Former State House press aide Dickson Jere has described Zambia’s fourth President Rupiah Bwezani Banda as a great and hardworking Head of State who worked tirelessly for the country although he lost elections after suffering intense and vile criticism.

In his recently released 250 page political memoir on the time he spent with President Banda, Jere describes the humility and fatherly figure in RB and how he treated his staff and ministers with a lot of respect.

Jere said President Banda’s weakness was also his strength as he could not fire anybody without tangible reasons and also believed in giving young people a second chance in life.

“The President wanted us to be 100 percent, which was difficult at times,” Jere writes in his book, which was released on Amazon last week.

Inside the Presidency – Trials and Tribulations of a Zambian spin-doctor is a must read book, which chronicles the days of former President Banda from an inside view.

A twenty-three Chapter book describes how well President Banda used, usually long hours in office, in order to make sure the country’s economy was stable.

The book has already been reviewed by different international scholars and publication and is likely to stir debate in Zambia on various issues that took place during the Banda tenure.

“The power of this book lies in its portrayal of President Banda,” one foreign book reviewer wrote.
“In a hall of shame or fame, the man is cast as selfless, hardworking, wise, religious and outstanding compared to other African leaders who just want to hold on to power come what may.’

The book also details meetings and disagreements with the Catholic Church and how the President worked very hard to try and resolve conflict, which he failed. The Catholics were not happy with Banda’s minister, Ronnie Shikapwasha who called them ‘genocidal’ in reference to their role in the Rwanda 1994 massacre.

Jere also explains the detailed meetings and planning of the 2011 elections and indicate how President Banda refused to manipulate the electoral process even when he was advised to do so by others.

The book also rubbishes the theory that founding President Kenneth Kaunda and the US Ambassador forced President Banda to handover power. Jere reveals that President Banda conceded defeat even before the final vote was announced and instructed his press aide to work on the conceding speech.

In a rare admission, Jere also takes blame together with State House staff for the failure to plan for the President better when they served as aides in State House.

“In retrospect, we advisors were also culprits,” Jere confesses in the last Chapter titled “Reflections”.
“We did not handle the President’s diary well. Throughout his tenure, party activities were never a priority,” Jere revealed. “We in State House also overloaded the President with many national issues and rarely allowed him to interact with the party,” Jere said.

The book is edited by a Ghanaian author and Editor Charles Phebih-Agyekum and published by a Canadian firm, Nsemia Inc; the text is plain and written in a readable and journalistic language. It is a book that will appeal to the public especially those that follow current affairs. It captures well the humbleness and humility in which President Banda carried himself in that office. It portrays the inside details of decisions in which the President had to preside over in his time such as the 2008 economic meltdown and the 2011 pre-election decisions.

“The President’s gift of combining serious discussion with a sense of humor was a source of strength to his staff,” Jere writes.

The first Chapter is brief history on how Banda became President in very tragic and unexpected circumstances following the death of President Levy Mwanawasa in 2008. The Second Chapter is more centered on the author himself how he was appointed to State House as Chief Analyst and thereafter as Special Assistant to the President and the difficulties encountered during that same period.
In Chapter three, the book takes you in the nitty-gritty of State House and security operations while the fourth one gives a breadth of projects which Banda personally pushed to develop Zambia.

The rest of the Chapters give a narrative of the President’s involvement in football and sports, international relations and diplomacy as well as his unique personality in dealing with human being.

The last Chapters takes you right to where Banda is, the trials and tribulations of being accused of corruption and abuse of office to other events such as being humiliated at the airport when stopped from flying out despite court orders.

[Zambia Daily Nation]

“We took over the company. It’s been 9 years, and since then, every year it is giving us a minimum of $500 million plus $1 billion every year; it has been continuously giving back. It’s a matter of taking a chance. All people sitting there: Take chance! If you won’t take chance, nothing will happen. Why we are different – different because we take chances.”

These are the words of Anil Agarwal, the majority owner of Vendetta Resources which owns Konkola Copper Mines (KCM). A true mark of a Gujarati businessman. Driven ruthlessly by ambition and profit. Taking every chance seriously—straight or crooked—to make profit. Indeed, the many young businessmen he motivated with that speech may be on their way to Zambia now, to ‘take chances’ with the opportunities in Zambia, and enjoy the VVIP treatment we give to foreign businessmen.

But his motivations talk also revealed the dark side of our nation:

• We have a huge deficit in governance capacity.
• We have a huge deficit in government—business negotiation.
• We have left our politicians play the role of business negotiators for our natural resources even when they are heavily incapacitated to do so.

That Anil Agarwal was meeting the president and taken to Parliament instead of the Ministry of Finance or ZDA which is in charge with investment promotion shows just how archaic our governance system is: The president is all, and all is the president. He is the all-knowing politician. Lawyer. Businessman. Policeman. Statesman. etc.

[pullquote]many young businessmen may be on their way to Zambia now, to ‘take chances’ with the opportunities in Zambia, and enjoy the VVIP treatment we give to foreign businessmen.[/pullquote]

That aside, however, all those condemning Anil Agarwal and his KCM, including the author, let us remind ourselves that when Anil Agarwal brought the $25million and gave it to Mwanawasa and his government in exchange for the KCM mine, he did so not because he loved Zambia (He did, however, love the VVIP treatment he received at the airport!), not because he loved us. Not because he loved our sun, our tourist attractions, or our mines. No. He did so because he wanted to make money. He wanted to make the greatest profit within the shortest possible time at the least cost possible. And our government just provided the opportunity to do so.

But what can be done? We have heard time and again how our politicians, civil society, trade unions etc. say that Zambia is not getting the best share from its mineral resources. Agreed, that is true. But is that all we can do? Complain and then carry on as if all is well? No.

Firstly, let us understand something. Government can participate in the mining sector in a variety of ways:

1. Manage the resource on behalf of the population—State Owned Mines(The Kaunda way)
2. Impose and administer the general tax regime—No participation at all(USA, Canada)
3. Take equity positions in some, or all, mining operations—Semi-participation(e.g., Debswana in Botswana)
4. Use state enterprises as operating companies—ZCCM, ZIMCO(similar to (1) above)

The nature of the participation will have a revenue implication for government. In the case of Zambia, it is a mixture of (2) and (4) where the government taxes the mines but still hold a minority share through ZCCM-Investment Holdings, which falls under the Investments and Debt Management Department of the Ministry of Finance—Headed by Alexander Bwalya Chikwanda.

Why revenue captured from copper does not accrue to Zambia

Prior to privatisation, the mines where government properties, and the tax regime that applied should be differentiated from one that ought to apply if the mine is foreign owned. Post privatisation, however, the Mineral Fiscal regime has not been buoyant enough to capture the new changes in ownership and the subsequent revenues generated under foreign ownership (Tax buoyancy is an indicator to measure efficiency and responsiveness of revenue mobilization to changes in output in the economy).

Now that the mines are owned by foreign companies which are mostly registered abroad in tax havens, the only way the government and the nation can benefit from the mines is to carefully craft a mineral tax policy that will maintain and attract investment in the mining sector while generating sufficient revenue for the country.

The high GDP contribution from the mining sector should be understood clearly—revenues captured from Copper Mining DO NOT ACCRUE TO Zambia! Not at all. Only on paper when we calculate GDP figures and growth. What accrues to Zambia are the taxes and royalties and the PAYE that mining employees remit to ZRA.

Imagine you own a farm, and you sublet part of it to a Zimbabwean farmer. When he has a bumper harvest and exports his maize to South Africa and banks the revenues in Zimbabwe, would you say your farm is doing well?
Would you tell your children that we are now doing well because our land is producing more maize? Only if you are stupid, of course! The only way you can gain from the harvest is if the farmer pays well his dues. And that is what we need to do with our copper.

What we can do

What we have to do, and this has been proposed many times since privatisation, is that we devise a clear and transparent Mineral tax system and enhance the capacity in ZRA to effectively monitor Mineral output on which tax will be imposed. In fact, since tax is just a proportion of revenues (Revenue = Price x Output), and since Price is set at the London Metal Exchange and is known to everyone, our government’s role is simplified: Just monitor output! Unfortunately, our ZRA has for a long time been unable to do this, and has instead relied on mining companies to report their output to ZRA, after which a tax is calculated. Now this is clearly administratively convenient and a highly inefficient way to govern our ever depleting resources, and has allowed billions of dollars to be shipped out of the country.

The mines can afford the best tax lawyers and highly trained and highly paid accountants and economists, and these, when matched with ours at the negotiating table, we end up with the Anil Agarwal deal. There is need to deliberately train, even at high cost, Zambians to be experts in mineral policy formulation and taxation at the ZRA and Ministry of Finance, and not entirely rely on the WB or the IMF (which is not the sole depository of knowledge as the Minister of Finance stated). We also need not fear to take time and discuss what exactly we want to achieve from our resources, and engage with the mines, taking a leaf from the exceptionality of Botswana in renegotiating with DeBeers to form Debswana. We do not have many mines that we can fail to monitor their activities, we have rather been too reluctant to initiate the obvious proposals to improve our benefits from the mines.

Borrowing Eurobond to build roads damaged by the mines

I think it is very absurd that a government would borrow money from the issuance of Eurobond to build roads on which mining firms who do not pay adequate taxes will drive their heavy loads on and destroy. But as the World Bank has said before: Mineral- dependent economies are often more prone to governance and corruption issues than non-mineral dependent economies. Also, negative consequences of macroeconomic mismanagement may be harsher in the context of mining than in a non-mining economy. The costs of macroeconomic mismanagement are high, given the often substantial fiscal revenue from mining, particularly when considering that these natural resources are non-renewable.

Unfortunately for Zambia, until we get the fiscal policy around our minerals right, the huge revenues from the mines will never benefit the Zambian people. What we ought to understand is that Zambia has been mining Copper for almost a hundred years now, and it will be mining Copper for the next 100 years or so. With that in mind, we should clearly have the incentive to get the taxes right now to benefit our future 100 years in time. As long as successive governments shun reforms, which must be consistent and adhered to, the likes of Anil Agarwal will always be there, and more will come for the harvest.

Conclusion

In conclusion, the PF have an enormous challenge and opportunity to redeem the country from the curse of abundance. The following would be worth considering:
• Enhance capacity in the ZRA and Ministry of Finance and the Ministry of Mines to adequately monitor, evaluate and appropriately tax mineral exports. Adequately mandate ZCCM-IH to be active in the monitoring process with the ZRA.
• Enhance governance systems, organizational and institutional capacity in sectoral ministries, in the ministries of finance and planning and Ministry of Mines.
• Promoting mineral resources revenue stabilization and reducing fiscal imbalances through greater fiscal discipline, certain level of fiscal conservatism and increased capacity for forecasting and managing mineral revenues.
PF: Take chance! If you won’t take chance, nothing will happen. The mines won’t pay. Take chance now!

By Hjoe Moono