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British High Commissioner advises Zambia on what needs to be done to ensure a bright future

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ames Thornton – BRITISH High Commissioner to Zambia
ames Thornton – BRITISH High Commissioner to Zambia

The British High Commissioner to Zambia James Thornton has said that it has become increasingly clear that Zambia’s own actions will determine its future. Speaking yesterday on the challenges facing Zambia over the next 15 years in regards to economic development at the “Shaping our Future” Conference at Radisson Blu hotel, Mr Thornton said that it was up to Zambians to determine how the country develops in the next years and decades.

The one-day conference, hosted by the British Council, brought together current and future Zambian leaders to discuss private sector investment as well as innovation and skills development among young people.

Below is the full speech

SPEECH FOR SHAPING OUR FUTURE CONFERENCE, 6 MARCH 2014

Wayne Harper, Country Director, British Council
Senior Government Officials
CEO’s present
Distinguished guests
Members of the press
Distinguished guests, ladies and gentlemen
All protocols observed
I am delighted to be speaking at this conference, organised by the British Council with substantial funding from the High Commission.
The British Council has a well-deserved high reputation here in Zambia, doing important work on education and entrepreneurship. It is great to welcome the Council’s new Director, Sean Harper, to Zambia. I am sure he will lead the organisation to yet greater heights.
I want to talk today about the challenges for the future that Zambia faces.

I think it is increasingly recognised that it is Zambia’s own actions that will determine its future.

We learned the other day that Zambia’s GDP is 25% larger than previous figures had indicated.

That puts Zambia much more firmly within the ranks of lower middle income countries.

The United Kingdom, through our Department for International Development, commonly known as DFID, has a long-standing presence here and is doing work in a wide range of areas.

Its contribution is substantial – yet also very small.

Substantial because it amounts in this UK financial year (April 2013 to the end of this month) to over £70m. That is about Kw690m at today’s exchange rates. That feels like a lot of money. Small because it amounts to less than half a percent of Zambia’s recalculated GDP.

We want to make a difference to Zambia’s prospects, but with only half a percent of GDP to play with, we have to work hard at it. Increasingly we look at what we do to support institutions or economic structures that will themselves deliver bigger changes than we would be capable of on our own.

All cooperating partners combined now spend in the order of 4% of Zambia’s GDP – a sum now less than the tax raised from the mining sector.

So what does Zambia need to do to ensure a bright future?

How Zambia develops over the next years and decades is up to you.

I think there are eight things that the country needs to think about.

(People tell me that you should make only three main points in a speech. They are right. But I am sure you will be able to follow me.)

1. Vision for the economy

Firstly, Zambia needs to consider broadly what sort of economy it wants to have twenty years from now. What sort of economic production do you envisage taking place?

Once that has been worked out, then you need to work out what conditions need to be put in place to encourage the development of such production.

The Government is currently revising the Sixth National Development Plan. I hope that the revised version will have clarity about those two issues.

2. Mining

The second issue is mining. I assume that, given the country’s copper reserves, mining will be part of that vision for the economy of the future.

In recent years Zambia has been very successful in growing its mining sector. Since 2000, at the time of the privatisation of the mines, copper production has grown from 257,000 tonnes per year to 850,000 tonnes in 2013.

Clearly a lot of investments that were begun some years ago are still in train and have yet to come on stream.

But I am not aware of many recent announcements of major new investment decisions.

If new investments are not being embarked on, we need to ask why, and whether anything can be done about it.

3. Diversification

My third point is about diversification away from mining.

The increase in mining output has been the main driver of Zambia’s phenomenal economic growth over the last dozen years or so. Without it, Zambia would still be struggling to reach lower middle income status.

But sooner or later, the easier to extract copper reserves will be used up. Production will plateau and will eventually decline. Zambia needs to think about how the current mining boom can be used to lay the foundations for broader economic development.

For that, the income from mining needs to be used well, to invest in physical infrastructure and, even more important, the development of human capabilities.

Actually, of course, people have been talking about the need for diversification away from mining for a long time now. Ten years, to my knowledge; but I suspect in reality for much longer than that.

Some diversification has clearly taken place. So-called non-traditional exports have been rising in the last eight to ten years. A lot of the non-traditional exports have been agricultural products, but they also include light manufacturing.

But it seems to me that there needs to be a debate about why more has not been achieved in this area.

One issue is the exchange rate. People are worried about the falling Kwacha. But the value of the Kwacha stabilised in about 2002 at about 5,000 to the dollar. There has been some fluctuation since then, but today’s rate, twelve years on, of less than six rebased Kwacha to the dollar is not a big movement.

Furthermore, there has been a lot of inflation in those twelve years. In real terms, the value of the Kwacha has increased significantly.

There are clearly disadvantages to a falling Kwacha. But one advantage of a Kwacha that was weaker over the long term would be that local production would find it easier to compete against imports.

4. Governance structures

The fourth thing a country like Zambia needs to do is to ensure that governance structures are right.

Governments need to be able to make effective, properly thought-through decisions for the benefit of their people.

Governments raise their money through taxation of individuals and companies. No-one likes to be taxed. It is important that government services are delivered effectively, with constant vigilance to ensure there is no wastage or syphoning-off of tax revenue.

It is only through good governance that mining revenues will translate into inclusive growth. It is these structures that make sure that funds are collected and managed in a transparent way for the benefit for the country.

The rule of law needs to be policed through an efficient judicial system.

Much of what the government does has an impact, either positive or negative, on business.

In the UK an assessment is done on the impact on business of every single regulation or piece of legislation, before it is brought in. This assessment is premised on strong consultation with businesses themselves.

The Zambian Government is spearheading such a process here. We are supporting them through technical advice from the UK’s better Regulation Office. But the key thing will be for it to be implemented properly by all the line ministries.

If done well, this assessment process should, over time, make Zambia an easier place for both domestic and foreign businesses to operate.

5. Education

The fifth thing the country needs to focus on is education. Like Nelson Mandela puts it “Education is the most powerful weapon which you can use to change the world.”

The OECD, a policy forum based in Paris, looks hard at drivers of economic growth. It says that the biggest single factor affecting long-term growth is education.

Zambia is good at getting children to enrol at primary school. But the government recognises that standards of education in schools are low. DFID is working with them to remedy this.

The type of education you receive is crucial. Do you just learn facts, or mathematical techniques? Or do you learn to think, to construct arguments, to solve problems?

It is because we insist on the development of such skills that British universities have such a good reputation. Many Zambians have discovered that at first hand by studying in the UK.

We also have globally recognised qualifications in vocational and professional subjects. Our host today, the British Council is administering over 40,000 UK examinations to over 15,000 candidates a year in Zambia.

With the world leaning more to a knowledge economy it is becoming increasing easier to get a more rounded education. With the increasing access to smart phones and internet penetration it is my hope that education services will become more accessible.

6. Entrepreneurship

The sixth thing the country needs to do is to promote entrepreneurship among its people.

Other countries have entrepreneurs who have really made it big. One thinks of Aliko Dangote of Nigeria.

There seems to be very few companies of any size that are owned by indigenous Zambians. I am not sure why that is.

I know that there are a lot of new entrepreneurs here – Bongo Hive is a good example.

What is it that will help small Zambian companies grow into large ones?

The Zambian Government is keen to develop SMEs. The increase in the capital requirements for banks here was intended to raise the amount of money available for companies to borrow. And the caps on interest rates were imposed in an attempt to ensure that companies could borrow at sensible rates.

You will have your own views as to whether the measures taken were the most effective ones to achieve the intended aims.

DFID is about to start a programme to look at the obstacles to SME creation, and to propose technical solutions.

7. Foreign investment

However, home-grown enterprise will take time to expand. In the meanwhile there is a particular need for foreign investment. The seventh task for Zambians is to ensure that the country is an attractive place for foreign companies to operate.

I will say a bit more about this theme, as it is of course of direct relevance to British companies!

There is of course intense competition for foreign investment. Every country wants to attract it.

The United Kingdom puts a lot of effort to attracting companies from overseas to set up operations in our territory and create jobs there.

I am sure all Zambia’s neighbours are doing the same.

I know that many multinationals consider many more investment projects than they have the capital to pursue. We will never get to hear about the ones they reject.

To put it bluntly, Zambia has to beat the competition. Competition not just from neighbouring countries but also from other producers in the developing world such as China and Vietnam.

Mining companies have to go where the ore is. Manufacturers can set up anywhere.

 Like Slavery and Apartheid, poverty is not natural. It is man-made and it can be overcome and eradicated by the actions of human beings. Sometimes it falls on a generation to be great. YOU can be that great generation.

Why would a company set up here?

Some service companies – banks, insurance companies or supermarkets – will come because of the growing Zambian middle class with money to buy what they have to offer. But Zambia is still a small market. As I said before, the country needs to think about what it can export.

What will attract companies wishing to produce for export?

Things like a competitive cost base, a productive workforce, not too much red tape, policy certainty, political stability and security of investment.

Companies also want the flexibility to run their affairs in their own way. If they recruit staff for whom they subsequently have no use, they want the freedom to pay them a reasonable severance package and let them go.

It is a paradox that, in order to attract new jobs, you have to accept that some old jobs may have to go.

Companies also want to be able to bring in senior staff who know their business. Excessive restrictions on work permits for expatriates can put companies off investing here.

8. Inclusive Growth

And the eighth and last thing the country needs to do is to ensure that everyone has an opportunity to share in the country’s development.

The inequality between rich and poor in this country is really striking. It is clear that much of the benefit of economic growth is accruing to the middle classes here in Lusaka. The increase in traffic on the roads here is testament to that.

The poor and isolated, particularly those in rural areas, all need to be able to access education and other public goods. They need to be able to improve their farming techniques, and sell their produce.

DFID will remain focussed on support to the poor. Not just because there is a moral imperative to help those who are in most need, who suffer most. But because there are massive economic gains to be made by giving them even basic opportunities.

The government thus has a fundamental role to provide opportunity and incomes for all. The government’s 700% increase in the funding for the social transfers scheme is a step towards attainment of this dream. We are pleased to have played a key role in piloting that scheme.

Conclusion

Ladies and Gentlemen

I have two final thoughts. First, a senior advisor to Tony Blair once said, after stepping down from working in government that governments tended to overestimate the influence they could have in the short term. But they tended to underestimate the influence they could have in the long term.

It is only in the last few years that the economic liberalisation put in place by Frederick Chiluba has borne the greatest fruit.

The choices that are made now will make a big difference to how this country will fare in ten or twenty years time.

My second message is that you here today can play a big role in shaping those choices.
Nelson Mandela once said, “Overcoming poverty is not a task of charity, it is an act of justice. Like Slavery and Apartheid, poverty is not natural. It is man-made and it can be overcome and eradicated by the actions of human beings. Sometimes it falls on a generation to be great. YOU can be that great generation. Let YOUR greatness blossom.”

42 COMMENTS

    • Yes agreed, very inspirational. Good job ba Thornton, thanks for a positive speech , unlike your neighbours, the US Embassy, who are just think obsessed with making Zambians homosexuals

    • @kaboi
      go check Muvi tv, lusaka times` report yesterday was incomplete and cryptic. US Emabassy said much more than what lusaka times reported,, they support constitution issues

    • Reading between the lines in Thornton’s statement you would be a f.o.o.l to think that the man was praising Sata and his government ;far from it. The man was actually sending some strong subliminal messages to Sata and his PF to get their acts together otherwise Zambia will continue sleep walking into the economic mess that existed in KK era.
      The subliminal warning messages are embedded in simple questions he raised such as;Why would a company set up here?What will attract companies wishing to produce for export?
      On governance he has indirectly warned the PF government to uphold the rule of law and make sure that the judiciary is worth its name. He also warned the PF to make effective, properly thought-through decisions for the benefit of their people ; not projects on the hoof for…

    • Be ware of the diplomatic language used by the English. They would be telling you how fo.o.lish you are in a subtle and friendly way to avoid raising tempers. Without knowing it you would be thanking them for telling that you are stupid!

    • I like undertones; only a few can make an implied meaning. Others would say ‘advising the government diplomatically’. Wish we could hear more of this, but ONLY from our leader and not an outsider.

    • Muzungu Wanzelu has spoken. Diversification of the economy into other sectors other than mining had been talked about ever since most us were in napkins. Kaunda called it ‘go back to the land’ but it was primitive and uninspiring. That’s the past and now we can do things differently with the help of the government to empower entrepreneurship amongst its people through transparent lending schemes. This in turn will help create jobs for the vast unemployed youth wasting their lives away. For instance, I could order 10 electric powered Mohawk city cleaning light trucks and setup an environmental cleaning business to keep Lusaka immaculately manicured and have an allocation for payment via the city council. We also have vast arable land for growing of disparate crops. We are ready!!!!

    • Absolutely, good information.
      The problem is the the arrogant Zambian leaders who don’t believe in advice. Honorable Commissioner is emphasizing that, people need to plan and thus is, in long term.
      Chipale ma Zambians and too much “me me me, I I I,” but no progressive and long term planning.
      Unless one doesn’t have ears, this is profound advice from Hon High Commissioner of Britain.

    • Ok, the imperialist has raised some important points, its painful that even the imperialist can see that our organisation of the economy is generally poor. He has pointed 3 critical things that need concentrating on. 1. In running our nation we are just not forward thinking enough, and this is so dangerous, because as Zambians we are just reacting to conditions instead of controlling conditions in the manner successful nations do, the fall of the Kwacha is an example, we have grand plans but don’t believe in them enough to act on them, and this generation must change this very urgently else i see trouble down the line. 2. He made a key point in that we need to decide what to base our economy on i.e Agriculture asap 3. Political and policy stability, we need to mean what we say and do it

    • Imperialists? Wake the fcuk up peoples! The muzungus have been and gone… People are still crying but mwandi ‘back at the ranch’ our new colonisers the Chinese are raping our land of our resources! Let’s live in the present and learn from our history…

  1. Good to wake up to reading something sensible… I think we need to think about this as Zambians.. Great advise comissioner, great advice

    • Translated into laymans language – Zambians wake up,the future depends on you.Don’t let PF destroy your future.

  2. If only these developed countries could desist from controlling us through west-favouring policies. Wer’re celebrating the 50th year Jubilee of neo-colonialism. We need sharp minded economists and think-tanks to liberate us

  3. Good speech. Not this American crap.

    Americans would have supported our constitution making process with vigour had we put a clause to support gays. Infact there should be a clause to restrain this American crap to stop people of the same sex marryinng each other. In zambia we do not have political will from our politician to publicly denounce this like Zimbabwe has done by calling them dogs. This is why I like Mugabe.

  4. Governance should have been at number 1 your excellency. Once sound governance structures are in place which are underpinned by a people driven constitution, then everything else falls in place almost automatically. We are also alive to the fact that western governamnets are not necessarily intersted with a people driven constitution because it will seal off corruption with governemnt through which they benefit from in so many ways.

    • Are you the onlyone who doesnt understand that the ‘government’ is civil service and civil servants have been busy thieving and buildng chalala?

  5. @Kudos u r right.

    I hated the Guy by HIS SKIN COLOR but I HAVE READ the Statement its so RICH & LIBERAL I ve never thought tht SOMETHING GOOD can come from his Mouth.
    1. We need entreprenuerers
    2. Sustainable Development-Education ( Science/Engineering courses). Whn people trained in this line can they “only” run manufacturing COs.

    3. Envisage-(Visio) wht vision does PF has.
    IT ACHES TO B LEAD BY PF.

  6. hahahahahaha ……@Kudos u r right.

    I hated the Guy by HIS SKIN COLOR but I HAVE READ the Statement its so RICH & LIBERAL I ve never thought tht SOMETHING GOOD can come from his Mouth.
    1. We need entreprenuerers
    2. Sustainable Development-Education ( Science/Engineering courses). Whn people trained in this line can they “only” run manufacturing COs.

    3. Envisage-(Visio) wht vision does PF has.
    IT ACHES TO B LEAD BY PF.

  7. The address is very diplomatic. It deserves careful analysis by relevant government officials and civil society, including advisers and EAZ. The mention of FTC is pointing to liberal policies of that era. The mixed economy ideology is generally accepted in the country. All that is required is required is vital for professional and business decisions.

  8. A powerful Speach we expect from a Diplomat.

    1.Envisage-talks of the PF to THINK & ve a vission of HOW ZAMBIA SHUD BE IN 10,20Yrs frm now.
    2. Education- You need to traim people who can be THINK-TANKS especially in Engineering and other INDUSTRY ORIENTED COURSE.
    3. Zed shud b inclusive in all its Dealings.

  9. Well Done

    A powerful Speach we expect from a Diplomat.

    1.Envisage-talks of the PF to THINK & ve a vission of HOW ZAMBIA SHUD BE IN 10,20Yrs frm now.
    2. Education- You need to traim people who can be THINK-TANKS especially in Engineering and other INDUSTRY ORIENTED COURSE.
    3. Zed shud b inclusive in all its Dealings.

  10. Good morning

    Not that it is wrong to listen to advice but it shows that these people are still dealing with us on the basis of the colonised and colonisers. Are we not able to figure out a bright future for ourselves? Does the Zambian High Commissioner ever advise the UK on what needs to be done for them to ensure a brighter future?

    What Mr. Thornton does not mention is the fact that for decades our resources have been exploited for a song to power the European economy leaving us with no choice but to rely on foreign aid. The truth is that they will only praise us if we are doing things that please them. They have always had one concept: to keep us poor in order for them to prosper. I don’t think the concept has changed.

    • Well looking a the way things are in the country obviously we are not showing signs that we want our kids to have a bright future.AND our high commissioners or ambassadors these days are all from the ‘family tree’ what advise do you expect them to give England.Face facts if you don’t lead yourselves someone else will lead you.

    • Besides when was the last time you heard Sata give the Zambian youth a message of hope and inspiration? the guy thinks presidency is swearing in ceremonies and campaigning for government induced by -elections. He has NEVER addressed Zambians or Zambian journalists . Wake up and smell the roses Nine Chale !

    • Nine Chale, you are right. These imperialists still and will always see us in a paternal light, I know them very well. Its a shame he has to head master us, I don’t blame, I blame the shameful and weak leadership that we currently have. If Ambassador Thornton was honest, he should have given us some reassurances that the British sugar firm and others will not tax evade anymore. But, Knowing them for who they are, they are quite pleased at the poor manner we are running affairs..

  11. I am busy writing my Ph.D thesis guys. Not the one like Mushota`s which is fake. I will join you later.

  12. ‘The type of education you receive is crucial. Do you just learn facts, or mathematical techniques? Or do you learn to think, to construct arguments, to solve problems?’
    I think Zambian education is about learning facts and mathematical techniques. Students are not trained to think. They just learn how to manipulate already developed algorithms. This explains why we don’t seem to have artists, Engineers or computer experts who can produce even an animated movie or advert like the one for airtel money. I will be both shocked and happy if someone tells me that, that advert was actually done by a Zambian.

  13. Should I trust the ‘British’ officially advising Zambia on economic matters, and because of the question emphasised by anybody at interest, ‘Whats in it for us’? However a forum for the British Council and DFID related activities bringing in less than $70 million, I would think this a very down to earth straightforward and positive approach.

    This is advice is key. We can tweak it to suit us to our advantage better. Imports to as long as our capital needs are well directed to priorities. For example enabling Zambians to own the means of growing the economy. Diversifying, would go with the fact that we are at the centre of Africa and can take advantage of that position to grow our economy.

    Can someone address the question as why Zambians do very well and hold positions and…

    • abroad and yet have been denied their potential at home? Are we seeing a change as the example in Lusaka as given by the BHC to Zambia? Can University of zambian students take a survey or have they, about who owns the means in Zambia. Except for Big investment projects, we may sample the shares if any Zambians have them in these, but why would foreigners come to Zambia and use only our trees and grass to make Lodges? Who is watching over this?

  14. Wonderful analysis!! Therefore, govt has exhibited immaturity and have no plan for the future of Zambia.

  15. How condescending! Still living in the colonial era. How come you Britons have never asked us to give you advice on how to run your business? Yet you want to give us unsolicited advice Atase ukutumpa!

  16. I think the HIV epidemic made us loose sight of the future. People were and are dying young. Especially at the inspirational ages. The generations have seen life seem shortened. Yes, poverty can make you not think past tomorrow’s meal but this lack of foresight is different. This is a national disease that we must change in our society. This is a grab what you can reaction prompted by the fear and psychological effects of the effects of HIV. It looks like this way of thinking is changing. People are living with it longer, in some areas of society, and maybewe are changing, we are aware of what the future could hold without fear, without fear of not achieving before we are taken.

  17. Hi very inspirational indeed, ba Nine Chale et al, limbi nimwe ba John solyo bwali!! here is a typical scenario, I am resident in Kitwe whose SME has been funded by CEEC to build a Milk processing plant which will employ about 45 people. We have submitted all documents & put up collateral with Finance Bank. The process started last year 2013 with submission of project proposal notes, ours was picked & were invited to prepare a biznes plan of which we were given an offer of funding early January 2014. Up to now money has not been released. Kwacha is now 6.2 to a $, CEEC Glenda Masebe was on TV confirming that funding for 2013 has been done, they are inviting for funding applications for 2014. So where is the money? Why should it take over 1 year to fund a project? I am sure even other…

  18. So where is the money? Why should it take over 1 year to fund a project? I am sure even other projects from other districts are suffering the same fate? Can some one from Finance Bank shed more light why money is not being disbursed? The projections put up by CEEC is that over 2000 jobs are to be created out of the 2013 funded projects, if the process is done in 4 months or so around 6000 jobs can be created within a year. Let DBZ, ZANACO & NATSAVE disburse the funds on behalf of CEEC, coz these are capable of handling such cases

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