The International Monetary Fund (IMF) has backed Zambia’s plans to raise mineral royalty to 3.0 percent from 0.6 percent and urged the government to limit its external commercial borrowing, a senior Fund official said.
The IMF, which concluded its fifth review of Zambia’s economic performance on Wednesday under the poverty reduction growth facility (PRGF), a three-year lending programme, said it was satisfied with macroeconomic performance.
“The IMF mission supports the authorities’ efforts to obtain greater revenue from the mining sector through the renegotiation of the fiscal terms of existing development agreements,” Francesco Caramazza, IMF mission chief for Zambia said in a statement released late on Wednesday.
“In this regard, efforts should be bolstered to increase revenue, through both tax policy measures and improved administration, shift spending to high priority areas, and raise the efficiency of public expenditure,” Caramazza said.
Zambia plans to raise corporate tax for the foreign copper mines to 35 percent from the current 30 percent while other taxes such as land rates could also be increased.
Finance Minister Ng’andu Magande said in August that Zambia would engage foreign consultants to help it renegotiate mining development agreements.
The Treasury awarded concessions on taxes to foreign mining firms after a near collapse of the vast copper mines in the early part of this decade.
Copper mining is Zambia’s economic lifeblood and remains a major employer in the country of 11.5 million people, where analysts say IMF-driven economic programmes have largely been successful.
“Recourse to external borrowing on commercial terms should be limited and only be made in the context of a sound debt management strategy and only for projects that are clearly economically viable,” Caramazza said.
Caramazza said Zambia’s fiscal management had been significantly strengthened, which, along with prudent monetary policy and the appreciation of the exchange rate, has caused inflation to fall sharply.
“The Zambian economy has performed well in recent years, reflecting strengthened macroeconomic policies, a marked improvement in the external environment, and extensive debt relief,” he added.
Caramazza said debt relief under the Heavily Indebted Poor Country (HIPC) Initiative and the Multilateral Debt Relief Initiative (MDRI) as well as the revival of the mining sector have strengthened Zambia’s external position and bolstered investor confidence.
“The mission projects GDP growth this year to exceed 6 percent and to remain buoyant over the medium term,” Caramazza said, reiterating the Fund’s earlier projection.
Fiscal breathing room created by debt cancellation in 2006 should allow Zambia to focus on spending more in education, health care, poverty reduction and infrastructure development, the Fund added.
ELUSIVE CREDIT MEANS ZAMBIANS BUILD SLOWLY
Banks are starting to offer loans, but the rates put them beyond most people’s reach.
Like many towns and cities across Africa, the landscape of Zambia’s capital, Lusaka, is dotted with partially built houses.
One of them belongs to Kelvin Phiri, a 30-year-old driver at a nongovernmental organization based in Lusaka. Mr. Phiri obtained a plot and started building a two-bedroom house near his current home in Lusaka’s Mutendere compound in January 2006.
As with most would-be Zambian home-owners, he’s working without a mortgage or financing. Rather, he’s building his two-bedroom house, quite literally, brick by brick.
A former taxi driver, Phiri has been able to save more money since getting a steady job. One of his paychecks each month goes to his rent and his family. The other goes to building.
Phiri keeps cement bags in his bedroom in the house where he currently lives with his mother, three brothers, and the daughter of his late elder brother. Every weekend, Phiri, who does not own a car, carries a few bags down the road to the plot, where he has hired local contractors to build.
“You buy maybe 10 packets of cement, you save again; you buy a heap of sand, you save again; you buy blocks…,” he says with a grin.
For most Zambians, even those in this southern African nation’s slowly growing middle class, the process of construction can be desperately slow.
Access to credit and the banking services that most developed-world citizens take for granted is limited in many African nations, with the exception of bigger players like South Africa and Kenya, and economic success stories like Botswana.
In Zambia, the situation is particularly difficult. Despite recent economic gains the majority of people remain in poverty.
Businesses working with foreign investors can construct buildings quickly. Business is booming in some fast-growing commercial hot spots of Lusaka, like the Manda Hill neighborhood.
But banks, until recently, found it more profitable to invest in government securities than to loan money to individuals or even small businesses. In an economy where only 20 percent of the workforce, at most, has a formal job, most people are considered credit risks. Credit bureaus don’t yet exist.
While good housing is scarce, securing ownership of land can be difficult and cumbersome. And for those who can get a loan, interest rates are often a huge deterrent. The average commercial bank’s lending rate recently exceeded 40 percent, and is currently about 28 percent, according to the government.
Few bank accounts, fewer loans
According to a 2006 World Bank study, less than 1 percent of Zambia’s 11.5 million people had an outstanding bank loan in 2005. More broadly, only 6.2 percent of Zambian adults have bank accounts, and almost two-thirds of those accounts hold less than $100.
As a result, houses often take years to build. When cash is available, there is a flurry of activity. When cash is short, the hammers fall silent.
“It’s very difficult to get loans, and even if you do, the interest rates are so high. So you say, how far can you go” without a loan, notes Diane Mulila, an administrative officer who is building a four-bedroom house on Lusaka’s outskirts with her husband.
But the dynamic is starting to change, slowly. Donors like the United States are recognizing the need for financing. After 16 years of government free-market policies, banks are beginning to offer home loans and loans to small businesses.
British-owned Barclays Bank is experimenting with a “building loan,” and has chosen five individuals who will receive 90 percent financing, given in stages.
“People have realized the importance of owning homes,” notes Kapoma Collins, an adviser at Barclays’ new home-loan center in Lusaka. “There is a great demand, especially for building.”
Last year, Barclays launched a home-mortgage program. The bank puts up 80 percent of the money, repayable over 20 years or until the loan recipient turns 55, whichever comes first, for people with permanent employment. The interest rate is 17 percent.
Between the job requirement and a minimum loan amount of about $20,000, the loan is still off limits to most. “For a 20 percent down payment â€¦ in Zambia, it’s difficult,” Mr. Collins acknowledges.
And in Zambia, like many other nations in the region, where 16 percent of the adult population is HIV-positive and the business sector is still developing, even the best-laid plans can change quickly.
Zambian middle-class professionals with good jobs, who in wealthy nations might easily get financing, are forced to be creative.
Some take out special short-term loans for building materials, at an interest rate of about 24 percent, offered by the Zambia National Building Society. Some borrow money from their employers.
Others start building and hope for the best, maybe getting a loan later down the line.
“We start and stopâ€¦. Anytime we have any extra money, we think about buying extra cement, buying extra blocks,” says Ms. Mulila, who laid the foundation for her own house last November using her savings and a loan from a family member. “We just live for the building project.”
Across town, five years after the first brick was laid, the Barak Ministries Pentacostal Church is just now approaching completion.
Open for worship, but still no floor
The congregation financed the church through weekly tithes, fundraising barbecues, and donations from neighboring branches, says Levy Nyirongo, the pastor at the church’s branch across town.
The church’s revivalist members want to hold a grand opening in March, but have already started worshiping and singing every weekend in the unfinished building, which still lacks paint, power, venting, and a proper floor.
“When there is a break, we are raising the funds,” Mr. Nyirongo says. “When there is money, we move.”
Meanwhile, Phiri, the driver, has reached window level on his home after 20 months. He’s looking forward to having some space for “myself and my future wife,” he says with a laugh.
For the roofing, he’s thinking about applying for a loan, but he doesn’t know whether he’ll be able to get one. “The fact is that it’s not easy,” Phiri notes. “It’s hard. I just saved bit by bit.”
Sata backs Levy over EU/AU summit ‘boycott’
Sata backs Levy over EU/AU summit ‘boycott’
By Chibaula Silwamba
Thursday September 27, 2007 [04:00]
PATRIOTIC Front (PF) president Michael Sata has supported President Levy Mwanawasa and other SADC Presidentsâ€™ decision to boycott the European Union/African Union summit if Zimbabweâ€™s President Robert Mugabe is not allowed to attend. And Sata urged The Post to establish jjounalism training school. Meanwhile, Sata has advised the government to give tax concessions to Zambian companies the way it is doing to foreign companies.
Addressing 25 trainee journalists participating in the fourth training programme at The Postâ€™s head office in Lusaka on Tuesday, Sata said British Prime Minister Gordon Brownâ€™s opposition to President Mugabe attending an EU/AU summit in Portugal in December was a clear case of racisms
He said that since European leaders were succumbing to Prime Minister Brown, Africans should also support President Mugabe.
â€œIf those who are inviting them want to succumb to Gordon, we also support our brother. They are supporting their white brother Gordon, we must also support our black brother, Mugabe,â€ Sata said. â€œThere is clear racism here.â€
He urged Africans in general and Zambians in particular to understand and appreciate the problems between Britain and Zimbabwe.
â€œNow, is the quarrel between Gordon and Mugabe going to engulf all of us?â€ Sata asked. â€œAs we are talking, we have allowed for the last 15 years these people foreign companies to get away our taxes, so if tomorrow I come and impose taxes, what is happening to Mugabe is going to happen to me. People who are exporting have not been paying enough taxes for the last 15 years and if I reduce your taxes and tax them because I want to protect you then what is happening to Mugabe is going to happen to me.â€
He also observed that most African governments were relying on development policies from other continents.
â€œWe donâ€™t have our own policies, we rely on donated policies and those donated policies when we are in government we implement them,â€ he said. â€œWe need to articulate our own policies.â€
Sata also observed that Zambia did not have a proper school where journalists could be trained.
â€œIt is long overdue for The Post to start a permanent Zambia School of Journalism,â€ Sata said. â€œI went to London School of Journalism, I went to Manchester Press Syndicate to write for children and I also went to London Freelance Journalism. I never practiced the way you are doing but I use the knowledge to interact with the media.
What we are missing in Zambia is a deep-rooted school of journalism, which will teach all of us what is journalism. Evelyn Hone College and other little schools have tried to teach journalism but they are not producing journalists.â€
He said just as the lion was afraid of a gun, politicians and other public figures were scared of a pen.
â€œIf a politician tells you that they are not scared of a pen then they are lying, mad or dead but still walking. Every politician, organization including the church they are scared of the pen but we should know how to use the pen effectively,â€ Sata said.
â€œThat is why I am urging my colleagues at The Post to start a proper school of journalism.â€
Sata said there were two forms of journalism â€“ one where journalists depended on handouts and the other where they investigated and wrote well-researched stories.
Sata urged the trainee journalists to strive to be analytical and investigative in their work if they are to reduce crime, corruption and poverty in the country. He said journalists should not shield any wrongdoer.
â€œIf you are my relative and decide to kill the story you are not helping me and the nation, you are killing the nation,â€ Sata said. â€œIf I have done something wrong, expose me. Then youâ€™re helping me, you have to inform the nation how criminal, biased, dictatorial and corrupt I am. Once you have done that, youâ€™re saving more people than saving me alone.â€
Sata encouraged the trainees to make â€˜a nameâ€™ through hard work.
â€œWhen you are digging a story, donâ€™t rush. Do a thorough job and be persistent,â€ he advised. Sata advised the female journalists to be cautious and work hard.
â€œThe game you are going into is a very dangerous game. You are vulnerable because you are beautiful and you are going to meet some men who are not only reckless but also have plenty of talk time.
Instead of getting news they will invite you for a drink and that will be your end. Even if you lament after four years, you are finished,â€ Sata warned. â€œItâ€™s like female lawyers, they fight to make a grade; you must also fight to make a grade.â€
He added that press freedom and access to information was very important although it was dependent on how that information was being used.
And Sata suggested that the government should give concessions to local companies for them to grow.
â€œThe Post has no tax payersâ€™ money but now it sells more than any other newspaper in Zambia and if this paper has supporting government policies and benefits of lower taxes, it would be printing in New York or London or Ndola because now they have reporters in Zimbabwe and Cuba.
If it was given the same concessions which are given to Chinese investors or Lumwana mine and Mopani mine, this newspaper would be in Dar-es-Salaam today and this would be a better ambassador in India than Mr Kelly Walubita,â€ Sata said.
â€œIf we gave The Post concession, the price of the paper would come down and become more accessible to many people like a man I found in Chama district during campaigns who was reading the newspaper upside down and saying pepa lelo yawama (interesting).â€
Sata said instead of promoting the Citizens Economic Empowerment, it would be better for the government to give concessions to Zambian investors.
And Sata said poverty leads to dictatorship and anti-corruption campaigners should forget about winning the fight if poverty was not reduced.
â€œDemocracy is not about elections or perfect electoral scheme. Democracy is about poverty. People who have nothing to eat will always be cheated. Poverty develops dictatorship,â€ Sata said. â€œUnless you can reduce poverty, you canâ€™t reduce corruption.â€
#1 Veteran/Pragmatist.Aren`t you doing your usual COPY and Paste on the POST main story?Authourities(LPM) put pressure on ACC NOT to prosecute MULYATA.I know this will keep you MUTE for some time.
Why 3%, should be 45%.
Phone credit low? Africans go for “beeping” By Andrew Heavens
Wed Sep 26, 11:32 AM ET
KHARTOUM (Reuters) – If you are in Sudan it is a ‘missed call’. In Ethiopia it is a ‘miskin’ or a ‘pitiful’ call. In other parts of Africa it is a case of ‘flashing’, ‘beeping’ or in French-speaking areas ‘bipage’.
Wherever you are, it is one of the fastest-growing phenomena in the continent’s booming mobile telephone markets — and it’s a headache for mobile operators who are trying to figure out how to make some money out of it.
You beep someone when you call them up on their mobile phone — setting its display screen briefly flashing — then hang up half a second later, before they have had a chance to answer. Your friend — you hope — sees your name and number on their list of ‘Missed Calls’ and calls you back at his or her expense.
It is a tactic born out of ingenuity and necessity, say analysts who have tracked an explosion in miskin calls by cash-strapped cellphone users from Cape Town to Cairo.
“Its roots are as a strategy to save money,” said Jonathan Donner, an India-based researcher for Microsoft who is due to publish a paper on “The Rules of Beeping” in the high-brow online Journal of Computer Mediated Communication in October.
Donner first came across beeping in Rwanda, then tracked it across the continent and beyond, to south and southeast Asia. Studies quoted in his paper estimate between 20 to more than 30 percent of the calls made in Africa are just split-second flashes — empty appeals across the cellular network.
The beeping boom is being driven by a sharp rise in mobile phone use across the continent.
Africa had an estimated 192.5 million mobile phone users in 2006, up from just 25.3 million in 2001, according to figures from the U.N.’s International Telecommunication Union. Customers may have enough money for the one-off purchase of a handset, but very little ready cash to spend on phone cards for the prepaid accounts that dominate the market.
Africa’s mobile phone companies say the practice has become so widespread they have had to step in to prevent their circuits being swamped by second-long calls.
“We have about 355 million calls across the whole network every day,” said Faisal Ijaz Khan, chief marketing officer for the Sudanese arm of Kuwaiti mobile phone operator Zain (formerly MTC). “And then there are another 130 million missed calls every day. There are a lot of missed calls in Africa.”
‘CALL ME BACK’
Zain is responding to the demand by drawing up plans for a “Call-me-back” service in Sudan, letting customers send open requests in the form of a very basic signal to friends for a phone call.
The main advantage for the company is that the requests will be diverted from the main network and pushed through using a much cheaper technology (USSD or Unstructured Supplementary Service Data).
A handful of similar schemes are springing up across Africa, says Informa principal analyst Devine Kofiloto. “It is widespread. It is a concern for operators in African countries, whose networks become congested depending on the time of day with calls they cannot bill for.
“They try to discourage the practice by introducing services where customers can send a limited number of ‘call-back’ request either free of charge or for a minimum fee.”
There are plenty of other reasons why mobile operators are keen to cut down on the practice. One is it annoys customers, pestered by repeated missed calls.
A second is that ‘flashes’ eat into one of mobile phone companies’ favorite performance indicators — ARPU or average revenue per user. Miscalls earn very little in themselves – and don’t always persuade the target to ring back.
Orange Senegal, Kofiloto said, lets customers send a ‘Rappelle moi’ (‘Call me back’) when their phone credit drops below $0.10. With Safaricom Kenya, it is a “Flashback 130” (limited to five a day — and with the admonishment ‘Stop Flashing! Ask Nicely’). Vodacom DR Congo’s ‘Rappelez moi SVP’ service costs $0.01 a message.
MORE THAN MONEY
But beeping is not only about money. Donner’s ‘Rules of Beeping’ suggests a social protocol for the practice.
“The richer guy pays,” he writes. It is acceptable to beep someone if you are short of cash and they are flush with credit. Never beep someone poorer than you.
Never beep someone you are tapping for a favor. You don’t want to risk annoying the person you are trying to win over. Never flash your girlfriend, unless you want to look cheap.
“Most beeps are requests to the mobile owner to call back immediately, but can also send a pre-negotiated instrumental message such as pick me up now,’ or send a relational sign, such as I’m thinking of you,'” the paper says.
It can go even further than that.
Cameroonian researchers Victor W.A. Mbarika and Irene Mbarika identified a different kind of beeping-powered relational call in a study for the technology association the Institute of Electrical and Electronics Engineers (IEEE).
“Lovers often communicate with text messages or beeping’,” said the study. “One party dials another’s number and then hangs up. One ring could mean, I am here,’ two rings, Call me now.'”
And the name they gave this new entry in the beeping lexicon? Borrowing a street slang term for an appeal for sex, they christened it “the booty call.”
Levy receives doctorate degree
President Levy Mwanawasa has been bestowed with an honorary doctorate degree in law by the Harding University of the United States of America.
This is in recognition for his outstanding performance as a lawyer over the past years.
The presentation of the doctorate was given to the president at the Benson auditorium of the university.
Dr. Mwanawasa who has been attending the 62nd session of the United Nations in New York, was visibly overjoyed when David Burks, president of the University presented him with the doctorate.
In accepting the award, Dr. Mwanawasa said he will dedicate the degree to Zambian boys and girls still struggling to find their rightful position in society.
Dr. Mwanawasa said as a young boy, he never thought of pursuing law as a career but was inspired by a Mr. Jack Dare a renowned lawyer who had visited his school and gave an inspiring lecture about law.
He said since that lecture, he developed a special interest in law and wor
H.E Dr LPM SC
Funny, it’s only African leaders who are conferred Honorary PHD’s. Think about it, there have been Great American Presidents, including Clinton and Reagan, but none of the many American Universities have conferred an Honorary PHD on any of them. An Africa leader will be in office, or is it power, for one term and the next thing, the same American Universities will be in line to confer a DOCTOR somebody. Why don’t they do the same for their leaders? This, in my view, is more out of ridicule than appreciation.
We have not directed MPs to boycott NCC-Sata
By ANGELA CHISHIMBA and KASUBA MULENGA
PATRIOTIC Front (PF) president Michael Sata says the party has not directed its members of Parliament (MPs) not to participate in the National Constitutional Conference (NCC).
And Mr Sata said it was not too late for Government and stakeholders to resolve their differences and reach consensus on the NCC.
Mr Sata in an interview in Lusaka yesterday said the party has not written to its MPs directing them not to participate in the NCC.
â€œWe have not come to that stage yet.
This process has not even started yet,â€ he said.
PF spokesperson, Given Lubinda, was quoted as having said the party directed its MPs not to participate in the NCC.
In reaction to that, Chief Government spokesperson, Mike Mulongoti, said political parties had no right to threaten MPs who wished to participate in the NCC.
Mr Sata said PF had been very flexible in the constitution-making process and that was why its MPs were not directed to oppose the NCC Bill in Parliament.
â€œWe should not be misunderstood.
When the NCC was taken to Parliament, we allowed our MPs to participate because we thought that the process would be (about) give and take,â€ Mr Sata said.
Mr Sata said whilst other political parties refused to participate in the Mungâ€™omba Constitution Review Commission (CRC), his party allowed its MPs to participate.
â€œWe believe in dialogue and not confrontation, and therefore Government should not take pride in building tension,â€ Mr Sata said.
He said at the moment, PF had decided not to nominate six people as its representatives to the NCC.
He said the Zambian Government should emulate Zimbabwe, which agreed on constitutional amendments.
â€œPresident Mwanawasa can recall Parliament once we agree to effect amendments for the benefit of all the Zambians,â€ Mr Sata said.
He said a number of stakeholders were willing to go back to the drawing table to iron out differences.
And Mr Sata said the funds put into the Zambia Centre for Inter-party Dialogue (ZCID) were meant for building inter-party dialogue and not for constitution-making.
Mr Sata said it was therefore wrong for people to suggest that PF had benefited from donor funds meant for the constitution-making process.
Meanwhile, the United Party for National Development vice-president, Richard Kapita, says there was urgent need to move forward with the National Constitutional Conference because Zambians were tired of endless debates on the matter.
During a Zambia Centre for Inter Party Dialogue sponsored programme on Zambia National Broadcasting Corporation television on Wednesday night, Mr Kapita said continued arguments over the constitution-making process might just derail the well-intended NCC.
â€œThis Government has gone a step further to give the people chance to debate the constitution making process.
People are tired of waiting.
There are other things that need to be done,â€ Mr Kapita said.
He said it would be sensible for all stakeholders to participate in the NCC where they would further debate issues they were unhappy with.
Mr Kapita said if some stakeholders boycotted the NCC in the hope that another Government would come and incorporate all their views, there was no guarantee that their aspirations would come to fruition.
He said it was wrong for some sections of society to say politicians dominated the constitution-making process because they were part of the church and civil society.
Network of African Peace Builders chairperson, Rinos Simbulo, said there was nothing wrong with the NCC Act because it was very clear.
Mr Simbulo said since the NCC Act was clear, the challenge before stakeholders was now to know the people who would sit on the NCC.
Civil society institutions should also stop thinking that politicians would betray Zambians because they represented the people in their respective constituencies.
But Council of Churches in Zambia (CCZ) general secretary, Reverend Suzanne Matale, said although the NCC was a step in the right direction, it was not good for the people.
â€œThere is need for us to build consensus so that when we go to the NCC, we will have ironed out contentious issues.
People donâ€™t want piece meal amendments to the constitution but a complete new constitution,â€ Rev. Matale said.
She said civil society organisations were not against politicians taking part in the NCC but merely wanted equal representation in the whole process.
Political analyst, Caroline Katotobwe, said it was wrong for a particular stakeholder to have majority representation in the NCC.
â€œWe admit that Government is the facilitator of the constitution-making process, but what we donâ€™t want is its dominance,â€ Ms Katotobwe said.
Meanwhile, a Lusaka resident, Stephen Nawa who stood in last yearâ€™s Munali parliamentary elections under the United Liberal Party, said in Lusaka yesterday that people should give President Mwanawasaâ€™s Government an opportunity to enact a new constitution.
Mr Nawa said after losing elections last year, he had given incumbent member of Parliament a chance to do her work for the people in the constituency.
â€œThis is what opposition political parties should also do. After losing presidential elections in 2006, they should give President Mwanawasa chance to perform his duties.
Their time will also come,â€ Mr Nawa said.
And in a statement yesterday, Operation Young Cheetah Movement national coordinator, Macleod Lunkoto, said Zambia could not progress if people embraced the spirit of going back to the same things after making resolutions.
Mr Lunkoto said the whole essence of dialogue was to ensure that all parties aggrieved to issues at hand reached a consensus because it would be unfair to disband dialogue because of certain organisations and individuals.
â€œAs a movement, we sincerely feel that the ZCIPD, should and must not bow down to unwarranted demands by minority groups that want to gain political mileage,â€ Mr Lunkoto said.
He said ZCID should not ponder for another presidentsâ€™ meeting but should just go ahead with sensitisation and establish a certain level of acceptability of the NCC composition by Zambians.
This Doc thing for Ba Levy is just to shut him up because the west was getting concerned that Ba levy was turning into another Mugabe by showing signs of anti – westernism especially over the zimbabwe issue. The minute ba levy steps out of line this same university will start asking for the degree back just like the did with mugabe. When he wasn’t talking about land distribution, he was showered with all kinds of degrees, apparently 17 in total but when the land distribution started in Zimbabwe, the have been asking for the degrees back.
I would also like to know what law ba levy is contributing to Zambia because he is currently manipulating Zambians with the constitution making process. If this church wants to build a university in southern province, all the have to do is ask for land from the local chiefs.
This is just politics at it’s best.
What is going on here? This apathy is a source of worry. Where have the membership migrated too? No voice on against these MMD mafias?
#4,5 The average for mineral loyalties (copper)world over is 2.6%. so your 45-60% is way too far, do a bit of reading before posting stuff
Hey # 13 u ryt man,It is absolutely ridiculous to suggest that mineral loyalty shud be 45-60% i mean that z jst plain stupid.i think its xenophobia towards investors.
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