said 2009. The most prominent exports were manufactured goods accounting for
government needed to produce figures to justify why mining companies which 63.2% of which refined copper was the most significant export item. Others were
externalized their profits were given tax rebates. He observed that government crude materials such as copper ores and concentrates; beverages and tobacco;
was more protective of mining investors than its citizens because the tax chemicals, machinery and transport equipment and food and live animals which
structure was such that citizens were heavily taxed while mining companies made collectively accounted for 35.7%.
profits which they went away with. The same MP had earlier wondered whether
it was actually true that mining companies could not make profit at a price of The five major destinations of Zambia’s exports during February 2009 were
US$3,200 per tonne. Imenda further demanded justification for the government’s Switzerland, South Africa, China, Democratic Republic of the Congo and
decision to discontinue the windfall tax. India. These five countries accounted for 80.0 percent of Zambia’s total export
earnings. Switzerland was the largest destination for Zambia’s export
In response, Ndalamei said that government had not been successful in products accounting for 52.6%. Major export products were Cathodes
collecting the tax and only three companies had paid hence the discontinuance and sections of cathodes of refined copper and copper ores and
in preference to the variable profits tax which would still capture any windfall. He concentrates.
Executive
Executive Issues
Issues
News Volume 9 - April 2009

Skepticism over 5% GDP Growth in 2009


Growth projections are being slashed downwards by some one million tonnes this year and this alone should create a supply deficit leading
to a surge in the price of copper. The US economy too is projected to begin a firm
The disruption and reduced profitability of copper mining as a result of the global recovery by the end of the year into 2010.
recession has led to uncertainties about whether Zambia’s overall GDP growth
objective of 5% in 2009 is attainable. But economic analyses and projections have become notoriously unhelpful these
days. They are increasingly no more than informed speculation and what is going
Increasingly, the view is that it is in the circumstances on the optimistic side. to count is how things will actually play out in the end.

Economic analyses have been increasingly fickle in the recent past. But some For now, there appears no way of telling for sure.
Zambia watchers who had projected a growth rate of around 3% have slashed

Mining On Course:
it further down and have now put it at around 1%. There are projections of even
negative growth altogether.

Africa’s Largest Copper Mine


Even among Zambians, there appears to be some skepticism.

The question of whether 5% GDP growth is attainable given the background was
posed by some members of the Parliamentary Committee on Estimates when
Finance and National Planning Minister Dr. Situmbeko Musokotwane appeared Lumwana expects to produce 170,000 tonnes (375 million pounds) of copper
before it on February 16, 2009. metal concentrates in 2009

The Committee chairman ULP Lukulu East Member of Parliament(MP) Batuke To the owners - Equinox Minerals Ltd of Toronto, Canada - it is known simply as
Imenda wanted to know whether 5% growth was feasible and the PF Matero the “Lumwana Copper Project, Zambia.” In practice, it is a large open cast copper/
MP Faustina Sinyangwe wanted to know specifically whether it was still feasible uranium mine in the North-Western Province. Arguably Africa’s largest green-field
“when companies were scaling down operations.” mining project that will give Zambia its newest town, development of Lumwana
mine is proceeding apace. The global economic recession has only introduced
Dr. Situmbeko maintained that it was still attainable because several interventions the element of uncertainty but has not stopped development which has reached
to protect investment had been put in place. He was optimistic because of production level since the mine was handed over to the owners by the contractors
measures to boost investment in agriculture, tourism and manufacturing put in in November 2008.
place through the 2009 Budget. There was also the Lumwana mine arguably
Africa’s largest copper/uranium mine that is due to come on stream in 2009. That is when the mine site and associated infra-structure were handed over to
the operators. Commissioning had started earlier, in April with the electrification of
The view that 5% growth is a long shot however persists. the main Lumwana 33kV substation. Following closely, was the completion of the
feasibility study on the design of a treatment facility for the uranium ore stockpile
This is against the background of a global economy that is forecast to slump that will result from the selective mining of the high grade uranium zones within
to -0.4% in 2009 before recovering slightly to 1.5% in 2010. Copper prices are the Lumwana Copper ore bodies. The cost of that facility is estimated at US$200
expected to be depressed most of 2009 before recovering slightly in 2010. million and it could recover approximately two million pounds of uranium oxide
and 12, 800 tonnes of copper concentrate per year.
In these circumstances, they project growth in 2009 at 1.6% and 2.7% in 2010:
“Mining investment and production is expected to be especially badly hit by But the decision whether or not to proceed with it will depend on improvement in
weaker prices.” the international project financing climate, as well as the market prices for uranium
oxide. In May last year, the mining company secured land title to approximately
The projection is that inflation will only come down slowly and will be 12.1% at 35,000 hectares that include town development and mine operating areas.
year end and not the projected 10%. They further project that it will stand at 11.1% This will enable the company deliver home ownership to employees and other
in 2010. The fiscal deficit in 2009 is put at 2.9% of GDP and 2.4% in 2010. The commercial developments within the project area. In June, the main mining mill
Kwacha is expected to average K4, 312 to the US Dollar in 2009 and K4, 614 in was fully energized and commissioning of the primary crusher also commenced.
2010.
A fire on July 7, 2008 caused damage to a main transformer and adjacent
Analysts who have revised their projections from an initial growth rate of around substation. It led to a four and half months delay to project completion and
3.4% to a contraction of 0.1% have done so in view of a growth outlook of a 2.3% handover. Still, crushing of material at the primary crusher started in September
contraction in the US and a growth of only 5.6% in China. These factors will weigh with the 4.5 kilometre conveyor belt transporting the crushed material. In October
on the value and volume of copper exports as well as investment in the mining Equinox secured an additional US$80 million loan to enable the company to meet
sector, while lower government receipts and job losses will restrict both public and additional working capital requirements resulting from the transformer fire and
private spending. delayed start-up. The same month, the mine’s large-scale electric shovels were
successfully commissioned and put into production.
Against this background they see Zambia’s economy shrinking by 0.1% as a
result of a collapse in exports and the subsequent impact on consumption. The first copper concentrate was produced during December 2008. By the end
of the year, the mine had processed 1,070,000 tonnes of ore producing 20,046
Government back peddling on mine taxes is seen to threaten fiscal revenues. metric tonnes of concentrates and deliveries started with 12,156 tonnes delivered
If it were not for falling energy demand and slower capital investment resulting to various customers. The same month, the first commercial quantities of
in lower imports, the country they argue would have risked even more severe copper concentrates were delivered to customers. The mine expects that it will
negative growth. prroducee170, 000 tonnes or 375 million pounds of copper metal in concentrates
in 2009.The mine owners have recently reached agreement with financiers to
But that is one view. restructure the debt repayment schedule.

The other is that the economic stimulus packages put in place in The result is that in the 2009 calendar year principal repayments have reduced
both the US and China should help keep copper prices reasonably to US$138.4 million, the majority due in September. .With such breathing space,
robust for most of the year. China has for instance already indicated Lumwana is likely to make a major impact on Zambia’s mining output from this
an increase of its copper purchases from 600,000 tonnes in 2008 to year on.

Executive
Executive Issues
Issues
Volume 9 - April 2009 News

Agriculture: Sub-Economic Prices


Hit Farmers Hard
Mkushi farmers now fear bankruptcy economic situation. Last year Soya beans sold at K3.4 million/Mt but this year the
ruling prices are around K1.98million/Mt.
Wheat farmers at the Mkushi Farm Block have expressed fears that they may end
up bankrupt if sub-economic prices for produce persist. They have complained However, there was a noticeable swing towards Soya beans in 2008 because it
of facing “a dire situation with our financiers as we have not been able to sell our requires less fertilizer and the Mkushi Farm Block is set to produce considerable
produce at economic prices…” quantities. “..It might be appropriate this year to allow significant exports of Soya
beans and Soy cake to allow the surplus beans to be sold to our neighbours in the
Sub-economic prices would appear to have hit this group of industrious farmers region,” the farmers have suggested. They are a forward-looking and altogether
particularly hard. “We are supposed to start planting wheat in four weeks time industrious group-just the kind of farmers Zambia needs at this time.
and yet we have not settled our loans from the previous wheat crop we planted
in 2008,” they told President Rupiah Banda when he visited, March 29, 2009. They have constructed a processing/ storage facility within the farming block
The farmers now fear that their loan repayment difficulties will erode the previous under the name AGRIOPTIONS. The facility is owned and financed 100% by
confidence banks had in wheat production.For farmers generally, there has been the farmers and on completion of phase one, the complex will store 27,000Mt
no respite from mounting production costs especially the escalating cost of inputs of grains- maize, wheat and Soya beans- in bulk silos and when fully complete,
of recent months and they have perhaps been highest in the 2008/9 season, all the facility will have the capacity for 60,000M/t. “Our mission is to be able to
round. guarantee quality of the product out of this facility and to this end we have ordered
top of the range products. Our wheat laboratory is state of the art and we are able
Against this background, the price of around K1.9 million per metric tonne to grade all produce,” they said.
offered for locally-grown wheat has been described by them as ”frankly an insult
to wheat farmers and are sub-economic.” They have warned of bankruptcy if the They will be installing a drying facility that will be capable of drying 50Mt of maize
situation is not reversed and soon. “We are asking government to come to the per hour. The plant will process up to 1000Mt of maize a day from March 2010.
rescue of the wheat industry which is young and requires some sort of aid until Total cost for the facility is estimated at US$8.8 million. Currently the members
it can fully stand on its own two feet…Farmers have invested millions of dollars of AGRIOPTIONS produce 35,000Mt of maize per year, 12,000Mt of Soya beans
in dams, centre pivots, combines to promote wheat production but at these sub and 22, 000Mt of wheat. Zambia needs these kinds of farmers and their problems
economic prices we are doomed to failure. Something needs to be done very have to be addressed. They are basic and relate to the very framework of their
soon to let local prices of wheat reach economic levels of return. ” business. Nobody will be done a favour if they are forced off the land yet if the
problems they face are allowed to persist that may be the only option for at least
The specific intervention that they want of government as at now is to consider some of them!
topping up the current wheat prices offered by the millers by K550, 00/Mt “to

Malnutrition Stalks
enable us to stay in production this year.” When he addressed them at the Country
Club in Mkushi, President Banda said his government was ready to assist the
farmers market their wheat. “I am aware that there is need to support our wheat

Under-Fives
farmers, to ensure that their produce is sold on a timely basis to enable them
obtain financing for the next crop.”

He directed the Minister of Agriculture Dr. Brian Chituwo to look into the issue
of excessive wheat imports. Zambia has in the recent past made great strides “The pattern of admissions for severe malnutrition is similar in all
in wheat production and is at the point of self-sufficiency with harvests of up to hospitals.”
160,000Mt. The issue is that there are at present 60, 000 Mt of unsold locally
produced wheat due to the depressed price and demand. Most of the local wheat A study by the National Food and Nutrition Commission and the University
was produced by the Mkushi Block but millers were still allowed to import wheat of Zambia, Demography Division entitled: “Severe Malnutrition Hospital
which has complicated the farmers’ situation. There is a sort of glut and millers do Admissions and Mortality trends in Zambian hospitals, 2005-2008,” makes
not need to buy locally. sad reading and calls attention to an issue that deserves it. The study was
prompted by reports in the last quarter of 2008 that mortality rates among severely
The silos at Mkushi are full of unsold wheat and growing it in winter calls for malnourished children admitted to the UTH Malnutrition Ward AO7 had risen to
quite some expense in order to harness water in dams, to purchase irrigation about 40-50%. That touched off concerns of poor nutrition and health among the
equipment and to procure expensive harvesting equipment. The investment costs under-fives.
to bring one hectare of land to wheat production are conservatively estimated at
US$5000. The situation with the staple, maize is not very different. This season A nutrition assessment around Lusaka urban indicated higher admissions.
saw the most dramatic increase in costs. At the time of planting compound fertilizer The subsequent study to assess the prevailing trends and patterns of malnutrition
prices shot up from K3.3 million /Mt to K8.8 million/ Mt. Diesel prices doubled. admissions and mortality in first and second level hospitals in the country is the
one whose findings have recently become available.
“This has led to huge borrowing from the banks to purchase inputs for maize It targeted general, mission and district hospitals across the country.
production. Coupled with the low wheat prices prevailing at the moment, farmers The key findings:
are on collision course with their banks unless we can realize a reasonable price
for this most precious of commodities.” They are about to start harvesting and •` The pattern of hospital admissions for severe malnutrition in Zambian
processing early maize for the market. By April/May, they will be at it.Mkushi alone hospitals was similar in all hospitals.
is expected to produce in excess of 30,000Mt of early maize. But it will be difficult • There was an increasing trend in hospital admissions and associated
to market it for as long as millers have access to highly subsidized maize from the mortality.
Food Reserve Agency (FRA) which is what is mainly available now in an attempt • There was a significant increase in the risk of death in the older age
to put the lid of the price of mealie-meal. groups.
• In comparative terms, mortality levels during hospital admissions were
The farmers want this matter of subsidized maize addressed so as to level very high.
the playing field. The price of Soya beans Mkushi’s third cash crop is equally Arthur Davison Hospital in Ndola and Kitwe Central Hospital had the
depressed on account of a reduction in the consumption of poultry because of the To Page 8

Executive
Executive Issues
Issues
News Volume 9 - April 2009

Weather: Not Noah’s,


but Floods all the Same
By mid-March 21 districts were under water crops, roads, bridges and several other installations. It is estimated that they have
damaged 80% of the rice crop and about 65% of maize grown on the edge of the
Floods are mostly an annual story. This year, twenty-one districts were under plain in the Western Province.
water by mid-March. With continuing sustained and somewhat un-seasonal
rainfall, the situation promised to get worse before it got better. Kalabo has been cut off, about 40% of the population is affected and an outbreak
of dysentery has been reported. A fear of crocodile attacks in the flooded areas
More districts were at risk and in the poorer sections of the urban areas has reduced school attendance. Rapid vulnerability assessment studies of the
homelessness increased as several houses collapsed under the deluge and still affected areas by the Disaster Mitigation and Management Unit (DMMU) of the
there was no respite. In some parts the rain was torrential and in others like Vice-President’s office were underway and interventions will be dependent on
Lusaka, soft torrents for hours on end. the findings.

Shangombo in Western Province was cut-off from the rest of country after the But in some of the affected districts notably Chavuma, Kalabo and Zambezi
access road was breached at three points. Three schools had to close and in all, relief food and supplies had been propositioned while Shangombo has been
forty-five households had to be evacuated to two temporal camps. supplied by air by the Zambia Airforce which has been engaged to fly out any
relief supplies. Repairs to the road and bridges to reconnect Shangombo were
The story was more or less the same in Kalabo where sections of the prison were underway. Indications were that the DMMU has the hang of things and would
partially submerged for a time. But even more serious and unexpected, a stretch cope reasonably well.
of the Lusaka-Chirundu road, one of the country’s lifelines given the worsening
decline of the railway system, was washed away. Trucks laden with vital industrial The big question mark was of course on the quality of road construction given the
spares and supplies were marooned. A few more days of this disruption and staggering failure by a major road of the Lusaka-Chirundu type to withstand the
Zambia would have been facing a crisis. rains. There has been some debate on this issue but it would seem nothing on the
ground has really changed.
Most supplies now reach Zambia by road mainly from South Africa.The road’s
failure to withstand the elements rekindled anew the vexed question of construction AFFECTED DISTRICTS:
standards in the country. It is barely two years ago that what was portrayed to
be a comprehensive re-construction of that road was completed. That it buckled Mwinilunga, Kasempa, Mambwe, Zambezi, Mufumbwe, Mporokoso, Mungwi,
under in this basic way tended to raise serious questions about workmanship. Shang’ombo, Lukulu, Kaoma Kalabo, Sesheke, Chavuma, Kabompo,
Solwezi and Mufumbwe.
After that, President Rupiah Banda ordered an assessment of all major roads
to determine their condition and he put the armed forces on standby in case Kabwe and Serenje, Kapiri Mposhi in Central Province, Mazabuka in
of a worsening in the situation. In the affected districts, floods have damaged Southern Province.

From Page 7
Malnutrition Stalks Under-Fives
highest number of deaths and mortality was highest in the 24-59 months age
group and lowest in the six months age group. The situation calls for action if not from conviction, from fear at least of what might
happen. There is unlikely to be any real prospects for advancement of any sort
Overall mortality rate for the study period was 24.2 per cent and the numbers that if the country comes to be populated by a generation of mentally retarded and
die from associated severe malnutrition has been on the increase since 2005. physically stunted people due to malnutrition.
The study concludes that severe malnutrition admissions in hospitals have
increased rapidly since 2005 in all hospitals and the proportion of admissions Yet, for as long as the current policy of “benign neglect” persists, there may be
is higher in the age group under six months and between six months and 11 no escape.
months.
FOOTNOTE:
Overall mortality was just as high as the one reported at UTH.
Some, notably the Jesuit Centre for Theological Reflection (JCTR) have related
There is cause for concern. this trend directly to the rising food prices and widespread poverty of recent years.
Zambia is already rated by the Food and Agriculture Organization (FAO) as having JCTR notes for instance that Ndola which recorded the highest cost of food items
the tenth highest malnutrition levels in the world. Further, improved nutrition is in the last half of 2008, also recorded the highest malnutrition admissions in 2008
an integral part of attaining Millennium Development Goal Number one-reducing according to the findings of the study.
by half the proportion of people living in extreme poverty by 2015. It is also a
requirement for meeting those MDGs relating to health and education. While only 588 admissions of malnourished children were recorded in 2007 in
Ndola, there were 710 admissions in 2008, the highest in three years. Kitwe
The study results show that Zambia is not exactly covered in glory in this recorded an increase from 428 admissions in 2007 to 475 in 2008.
Endeavour. The slippage is large and widening and reflects on the availability and
cost of food. It also says something about the general level of health education. The food price escalation has continued in 2009. According to the JCTR Basic
Needs Basket (BNB), the cost of food items alone in Lusaka was K774, 250, an
This is a story about still advancing poverty and it calls for vigorous interventions average nominal increase of K12, 700 from K761, 550 recorded in January 2009.
on a national scale and practical concern in the highest levels of In Ndola the cost of food increased from K760,690 in January 2009 to K767,070 in
government. February and the cost of food items in Kabwe was K710,100, Kasama K697,910
The nation’s maternal mortality rate is still extremely high. and in Mongu K679,730.

Executive
Executive Issues
Issues
Volume 9 - April 2009 News

Culture: Tourism: Better Late


Kuomboka 2009 Than Never!
In all cases the emerging clash between tradition and commercial interests The Northern Tourism Circuit seems set to come to life…at last
has to be closely managed.
What is now officially designated the “Northern Tourism Circuit” is all the rage in
The date has been announced for one of Zambia’s longest-running traditional tourism nowadays. The authorities are getting down to work there and they do
ceremonies-the Kuomboka- of Western Province. The annual migration that has seem to mean some business. Finance Minister Dr. Situmbeko Musokotwane
been an item of the traditional calendar over the years will this year take place on was for instance none too pleased with the negative comments about the circuit
Easter Saturday, April 11, 2009. made by some Members of Parliament during the budget debate!

The colourful ceremony celebrates the migration by traditional boat of the But crucially, the 2009 budget allocated considerable resources for the
province’s traditional ruler-the Litunga- from his flooded summer capital, Lealui development of the circuit which has several beautiful waterfalls and the huge
to the winter capital, Limulunga on higher ground. His boat traverses a traditional Lake Tanganyika among its offerings and is centred on the until now quite
route through the flooded Zambezi plain paddled by colourfully dressed and neglected Lake Tanganyika resort of Kasaba Bay. Kasaba Bay itself is situated in
enthusiastic paddlers called to traditional duty. the Sumbu National Park which until the rampant poaching of the later years had
quite a sizable herd of elephant including a tame one who regularly emptied the
Both his departure from Lealui and arrival at Limulunga are full-scale ceremonies dustbins around the resort on cue.
celebrated and observed in a time-honoured way. This year, nature has not been
the impediment it can be. There was sufficient rain and the Zambezi plain is suitably But even with the poaching which was serious since the area is particularly
flooded to allow the ceremony to be staged in all its splendour. Preparations are vulnerable as it can be approached by speedboat from Congo, Burundi or
underway and are largely on course. Tanzania, small animals such as warthog and those in the antelope family
continued to thrive. Now, there is K24 billion in the budget for rehabilitation of
So, it is that Mongu, the provincial capital is readying itself for perhaps the most the road from Mbala to Kasaba Bay, a terminal building to cater for civilian traffic
hectic time of the year on its routine. Zambian tradition too seems set to “romp is to be constructed at Mbala airport at a cost of K11 billion and the airstrip at
through” the Zambezi plain one more time at least and that is a both satisfying and Kasaba Bay is to upgraded and the resort itself electrified.
troubling thought. The question is whether the country’s traditions can survive in
their material particulars or whether they will only survive the way of Christmas – The sum of K1 billion has been set aside for the preparation of an integrated
overtaken by commercial interests and the core significance lost! development plan for the circuit. The objective is to be able to attract at least 12
world class hotels to the area!
Christmas nowadays tends to be about shopping and other forms of conspicuous
consumption far removed from the celebration of the birthday of Jesus Christ Well, about time too!
that it is supposed to be. Obviously the traditionalists have been swamped and
overwhelmed by commercial interests. The prospect of that happening to local That these plans are materializing only illustrates just how long Zambia has sat
ceremonies is not to be relished yet it is a possibility. Traditional ceremonies are and is capable of sitting on its potential. Inertia and the habitual absence of timely
crowd pullers mainly because of active ownership by communities and where responses has clearly cost Zambia dearly in terms of opportunity and practically.
there is a crowd there is likely to be a business opportunity. Bishop Furstenberg, the late Roman Catholic Bishop of Mbala, which incidentally
was the first Catholic diocese in Zambia and is the point at which Catholicism
Companies now actively sponsor most of the ceremonies –not a bad development entered Zambia over 100 year ago, was a passionate and quite tireless advocate
at all in these economically troubled times. In fact, their involvement could help of the “Northern Tourist Circuit” in the 1980s without using that appellation, of
prolong the ceremonies but it could also change them fundamentally. For that not course.
to happen both sides will need to define their interaction, goals and objectives more
clearly.It is not for instance for the traditional organizers to sell the ceremonies to But he had it very well worked out. In fact just as it is outlined today and this is
the highest or willing bidder just in order to have a sponsor. Theirs should be to a coincidence? He was suggesting in those days not the construction of a new
preserve tradition and check any untoward intrusions. terminal building at Mbala airport but that the existing airport should be shared by
military and civilian traffic something along the situation at the Lusaka International
It can’t also be right for sponsoring companies to make intrusive inroads and airport and in fact put pen to paper to the authorities with that suggestion.
encroachments simply because they are the sponsors. Proportion and care needs
to be observed. All must seek to preserve the ceremonies as close to original as But things remained as before. The suggestion of sharing Mbala airport was
possible and marketing activities at such occasions need to be well-thought out treated as something of a heresy. But he remained very clear in his own mind
and staged. Out and out marketing can only debase the ceremonies to the level that the area had all the potential for tourism which needed to be developed
of a bazaar and that won’t do. to enhance the local economy. Mbala or Abercorn as it was known previously,
named after a chairman of the British South Africa Company (BSAC) is in fact
The Kuomboka for instance is a well defined ceremony and comes with its own at the very centre of early Zambian history. It is widely believed to be the more
colours, more or less. Virtually all the others too have their own details.But at likely first western-style settlement or town in Zambia. For, contrary to the popular
nearly all of them, there is an increasing intrusion of commercial brand colours imagination the first Europeans to enter modern day Zambia may not have done
and not always done appropriately. so from the south.

From
One page
wonders 8
why. They instead seem to have been missionaries of the Church of Scotland who
The suggestion is always that the organizers are beginning to lose control or else after finding Lake Nyasa now Lake Malawi realized that it lay in a volcanic fault
that they have only loose agreements which don’t really define the expected roles. in which there was bound to another or more lakes. Partly in search of the next
Tourism is one of the priority sectors for the economic diversification programme one, they arrived at Mbala on the shores of Lake Tanganyika. The route they used
and these ceremonies would be a real boost. eventually became a road, the “Stevenson road,” whose outline remains and was
to be used by more Europeans, adventurers and missionaries.
However one of the attractions of the Zambian tourism circuit is the near pristine
condition of many of the attractions –hence the tourist motto: “Zambia, the real These early missionaries built a church, at Niamikolo. They were
Africa.” The country may be the poorer if that isn’t preserved in all cases. To Page 10

Executive
Executive Issues
Issues
News Volume 9 - April 2009

Obituaries
Gwendoline Konie Lt-General Christon Tembo
[1938-2009] (1944-2009)
Gwendoline Konie who died in Lusaka on Saturday March 14, 2008 assiduously Lt-General Christon Tembo who died in Lusaka on March 6, 2009 rose through
fought the Zambian women’s corner when it was unfashionable to do so. She the officer ranks in the Zambia Army to be commander 4ZR at Gondar Barracks in
was perhaps the country’s first gender lobbyist and always sought to advance the Chipata, Army Chief of Staff and Commander from May 1985 to January 1987.
cause of women and call attention to their situation in the country. He was the quintessential soldier. In matters military, he could be outspoken. He
for instance was critical of the IFA trucks that were procured from the old German
It was all at a time when Zambia had no gender policy and gender issues were Democratic Republic (GDR) for the armed forces. He said they were “farm trucks”
only dimly appreciated and understood with the result that several times she and not for the military.
was the subject of jeers and derision mainly from men who thought she was
nit-picking. At his farewell parade as commander in Lusaka, his remarks showed that he was not
exactly comfortable leaving the armed forces. He sounded like a man hard done by.He
But she held her own and in a remarkable public service career, she rose to be then served as ambassador to what was then West Germany. He was implicated in a
among the earliest women Permanent Secretaries. She was a senior civil servant coup attempt and was detained but was subsequently set free. That, as later events
already by the time of independence in 1964 and was to rise higher in the years were to suggest perhaps determined his political outlook. Throughout the campaign for
after. She was among Zambia’s earliest female ambassadors with a posting to multi-party politics, he came through as avowedly anti-UNIP. He entered active politics
Sweden. She was later to serve as Zambia’s Permanent Representative to the in 1991, a founder member of the MMD. He came to be a vociferous and fearless
United Nations. member of what was then the new party, the Movement for Multi-Party Democracy
(MMD). He caused temperatures to rise considerably by his public and deliberate
She was Permanent Secretary in the Ministry of Tourism on her return before her insistence at the time that the late Iraqi dictator Saddam Hussein was being sheltered
retirement from the civil service. Throughout, she was interested in raising the in Zambia by the UNIP government of Dr. Kenneth Kaunda. An angry Dr Kaunda held
profile of women in Zambia and dubbed in business as well. She for many years an early morning press conference at State House to quash the rumour and was not
ran a successful hair salon on Cairo Road in Lusaka. It was one of the earliest complimentary of the new opposition party.
and also published a magazine Women’s Exclusive. Later she was to run a travel
and tourist company. The MMD leader at the time, the late Arthur Wina sought to play down Hussein
claims. General Tembo was the Minister of Tourism in the first MMD administration
She was to return to the diplomatic service as ambassador to the Federal after 1991 and was subsequently Minister of Foreign Affairs. He was named Vice-
Republic of Germany. Again largely on account of her desire to raise the profile President in 1997 and continued in that capacity until 2001 when he left the
of women in Zambia, was a presidential candidate for president of Zambia in the MMD over former President Frederick Chiluba attempt to cling to power in the
2001 election. She was unsuccessful but satisfied that she had at least put the time- honoured African tradition by securing a third term in office.
women on the line up -something that remained dear to her.
Even as Vice-President, he made no secret of his opposition to Dr. Chiluba’s
She was born in on October 9, 1938 and educated at the famous Chipembi Girls’ designs and more or less told him to his face that he stood ready to lead a splinter.
Secondary School in Chisamba. She died on March 14 after having suffered a That is what he did. With others who had similarly decamped from the MMD,
stroke and was put to rest at her “New Kasama” farm east of Lusaka. he formed and led the Forum for Democracy and Development (FDD) and he
was the party’s presidential candidate in 2001. Despite much hype, it was a long
A day’s national mourning was declared to mark her passing and the burial was shot and he was unsuccessful. He was one of the petitioners against election of
preceded by a church service at the Cathedral of the Holy Cross and one of the President Levy Mwanawasa in 2001. He remained leader of the FDD until he
eulogies was given by Dr. Kenneth Kaunda, Zambia’s founding head of state. relinquished leadership to Edith Nawakwi who still leads the party today.

In her passing, Zambia lost a tireless and courageous advocate for the What General Tembo was above all was a soldier who may have stumbled into
enhancement of the role of women in the society and a dedicated public servant. politics only through the sheer force of circumstances.

M.H.S.R.I.P

From Page 9 Tourism: Better Late Than Never!


decimated by malaria but the outline of that church remains and acts as arrested by the British colonial authorities, brought to trial in Abercorn and was
“lighthouse” for boats on the huge lake and Tanganyika is immense. The subsequently shot for “pillage and slave trading in British territory.” Asked to say
presence of these early protestant missionaries in Mbala seemed to attract the something in mitigation at the end of the trial, he is recorded as having quipped:
attention of one who was to leave an indelible mark on the course and history “of what use is it? These men want my death” and in that respect, he was right.
of Christianity in Zambia. He was the later Bishop Dupont, the very first Catholic
bishop in Zambia. There are thus many historic sites around Mbala and to Bishop Furstenberg they
could all form part of a tour. There is the Kalambo Falls with its pre-historic site
Apparently in a rush to counteract or match the influence of the Protestants, he and in those days at least, there was still the Outward Bound Lake School as well.
crossed the lake from Kalemie in the Democratic Republic of Congo(DRC) and In addition, at night when the Kapenta rigs take to the lake, their fishing lights give
reached Mbala-bringing Catholicism into Zambia. He was by all accounts a the impression of a vast city on the water! Bishop Furstenberg was of the idea that
remarkable man. He was nicknamed “Moto-Moto” by the local people which says tourists could even go with the fishermen to experience it all first hand instead of
something about his character-the fiery one. He was in other circles known as just savouring the Kapenta on the table!
“terrible eye” because he was a marksman. He went about establishing a series
of Catholic missions in the Mbala and Kasama districts, the first at Kayambi Mbala isn’t far away from Kasaba Bay especially using the lake and the other
which means first in the local language. waterfalls in the area Chishimba near Kasama, Lumangwe and other attractions
could form part of a package tour. Whether it will be possible to attract 12 world-
The notorious Swahili slave trader Msidi or Mshidi who used the lake to class hotels to the area is an open question. What is clear is that the authorities
ship slaves from Zambia to Zanzibar met his waterloo at Mbala. He was are in arrears and will need to be mindful of it!

Executive
Executive Issues
Issues
Volume 9 - April 2009 News

SPORT SPORT SPORT SPORT


End Game in a Doubtful Spat
FAZ President Kalusha Bwalya’s indefinite suspension from
sport has been lifted Investigations by the NSCZ uncovered crass disregard of
procedures in the transfer and sought answers from FAZ. Bwalya
The Chairman of the National Sports Council of Zambia (NSCZ) had earlier responded to the insistence by the NSCZ on a “clean
Dr. Julius Sakala wielded a bombshell on March 19, 2009. He slate” by referring the matter to the FIFA Players’ Status Committee
announced the immediate suspension from office and from all sport, for determination- a move that was done in the spirit of and was
of the President of the Football Association of Zambia (FAZ), the widely understood to be a snub for the NSCZ. It also laid the course
soccer icon Kalusha Bwalya. for some kind of showdown between the Zambian authorities and
Kalusha Bwalya and FIFA on the other.
The suspension was indefinite!
Subsequently and apparently on the basis that the matter was
It followed Bwalya’s failure or neglecting to appear before a before FIFA, Bwalya would not appear before the NSCZ disciplinary
disciplinary committee of the NSCZ delving into the irregular transfer committee! The shadow boxing over the issue was of course all
of the teenage winger, Emmanuel Mayuka from Kabwe Warriors to unnecessary and quite unsavoury.
the Israeli club, Maccabi , Tel Aviv. Lengthy NSCZ investigations
into the transfer had uncovered several irregularities in which the There are varying versions of what prompted Bwalya’s climb-down.
FAZ President and his association were implicated. One is that a frank discussion with Sports Minister Kenneth Chipungu
persuaded Bwalya that the only way out was to apologize.
Mayuka’s International Transfer Certificate (ITC) was issued express,
even before his club could reach a decision on the matter! “The Minister told Bwalya in no uncertain terms that he was not
above the law and that the NSCZ were within their mandate to
Sufficient notice was not taken of the fact that Mayuka at 17 was summon him,” sources have revealed.
under Zambian law a juvenile and that his transfer would have
to conform to the provisions of the law. There have been flirting Several other observes have said it was good Bwalya apologized
suggestions in fact that money may have changed hands at Football because he was headed nowhere with the line that he was pursuing.
House hence the “indecent” speed with which things were done. He would only have repeatedly hit his head against a brick wall!

The sum total of the irregularities uncovered is that Mayuka’s Kalusha well loved in his playing days is not always well regarded as
transfer is effectively null and void. The investigation revealed a an administrator and there was increasing disillusionment with his
pattern of neglect and very feeble administration of the transfer conduct on this matter. FAZ and NSCZ are not mutually exclusive.
process by the FAZ. They can work together and have in fact to do so if sport is to
develop given their mutually reinforcing roles.
The conclusion was that the transfer had to be regularized and FAZ
had to answer to the mess. Bwalya however consistently down The NSCZ is established by and operates under an Act of Parliament
played the scandal and his attitude seemed to be that the FAZ and always had a clear locus standi on the matter. All footballers
was being interfered with through the investigation and therefore are first and foremost citizens of their specific countries and their
he tended to brush it aside and even to pretend that it was of no governments have obligations towards them and especially their
import. welfare. 7

More specifically, he ignored NSCZ summons to appear in person To expect that governments will have no say or interest in what
before the Disciplinary Committee chaired by Zambia National happens to their citizens simply because they are footballers is
Service (ZNS) Commandant, Major-General Raphael Chisheta. He hardly realistic. If anything, events after the Gabon air crash for
is reported to have instead merely written a note! The NSCZ would instance have shown that government is still the primary port of call
have none of that and the suspension followed almost immediately. even for footballers.

Subsequently, Bwalya apologized publicly and “unreservedly” to In this case too, the matter hinged on disregard of Zambian law and
the NSCZ and its chairman and said he was now ready to appear the possible placing of a Zambian in a disadvantageous position
before the committee and at their call.He said he recognized that no far away from home. Bwalya’s suspension was lifted as FIFA was
individual was “bigger than football.” coming into the picture saying it did not recognize it in the first
place.
His suspension was lifted immediately and there seemed a sigh of
relief all round that a potentially explosive but unnecessary situation Many nowadays hope and expect that Bwalya will now use his
had been diffused. Mayuka was issued with an International Transfer connections in FIFA to promote Zambian football and especially
Certificate (ITC) as it turned out irregularly by the FAZ which led to the sagging local league and not to conjure up cleavages
a protest from his old club Kabwe Warriors who were still as is their that put the Zambian authorities and FIFA on a collision
right mulling over the transfer request. course.

Executive
Executive Issues
Issues
News Volume 9 - April 2009

Ndola Stadium Project in Fillip…


As team of eight advance engineers arrive to kick start and government officials.
construction
They are also expected to do a lot of the preliminary work before actual
It is now only a matter of time before construction work on the Chinese construction starts. Leveling of the site is already underway and Hua
- funded 40,000-capacity ultra-modern sports stadium in Ndola starts expressed satisfaction with the pace of work and co-operation among all
following the arrival in the country of the first group of Chinese engineers the stake holders. However, work has recently been adversely affected
to work on the project. by heavy rains.

The group of eight engineers arrived April 7 and the Vice-President of the Still, most of the clearing and leveling has been done and with the
Chinese construction company hired for the job, Anhui Foreign Economic rains now receding, more progress should be possible. Ndola has been
Construction Company (AFECC), Hua Cheng Long said when he met without a stadium since 1988 when the Dag Hammarskjold Stadium was
the engineers on arrival that his company was anxious to complete demolished to make room for a larger one meant for hosting the Cup of
construction of the stadium as soon as possible as it was a symbol of African Nations (CAN) final that year.
cooperation between Zambia and the Peoples’ Republic of China. The
Construction period is estimated at 26 months. Zambia ultimately opted out of hosting the final but only after the
stadium had been demolished.The demolition sparked off considerable
But Hua said it could be done in a shorter period depending on how the controversy as many wondered whether demolishing it was the correct
Chinese engineers were facilitated. More Chinese construction experts approach in the first place. Many said it would have been wiser to simply
to work on the US$70 million arena are expected and will be arriving in build another one and leave the old one intact. But it was too late.
batches. The next group is expected in the country this month-end.
Subsequent successive fund-raising to rebuild the stadium came unstuck.
The eight engineers are the spearhead group and are basically The late President Levy Mwanawasa negotiated and secured Chinese
familiarizing themselves with Zambia and will meet with local suppliers assistance for the project during a visit to Beijing in 2007.

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