BANK of Zambia(BoZ) Governor Michael Gondwe says the Government’s plan to introduce the Industrial Development Corporation (IDC) will succeed in triggering job creation and generally drive economic growth forward, once the concept is implemented properly.
Speaking when he appeared before the Parliamentary Committee on Economic Affairs, Energy and Labour in Lusaka yesterday, Dr Gondwe said the IDC would help forge the economic agenda for the benefit of Zambians.
Dr Gondwe was appearing before the Committee which is chaired by UPND Siavonga Member of Parliament, Kennedy Hamudulu, to discuss the status of employment statistics in Zambia.
Dr Gondwe who was responding to UPND Mazabuka Central MP, Garry Nkombo, who wanted to know whether the IDC would work to better the economy, said the IDC was another vehicle which Government could opt to implement as a tool to foster growth as well as create employment.
“In my view the IDC is an effort to look at how best to grow the economy and not entirely depend on the private sector and certainly when properly implemented, it (IDC) will help the economy and divert the country towards inclusive growth, which the private sector cannot do,” he said.
Dr Gondwe also said that the target set by Government to create 200, 000 jobs was highly attainable especially with the improved investment climate in the country.
He said that according to the Central Statistical Office (CSO), formal employment in Zambia increased during the last five years, by about 65.7 per cent to 847, 419 employees in 2012 from 511,338 employees in 2008.
He said the biggest number of additional jobs was recorded in the trade, wholesale and retail distribution sector where 81,659 jobs were added.
This was followed by the transportation, storage and communications as well as manufacturing sectors, where 48, 208 and 36, 891 jobs were created, respectively while the construction sector was in fourth position at 22, 787 additional jobs.
Am not an economist but I have started doubting the intellectual capacity and capability of some of these so called educated economists. Which Industries do we want to develop? The privately owned? How are you going to sustain INDECO in terms of salaries for the 200,000 jobs, maintenance etc.? Trial and Error. CNP.
who told you that Gondwe is an economist, the man is a lawyer with two LLB degrees, apparently he was not confident of His UNZA LLB so he went to study another one from Virginia university, a diploma in banking and an advance management studies from oxford. he is not an economist unless he did some short courses which we don’t know about.
What is his Phd in?
In fact its you who is dull and terribly ignorant. Please do not parade your dullness here. Have you not seen what the Zambia Railways Limited has achieved just in one year? IDC will be just a tool of empowering Zambians just as other countries are doing. You cant have an economy being run 100 % by foreigners no no…we need also some companies run by locals.
Truth Hates,
How does IDC, a government entity, empower the locals? You obviously missed the trian, my friend. There are other vehicles to empower the private person than the IDC. IDC is unsustainable chiefly because the factors that caused its failure in KK era are still there. Need I say more?
that’s PF for you no detailed analysis, just talking about the good side, so they want us to assume it will be flawless this time while-st ignoring the other bad side.
Now we need to question the “Capitalization” of IDC and the planned avenues of amortization.
We have learnt enough. This indeco thing will just be a ficus of nepotism and tribalism. Watch the space
Circus I meant
This BOZ governor should not play politics in order to keep his job (being politically correct for the moment). Otherwise he will end up like late Dominic Mulaisho, ostracised for the failures of KK’s UNIP failed economic policies. He is even distorting figures announced by state house. 1m jobs they hallucinated they would create through indeco. God help us!
Stop lying iwee! Which state house gave you 1,000,000 jobs to be created through IDC? May be the one in Pretoria? Most of you Zambians are negative about everything and the power of the subconscious mind is working hard to ensure you reap your negativity by your own individual failures. Start being positive about certain actions that are meant to benefit the majority. Other countries are busy implementing policies just like the IDC and reaping positive impact for their people in terms of employment and wealth redistribution and here we only have negativity! Shame on you all and be ready to fail because just as you wish others so it happens to you!
Mundia M, you are not making sense!
You failed to run an airline,zamtel or ZR but now you wanna convince us you can run an even bigger and more challenging conglomerate? Truly INDECO must be a figment of PF’s warped imagination.
INDECO in itself is not a problem people! it exists in other developed countries as well and it has really helped in establishing efficient and profitable industries. like the governor said when managed properly it can lead to inclusive growth, which the private sector cannot bring. BUT the only problem is, what guarantee do we have that it wont be mismanaged? with the current mismanagement of resources and the track record of the past failed INDECO, it’s only natural not to trust that it will work out this time. the government is just too inefficient to run any institution.
This is the problem we have in Zambia. The Govt had outlined what it wants to do to create jobs and the idea is viable enough. All we hear from disgruntled elements including their favoured candidates is shooting down without offering alternatives. How ironic. Grow up chaps and do something constructive for yourselves. Don’t be like former faza bwalya who campaigned hoping for a job
@ Bantustan Nyandule : Alternatives are there. We do need to re-invent the wheel or swing from one extreme to another like MMD trashed everything UNIP did and now PF wants to trash everything MMD did and start UNIP’s failed experiments all over again. Zambia will only succeed if successive govts build on the successes of previous govts. The corrective action of repossessing and ZAMTEL and ZRL (infrastructure companies) is enough. Do you fathom what it take to create 1m jobs in a tiny economy like Zambia when the worlds larget economy (US) is only managing 78 000 per quarter? PF needs to build on what MMD left not wreck it.
Just like your name suggest, you are truly theory only. PF has not recked anything MMD started and they are still completing some of MMD’s projects. However, since you are all theory, let me tell you that INDECO from UNIP was not bad despite MMD & Chiluba trashing it. INDECO failed because Zambia was going through a lot in the 1970s and 1980s. The economy was socialist, we were alligned to the former USSR, liberation wars in neighbouring countries were rampant, external forces in the west were pressurising the UNIP GRZ on external loans through the Bretton wood institutions and we had ineffective managers who were being politically manipulated. Most of these conditions are nolonger their and the PF government can easily achieve through the IDC if only they keep politics away.
@MundiaM: I have great respect in understanding how things work, and any such understanding starts and ends with a theoretical framework. Applying such understanding of theory to projects one may want to execute will produce outstanding results. That’s why I call myself Theoretician. However, this blind execution of projects by PF without regard to or understanding basic economic theory will only lead to disaster! Secondly, in your opinion, what will take away the bad management and political manipulation that killed UNIP’s Indeco (you refer to ) this time around?
Thirdly on 4th January 2014 LT quoted a commerce a minister promising 1m jobs from the Indeco masterplan. So 1m jobs have been promised. But I am not gullible!
Bo MundiaM: You talk about pressure to borrowing from Bretton Woods institutions. Aren’t we borrowing recklessly under PF just like in the UNIP days? Zambia signs for fresh loans from China (LT 31/12/2013). Soon another international Bond will be issued we hear. Loans gotten without a plan on how to use them. All this as Zambia’s trade shifts from a trade surplus to a trade imbalance, budget/fiscal deficits and a growing debt to GDP ratio, rising food inflation, unbudgeted expendtures and now 1m million jobs from govt sponsored indeco etc. Even an O’ level economics student will attest that the country’s accounts are not looking good and are heading downhill. You have your opinion and I have mine. So let’s just agree to disagree but respect/remain patriotic in our own separate ways
@Theoretician, don’t be deceived with the name MundiaM. This guy is not Bo Mundia. He is a BaShilubemba. He is a Ba not a Bo. He got pissed off with his hero Ukwa concerning the issue of Chitimukulu Chanda Sosala. He explained in detail sometimes in deep Bemba about Bemba traditional culture!
CONTD:PF’s job creation solution lay in the financially strenuous road, stadia & university projects coupled with basic skills/artisan training in thing like bricklaying, carpentry & plumbing so that local labour is used rather than Chinese or RSA artisans. In countries like Botswana an expatriate can now only work for 3 years whilst training locals to take over in Zambia some expats have clocked 50 years. Certain businesses should be restricted to Zambians only e.g operating minibuses, selling in markets, hair saloons etc. You cannot set up certain big businesses in Bots & RSA without local partnership eg up to 75% in local aviation in RSA & 60% for banking in Nigeria.
CONTD 2:Countries like Nigeria, Ghana, Uganda have legislated local content laws in their natural resources/extractive industries sector that force foreign investors and contractors to source a proportion of services and goods from host countries citizens. This is how African success stories are delivering prosperity to their populations not throwing money in pitiless bottoms/bottomless pits. But what is happening in our copper industry. All major business lands on the plates of RSA’s, India’s and China’s businessmen! God help us!
You know you are in a mess and are without a viable plan as a Country when your Bank Governor fails to address point-for-point the past flaws and concerns cited so clearly by many credible people / organisations about re-introduction of a huge parastatal under the current climate of Zambian Politics. You are in an even bigger mess when the Bank Governor makes no mention of feasibility study taken to ensure that past mistakes do not re-occur. As a result, this will be a still birth, guaranteed.
Aptly observed.
Economics is not a profession Its simply a tool in managing asset classes In the day and age you need to be thorough as you move the apex in managing assets be it at firm level or National or Global
Please understand that economics is only a tool in managing asset classes and is not a stand alone You therefore need not be an economist but you need to understand indepth economics and econometrics and further analysis to be revelant decision maker but economics is one of the primary tool in National economic management but has to be combined and need not be a stand alone To be a better decision maker in Zambia we need all rounders that is where the problem also seems to be…
“Economics is not a profession”? What a crock of nonsense!
If you don’t know something, the sane thing to do is keep quiet!
Please understand that economics is only one of the tools in national economic management Its not that its a tool and an end in itself.Its one of the tools in assets management and need not be treated as primary
There is a mirth in Zambia that economics is a primary tool in assets management but to the contrary Economics econometrics and analysis are only a tool in asset management
An all-rounder approach in national asset management must be the key issues without being too narrow if we will be more refined at the apex in national decision making Lets change the thinking and use economics with other faculties to refine National economic management
Change the thinking
Economics is but one of the tools in Assets economic management of the country its not an end in its self Lets get it right and will save many things in Zambia
That is the common misconception and thinking that economics is an end but rather only one of the tools be it econometrics or further
We will save many things
To end this debate, all those opposing the introduction of the IDC should simply be denied any jobs in the company once it is formed.
Their pessimism and attitude of sheer resignation is a more dangerous setback to the venture than anything else. In order for the company to succeed, employees must have full confidence in the establishment and show full commitment to the achievement of it’s the goals. From the onset, it will be very important for employees to maintain a strict adherence to the principles of state-management to ensure effective quality performance if economic growth is to be achieved.
As a non Bemba I do not expect to get a job from this government anyway. Why should I expect a job in INDECO when I have already been discriminated against?
More jobs for Ukwa and his fellow kolwestans, Chumbu is on 13 hrs news swearing in another useful ***** as reviewed by ZWD and he is telling Ngandu to tell the public that we already have a constitution and we don`t need one.
Please I look forward to having a functional IDC asap. There is no country in the world where all the important business are in the hands of foreigners. Please bring it on now so that even us Zambians can be empowered just like our friends in Botswana, Namibia etc. But PF dont employ cadres , employ professionals to manage IDC.
Peace and Prosperity to Mother Zambia.
Shvt vp!
What a disgrace! Is this the man Zambia calls governor of its central bank? His presentation is disgustingly shallow. I would have expected more depth from such a professional. He doesn’t sound any better than the politicians.
For instance, is Dr. Gondwe aware that government’s involvement in business could result in capital flight and also scare new investors from coming in to invest? He is proudly talking of employment having risen by 65.7% in the last five years. Does he acknowledge that most of that job growth was in the private sector which the government is now trying to stifle and kill by its proposed involvement in industry? Who wants to compete with government? A government operated business can be loss making and still survive because of government’s power to borrow.
Is this Dr. Gondwe oblivious to the fact that prior to 1991, redundancies and retrenchments were the order of the day in Zambia? Unemployment was rampant mainly because of Kaunda’s policies of government involvement in business.
If this PF government is passionate about job creation, why can’t it make capital available to private entrepreneurs who are desperate for capital? In many countries, that’s how government gets involved in creating jobs in an economy.
Why doesn’t the government set-up a program to train new entrepreneurs on how to manage their businesses? Small farmers are among those who desperately need that kind of education. How about helping small businesses engage in the production of exportable goods. ” Made in Malawi” goods in the USA and zero “made in…
Even the people that Gave past flaws did not see and explain the opportunities like SWOT in the IDC giving various options on operation and financing of the IDC
For me to buy in I would follow the analysis like historical ,present situation and looking at the options and make a case recommendations as given looking at all options on the pros and cons and show cases where IDC has failed and succeded and why and how the structure has been and the method of Financing
I think the people that be before actually giving a go ahead will ask for a detaild researched report
Then to say will stifle private is not true as a careful Investment policy statement should define the areas…
You mean addressing the concerns and fears of the stakeholders? This is the platform and the government has so far done a horrible job at that.
Gov. has made an intent that needs justification for it to be chartered There has to be a position paper that will formally usher in the same and that ought to be carefully researched with facts and opinions put correct according to best standards in investments recommendations and research.
They will need a document to detail past present opportunities strengths’ and weaknesses carefully weighting the risk and returns and partnerships that can be exploited.Its not that mentioned done and dusted, there has to be a conceptualization”””
Enshrine also the partnership of Zambian own with foreigner investors and skills and management transfer to promote private Zambian entrepreneurs
What a waste of time and energy.This PF govt knows too well it cannot pull off this complicated venture and it has already under its belt several failed projects… like ZR.
Can this cadre tell the nation by giving examples of which economic programme sata has initiated and successfully completed? If his leadership has failed dismally to just organise and deliver on farming inputs to grassroots who produce food for his belly how is he going to implement in indeco. Sata is a disappointment period.