Friday, March 29, 2024

Lack of Forex is a result of Multinational Capital’s unwillingness to bring it back to Zambia

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President of the Economic Association of Zambia(EAZ), Dr. Lubinda Habazoka
President of the Economic Association of Zambia(EAZ), Dr. Lubinda Habazoka

By Lubinda Haabazoka

For a country to develop, we need to unite towards a common goal. Our enemy is multinational capital that manipulates our economic growth and steals our mineral resources. We blame one another for a poor economy forgetting the lack of forex is a result of multinational capital’s unwillingness to bring it back to Zambia.

We have been conditioned to fight one another. Country credit ratings are manipulated by people we think mean well for us but that’s not the case. Unknowingly they influence our politics but we are too blind to see that because the battle is between tribes, political parties and other different formations. In fact we even go to them for funding.

One thing South Africans or Batswanas are better than us for is that they understand their national identity.

I have been repeatedly saying that Bloomberg, financial times, African confidential, rating agencies and other influencers of investor behavior can be manipulated to punish or support a country.

Zambia at the moment is at a stage of being punished for its relationship with the dragon. Zambia at the moment is being punished for its strong stance on illicit financial flows in the mining sector. We have for long underestimated the strength of the mining company monopoly capital. This capital has the potential of influencing regime change by scaling down mining activities citing tax or any other factors. The mining sector can also influence rating agencies and major tabloids to be in the negative about a particular country so as to reduce the economic fortunes of that country.

Forget what we have borrowed for infrastructure development. That’s peanuts compared to what we are losing out through illicit financial flows.

We were advised by the IMF and world bank to get a credit rating in order to access money from the international capital markets. We got that and issued three Eurobonds for which these institutions commended us. So why are they blaming us for that debt today? The Eurobonds were advised on us to trap us and make us dance a certain tune. Eurobonds cannot be renegotiated. One company even proposes to buy out government’s 20% stake in a certain company for $750m to repay the Eurobond due in 2022. What a bloody coincidence!

Despite the fact that we meet our Eurobond payments these fake rating agencies continue downgrading us. Companies continue to externalize what they can to squeeze us of foreign exchange and liquidity. That is what we pay for privatizing our strategic sector. We were insane to sell off assets in a sector that provides 80% of forex to Zambia. We were literally surrendering the value of the Zambian kwacha to monopoly capital. Who told us to privatize? The IMF under SAPs. Despite copper prices being high we can’t give a command to increase mine output to enhance forex because we don’t own mines!!!!

We should never make this mistake in the future. We need to create wealth. We need to enhance Zambian participation in the economy. IDC and Zccm IH should scale up their presence in major companies.

We need economic freedom!!!!

Russia was paying money to the three rating agencies. When the west put sanctions and some Russian banks were cut off visa, Russia also cut ties with foreign companies including these rating agencies. But these rating agencies continued rating Russia but now in the negative because Russia was no longer paying money and also to kill off Russia completely. The Bear, however, is still alive because the bear owns its own economy!!!!

So now we are contemplating ongoing on an IMF package. Once that happens, we will have little control over our monetary and fiscal policies. Is that not what they intended in the first place?

Just read this and from now onwards never trust Moody’s ratings.

The credit rating agency Moody’s has agreed to pay nearly $864m to settle with US federal and state authorities over its ratings of risky mortgage securities in the run-up to the 2008 financial crisis, the department of justice said on Friday.

Moody’s reached the deal with the justice department, 21 states and the District of Columbia, resolving allegations that the firm contributed to the worst financial crisis since the Great Depression, the department said in a statement.

The Big Short: is the next financial crisis on its way?

“Moody’s failed to adhere to its own credit-rating standards and fell short on its pledge of transparency in the run-up to the ‘great recession’,” principal deputy associate attorney general Bill Baer said in the statement.

The Author is Economic Association of Zambia (EAZ) President

61 COMMENTS

    • This habazooka is a very dull man.

      The PF chewed the Euro bond. And they can not account how they spent it.

      Stop spreading lies please.

    • No harm in keeping quite if you don’t understand what he’s talking about. How much reading have you done on the subject matter to understand the influence and effects of multinational business on a given economy. How about the illegal practices perpetrated by them including tax evasion and capital flight to tax havens. Muleishiba Utuntu…!

    • An academic should never ever comment this way. Lay the evidence bare as the Tax Justice Network, Oxfam and Action Aid do.

    • The PF government should with immediate effect suspected 80% of its new capital projects in order to arrest the fast declining economy. In addition, all by-elections should also be suspended until things improved. GRZ should also instruct it’s ministers and some senior GRZ officials to park those expensive SUVs as a way of cutting on high operational costs such as fuel and vehicle parts.

      God bless Zambia.

    • Dr, Habazoka is very intelligent for an average INCOMPOS to grasp. People were blaming Mugabe and still do for factors someone began to do to pull him and Zimbabwe down. That is why UNDER FIVE is a danger to Zambia. AFUNA KUGURITSA ziko but Zambia will not allow a THIEF to be a president.

    • Haabazoka has exposed himself. The truth is that he doesn’t know how the credit rating agencies work. Once Zambia exposed herself to the international market, she had to know how to manage her financial risk. Apparently getting advice from such people doesn’t help. Zambia is a high risk borrower. BOZ recently told us that our reserves are too low and we are failing to stabilize the exchange rates because all our forex is spent in debt servicing. There lies the real issue sir. In addition, Zambia is an importer putting more pressure on forex. Yaba uluse to my zambia.

  1. This is why I don’t rate people with PhDs – they’re not a measure of intelligence or even morals.

    We are being punished for not using our resources efficiently and not planning effectively. Stop whining about rating agencies, the IMF, and the World Bank.

    At the end of the day, this government made some dumb decisions and it has to be held accountable for them.

  2. Academic writing is very good for novice. Ba teacher please broaden your research to include countries like Ghana.tanzania Rwanda to mention but a few may be thereafter you will include a factor of bad governance in your academic writing. Retired Student.

  3. Here we go again. Back to unip days. Round 2. Unip reloaded. whatever you call it but we have been through this road. The first mistake… how on earth can you vote for Sata? Second mistake… how on earth can Sata adopt chikwanda as finance minister, the same guy who was responsible of taking the nation through this route during unip. After this mistakes after mistakes to numerous to mention. Do you think the term chimbwi no plan was justified?

  4. I see this ostrich head in the sand type analysis everywhere I look in the ruling party cadres. Time to make the change for better things.

  5. A country with no assets cannot control its economy. Dr. Habazoka is spot on. Compare with Chile-it owns 60% of its mines which produce 5,600 million tonnes, that’s 3,360 million tonnes or $19bn into its economy. Zambia produces 800 million tonnes or $4.6bn which leaves our economy first then we get taxes and royalties from the mines. See the difference???

    • How was the economy doing when the then unip government was owning all the businesses and all mines? Do you remember? Than why did the people in masses vote unip out of government?
      Exit unip enter mmd. With all government owned businesses sold off and all mines sold off, how was the economy doing very well? Short memories for some people. We heard this communist song before, try something else. You will run out of explanations and excuses boi.

    • Now compare poverty levels during UNIP and MMD eras. Street kids came with MMD. Like Chile, a balance of both is a healthy dose. UNIP and MMD were both extremes. Use your head, how does private ownership taking out billions to other countries benefit Zambia?? Make me understand please!!

    • Zambia does not produce 800 million tonnes of copper. May be 800 000 tonnes and Chile does not produce that figure. In fact world copper priduction does not come anywhere near what you claim to be Chile’s production.

  6. There is sense in what Dr.Habazoka has said.Certainly there is one factor missing in the cocktail of issues that have led us to a crisis we are in – POOR LEADERSHIP! While it is important to realise that as an underdeveloped country we need to control key sectors like mines and energy to control forex and stabilise our economy,POOR LEADERSHIP ALWAYS LEADS US TO ABUSE THE PARASTATALS!

  7. ..continued..and that leads to opposite (destructive)consequences on our Economy.CERTAINLY WITH GOOD LEADERSHIP THE PROPOSAL IS WORKABLE,JUST LOOK AT BOTSWANA WHERE THEY 50% STAKE IN DIAMOND MINING AND MARKETING WITH SERIOUS LEADERSHIP!!

  8. This guy tried to be like me in marrying a whlte woman. But how does he go for Russian? Russian are like the black people of Europe

  9. This guy tried to be like me in marrying a whlte woman. But how does he go for Russian? Russian are like the black people of Europe x

  10. Unfortunately good Dr the level of education in Zambia has deteriorated to just understanding economics of the monthly breadbasket and the exchange rate. Please keep speaking with the voice of reason, we shall pray that you are given a chance to become MOF and implement some of your progressive ideas. It doesn’t make sense why a country of such a major USD export commodity should not have at least 20% of its receipts banked in Zambia by law. Confidence in the current MOF went out the window when he retained VAT over Sales Tax.

    • I hold hands with you in prayer that Zambians like this Dr. are given positions of making / influencing policy to our advantage.

    • U don’t know what u are talking about. Do u know how much “Dutch disease” would occur in Zambia if all export proceeds were banked in Zambia? The kwacha would appreciate to ridiculously high levels so that u cannot export anything else. We hv a small forex market with few players on both demand and supply. This results in rate fluctuations that you don’t see in deep markets after injection or reduction of a few dollars.

  11. It’s painful to read some of these comments if it’s any indication of how people really think about their understanding of Global finance and Capital. There’s no shame in keeping quiet when you don’t have an informed opinion to give.

    • Bring back the money to be spent on what? Repaying debt? The “common man” is no beneficiary of such investments. Only those in authority or those paid to vuvuzela benefit. Townships have been flooded with just the first rains; the road past my house Gadsden done,but with first rains the water is somehow going back into my yard and has damaged automatic gate, and the water in the drainages is not moving; mosquitoes are breeding there happily. Do multinationals must bring the money, to whom and for whose benefit

  12. Fake economist has run out of lies, now he is blaming rating agencies and multinationals for failing to prudendly use natural resources we are endowed with. You fail to feed your family and you start blaming others, the environment, the economy, this guy is a buffoon with misguided economic theories from some low Russian university never head of. Now that things have gone hayware he is trying to to sound like a gong that makes stupid noises.

  13. I totally agree. The first trap they led us to was christianity and as we closed our eyes to pray, they scrambled for our resources and took our intellectuals into slavery. Afterwards they hoodwinked into independence and whilst we celebrated they unleashed multinational corporations and privatization through which they control our resources and select our leaders. And as we look up to heaven praying to Yahweh (a god who originated from Africa), they have led us to Eurobonds.

  14. Economic history is giving a different narrative. When conditions are met, then Foreign Reserves are high. Of course, when the foreign reserves are high, then multinationals do not bear the blame. True, there is an element of speculation but speculation without exports is not sustainable. It is hot air balloons. It bursts and then real business in the market place can begin. There is no need to blame someone else for failure to export. Keep on exporting valuable goods such as agriculture produce, mining copper and tourism and other services and the foreign reserves will show. We did it in the past. Why can’t we did it now? take time to be defensive. Corrupt is laziness. Laziness is corrupt.

  15. There we go…….blame everything on the west.

    The trick to blame everything on climate change was not working.

    Ati they forced us to get eurobonds…….??

    Did they force you to pay $1million/ km for roads that make no money ???

    Or did they force you to pay $42 million for 42 gonga fore trucks ???

    • “… We have been conditioned to fight one another… Unknowingly they influence our politics but we are too blind to see that because the battle is between tribes, political parties and other different formations…” WE ARE CURSED WITH COLONISED MINDS, LIKE THE COBRA ALWAYS PUT IT, EDUCATED F0.0.LS.

    • Badala…it is leadership failour that is cursing Zambia.
      How come Rwanda is doing exceptionally well but has less minerals and borrowed less than Zambia ???

      Ati colonised minds ???…….stop wearing shoes and cloths and go back to wearing skins….

    • Ahhh….the regime change narrative, it’s all down to leadership. Install hh and he will fix everything, right?? IDC is an initiative that will benefit future generations not privatising everything. That borrowed money has placed over 6 district hospitals in Lusaka alone to an extent Zambia scored high on the health delivery benchmarks set by the UN. So is this PF GRZ not doing anything for us???

  16. And this is the leader of the economic association of zambia?
    Where do I even begin? Who allowed the multinationals to own our mines? Who put in place weak laws that allow for leakage of forex? Who is corrupt and allows shaddy deals? Why cant we run our own stuff. Why do we allow multinationals to bring expatriates to do jobs that we can do?
    Whose fault is it that we cant maintain a decent agricultural sector and achieve food security? Look here, you need to grow up and man up. Take responsibility for your failures instead of trying to excuse it by pointing fingers at external factors. The problems in zambia are a result of 1. A corrupt and lazy population 2. An eben more corrupt, greedy, and incompetent leadership. 4. Misplaced priorities. 6. Ignorance. 7. a seriously flawed moral…

  17. Sometimes its simply the issue of where capital was obtained and how those indentures or agreements where made Certain supranational and multinationals operate global Treasury systems simply to manage well their Treasuries and reinvest in their countries of operations and how these returns are made its a preserve of the operating countries to craft and manage with these supranational and multinationals Certain projects and companies to operate are mega and ultra mega and requires capital to operational and those Treasuries are normally situated in Financial centers or cities We can change that and work our Financial system and make lusaka a Financial center for those global…

  18. supranational and multinational companies at-least a sub center in Africa and ensure the DRs concern are but we are addressed Some efforts are being done to mordernise the city make it a smart city attractive for those global banks,apart from usual Barclays and Stanchart, that run those Treasuries

    Private participation s in the economy is Good with Government that should not be ruled out at 10% 20% 50% or 75% (optimal cost of capital structure) but Government should be more on Service delivery Coming up with new frontier and investments in resources and companies and taking them to markets when they are prime selling them at a return,that should be the role of IDC as opposed…

  19. as opposed to IPOs by private companies that would send those used companies with little value for public (ipos) So the Dr might be correct on the roles of IDC to take the lead but if capital formation is a challenge that can be researched and actualized but he might b wrong on participation and structure of these Global multi nations and supranational who might risk their multi millions capital raised in those ratings and countries of bond and equity Perhaps now that we might encourage companies to raise money locally through depositories and others by Foreign investor s we may realise more benefits in Forex (FDIs Directions) and Treasuries that can be structured in tax reshemes and…

  20. tax regimes and structure and others (soft) to ensure the correct observations by Drs in FDIs (unwindings) are addressed It has to start at Formation and written in contracts and never at operations of those FX and Treasuries to route those Finances into the local Zambia Financial systems

    My last comments is heightening the levels of regulatory standards and ethical environments oversight in operations and management of Treasuries and ratings rationale to reduce mistrusts among st the private and Government If the Investments climate in Zambia priorities sound and ethical environments including ESGs then most of those fears will be addressed Now because we are behind in our Financial…

  21. literacy skill sets and market designs including observed competencies we may fail to rein-fence what the DR is saying but it can be managed

    On the case ratings upgrades or downgrades,the comments by the DR are observed but all ratings like other management risk reports are opinions of sponsors and most of these sponsors are Financiers and Investors who what to have an opinion before putting their money Now those ratings are supposed to be done in an ethical manner,reflecting basis,reasoning and reasonableness,substance or materiality and without any influence from any other in payments or handouts To avoid any Zambia can also invite its own rating agency and allow a review to ensure…

  22. basis The Country can also have a reviewers (an assurance,auditor or compliance) of those ratings But rating agencies are there for Investors (sponsors) own risk management and score and cannot be avoided or written in between What is needs to be done is to understand the methodologies in use and counter any perceived misratings with what is consensus They are suppossed to ensure fairly
    accurate,reasonable,basis and non pumped up reports directly to sponsors whether companies or sovereigns

    In conclusion some points in Drs are validy but it could be a case of Markets(Financial) and Sectorial Developments and capacity This can be seen in some comments We need to develop the country…

  23. Financial systems and advisory management services ,infrastructures not only roads but ICTs and core Banking and not simply from a resource side (minning) but as a Financial Center and a smart country that Investors can come and feel welcome and comfortable to reinvestment with Zambians and companies for long-term We may attempt to rewrite the Global Financial systems but we need to see the advances and move sustain ably so because capital also follows demographics and by nature these companies from mines do invest in those countries (equity and Bonds)

  24. So if we donot have and have not worked our local Lusaka Stock exchange and investments Banks here to have those products in lead with those Minning companies Treasuries and Investments firms to reside here then what the Dr is saying might not give the returns (fair) on proceeds of the mines because these Firms realize those FX for Investments in markets which have products that can give them those principles of Global Treasury Management

    What has worked is Taxation,ownership structures and local participation by companies and employees for long-term development and sustainability but capital can come and at one day will unwind or return to owners that will always be the case

  25. @ Sparkle Delight, intelligence is overrated, so don’t conflate PhD with it. @ Student (Rtd), excellent point. Now, for years we have been importing laborers (LABORERS) from China and ALL the cash for OUR laborers remains in China. It has NOTHING to do with Rating Agencies. That is a completely separate issue. For yonks we have been depriving our people of participation in THEIR economy. Now we are at breakpoint because even the little crumbs are stolen by the leaders in inflated contracts and kickbacks – Iwe ci Lubinda uzisunge!

  26. This HabazoKa is a confused Russian economists. Every issue has two sides. He has not talked about PF mismanagement which has been the cause of this economic quagmire.

  27. This Country is owing too much .Coupled with mismanagement of public funds.Over blown project costs, unnecessary luxury purchases.
    IMF has no confidence in our financial management.
    Let alone the citizens.
    Your analysis has A PF ELEMENT IN IT.
    One does not have to be an economist to see what is happening in our country.
    There is chaos economically in our country and that has to be corrected.
    You need to contribute positively to matters of the economy and not what you are doing.
    I personally have questioned your levels of education.
    You dont speak objectively..

  28. The good to observe and take from the article is also that countries are realizing and putting safeguards in their Financial systems and economies There is a move towards national resilient Financial systems to counter what the Dr is perceived to be saying away from the Globalization and Treasuries Multinational systems to ensure long-term performance of country indicators You can see it in the brix it reasoning ,simply to ensure mitigation of contagion Financial crisis You see it in monetary policy and other Instruments

    So Zambia should be local but truly well attractive and competitively global in terms of attracting FDIs and depth of Financial systems “Not dealing Rooms against…

  29. JOB SEEKING FROM A DEAD HORSE PARTY H@@BAZOKA??
    * Multinationals are responsible for Mukula?
    * Multinationals are responsible for 48 Wheelbarrows & dodgy ambulances?
    * Multinationals are responsible for Toll gate scam?
    * Multinationals are responsible for Eswat1nigate?
    * Multinationals are responsible for Eric Ch!mese army uniforms & equipment scam?
    * Multinationals are responsible for Black Lechwe?
    * Multinationals are responsible for Am0s Ch@ndagate?
    * Multinationals are responsible for Social Cash Zampost scam?
    * Multinationals are responsible for Esther’s exorbitant Ancient Fire trucks?

    • continued;
      * Multinationals are responsible for 51 mushrooming houses?
      * Multinationals are responsible for paying for Government officials after dissolving of Parliament?
      * Multinationals are responsible for an expensive Presidential Jet when Civil servants & farmers not being paid?
      * Multinationals are responsible for grinding ZESCO to bankruptcy by siphoning cash to P.F campaigns?
      * Multinationals are responsible for expensive fuel despite lies that cheap Saudi Fuel is on the way?
      * Multinationals are responsible for Cholera, as they won’t come & clean our FILTHY Cities?
      * Multinationals are responsible for 2turdy Mwale being paid Millions in U$D for NOT doing any work?
      * Multinationals are responsible for a disturbing Ghost payroll?
      * Multinationals are responsible…

    • Continued,
      Multinational Capital, & multinational scheming is responsible for I Could go on all day and night!
      This big shameless Brute H@@bazoka should be busy using his dodgy Russian qualification to Job create, rather than joining the long queue of useless Zambian professional Vuvuzela’s, who’s main preoccupation is to be a leech, that strives & attempts to suck the last of meagre taxpayers resources from the treasury via the expiring P.F party.

  30. “Not dealing Rooms against the assets of the country and kwacha we see on the 2 opposite banks in Cairo Road always transferring Euro and Dollars to fulfill those global Treasuries ” for those multinationals and supra nationals

    But then on the global view this article could have taken a different view analysis and tone as it clearly missed the Global Financial and Investments systems and is counter to Investments promotions and good environments for those that Zambia has created and investors enjoy for moving their money to invest in these Sectors

  31. No wonder nobody seems to be taking responsibility from government,with this kind of narrative, its the world against poor Zambia!
    Lets learn to take responsibility,everything you are pointing fingers about was done by the leadership of this country with NO one holding a gun to their heads. If they could not see those traps, then obviously they are NOT at all good for the nation! How many times have they been advised on the need to compel these multinational companies to bank locally?Or even compel all expatriates working in Zambia to be paid locally? You are waiting for IMF to come and ‘suggest’ all this to you…?

  32. Lubinda should keep his mouth shut and look a fool than open it and remove all doubt. Your friend Chawama Mouse is busy wasting taxpayers money on useless foreign trips and you blame other. He is building houses abroad and you keep quiet. What a bawbag you are!

  33. In short Dr H,zoka is saying we were cheated by a conflagration of western agencies and multinationals. That means we never had economists grounded enough to meet the global grading for positive speculatives and predictable outcomes.For how long are we going to remain incapacitated in such areas as to remain ever vulnerable to unfair exploits of capital?

  34. The Big Short, my favourite-est film of all time!

    But Sir, how many times have citizens shouted against selling Mines… Nationalise call outs have fallen on deaf ears.

    The truth is that our economic performance is at the mercy of the Western economic institutions. This IMF, was created out of the Bretton Woods meeting when Western nation fresh from war decided to Improve their losses by mugging the world by creating a new USD standard global monetary standard. Look at poor Argentina……even had to have an unfair court hearing held by USA courts paying itself their money.

    • You touch their money, you can’t escape them. Better friendly country to country borrowing and working together to make money and share the income. Western economies have little natural resources left. They mean to dig up all third world country resources and direct in one to their economies. Now our currency is failing, quantitive easing is likely to be used to print money…the beginning of the end economically!

  35. Habazoka is right in a round about way. However, what he has deliberately left out is that our so called leaders are duplicitous in this racket. As much as tries to absolve the PF, I don’t buy his argument.

  36. It is true that PF ate the Euro bond.. however what this man says is true! We own nothing we will always be the West’s slaves..
    Why did we borrow the Eurobond??
    To build roads?? Apartheid South Africa was under sanctions for many years yet prospered..after many years of independence I don’t understand why we don’t have a Zambian brand that manufactures Capital equipment for mines and roads and why we don’t have food security and why we don’t make our own cars.
    And the cherry on the cake we sold our mines.

  37. Someone tell this Habasnake to shut its trap….And the economists including trible HH are happy to be led by that thing as their president?

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