Agriculture and Cooperatives Minister Sarah Sayifwanda has disclosed that Government has slashed the proposed K58 billion recapitalisation budget by Nitrogen Chemicals of Zambia (NCZ)to K8 billion.
And Government has disclosed that it would start distributing fertiliser for the 2008/09 farming season to small scale farmers by July and has invited private companies to bid for the supply of fertiliser and that NCZ was also free to apply.
Speaking when Mrs. Sayifwanda addressed NCZ management and Union officials in the company boardroom yesterday (Friday),the Minister disclosed that the move was made because most of the items on the budget were irrelevant.
The Minister also disclosed that she had called NCZ Chief Executive officer Richard Soko in the presence of Minisiter of Finance and National Planning Ng’andu Magande so that he could explain how the K58 billion meant for recapitalisation adding that he had to convince Government on expenditure for the budget to be approved.
She said this was done because Government was trying to avoid another misapproriation like the incident regarding the K24 billion which was given to the company between 2000 and 2003.
She observed that Government has been spoon feeding NCZ for a long time now and that it was now up to the company this time around to seek other sources of revenue for it to become self reliant.
But the Minister assured that it still cared for NCZ and was doing everything possible to address problems affecting the company and maintained that Government will not privatise NCZ because it played a very important role in the agriculture sector.
She called on workers to be patient as Cabinet was still reviewing the operations of NCZ in order to chart the way forward.
Government’s intention, the Minister stated was to start distributing fertiliser for the 2008/09 fertiliser farming season to small scale farmers by July hence it has invited private companies to bid for the supply of fertilizer and NCZ is also free to apply.
And the Minister has advised the National Union of Comemrcial and Industrial Workers at Nitrogen Chemicals of Zambia to use her office when expressing their grievances regarding the situation at the company instead of them taking the law into their own hands.
Ms Sayifwanda said it was wrong for the NUCIW to write directly to State House asking the Republican President Dr. Levy Mwanawasa to address the plight of the workers at NCZ when her ministry had not failed to do so.
She noted that it was not right to by pass her office when the President had entrusted her with all the powers to run the ministry of agriculture and advised that any future correspondence over the company should be addressed to her office for speedy resolution of problems.
But speaking earlier at the same meeting, NUCIW National President Seth Paradza told the minister that the union had decided to write to the Republican President Dr. Levy Mwanawasa because in 2001 he promised that he will be helping NCZ when need arose.
He warned that workers would soon start holding peaceful demonstrations and called on the President’s intervention in the problems that had dogged NCZ.
ZANIS/ENDS/BS/SC/CLM
why cant the Government privatize the company so that the NCZ should continue producing the fertilize and the Agriculture sector will benefit alot
ala mwaliba ubwafya mu zambia. we need Jesus to come and save us. If they privatize it, they will give chinese who will close it after 2 years (like mulungushi textiles)and then we will start importing fertiliser from china. Both ways its tricky. unless they give serious people not chinese.
Talking of NCZ, how is Kapiri Glass Factory doing? I am sure it is bennefiting greatly from the building industry which is on the upswing-I mean as far as windows (etc) are concerned the factory must be running on huge profits.
There has been too many management lazy hands at NCZ. Something right ought to be done at this industry. We need top notch team not hand picked politically correct appointments meant to appease bootlickers. Levi save us!!
#If NCZ was a viable industry it would have found a private investor many years ago like the now privatised chilanga cement or Nakambala sugar.I someone showed up to invest in NCZ you will have to be very careful with his “real” motives. He may just be interested in stripping of some machinery & equipment and and sending them for use in his home country or sell them. I believe this is what was done to companies like LENCO & ZAMHORT Canning factory. That NCZ project was MISCONCIEVED. Planning of such industries that process bulk materials have to take into account location economies (abundance of raw materials where you decide to locate them & short haul distance/ minimal tranportation costs)
For example Chilanga cement was sited where it is because massive limestone deposits. Limestone is the primary raw material in the manufacture of cement. Ndola lime too does not have to import semi processed limestone for conversionto lime products because the limestone quarry is within its premises. Nakambala sugar mill are surrouded by thousands of arable land and abundat water to irrigate sugarcane. NCZ was meant to produce fertiliser and acid. The primary raw materials are phosphate rock or guano (seabirds’ droppings) and sulphur respectively. There is niether phosphate, guano nor sulphur deposits in Kafue.
In the absence of these deposits countries that are blessed with a sea coast locate such industries in coastal towns (such as Durban in SA) and import raw materials by sea thus eliminate costly overland transport of bulk raw materials. NCZ was designed to process semi-processed raw materials and these have be imported from overseas.That immediately puts it at a competitive DISADVANTAGE with companies like SASOL of SA. I feel pity for the agric ministry officials and indeed those that have had the misfortune of such a burden thrust upon them
I would not be exaggerating to assert that it is cheaper to import finished goods(fertilser)than to produce it at NCZ(especially with the strong ZMK, but rising prices/costs of fuel/labour or shall I say the operating costs in the “strong” ZMK translate to high unit costs). Workers and stakeholders at NCZ may not like this but this is the state of affairs. In a rush for industrialisation some Zambians connived with international con salesmen and contracted huge debts for the country for aquiring and building lame duck technology/industry such as NCZ &INDENI and made money for themselves from sales commisions
#2 Kindly google this article it explains how zambia’s fiscal & monetary policy and have killed the textile idustry:The Dumping Ground
As Zambia Courts Western Markets, Used Goods Arrive at a Heavy Price
By Jon Jeter
Washington Post Foreign Service
Monday, April 22, 2002;
QUOTE:This southern African country once had a thriving clothing industry. But when government officials began opening Zambia’s economy to foreign trade 10 years ago in exchange for loans from international donors, tons of cheap, secondhand clothing began to pour into the country, virtually duty free.
Not especially efficient, Zambia’s textile factories were overmatched by the wholesalers, who could deliver affordable, passable clothing without paying production or labor costs or the tariffs that once protected local manufacturers from foreign competition.
So, Zambia’s clothing industry all but vanished. Within eight years, about 30,000 jobs disappeared, replaced by a loose but crowded network of roadside and flea-market vendors beckoning shoppers to “rummage through the pile,” or salaula in the language of Zambia’s Bemba tribe.
The expansion of global trade following the end of the Cold War has transformed Africa into a dumping ground for what the industrialized world no longer needs or wants, a deluge of secondhand clothes, used cars, old furniture and tools and weapons. END OF QUOTE
The fate of the textile industry can be used as a proxy for other manufacturing industries in Zambia.
NCZ management must be reformed and new managers recruited to meet the challenges of a nation that wants to produce fertilizer for its farmers and export the excess.
Privatization is a dreamers’ solution. Where does it say that privatization is a panacea? Why not work hard to ensure that we have an effective management team at NCZ instead of running away from technical responsibilities that developing Zambia presents?
You can privatise it through the Stock exchange and not necessarily selling the whole company to a ‘foreign investor’. Actually all the remaining parastatals should be quoted on LUSE. This is what we should have done with the mines. We have this funny situation where Mopani is quoted on the Zurich exchange, Vedanta on London and Mumbai stock exchanges, First Quantum on Toronto Exchange and not in Zambia. So we have the Indians, Canadians, Swiss etc buying and trading in shares that are basically Zambian assets. Ba Zambia ubupuba.
#14
I totally agree you.
#14 Mbulawa:Good alternative option that u have suggested. However, viability of the project/operation can not be overlooked. Even if NCZ is listed on LUSE business analysits will have to evaluate among other things such as competition from cheap imports/strong reliable customer base (not GRZ nkongole); whether it has a +ve NPV.
#13 Development specialist: your attitude worries me. A lack of business sense that is so perversive in our culture. And overly simplistic approach to economic issues. Nothing is for free except the oxygen you breathe. Even in socialism someone somewhere (taxpayer) pays. Why do you think the Chinese communist party now embraces capitalism with such vigour?
It makes me shudder to think that we have people (running our institutions with a direct bearing on the economic well being of the nation) that seem to think GRZ has bottomless pit of money that can spent anyhow! Thriftness and astuteness is certainly missing in our culture and maybe it should be introduced in school/college curriculae.
We all know deep down our hearts that we are too lazy to work hard even when we know very well this is the job that puts our food on our tables. In many ways we choose to go fishing/ drinking Kachusu in shanty compounds in steady of overseeing the work we are paid for. If we see someone from the western countries encouraging us to work hard we start writing to Kabusha that he/she is treating us like slaves. In the western world you are paid for what you have done and not for fixed monthly salary. We need to change our attitude towards work as the evidence compels to do so. We will be moaning for years but change is the only solution for this impass.
Placing the ownership of our parastatals on LuSe is not the right approach given that this would be empowering the hands of speculators and market manupulators. Zambia requires a stable set of systems that would enable her to become a bouyant economy based on public ownership via the GRZ until the majority of our citizens’s economic muscles are built up from the current povert levels.
Finally, placing the these companies on LuSe would only empower the same thieves that are responsible for the vast amounts of funds missing from our public institutions as revealed by our Auditor General’s numerous annual reports.
#19. Development Specialist honestly the only way an ordinary Zambian can own part of the economy is through the stock exchange. You can buy 1 share of Celtel at K840. Ownership through GRZ? Arent ZAMTEL, ZESCO and the very NCZ etc struggling because of this same GRZ ownership? Doing the same thing over and over and expecting different results is not the way to go.
Theoretician- Your contributions are very informative. You are a true Patriot. How I wish that there was a way some of these comments by bloggers could reach the intended audience-Grz and Influential Politicians. How effective is EAZ? Who makes economic policies in Zambia. Why the silence on the current Kwacha exchange rate disparities? Thanks for the referred web page at washington post. It is indeed a sad reading yet realistic picture of our country.
#21 Anonymous: Thanks mate