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Tuesday, November 23, 2021

Sean Tembo Proposes a Blue Print to Turn around the Zambia Economy

Columns Sean Tembo Proposes a Blue Print to Turn around the Zambia Economy

By Sean Tembo – PeP President

We have noted the various haphazard and uncoordinated efforts being pursued by the UPND Government in the quest to try and turnaround the Zambian economy and as a progressive-minded opposition political party, PeP has decided to offer some possible solutions as outlined below:
1. Strengthen Collection of Non Tax Revenue: According to our estimates, less than 30% of all non-tax revenue such as fees and fines, ends up in the treasury due to pilferage. This is largely due to the manual receipting system and lack of internal controls. A common scam among revenue collectors is to write a receipt for say K5,000 without using carbon paper underneath or in the case of self-carbonated receipt books, by inserting a firm cardboard, and after the customer goes, to then insert the carbon paper and write a lower amount such as K150. When officers from the Auditor General come to inspect these receipt books, they look perfectly in order. The only way to reduce pilferage in revenue collection is to computerize the receipting system with a centralized server.

2. Strengthen Collection of Tax Revenue: every time one goes to buy items in a shop, it is sickening when you’re told that “the fridge is K3200 but if you don’t need a tax invoice, l can give it to you at K2800”. People treat VAT as something optional which they can charge or not charge, and yet when it comes to claiming, they claim in full. There are three ways to strengthen the collection of tax revenue. The first is to increase the number of ZRA officers and offices across the country so that we have more ZRA offices than Police Stations and Police Posts combined. Secondly, to ensure prosecution of deliberate tax offenders so that it serves as a deterrent to future offenders. Third, ZRA officers need to be given the best remuneration and conditions of service among all the parastatals, after all they’re the ones that make the money for Govt. Their current conditions of service are deplorable especially the part where they work on contract basis with the perpetual fear of having their contract not renewed if they do not do the bidding of their bosses. ZRA officers are too critical to the nation for them to be treated with such contempt.

3. Retain at least 50% partial control of all Copper Mines that were sold by ZCCM: Copper is supposed to play three main roles in our economy being (a)source of much-needed forex (b) source of direct and indirect tax revenue and (c) source of employment. Among these 3 key roles that copper is supposed to play in our economy, it is the role as a source of forex that is critical to the sustainable management of the economy because there is no significant amount of forex that comes from Non Traditional Exports (NTEs). For as long as current owners of mines keep externalizing the forex proceeds from copper sales and only remit back the nominal amount needed to pay salaries and other bills, we are doomed as a country! The temporary solution to this is to enforce exchange controls so that all proceeds from copper sales must be remitted back to the country intact. The long-term solution is to acquire at least 50% shareholding in all copper mines that were sold by ZCCM. There is a fallacy that we failed to run the mines hence it was necessary to sale them. That is simply a fallacy. What happened is that the price of copper fell on the world markets, which was a temporary event as has been happening in the past couple of years. However, we rushed to make a long-term decision of selling the mines based on a short-term event. Since we don’t have the money to buy the 50% stake, we can get it by enforcing ridiculous regulatory measures to force the current owners out after which we would identify new partners with whom we would have the 50% stake. The Mineral Royalty Tax was a good example of one of the measures that we can implement to force the current mine owners to accept our terms as a country.

4. Reform Key Government Institutions: The “big man syndrome” in the management of government agencies and parastatal bodies must come to an end. This can only be achieved if people are recruited on merit following rigorous interviews. To this end, each and every job in the public sector as well as government institutions would be advertised and independent recruitment agencies appointed to handle all recruitment of Permanent Secretaries, Parastatal CEOs, Bank Governor etc so that competence is the only consideration and not the size of their tongue and its ability to lick people’s shoes or indeed whether their surnames are associated with pre-independence freedom fighters or members of President Kaunda’s first cabinet. Institutions like BOZ cannot be allowed to lamentably fail in their primary mandate and people are still allowed to keep their jobs. Other reforms would include for institutions such as Central Statistics Office and the approach used to calculate year-to-date inflation as it is fundamentally flawed and exposes the economy to huge fluctuations.

5. Strengthen the Criminal Justice System: Our criminal justice system only works for crimes against other persons such as murder, assault, rape etc. It is non existent for commercial crimes like theft, especially theft by servant. This has resulted in pilferage being the largest cost to businesses in Zambia because people know that if they are caught stealing, the most that will happen to them is to loose their job and maybe spend a few days in police cells and not jail time. Everytime one goes to buy something in a shop in town, you get sickened by employees who approach you so that they can steal from the owner of the shop when buying items. They keep saying “am going to write 3 on the invoice but when issuing from stores l’ll issue 7”. This is so rampant that it’s sickening and its all because we have a very weak criminal justice system. If all offenders were sent to prison, even for a few months, pilferage would go down as people would be afraid of doing jail time and the economy could grow.

6. Transform the Marketing Side of the Agricultural Sector: Successive governments have been making the same mistake of focusing so much on the production side of agriculture and forsaking the marketing side of it. Provided there is a good market for a given produce, people will find a way to produce it using their own means, they won’t need FISP or any other assistance. Provided the market is there for a given agricultural produce and the price is good and stable year after year, production will shoot up. The country should be allowed to freely export agricultural produce and not having to do it illegally in the middle of the night while there is a claim that we have a bumper harvest.
7. Reduce the size of Government: The size of Government should be reduced by among other things scraping off positions of Provincial Minister, District Commissioners and cutting down the number of line Ministries to not more than 12. There’s need to utilize the local government system at the local level. Its a duplication to have the presence of both the central government and the local government at grass root level. There’s also no point in having a Ministry which only has one department such as the Ministry of Religious Affairs or the Ministry of Gender.

8. Exit from Regional Trade Blocks Such as SADC and COMESA: While several countries in the region are members of integrated regional trade blocks like SADC, each country is also busy pursuing nationalist policies. Almost each and every member country of SADC has a citizen economic empowerment law which gives preference in terms of trade to its own citizen owned enterprises over foreign owned enterprises. Instead of wasting resources pulling and pushing at the same time, PeP would withdraw from these regional talk shops and concentrate on other approaches to economic growth. The decision by the British to exit the EU and the election of President Donald Trump are clear signs that globalization is finally coming to an end and nationalism is the future.

9. Open the Borders to anyone who wants to come and Invest, Work or Live in Zambia: A country is built by people with dreams. Those people with dreams do not necessarily need to be citizens of that country. Provided they pay their taxes in full and comply with the laws of the land, it is not the business of govt if such people enjoy eating dogs or cats.

10. Enforce Fiscal Discipline: Develop a budget, fund the budget and spend according to the budget. Do not spend on items that are not in the budget such as free soccer tickets or chartering private jets for the Republican President, when items that are in the budget have not been funded.

If we were to consistently pursue these ten points as a country, within 5 to 10 years, we would be a regional economic power house even ahead of South Africa.

24 COMMENTS

  1. Mistake was made when you people dismantled what Unip and KK had built. All that was needed was to improve on those industries and make them profitable. Instead of selling the mines you should have simply returned the shareholding back to RST (RCM) and Anglo (NCCM). But because KK was according to your perception was not educated, you thought that what whatever he did was out of ignorance. Our neighbors have flourished because of the CONTINUITY WITH A CHANGE POLICIES. Mulimuchibe

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  2. Robust infrastructure development policy is the answer to economic growth and prosperity. The break down includes road network and bridges, schools and universities, clinics and hospitals, electric power plants, marijuana commercial farms, coffee plantations, sugar plantations, crop production, livestock production, fruit export, air travel and mass tourism, etc.

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  3. You can’t continue to squeeze Zambians from every angle by increasing tax collections by all means possible……..

    The answer is not maximum collection of revenues but maximum import replacement to create maximum amount of jobs……..

    The other main problem is even if manufacturing is brought, for the little we manufacture , all profits are externalised because foreigers own almost all manufacturing……….

    Replace imports , including mine consumables , one by one , while establishing targeted training of Zambians to own and run manufacturing plants……

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  4. and they wont listen to him because he is Sean Tembo….this thing of looking at a name of someone before they can agree and listen to him should come to an end..and am talking to you Shishuwa Shishuwa

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  5. The first sentence kills the interest to read, I can’t, full stop!!! Oh, I almost forgot your are opposition, one man though.

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  6. Dr. Makasa Kasonde (Private Citizen) – This was attempted by PF, albeit with a lot of stealing, unfortunately there were a lot of politics in the application of this very important task. Already productive areas such Southern, Eastern, Central, and Copperbelt Provinces were neglected and most of the infrastructure development in terms of roads, schools, hospitals etc, went to Luapula and Muchinga Provinces. With the high debt, the current government may not do much on infrastructure development – unless they recover as much of the looted monies. I agree with the points that Sean has listed above and I can add a few ideas as well. With regard to ZRA, I think also that they always set a low target for themselves and then year in and year out they are “over achieving”. Let them break down…

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  7. Has the budget come out yet? This Sean Tembo blueprint looks like it was proposed in August before even cabinet was announced.

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  8. Why does this guy – who got 0.00001% of the votes during last election – get this platform to ventilate his obsolete ideas? Pathetic!

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  9. You can only squeeze so much juice from a mango………..

    GRZ knows they can’t on increasing revenue collections while production is at a low and the cost of living is so high……….

    Some of Those people dodging taxes are doing it as a matter of survival……..

    Too much taxes actually retard the economy……….

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  10. Sean on this one you are 100% right!. On trade, just to stress that Zambia should stop being a net importer on everything from Onion, frozen chips, tooth picks etc. We need to start producing some basic items as was the case under KK. We need to import less and export more. The primary focus of missions abroad should be on trade and investment in favour of Zambia. Send the right people into the foreign service- those that already understand (not on the job training) global trade and investment. The existence of foreign missions should be based on production of concrete results and not the attending political functions. You have a peaceful country, good weather and abundant resources that can create opportunities for millions of people!

  11. Sean E Tembo, this is YOUR manifesto with your household family and the people who voted for you. You also have 5, 10 or 15 years to keep selling your vision of Zambia and one day, if the Zambian people think that the UPND has failed, you will get a shot at the polls. Meanwhile, stop dreaming and telling the people in government what to do. Otherwise, disband your party and join the UPND and then input your ideas as an ordinary member. There is a UPND manifesto which says nothing about ‘nationalisation of the mines.’ Zambians accepted it and voted for it. So, go away Mr Tembo and await your turn.

  12. @ Deja Vu NCCM, RCM RST, where Anglo American companies. After much persuasion including tax holidays and VAT refunds, they were given KCM only to walk away in 2001. This was after other companies that did not have the tax incentives which Anglo had, leveraged Anglo incentives with government for similar incentives. Mining is not a simple business the way you put it across. Anglo back the mines that they cherry picked. They screwed us big time in tax incentives ( which where extended to all mine investors) and walked away after screwing us.

  13. @ THE SAINT ,
    You understand the current situation more than Sean E Tembo. I wonder what he will be telling his 1,813 fans that voted for him, if UPND implemented those little ideas he has 🙂
    You can tell someone is desperate and trying to be relevant.

  14. His own party doesn’t have a blueprint. So, jst how will he propose one for the Current government?

  15. For your info: HH did most of his blueprint ideas whilst in opposition, he educated orphans, helped young People start companies, helped the Lungu government to collect more tax by paying his own taxes, and above all, he was and still is the largest employer in Zambia today. So, who should give who advise here?

  16. And does this mwankole even pay his own taxes in full? If not then what is ZRA going to collect and from who? If not him.

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  17. This is good unlike the bitterness which UPND exhibited whilest in opposition and now reality has dawned on them, they appear not to know what they’re supposed to be doing because their 10 point plan didn’t have the HOW part. They keep suspending this, that,you’re now asking farmers to transport farm inputs at their cost??? A lot more mayhem expected.

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  18. President Sean Tembo is very right on point number 5. Shop owners more especially in Lusaka should find time to check what their employees pack for the customers. In 2012, I entered a shop to buy electricity cables for wiring, they declared less items to the cashier who never bothered to check what was packed as she was busy with the phone. Outside, one worker asked that I should give him the difference, I argued that I had helped him to steal so i was also part of the deal or else I would cause commotion. This has become a trend and must be stopped.

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  19. #13 Bashi Chite…. These companies owned 49 percent shares in the mines and the rest belonged to GRZ. Maybe you were not aware of this? Chairmen for these companies were Zambians Mr Francis Kaunda and Mr David Phiri each. Government had more say and I still wonder why we had to do away with that arrangement.

  20. Dr Makasa Kasonde( private citizen) @ 2, development is a bottom-up process. It starts with having people who are able to work land productively as farmers. Then light industrialisation based on processing agricultural output follows. As farmers get better at their trade, u start needing fewer and fewer of them to grow the food u need. This leads to farmers’ children not necessarily ending up as farmers but as industrial workers or any of the non-farm occupations. As these processes are going on, the rule of law matters because it gives u good government that ensures that public money is spent properly. U can build infrastructure but if public money is not spent properly, the state will accumulate unsustainable debt and the outcome will be disappointing. Sounds familiar? Of course it…

  21. @ Deja Vu.This arrangement 51%:49% arrangement only happened after the mulungushi reforms of 1968. All the while European settlers and their American colleagues owned/controlled the mines. Nkana mine for example started operations in 1924. We achieved the 51% in 1974 after paying Anglo our dividends as govt to pay for the shares. Francis Kaunda & David Phiri were made CEOs and was now our role to control the mines and pay dividends to shareholders. What followed is history! I don’t blame thes late gentlemen. Just look at the rot at IDC, Ndola Lime and you will have some answers, some of which will be political interference and nepotism, cadreism etc

  22. #22 I still feel the 51 49 should have remained. South American countries operate along such lines. I can’t comment on the IDC because I don’t know anything about it.

  23. This is supposed to be like a fiscal Plan 2021 as baseline into 2022 to 2030 taking into consideration all material policy pronouncements
    that have impact or fiscal implications that may be considered most likely by the minister and you show the alternative fiscal balance given the current outlooks to get us back on track but at the same time performing the economy and creating sectors in those financing and funding methods If possible as Budgetary fiscal plan showing the revenues methods expenditure and capital to continue supporting productivity in material sectors like infru and constructions that has employed the heavy unskilled Its also about the economy and fostering business As…

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