By Mwansa Chalwe Snr
President Hakainde Hichilema, solicited for advice from Zambians on his face book page while commemorating his 100 days in office. He asked for ideas in areas where his administration can improve.
“Today marks 100 days since we took public office. We know that there’s more to be done. Please rate our performance on a scale of 1 to 10. What have we done well and where can we improve? We are taking note of your submissions,” he wrote.
To answer the President’s call and open invitation, like many other Zambians, I have decided to make my own small contribution. The core of my contribution is that the country faces mammoth challenges that require a strategic and rational approach to solving. It is important that some kind of sequencing and prioritisation is done in the implementation of interventions to address the huge expectations.
On the basis of the lessons I learnt in handling difficult professional Accountancy examinations in the 1980s; where in order for one to pass first time, the winning strategy entailed doing the easy questions first, I concur with the advice that Mr. Chibamba Kanyama gave the President in one of his recent articles.
“The high levels of expectation for the UPND to deliver is not only benchmarked on the election promises but on the high levels of poverty. In addition, there is a strong and growing narrative being pushed from other interested parties for the government to deliver today and not within five years, the period of its mandate. The best approach, therefore, for Bally and his team, is to have a two-fold strategy: identifying the quick fixes that offer short term gratification (but give an IMPRESSION things are happening) and a long term strategy that fixes the economy for generations to come”, Kanyama wrote in his impressive practical illustrative article.
The low hanging fruits that I want to recommend to the President are short term initiatives that are likely to immediately increase economic activity, create jobs for the youth, and reduce the cost of living and cost of doing business and increase tax revenue. There are not exhaustive by any means, but they are indicative of the type of interventions to focus on in the short term.
Road map for Youth Job creation
The first low hanging fruit that should be cultivated is one that is close to my heart. The road map is to fast track youth job creation. Although this may not appear to be such a low hanging fruit to many due to its unfamiliarity (innovation), it is based on my extensive research. This initiative will reduce pressure on the UPND Alliance to create youth jobs. The initiative entails the adoption of a differentiated strategy from all previous administrations in terms of approach to youth entrepreneurship and empowerment. The administration should implement a KNOWLEDGE based approach as opposed to a FINANCE based one. The youth job creation road map I am proposing should make use of mobile technology as a distribution channel because most youths are addicted to Cell phones. There are studies by the Organisation of Economic Corporation and Development (OECD) and the United Nations Development Programme (UNDP) that support such an approach. In practical terms, I would recommend accessing this low lying fruit and knowledge based youth job creation solution on the following website: www.youthemploymentcreation.com. This website can lead one to a ” One Stop Youth Entrepreneurship Digital tool” which can enable the youth create their own jobs from the comfort of their mobile phones. And all the Government has to do is simply to facilitate! This low hanging fruit youth empowerment intervention casts the net so wide that millions of Youth can benefit from it and critics will be silenced by its novelty. This is interventions is in tandem with the government’s pronounced policy of building Zambia as a Knowledge based economy.
Enforcement of 20% Sub Contacting
The second low hanging fruit is the enforcement of the 20% sub contracting to Zambian firms by foreign Contractors which was not previously complied with due to corruption and the lack of political will. There is no doubt that there are billions of dollars’ worth of contracts that the previous government signed with foreign contractors which are currently in progress and many more in pipeline that can be a source of jobs.
Zambia inked a policy requiring that 20 per cent of contract works to be subcontracted to Zambians by all foreign contractors in the country. The 20 per cent sub-contracting Policy was developed by Government so that local contractors are empowered financially, to ensure that they get the much-needed skills and experience in construction, create jobs and retain or earn foreign exchange. The majority of Chinese foreign contractors have ignored this policy. The Zambian government through the former Permanent Secretary in the Ministry of Housing and Infrastructure Development, Charles Mushota admitted that the 20 per cent sub contraction policy had not yielded its intended good results because some contractors have failed to comply with this policy. The Minister of the same Ministry, Vincent Mwale whilst on a site visit to one of the road works blasted one of the biggest Chinese Contractors in Zambia, AVIC International for failing to comply with the policy.
“I am in receipt of a petition from small and medium scale contractors who have complained that you, Avic International are not complying with the 20 per cent sub-contracting Policy.” The Minister said. “As Government we want that, through the 20 per cent sub-contracting Policy, we build capacity in Zambians who in future may bid for bigger contracts because they would have gained the experience.”
There is need to do a quick review of these and the President should ensure and monitor that all are complying with the 20%. It is not rocket science that jobs will be created immediately, the exportation of jobs will be stemmed, and foreign exchange will either be earned or retained. There are billions of dollars involved in the money we borrowed for which contracts have not yet been fully executed.
Reduction in Mining Houses foreign exchange retention
The third low hanging fruit is the reduction of forex retention by mining houses. In theory, copper mining contributes 70% to Zambia’s export earnings. This figure is misleading as very little foreign exchange comes back in the country as it is retained by the mines. This is what explains why there is very little correlation between the increase in copper prices and the kwacha exchange rate. The issue of Zambia deriving insufficient benefits from copper exports is one that is independently confirmed by the International Monetary Fund (IMF) in one of their country report.
“Care is needed with the interpretation of the export shock in the case of Zambia. Given that not all the copper export proceeds return to the country because most mines are foreign owned. Staff estimates that at least 40% of exports do not return to the country.” The IMF report noted.
The HH administration should negotiate with the Mines to reduce their foreign exchange retention by remitting an increased amount to Zambia. As an import dependent country, the strengthening of the kwacha will be beneficial in the light of the planned austerity measures under the IMF program. The benefits of more foreign exchange inflows will ensure that the negative impact of the planned increase in power and electricity due to removal of subsidies will be minimized. In general, the cost of living and doing business will be manageable. The government’s negotiating carrot is the Mineral Royalty Tax (MRT) that has been made tax deductible. Zambia needs to get something in return and not the pie in the sky promise of more investments which just benefits foreign shareholders.
The fourth low hanging fruit that should be harvested is the government acceleration payment of small Zambian owned businesses. The government should consider refinancing the so called arrears through whatever means possible. They should borrow long term to replace the short term home creditors. The instrument that should be used is up to the experts. The easy one that comes to mind is the issue of a government bond for the purpose. Zambian government bonds will be in demand in the light of the approved IMF deal. This action will certainly help Zambian businesses with increased working Capital thereby and create jobs.
The fifth low lying economic fruit should involve the Zambia Revenue Authority. There is no doubt that the Authority needs some medium term restructuring and reforms in tax administration. However, there are some simple administrative actions that the new Commissioner General can do that will immediately have impact on revenue collections. It is a well-known fact that ZRA like many institutions were laced with endemic corruption during the last ten years and consequently, there was so much revenue slippage. One simple action which will be revenue positive, is to transfer ZRA officers from borders and revenue collection centres so as to dismantle corruption rings and cartels. There could be other simple measures that the Ministry of Finance and Commissioner General could implement apart from transfers, which could increase revenue collection.
Conclusion
According to many experts, critics and the Opposition, one of the major failures of President HH’s administration in its 100 days, was the lack of a clear roadmap for creating jobs for the youth who put them in power, in order to give them hope. The planned Constituency Development Fund (CDF) by itself is no solution at all, because similar programs, which were all entirely finance based, failed to create sufficient jobs. The authorities need to be aware of this mantra: “Money alone neither solves problems nor create jobs But Knowledge solves problems, spurs innovation and creates jobs.”
In view of the President’s invitation for ideas to help them improve their performance, I am appealing to the President to engage us in Private sector. We, in the private sector could easily help with the Youth employment creation roadmap. We do have novel and practical ideas for job creation in the short, medium and long terms which involve the four Youth Cluster Ministries. We are just a phone call away. There are latent millions of youth jobs existing currently in one or two blue oceans in Zambia. And all that is required is to press a button activate them.
According to a study by the African Development Bank (AfDB) which preceded the design of their Jobs for Youth in Africa (JfYA) Strategy (2016-2025), they concluded that one of the major causes of African countries’ failing to create Youth Jobs is the lack of involvement of the Private sector in the design and implementation of interventions. The Bank encourages such cooperation through Public Private Partnership (PPP), if Youth programmes are to succeed.
The Zambian government is well advised that as they pursue the low lying fruit strategy, it has to be matched by an aggressive communication strategy. They need to be communicating more and more about what they are doing so as to manage the perception war that is currently going on. In the real world, perception is more important than reality to win over the public.
The writer is a Chartered Accountant and Author. He is a retired international MSMEs Consultant and an independent financial commentator. He is also an Op-Ed Contributor to the Hong Kong based, Alibaba owned, and South China Morning Post (SCMP). Contact: [email protected]
