Authors Posts by Kaela B Mulenga

Kaela B Mulenga

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The Author is not part of PF government or on its pay roll. These are purely his personal views.

By Dr. Kaela B Mulenga

The Concerns

Kaela Mulenga
Dr. Kaela Mulenga
It is nice to feel that one comes from a country like Zambia which is blessed with abundant natural resources and minerals like copper (cu), cobalt, uranium and others. But the celebratory mood soon dissipates when especially one looks at the situation in the long run – for these resources can get exhausted.

Take copper for instance, this is not only a waste resource, but since it is finite, at some point later, it will therefore be exhausted. What happens then? As one politician lamented, once all the profitable minerals are taken out all we’ll have left with will be “big holes” in the ground. Some estimates put our love affair with copper to end in 50 years. That means my 7 year old granddaughter will only be 57 years old then. What will she live on there after?

This situation is compounded because while copper life is going good, currently hardly any savings are being made for neither a rainy day nor any substantial investments; are being undertaken to diversify our economic activities away from copper. When debating on windfall taxes – Hon Yamfwa Mukanga (Kantanshi Constituency MP) said, “We need something to show to our children when copper is gone that – this is what we built from the copper taxes”.

Today, probably more than 90% of our GDP is generated from copper proceeds. In short, no copper no economic growth and no growth, no reduction in poverty. It is that simple.

And we should not forget about the reprehensible damage caused by mining activities. Environmental degradation always occurs. So while we mine other ills and hazards are also being created. We have heard stories of poisonous gas fumes in Mufulira, contaminated Kafue river, and not to ignore the huge copper waste dump in Nkana. All the bad by-products produce a social cost. But who is going to pay for these costs? These costs are externalities to the producer and are never taken into consideration. Corporate social responsibility is not on the agenda of many companies.

When air is polluted and drinking water is full of toxic effluents and chemicals – our health is compromised. So, even if all the profits from minerals were to be surrendered to us, it would be too late – for everybody would be dead by then.

If the long-term prospects are bleak because of depletion – in the medium to long-term, we’ll also be faced with problems of substitution effects. That is, as the price of copper soars, consumption of this commodity is bound to plateau. Why? In due course, persistently high price would force copper consumer industries in China, India, Japan and elsewhere to look for other cheaper substitutes. All profit making organizations in free enterprise, behave that way. They aim for cutting costs to boost their profits.

As we speak, already copper has lost some market to alternative materials like aluminum and plastics. When the price of expensive nickel fell from $50,000 per tone to below 50 percent more of it got used instead of copper. Hence, the higher the copper price, could eventually outstrip its viability for use in say construction piping.

In addition, architecture, plumbing and other energy efficient methods have impacted copper demand somehow. In China perhaps the largest consumer of copper, they have started using simpler fabricated products for roofing. Plumbers have switched to PVC tubing instead of copper. Simply put, due to inventions and/or new technology, we could one day wake up and find our copper completely obsolete or 100% replaceable.

We should also not ignore the fact that economic growth even in China has began to slow down. Mind you, we don’t even know how much stockpiling Chinese have been doing. We can’t bank our hopes only on the fact that China continues to consume some 65% of all world produced copper to feed its modernization program for electricity and infrastructure expansion.

From experience, we should also know that eventually, the total world demand is bound to fall – along with the price. We can recall that copper prices fell drastically in late 70s/early 80s under Kenneth Kaunda’s rule. Also if we were to take into account the impact of excessive supply on the price from other producers (whose decisions are beyond our control) like: Chile, Mexico, Peru, Russia, DR Congo, and China itself – [if it so wished to influence prices], we can’t be banking on perpetually good copper prices.

In summary – these are some of the issues we should keep in the background I think, when we discuss this sensitive but import matter of windfall taxes.

The Big Debate

In our local media – newspapers, TV, Radios and discussion forums on the internet – especially the social websites: a heated debate is raging on regarding different forms of mineral taxes: royalties, operating profits taxes, and in particular – WINDFALL TAX a form of taxing the revenues. Revenues in this case concerns copper earnings. And the question is: should Zambia levy these revenues, and if so, by how much? Should our concern only be limited to profits?

This serious debate has developed into two distinct camps – one pro and the other against, basically the re-introduction of windfall tax (WT). Unlike LAZ who offer their opinion on important national issues, our EAZ stays silent. I have taken liberty to offer my own opinion.

The sharpest salvo on WT came from the current PF Minister of Finance – Hon Alexander Bwalya Chikwanda (ABC or Alex), who has labeled those seeking the re-introduction of the 25% windfall tax as “lunatics”. [The Post, March 22, 2012]. Alex thinks that production costs – including sea and inland costs are already enough burdens on producers. As such, then we shouldn’t levy them more – apart from the merger 6 per cent royalties he proposed in the budget.

This position is probably not shared by some of the PF “back bench” or “freshmen ones”, especially those who faced the youth and miners in the campaign like Hon Wylbur Simuusa (Nchanga Constituency MP)

As one might expect, the sharpest response to counter this, comes from none other than the former Minister of Finance under Pres. Patrick Levy Mwanawasa (Levy) – Ng’andu Magande. Curiously both men happen to be economists. Magande who by the way first proposed windfall taxes sharply argues that: Windfall Taxes are a must if Zambia is to raise sufficient revenue – while the going is good with copper prices for investments and the diversification program. He adds that – “moreover PF was propped into power on the promise of re-introducing the very WTax”. [The Post, March 23, 2012]. So why chicken out now, he asks?

In addition Magande strongly feels that, re-introducing WTax now would be a good policy direction – without which otherwise the investors’ confidence would be affected. He further feels that, flip flopping on WT question puts pressure on the Zambian Kwacha.

A third force in this discussion comes from the previous MMD government people – best represented by ex Minister of Finance – Hon. Dr Situmbeko Musokotwane. Without explicitly saying whether he is for windfall tax or not, Musokotwane however charges that – so long as PF government fails to immediately re-instate the WT as they promised during the September campaign, getting to power would be seen as by “false pretences”. [The Post, December 7, 2011].

Under Pres Rupiah Banda (RB), Musokotwane was the strongest voice fighting against the re-introduction of windfall tax, even if many people still remained skeptical. In fact, there are many Zambians who accused both Musokotwane and RB as being unpatriotic sons for opposing the windfall tax. The inspiration for what I call “RB/Musokotwane doctrine” was based on the premise that – China would continue propping up Zambia financially, hence, sources of budget money was secure.

Along these lines – i.e. being either in favor of or against WT, let me now discuss some main themes I see pertain to either side. For those seeking more details, there is a robust debate on this topic on Zambian Economist. [see www. zambian-economist.com]. About a year or two ago, Chola Mukanga (Cho) – founder of Zambian Economist, presented an excellent discussion on WT in an essay form headed: Eight Reasons for Rejecting Higher Mineral Taxes. Cho discussed in detail pros and cons for each reason.

My attempt here is therefore not to repeat that discussion but just to draw distinct boundaries between those who support the re-introduction of WT and those who don’t. A foundation we shall fall back on later when I go through the economic analysis.

Among the arguments raised by those who are against higher taxes (the Musokotwane group) – increasing windfall taxes, include:-
• This camp contends that there is no investor who could risk their capital if at all they cannot expect good returns. By extension, this group therefore sees low taxation as a strong incentive for attracting more investments.
• They argue that unless you have favorable tax holidays, concessions, and exemption or low both royalties and windfall taxes, you cannot expect to attract foreign direct investments (FDI). [The assumption here being that the bulk of investments would have to come from outside].
• Regarding the viability of taxes, Prof Clive Chirwa, a presidential aspirant (Bolton University) – [see Zambian Economist, Nov, 2010], observed that: “good investors with a heart will accept tax of eight per cent on royalty and 25 percent on windfall tax”.
• But this group believes that if the PF government re-introduces a 25% windfall tax that would be scaring away new investors.
• In cases where agreements and other concessions have been signed between the Zambian government and the mining investors – those should not be broken, terminated or tampered with. Doing so would not only be regarded as violation of ‘Rule of Law’, but would be sending a bad signal to the investors. According to this view, the rule of law means respecting international agreements, which are legal contacts. These must remain binding no matter what.
• This side also opines that – reviewing, renegotiating the contracts and worse still, unilateral cancellation of these agreements is inimical. That can only happen at the peril of destroying investor confidence. Never mind that Zambia is a sovereign country with security concerns of its own. To them, investor long-term stability is more important than what is in Zambians’ interest.
• Rather than taxing mining operations to death, this side prefers designing/inventing other non-mining sources of government revenue. But having a country which is so skewed towards mining, with virtually no other viable alternatives, does that bother them? Yet the perceived alternatives – agriculture and tourism, are still in the development stages. The manufacturing sector initiated during KK’s days, is also almost non-existent. Since there is also this notion that, if you heavily tax private corporations you impede economic development, raising revenue from firms is not an option either. And above all, in Zambia, only a small number of the population has personal incomes you can tax (miners and civil servants).
• Further, you cannot count on collecting any taxes from the grey (cottage) industries either. And when it comes to excise taxes – i.e. from custom duties and tariffs, the larger portion of this would come from imported vehicles. But to encourage the importation of goods promotes externalization of a valuable hard currency to car manufacturers. In short where would the government get large enough revenues if not from minerals?
• It is also important to note that when the opponents of windfall taxes and MMD accuse PF government of not having a common voice on WT and co-ordinated economic policy as Musokotwane charges – they are simply playing politics. They want to use the pretext of WT as a tool to politically weaken PF. In another sense, appearing to oppose WT is a good strategy for them – by first appeasing the investor community and second, by confusing PF members some of whom also oppose windfall taxes.

When we switch sides to those who favor windfall taxes, you have many voices. Magande has turned out to be the staunchest critic of anti-WT group.
• Perhaps the most sound argument raised by this group is that – since copper is exhaustible, unless we use it prudently now when commodity prices are good, we’ll regret later. And so, while the going is good, we must make sufficient revenue from it so that may be, we can diversify to other areas in our economy.
• Andrew Sardanis, the brain child behind both Indeco Ltd & ZIMCO (Zambia Industrial and Mining Company) – therefore he knows a thing or two about international business, said that : “it is an injustice for the Zambian government to only collect US$77.6 million from copper exports valued at US$2.9 billion”. [see Zambian Economist, Oct, 2011].
• If we are to reduce poverty and youth unemployment, which are so rampant in Zambia – minerals extraction sector, whose infrastructure is already in place, has the biggest potential for solving some of these problems. Empowering of people can only occur through creation of jobs.
• The advice coming out of this group to PF government is that – since the request of re- introducing windfall tax was posed to the Zambian people during the elections and that it was massively endorsed by them, negating on it, is breaching peoples wish. Mine Workers Union of Zambia (MUZ), has for example, been openly urging PF government to implement WT without delay. [The Post, December 1, 2011].Otherwise they warn that – the political fortunes of PF party can be lost by this one issue.
• This w-tax side also observes convincingly that – since the copper prices have shot to the roof, currently around US$8,000 per tone – [Bloomberg listing puts it at $3.78 per lb], given the production costs of only about US$3.000 per tone, implies that investors are making handsome profits. Must the profits be excessive to maintain the presence of investors, they wonder? As we shall demonstrate later – unless the company is making huge loses, operations ordinarily continue, so long as the expenses for fixed investments are being covered.
• Moreover, the windfall tax proponents feel that – it is not the investors who are opposed to WT per se, but Zambians themselves who, for some strange reasons, are scared to face them. Whether it is the fear of “masters” syndrome or are compromised because of bribes received or rewards promised – no body knows exactly.
• If investors are not technically opposed to windfall taxes, could then the delay in bringing it back depend on incompetence of our bureaucrats or due to unpatriotic or confused political leadership? We wish that someone can unearth this anomaly. Perhaps Dr Musokotwane can share with Zambians battles our negotiators face when they discuss with investors. Citizens are entitled to know the arguments investors make when condemning WTaxes.
• The long-term stability argument raised by anti-WT voices is also not that strong because as far as Zambia is concerned, that should not be an issue since everyone knows that the country is an oasis of peace. In fact Zambia is probably the most stable country in Africa.
• In addition, the pro-WT makes it known that – raising money for capital investments through borrowing and/or from donors, would not be the preferred route. Why not? Yes, it is because when you get heavily indebted to foreign partners (remember HIPC?) – you do not only lose control and eventually sovereignty, the debts keep on piling up exponentially. The interest rates are raised at will by the lenders, bankers or outside capital sources. [This might even include loan sharks and speculators].
• Being swallowed into international debts they contend – has a lot of risks among them being exposed to potential blackmail. Greece is a classic example of what might happen, if we put emphasis on borrowing. Further, those who harbor ideological or philosophical issues would even tell you that – transferring wealth from State/public owners to the private ones is the worse sin one can commit against ordinary and innocent citizens. Besides, this also worsens the gap between the ‘haves’ and the ‘have-nots’, which has been growing for decades.

In summary, although I have expressed the differences between the two opposing stands eloquently – that is not what the ordinary Zambian is looking for. What they need is the convergence of the two sides into one camp – to map out a sound and fair common ground so that a single public policy prescription can be crafted. Squabbling is a sign of immaturity and cannot benefit the ordinary people. Therefore, unless we can come up with some consensus on policies, which can yield substantial economic development – nobody wins.

In the next section, using economic reasoning, I am presenting some ideas which should be considered by both sides. Hopefully, facts will speak louder than mere words.

The Economic Analysis

Let’s begin by considering a simple model in production process. Financial Times and other Business Bulletins, estimate the production of a tone of copper to be around US$3,000. The total cost (TC) to a firm is composed of a portion of fixed costs (FC) and that of variable costs (VC). Where by fixed ones are those costs for doing business which is constant regardless of the level of production or productivity. Rent and fixed capital equipment are good examples. And respectively, variable costs are those which increase as the level of work/production increases. That is, the more copper bars you produce, for ex., the more workers a company would need. These are the basics we must know.

Thus, fixed cost plus variable cost divided by units produced determines (is equal to) the total cost per unit. That is: FC + VC/ UNITS = TC per unit.

Immediately, the picture emerging from this relationship is that – first, total cost (TC) per unit falls as more units are produced. For example, if the fixed cost (FC) for producing a tone of copper is estimated to be $2,000 per tone and respectfully variable cost (VC) is $1,000 per tone – producing say, 500,000 tones, would be at a total cost per unit of $0.006 per tone. But a 700,000 MTones production level drops this per unit total cost to $0.004 per tone. This implies that the higher production level (i.e. the lesser per unit cost), results in greater profits.

Secondly, even if variable costs were to go up, so long as a higher production level is also being achieved, profitability would still be maintained. Consider another example – if variable cost go up from $1,000 to $1,500 per tone – the per unit total cost for 500, 000 tones, would be $0.007 per tone – while as a 700,000 MTones level reduces it further down to $0.005 per tone.

Now to a profit making enterprise, the question of revenue comes in. These firms have to also examine carefully marginal revenue (MR) – which is the additional revenue a firm receives for making and selling an additional unit of output. That is why in perfectly competitive markets – for profit making’s sake, the price of the product is set to be at least equal to its marginal revenue (MR). Where the total revenue (TR) is the price of the product (P) multiplied by the quantity (Q) sold. [i.e., TR = P x Q].

To keep it simple, I do not go into details analyzing how the law of demand impacts the marginal revenue (MR). It is sufficient here only to know that in general, the price determination in the market is influenced by supply and demand forces. Having considered the marginal revenue side, the company then has to relate it to the marginal cost (MC) side.

Where – the marginal cost is the additional cost incurred to make one more unit of output. Thus, companies will continue employing more workers up to the point when the law of diminishing returns sets in. Ordinarily, as you add more units of labour, you should expect to get more output. The limit a company aims for is when any additional worker/labour unit, causes MC to rise, because at that point, the firm begins to react. Otherwise they’d be losing money.

Why is this discussion important you might ask? Yes, we want to know what guides the decision making of profit-making investor firms. So that people can be able to form their own informed opinions. A politician may also be interested in knowing about these dynamics. For instance, when does a corporation decide when to pull out or stop operations? Is it when a firm is losing money or what?

To an economist, not necessarily so. A company may find it cheaper to continue producing even when they are making loses. How come? Take today when the price of copper is very good, over US$8,000 per tone. Assuming the total cost to be around $3,000 (the price being quoted in many news bulletins) – huge profits of $5,000 per tone is being made. [$8,000 - $3,000 = $5,000]. Very lucrative indeed! So the question of anyone pulling out is quite remote.

And since in the case of Zambia there are no barriers to entry – that, there are no regulatory obstacles or licenses being denied – any willing investor is free to come. Therefore, you can be rest assured that more companies will continue flocking to the country, so long as there is still a large cake of profits to be shared. That is the way free enterprise capitalism works. Competition for profits rules.

But suppose the price of copper now dropped to only US$2,500 per tone. Using the same total costs of $3,000 from our example above ($2,000FC + $1,000VC] – this yields a negative profit (loss) of $500. [$2,500 - $3,000 = $ - 500.00]. But note that – even at this low copper price (a loss), companies would still prefer to remain open, because it is better to lose $500 than losing $2,000 which is the fixed cost the company has to incur anyway.

Therefore, so long as the company’s loses are less than $2,000 (the fixed cost) – it makes plenty of business sense to continue. That is, those companies already in operation in Zambia will not close if they can at least continue to recoup those investments made in plants and other equipments. You can take this word to the bank. [And bear in mind that, since re-capitalization or replacement of depreciated equipment is not done yearly, the fixed costs remain unchanged].

The shut-down point to both economists and business CEOs is when total revenue (TR) exactly equals total variable costs (TVC). Or that, as long as a firm’s revenue is sufficient enough to cover all the variable costs and leave something extra towards fixed costs. You DO NOT STOP operations before this situation is violated. You continue to produce so long as MR is greater than or equal to MC. This is standard operating procedure for firms running profitable businesses.

There are more elegant ways to illustrate this shut-down point, such as through elaborate mathematical equations, but I leave that for another day.

Let me now discuss issues related to deplete table resources, and describe how windfall taxes come into play. A non-renewable resource such as land or minerals – at least in the long-term, is fixed. That is, regardless of price offered for it, you cannot get more of it. Once used up completely, that is it. It is gone! For economists, anything whose supply is fixed – has a supply curve (S) which is perfectly inelastic. A change in price does not change supply]. Therefore vertical as illustrated by line SS in Fig 1.
But as demand of this type of a resource increases – its demand curve (D) illustrated by line (DD) shifts right. This again is easily illustrated in Fig 1 – as demand rises, the price of say land (its rent) shifts up (increases) from P2 to P3. The practical example is that – when the demand for land for say growing food such as maize goes up, it means that the price of having or using that land also rises. That means then that, the higher the prices on say mealie meal leads to more land being used or cultivated for growing that maize.

More specifically, if the price of pieces of land or plots down town rises, makes the owners of that land instant millionaires. If property rights were reviewed and zoning done in compounds like Kanyama and Chawama – if these truly become part of down town Lusaka say, those people owning those plots could become rich. But since these people are relegated to being squatters, they continue to remain as paupers. Transpose this in Zambia as a whole; you get a sense of how our mineral resources are being treated.

From diagram one, we can also see that – initially when the demand for land is very low (at D1D1), land would be free (at q1) since the demand is less than supply. At a low demand, everyone can have any land he/she wants because supply is plentiful. Many people in rural areas survive because of this economic principle. But as demand rises to D2D2, land begins to get scarcer and its price (P2) – rent, gets higher. And similarly, when that demand shoots up to D3D3, its rent (price) – rises yet more to P3.

Note then that: considering Zambia as a whole, due to fixity of supply, the price of our natural resources can shoot to infinity, but you cannot say create more land. What you have just gets used up (exhausted). That is why land or any other non-renewable resource, is considered priceless. This is the way we should be looking at our mineral resources.

As we scrutinize our resources more, we discover that – in the short and intermediate period, land or minerals, which in true reality are FIXED, can be assumed to have upward-sloping supply curves (not vertical as we saw earlier). Demand curve (DD) is as usual, downward slopping. How come? Yes, it is because, in practice and everyday mining operation – the supply curve of say copper (or oil) production looks that way. It appears that way because when it is more difficult to recover or extract these resources from the ground – using advanced technology and modern equipment; you get more output as you go along. This gives an impression as if resources are unlimited. In that sense then, supply is upward (increasing) from a presumably fixed-supply resource. This assumption of an upward-sloping supply curve is demonstrated in Fig 2.

What we observe from this graph is that – as demand raises (from D1 to D2), a shift outward, the economic rent (or land rent) goes up. What does this tell you? It suggests clearly that as the demand for a non-renewable resource increases, naturally its economic also rises.

It is this economic rent which is of interest to our discussion on windfall taxes. The higher the economic rent (or simply land rent); of course, the better it is or should be for the land holders (or owners of resources). Where these resources are publicly owned, it’s the government which becomes their custodian. Then the objective here is to get as much of this rent as possible. Those who propose the 50/50 sharing principle when it comes to sharing of mineral wealth should therefore weigh their demands armed with this reasoning.

The last economic analysis I have is this: assume that Zambia discovers a large pool of oil or gas in Luangwa valley. As stated earlier, oil being another good example of a non-renewable resource – has similar characteristics. Rent generated in the market for oil is illustrated in Fig 3.

As explained above, we have to assume an upward-slopping supply curve (SS) for oil with downward slopping demand curve (DD). Where supply curve (SS) and demand curve (DD) cross (intersect) each other (point E) – determines the equilibrium price and quantity. The equilibrium being the ultimate position of neutrality – once reached, no other strategies or adjustments make economic sense.

At equilibrium, the shaded area (PEPe) on the left side of the supply curve (SS) represents the producer surplus or rent for oil. To capture this rent or portion of it thereof is what government attempts to do by charging the oil companies – royalties or some other form of taxes on profits. Ignoring collection of this surplus would not make any economic sense. It would simply be a loss of revenue to the government.

Observations

Therefore, what are some of the conclusions we can draw from this long discussion above? I hope that in some way, we can use it to settle the controversies surrounding windfall taxes, royalties, and other mineral taxes. From my discussion, few things should be clear: –

• Zambians sitting on huge mineral resources ought to find a way of rewarding themselves something from that ownership.
• That, while investors are welcome, they should be seen to pay a fair share for using (renting) these resources belonging to Zambia. Therefore, so long as the sharing is fair, there should be no problem.
• That, it is up to Zambians to know what it is entitled to and claim it accordingly. If they don’t, they will have nobody to blame. Information and economic methodologies exist which Zambia can use for bargaining.
• But as corruption grew in the country and Zambians’ discipline on public policy enforcement got weakened – investors got emboldened. They became adamant and cared little about transparency. No wonder there have been cases of some of them even refusing to pay taxes, Imagine! Where are compliance officials and the judicial system to supervise enforcement?
• In order to settle disagreements on windfall taxes and other mineral taxes or concessions, we need what some people refer to as: “full buy-in” and a transparent “all-party” tax policy. A consensus position which must be presented to the investors.
• We cannot continue with a situation whereby investors are basically defrauding Zambians. And since the world is getting more complicated and unfriendly, we must find nationals who are not only smart, and technically savvy individuals but courageous enough to face exploitive investors. The Zambian people are counting on Pres Michael Sata’s PF government – whose rhetoric so far is at least very encouraging.
• As we saw in the analysis above, as demand for copper (our resources) grows, the rate of extraction also grows – encouraged by good prices. If Zambia does not take advantage of this opportunity – then the allocative effect of that is that – more wealth will be shipped out of Zambia to other already richer countries.
• Conversely, when poor prices set in – this will slow down extraction and therefore economic benefits accruing to us. Even the small revenue we get would disappear. Once more the country would be in a more difficult situation, depending on economic aid and donations.
• In my discussion, there was an insinuation that – given a corruption-free environment, the discussion on windfall tax would not be as controversial. For, no normal profit making firm would find the Zambian conditions – including paying of WTax unfavorable. The super high copper prices of today should encourage even more companies to invest in Zambia.
• If Zambia hesitates or makes a bad decision on this important question of windfall taxes, which shall we blame – is it “kindness”, “ignorance” or “fear” factor? Although Standard & Poors has awarded a B+ grading for Zambia’s current future outlooks, Fitch a short while ago downgraded its Bonds. Some of these are nothing but scare tactics to be watched.
• With US$8 – 10,000 per tone copper price, handled properly should for once, give us the power of the purse. In high prices ought to lie our strength at the negotiation table. If we relent, we’ll again let opportunity pass us by and revert back to our customary position of taking dictations. Must we always succumb to manipulation by others? Why can’t we be the manipulators?
• Finally, because of the fact that minerals are exhaustible, charging a reasonable amount of taxes today, for a rainy day, should be understandable. Revenue is needed now so that the country can diversify and prepare for the day of reckoning (Armageddon) – which will for sure eventually arrive.

Therefore, it is no longer wise to allow investors to invade Zambia and let them exploit its resources at will. We must do something about it. Feedback or comments are welcome. Cheers!!!

Kaela B Mulenga
zbia@hotmail.com

Toronto, April 15th, 2012.

14560_1413913708871737_6533047964921443482_nOn Friday May 9th 2014 at a Lusaka Cresta Golfview Hotel – a book titled “The Family Question and Other Plays”, was launched. This important book is a collection of eight most outstanding works and plays written by Prof. Dickson Mwika Mwansa (Prof. Mwansa). Prof. Mwansa is the former Vice-Chancellor of Zambia Open University.

This launch was witnessed by many notables from the academic circles like Prof. Lyson Tembo, Diplomats as well as politicians. Unfortunately due to conflicting government engagements, VP Dr. Guy Scott who was supposed to be the guest of honor – could not attend.

Note that, on October 24th this year, marks exactly 50 years since when Zambia attained political independence from our colonialists – The British. When Britain ruled us, she made sure that everything under its influence: – land and its people, where effectively controlled. Zambia’s development path therefore, was culturally and socially determined by them.

It is therefore, quite refreshing to welcome works like that written by Prof. Mwansa. In essence Mwansa, 50 years after independence, he is liberating us from British – cum European cultural bondage. Our minds and thoughts were somehow arrested by this foreign intruder. Our traditions, customs and morals – basically our rich history, was buried under this cloud of dominance.

Through theater arts and drama, Prof. Mwansa has opened up our minds so that we can reflect and see what has been happening to the Zambian society at large. Plays like: Father Kalo and the Virus or Builders and Destroyers amply demonstrate this point.

In “The Family Question and Other Plays” – Prof. Mwansa makes an attempt to try and revive some of our lost glory and respectability. Using theater arts and drama in combination with his vast experience as an educator, Mwansa touched on every conceivable societal issue. That is, social issues and problems which are facing us today are highlighted.

Notable among those themes discussed are: corruption, abuse of power, moral decay resulting even into epidemics like HIV/AIDS, breakdown in love and marriages, and not to forget about ethnicity and politicking. In some clever and craft way, somehow, Mwansa has touched on all of these societal headaches – poverty and the like.

Through a potpourri of acts and scenes, Mwansa is able to entwine issues and in a simple way, show us what is happening to the Zambian society.

Speaker after speaker at the launch among them – ZAOU Vice – Chancellor, Prof. Mutale Musonda, Prof. Lyson Tembo, Prof. Steward Crehan, Mr. Ghankanani Moyo, and Mr. Mark Chona among others, lauded and echoed the innovative and pioneering efforts taken in the publication of this collection.

All of these people and those who attended did not only welcome this important book, but one hopes that more of its kind will follow soon. Indeed, the coming out of this volume poses a great challenge to not only other writers, but also to the whole entire Zambian youth. It is time they took up the mantel and moved things forward – hopefully we don’t have to wait for another half a century.

While the Madalas during the UNIP days had the courage to chase the colonialists, the youth too must take the challenge a step further – the intellectual way.

Fifty years ago, youth specialized in throwing stones. Those of today should specialize in reading. As someone said, “if you want to hide some knowledge from Zambian people – put it in a book” because they don’t read. But a society which does not read remains backward.

In sum, the shape of the Zambian culture, morals and other pillars on which society can be built, should be paved and determined by the Zambian sons and daughters wherever they happen to be including the Diaspora. It is too important a task to leave it up to others to do it for us. Moreover if we fail to savage our past history, who will? Let’s follow Professor Mwansa’s example by digging deeper into finding out who we are as a people.

I therefore see “The Family Question and Other Plays” – as a lovely gift to the Zambian populace at this time when we are celebrating the golden (50th) birthday of our nation. Cheers!!

Lusaka, May 16th 2014.

Kaela B. Mulenga

Writer/Development Economist

zbia@hotmail.com

PS – Prof. Dickson Mwansa can be reached at c/o ZAOU, or through WWW.Xlibrispublishing .co.uk

By Dr. Kaela Mulenga

Mandela who visited Zambia 7-days after he was released from Prison in 1991, with Former President Kaunda
Mandela who visited Zambia 7-days after he was released from Prison in 1991, with Former President Kaunda
Today Nelson Mandela popularly known as Madiba is being hailed as a moral authority when it comes to issues like: democracy, racial-equality, common decency, humanity and fighting oppression because he took a principled stand on all of these.

It is such a huge honor for Africa to have someone becoming literally an instantaneous Saint. No wonder over one hundred presidents and Heads of States and other dignitaries have come to pay their last respects to this man. The outpouring of tributes from all over the world is simply miraculous – rivaling only to the funeral of beloved Pope John Paul II in 2005. Eulogies delivered by Statesmen like Barack Obama and Noble Laureates of Bishop Desmond Tutu stature have been touching.

Tata Madiba has now gone in history as the peace icon of the century. What Madiba stood for and fought against is what should generate interest mainly in people of the African stock. Who is this man the world has fallen in love with? What did he do for the world?

Fifty years ago not so many people regarded what he was involved in as Messianic. The Apartheid leaders and some Western countries saw him as a terrorist. Only few people in positions of influence were prepared to support his struggles. Yet Mandela for a long time he has been fighting against all forms of injustices. His enemy No. 1has of course been Apartheid system which he saw as encompassing the entire humanity.

Racial tension and oppression of man by man have been at the centre of the present day human conflicts. The whole Africa is engulfed into it. So is – North America, Latin America, Europe, and Asian countries. Everywhere in one form or another, it involves relations between black and white, one race against another, one class against another, rich against poor or master versus servant.

Because the late Mandela was involved in all of these struggles, that’s why he was often quoted as saying – “during my lifetime I have dedicated myself to the struggles of the African people…., I have fought against White domination, and I have fought against Black domination”. The later being a reference to some African leaders who themselves became oppressors of their fellow black citizens.

But as soon as the Apartheid project was abandoned in the early 1990s, Mandela was the first one to preach reconciliation. Ever since his release from Robin Island prison in February 1990, Madiba has been inspiring people to love one another. He has not only led by example but he has continued to make sacrifices thereafter.

Mandela’s trajectory should even be well known to Zambians. Why? Yes, because we have Kenneth Kaunda (KK) who when it was difficult for many people or countries to see what kind of a man Mandela was, he did. If Mandela stood on the correct side of history, so should Kaunda be.

Half a century ago, many people including some Zambians, blamed the stand Ken took – which included the allocation of state resources towards the political struggles of those countries in the sub-region still under colonial rule or tormented by Apartheid. Mozambique, Angola, Zimbabwe, Namibia and of course South Africa are countries in Southern Africa Kaunda vowed to support. In these countries black Africans were not only discriminated against, but were also disfranchised

Although Zambia had attained its political independence in 1964, KK felt that this was meaningless until when other countries in the region were also free. It is this vision and foresight which makes our KK in some way an equal to Madiba. Both have capacity to see what many of us couldn’t see especially if it means looking into the far future. Because they (KK & Madiba) are convinced about the “truth”, it therefore then becomes easy for them to commit and make sacrifices.

The tenacity, with which Madiba’s “Long Walk to Freedom” is known for, has got its roots from identifying what is right or wrong. Madiba was hundred percent correct that Apartheid was wrong and that it should be fought against. His famous quote – “I’ve cherished the ideal of a democratic and free society in which all persons live together in harmony and with equal opportunities…”. And if achieved is indeed “an ideal for which he was prepared to die”. [20 April 1964, Rivonia trial].

Kaunda often preached that – ‘oppression of man by man is wrong’. And that ‘God’s people should not be made to suffer any injustices’.

As Madiba saw it many years ago, and now of course many people agree – Apartheid was evil. For the sake of those who aren’t sure of its roots – Apartheid or ‘apartness’, commonly known as the “Policy of Separate Development”, was introduced in South Africa in 1948 when the Afrikaner National Party, under the leadership of Daniel Francois Malan formed government.

To implement this policy, about hundred (100) laws designed to keep blacks and whites separate were put in force. The main idea being to make blacks ‘hewers of wood and drawers of water forever’. Hence, one of the key elements of Apartheid was to maintain white domination over blacks. In essence blacks were no better than slaves of sorts.

According to the Boers or the Afrikaners – a white tribe of Africa, arrogant and xenophobic, they thought that they had a right to chastise and even kill blacks. They saw Africa as a place, ‘where the strong eat and the weak are eaten’. Apartheid built on this principle – that’s why Mandela’s ANC in its crusade against it, decided to abandon the Ghanaian tactic of non-violence. They replaced it with armed struggle using Umukonto we Sizwe – ‘the Spear of the Nation’.

If Afrikaners didn’t have to confront combatants like Nelson Mandela, they would have to this day continued to believe in their mystic Christian mission to save the Dark Continent.

Like fundamentalist Moslems, who misinterpret Koran to suit their goals – Afrikaners, as is confirmed by one of their own – Journalist Rian Malan in his book – “My Traitor’s Heart” (Vintage Books), ‘stern and unforgiving passages from the Old Testament are used as divine justification for their crude behavior and way of life’.

Boers a descendant group from the Dutch, who established a Dutch colony (to facilitate trade of Dutch East India Company) at the Cape of Good Hope – now Cape Province, is known for cruelty. They often expressed their hatred against the so-called “dark-skinned heathen” a.k.a. blacks. Their Dutch language degenerated into a vulgar dialect known as Afrikaans.

These race-hating and anti-black white savages would rather die than accord black people equality before the law. That’s why you had pass laws. Mandela was incensed by these.

To expand their influence, the Boers fought their way into the interior of Africa, often clashing with black African tribes – mainly Zulus, Xhosas, Bushmen and Hottentots tribes. Bushmen and Hottentots were nearly completely wiped out. Those who survived were enslaved or became servants and animal herdsmen.

The leader of the Boers frontiersmen was a fellow by the name of Dawid Malan, a fornicator who ran away from Cape Town government with a black slave woman called Sara. [Apart from white wives, having black concubines was a common practice amongst Boers. Maybe that’s why you have so many coloured (mixed race) in the Province]. When and how Afrikaners became completely anti-black is not quite clear.

But over the years, wars between Boers and Africans were many and sometimes very bloody. At the peak of the British Empire, especially when gold and diamonds were discovered around the present day Johannesburg, British joined in the fights. Where Afrikaners won the battle, Boer Republics were established.

You can imagine how Afrikaners felt in 1948 when they won the instruments of governance over the whole of South Africa. It is perhaps that year when the fate of Madiba was decided. This system had to be fought at all costs.

The enforcement of this Apartheid policy fell under the direction of General Magnus Malan’s military machinery. Another Malan. Coming into existence were pass laws, censorship, job reservations, disfranchisement of non-whites, immorality laws and repression of all kinds – all intended to put the black man down, and keep him that way forever. The idea was to remove any chance of black people to come up and challenge whites.

To an Afrikaner, white supremacy had to be maintained all the time. This is the system, Nelson ‘Madiba’ Mandela fought against in whatever way he could including 27 years of incarceration. Steve Biko tried to use Black Consciousness and other non-violent means, but was killed. Even those who tried to use civil disobedience perished at Sharpeville massacre. Many others like those students protesting against Afrikaans lost their lives in this process against racial segregation. It was tough!

Thus, as millions of people around the globe participate or tune in to celebrate Madiba’s life, let’s not forget what he stood for. By reconciling and shaking hands with his adversaries, he demonstrated the softness of his heart and respect for humanity – shaming and exposing those who oppress fellow human beings. Accepting one another as equal human beings is perhaps his most profound legacy he has bestowed on us.

As he takes his final steps to his resting place in Qunu, I am sure that – for a long long time, there won’t be many people like him.

We thank you Tata and adios Papa Madiba till we meet again in heaven. MHSRIP!!

Toronto — December 12th, 2013
Kaela Mulenga
zbia@hotmail.com

By Dr. Kaela B Mulenga

Kaela Mulenga
Dr. Kaela Mulenga
A recently received twit from one of my readers asked me to comment on PF’s taxing policies. I suppose this is a relevant topic now because of what is going on between the PF government and KCM. Jobs, profits and government revenues are all intertwined.

Mineral taxing issues for Zambia have been exhaustively discussed in several of my on-line blogs on UKZAMBIANS site and elsewhere. I normally make comments to complement the excellent tax debate found on Zambian Economist (ZE). But somehow the message I propound hasn’t sank in with our taxing authorities. Let me elaborate.

I do realize that copper prices do sometimes rise and other times they fall. And that consumer preference does change. Indeed things do happen. With no investors and when customers turn away from buying copper, we lose revenue. I know that. Therefore I am quite concerned about the dependence on copper, which after all one day may no longer be in demand.

In this situation, the solution according to me – would be to diversify away from copper now, and develop a more balanced and integrated economy. But you cannot diversify if you do not have the financial resources. Therefore apart from user fees of all sorts – borrowing and taxing seem to be the main options available to governments for raising revenue.

I prefer that we go the taxing route rather than borrowing money from abroad. I totally agree with Zambian Economist’s position [available on Zambian Economist site] – that the biggest drawback Zambia faces is the lack of a long-term tax strategy, which should transcend different Zambian administrations. Zambia is not the only country producing copper – so models on which we can base our taxing policies are already available else where.

In developed market economies, taxing issues are used to sway voters. Lower taxing doctrines are identified with countries where ideologies tend to be socially conservative or Republican. In these countries, household and corporate taxes are lower. On the other hand, liberal or social democratic governments tend to favour higher and progressive tax rates – for, they argue that – that is necessary to encourage national income redistribution.

In fact the two-party political system in USA and UK for example, is driven by tax regimes.

In developing countries like Zambia, where the economies are still weak, and that survival is in general based on raw materials and natural resources – mineral taxes and royalties together with commodity export taxes become important. Rather than selling policies to voters as they do in DCs [Developed Countries], LDCs [Less Developed Countries] politicians have to demonstrate to the investors, the fairness and attractiveness of their tax regimes. Otherwise nobody comes to invest.

In addition, although only a small portion of populations in poor countries have formal jobs, nevertheless, everybody is affected by the taxes levied. Surely even those who are unemployed reap some benefits from roads or flour milling plants once built. In short developed or not, the decisions government makes regarding taxes, therefore, become crucial. Government needs huge amounts of resources to get rid of poverty.

In Zambia we need a taxing policy which can remain in place regardless of which political party or leader is in power. This helps to remove confusion. So far every government which comes in thinks that it knows what is best and has all the solutions. In the meantime while this anomaly persists, foreign investors have a field day extracting all the profits they can get from the country. The differences over the inclusion of windfall tax in the government’s revenue making tool box, is a typical example.

The government of Pres Patrick Levy Mwanawasa managed to introduce the windfall tax without any uproar from investors. But Pres Rupiah Banda’s (RB) administration reversed it. And Pres Michael C. Sata’s PF government, in spite of the fact that in 2011 they campaigned to support it – refused to re-introduce it. This sends a confused message to the investors.

An explanation why Zambia behaves this way is not clear, but there are some hints we can consider. First, I do not believe that Zambians are convinced that minerals – as non-renewable resources will one day get exhausted. Or maybe they fail to visualize that once these resources vanish, it is imprudent not to be ready for that fateful day. Indecision has contributed significantly to the prevailing instability.

Second, we seem not to be convinced that – even though our largest copper consumers would not dump us, China and India like everybody else are also subject to business cycles. This means that their economies too are vulnerable. Irrespective of commodity prices trend, they too will have to be dictated to by the booms and bursts pattern. As the prices rise or fall, they make adjustments in consumption, which means that at some point, their economies would also stop growing. As they reduce purchases of copper, we go down with them.

As sellers of the raw commodities, our goal then should always be to take advantage of boom times. Hence, during periods of good commodity prices, that should be the time when we can maximize revenue and in return economic development. A diversified, balanced and integrated economy should be the priority then.

Third, in spite of Zambia being in the mining business for over 100 years, we seem not to have all the necessary information and critical knowledge on which to base important (production or financial) decisions. Consequently each new investor who comes along continues to bully us because they know that we lack data or info to counteract their actions. The pomposity of Mr. Kishore Kumar of KCM demonstrates this. Although we’re living in an information age, facilitated by the arrival of internet, unless one is aggressive, mining information – on mineral prices, costs, inventories, etc., remains a challenge.

Given accurate price and cost information, this could assist Zambia in designing clever tax policy/laws and/or working out effective compliance strategies.

When agreements are being entered into, investors irritatingly continue to manipulate cost information to get favourable terms from our authorities. This is in addition to the false promises they (investors) make concerning job creation argument to get operating licenses.

During negotiations, somehow, the investors’ demands overshadows – their access to untapped resources, cheap labour, use of local infrastructure and the large profits they end up reaping during boom years. These people would raise anything they can get, pointing to issues like the cost of doing business in the country and others as a way to demonstrate that they’re making sacrifices on our behalf when in fact not.

What I am trying to point out here is that – from the outset, investors’ exploitation techniques never stops. Fearful of losing investments, which in turn admittedly is the source of jobs for the people – our governments soften up and give in. Licenses are granted and soft, instead of fair tax codes are imposed.

Thus to please investors, we keep on dancing to their tune. Avoiding windfall tax together with charging lowest corporate taxes, from our point of view, lowers government revenues and hence, brings in fewer resources for development projects.

As if that was not enough, foreign companies, through various means dodge paying taxes. Sometimes they cook books or use tax heavens or schemes to manipulate accounting reports to avoid taxes. In some cases they simply use advanced digital technologies when transferring funds abroad, which our unsophisticated officials fail to detect.

It is against this background I hope that our Finance Minister should reshape Zambia’s taxing codes. Some of the things government must address should include: –

 A plan to raise sufficient tax revenues during the booms so that we can buffer the valleys of the business cycle. I hope it is not too late. Reliance on foreign borrowing, especially when we are approaching a valley, comes with a lot of disadvantages. One obvious one Zambia has experienced before is that – once the public debt gets too large, the little foreign exchange the country earns goes towards paying only interest rates. This leaves the principal as a burden on the future generations.

We also know that, although a small portion of what is borrowed might go towards infrastructure development, the bulk of it is consumed and not invested.
And by its very nature, foreign debt ties in a country’s hands, making “sovereignty” difficult to manage. When we were fighting against colonial domination, I never knew that we would surrender control of the economy back to them in less than 50 years. The benefits of the 7% economic growth are accruing to expatriates and foreigners rather than the local Zambians.

 If Zambia is to make ends meet, fair rewards must be reaped from the natural resources we possess, at least when the commodity prices are good. This means putting in place fair tax codes (emphasis on fair) and plugging all tax loopholes so that everyone complies and pays what is due. Otherwise Zambia will never earn its fair share from its natural resources.

 We also need knowledgeable locals who can challenge investors when it comes to cost structures, commodity movements and trends, and international mineral and royalties’ regimes. Some of these competencies are available around the globe – but it is now becoming doubtful if PF government has an interest in reaching out for them. A lot of brains in Diaspora are being wasted. The consequence of this is that – expatriate influence will continue to dominate policy direction.

 Otherwise if we continue on current policies, we’ll never get rid off tax policy headaches, that is, allowing foreign investors to continue taking advantage of our weaknesses. Being resolved to attain fairness is noble. Failure to challenge investors where challenge is due, is weakness. And we should not forget that these foreign investors will always be backed by not only their powerful home governments, but also by the World Bank. For us, none other than ourselves will cover our backs. Let us put self- interest above being nice and civilized.

Kaela B Mulenga

zbia@hotmail.com

Kaela B Mulenga

Kaela Mulenga
Dr. Kaela Mulenga
For more then three days people around the globe have been, with horror, watching the terrorist attack in a shopping mall in Nairobi Kenya. Westgate an upscale mall, presumably Jewish owned and frequented by expatriates and rich Kenyans was on Friday attacked by 10-15 Al-Shabab – an Islamist extremist organization based in Somali. This is according to their own admission on Twitter. This is presumably in retaliation to Kenya’s hot pursuit of the rebels inside Somalia in 2011.

kenya_mall_attack_AP133838430825_fullwidth_620x350
Kenya’s president, Uhuru Kenyatta described this as a cowardly and heinous act against Kenya.

Al Shabab is backed by Al Qaeda, the extremist organization found by the late Bin Laden. Although there are other Moslem members in Al-Shabab, but most of them are of Somali origin. Here is a terrorist organization which, to advance its own selfish goals, it doesn’t mind killing innocent people – including women and children.

Using hand grenades and armed with weapons like AK-47, Al-Shabab stormed the mall on Saturday. The siege has so far cost over 68 lives with over 175 people injured. Among those dead or injured are two Canadians, two French, a South Korean woman and a number of Americans. Because of fear of killing more hostages, the Kenyan Commandos, Police and the Army were hesitant to root them out.

Apart from some unspecified help coming from Israel, there has been no mention of assistance coming from African countries.

In 1998, Al Qaeda terrorist group bombed two US Embassies, in Nairobi and Dar-es Salaam in Tanzania. In Nairobi at least 200 lives were lost. In 2002, an Israel owned hotel in Mombasa, Kenya was also attacked. In addition, they tried to bring down an Israel jet. All these attacks are primarily aimed at United States of America. Kenya being pro-America and a weak point, it is attacked, hoping in the process to provoke America.

From the time when Somalia became a ‘failed state” after the down fall of strongman Siad Barre, Al-Shabab and other Muslim groups have been trying to establish a Muslim State in Somalia. Such a Muslim State would be ruled under Sharia Law – where women would have no rights and say whatsoever. The thieves and petty criminals would be punished by hand or fingers amputations. And everyone who is a Christian or non-Muslim would be regarded as a “non-believer” And hence an “infidel”

But according to Koran or an interpretation of it by Imams (Islam priests), any ‘infidel’ who resists conversion to Islam, risks being killed through a holy war, aka, murder in the name of Allah. Faithfull Moslems offer their voluntary services to this war as “jihadists” commonly known as ‘suicide bombers’.

This is basically what Al-Shabab is fighting for. When they come to the West, they are free to belong to a religion of their choice. In the state of their own, they can do what they want but they have no right to force others else where to do what they want.

Some great thinkers believe that Islamists, through Arabs domination, are trying to forcefully convert black Africans to Islam – a fete they failed to achieve before during the continental “Arab Slave Trade”. Except that this time round, they want to involve black African proxies like Al-Shabab or Boko Haram in Nigeria.

From this perspective you can probably see why Moslems hate America in particular and the West in general. This is because USA doesn’t care so much about the Prophet Muhammad’s doctrine since they have theirs. – called Christianity found by Jesus Christ. Any Christian Nation is likewise hated by Moslems.

Because of this stubborn refusal to believe in Islam, that is why there exists this monstrosity of animosity. But what is funny is this – Moslems from Middle East and elsewhere in the Moslem world, always runaway from Muslim dominated and administered countries. They flock to Western-type of democracies. But the reverse is not true. Who wants to live in a country where there are virtually no rights?

Why is it only one-way direction? Well, the way Mullahs (keepers of Koran’s teachings) and fundamentalists run their Islam-based societies, probably leaves much to be desired in terms of good life. Consequently, the standard of living in these countries is very poor. Freedom of expression, and human rights etc., are probably not respected. In these patriarchal societies, women are at rock bottom compared to men. This, in today’s modern and inter-connected globe forces their citizenry to migrate somewhere else.

Thus, the Mullahs, perhaps out of jealousy, try to stop this trend. That is why they’ve declared a war against the West and its allies – which includes all Christian dominated countries around the world. This is irrespective of the fact that Moslems are heartily welcomed any where in the West. In the West, Moslems’ rights, including the rights to worship are respected.

In the case of Kenya, when Somalia broke down and war ensued, the country opened their hands and welcomed every single refugee who was running away from war, persecution or poverty. Kenyans unreservedly gave sanctuary to anyone who needed help. Even if sometimes resources were scarce, but Kenya never closed its doors on anybody.

Yet Somalians including those who are now Al-Shabab members, I am sure passed through Kenya. Kenya has been a stepping stone for many refugees including those Ugandans running away from Idi Amin or those running away from the war of attrition in Southern Sudan.

Given these facts, how then can we explain what has happened in Nairobi? Quite frankly it is just a question of “biting the hand that feeds you” sort of scenario. Simply put, these people cannot appreciate what Kenya did for them. God knows what could have happened to some of these people had Kenya decided to be tough with them or closed their border. Would they have found their way to Minnesota, USA, or Toronto, Canada, or Stockholm, Sweden? I doubt it. Neither do I believe that Ethiopia would have given them sanctuary.

Going beyond Kenya, there are other African countries who also helped not only Somalians but other African refugees trying to get out. Zambia, Tanzania, Namibia and South Africa are among those. For example, it is rumored that over 16,000 Somalians obtained legally or illegally Zambian passports to get to Canada alone.

Zambia came in contact with Somalians during the “hell run” period soon after independence, because being land locked; Zambia was desperate to get crude oil from Dar and on the way back export copper. Then Somalians became very useful to us for running this haulage. Up to today you see a sprinkling of Somalians in Zambia more distinctly in Ndola and Lusaka.

While those Somalians living in Zambia have been largely peacefully, one cannot be too sure what they are up to. Since some of these might be acting as “sleeper cells” as the case of Kenya has amply demonstrated, we hope that our security organs are a step ahead. For, one needs to have a contingent plan in place. A team of quick response force must be trained ready to respond just in case something happens.

Under KK (Kenneth Kaunda), such risks were minimal because nobody dared do anything stupid under his watch. He was feared because they knew that Kaunda would retaliate ruthlessly. Literally he would hit back like a wounded lion. We miss him for that. They can’t dare do anything senseless in South Africa either, because the street boys of Soweto and other compounds (with high intolerance for Makwerekweres) would pounce back on any terrorist living among them. Here is a case where cadres are used to a good purpose.

Therefore if Zambia can withstand big crisises like the one facing Kenya, calls for seriousness in our resolve. This means that we cannot afford to entertain any kind of violence – real or invented by politicians. And therefore, anyone caught attempting to blow up the situation to what it is not, must be dealt with firmly. The PF government has to do everything possible to avoid violence being the order of the day. Because it is this violence which terrorists like al-Shabab can take advantage of.

If we are to maintain peace and tranquility we have been enjoying for the last 50 years, we must do everything possible to avoid the horrific scenes we are seeing on our TV screens from our otherwise peaceful neighbor – Kenya. For, just like Kenya, we are ill equipped to handle such major terrorist attacks. [If we were, how come nobody in Africa came to Kenya’s aid?]

Our prayers go to Kenyans, who are being attacked by the same group of people they helped to survive in time of need. This is really a time to reflect. Cheers!

Toronto, September 23, 2013

By Kaela B Mulenga

Kaela Mulenga
Dr. Kaela Mulenga

To most people living in Diaspora, news that Prof Clive Chirwa (Clive) was arrested in Zambia on alleged corruption charges, was shocking to say the least. As a columnist, I got hundreds of messages sympathetic to Chirwa’s plight. If anything, many are now reevaluating their plans of returning back home. This is too bad because there is a lot of talent abroad (outside the country), who can make a valuable contribution to the economic development of the country.

Everybody has vested interest in the fight against corruption. But it is another matter when this fight is targeted at wrong people, or is in my eyes trying to kill flies. This approach not only trivializes the campaign, but it makes a mockery of the whole thing. Killing a fly with a sledge hammer always fails.

Even without full details of the allegations, other than Clive’s political enemies, everybody knows that Chirwa , who hardly stayed on the job as ZR CEO for a year, was not corrupt. In both allegations it is quite easy to see that Chirwa might, due to unfamiliarity of how things and processes are done on the home front, has probably only committed “administrative oversight”. But certainly not serious offences.

Clive Chirwa
Clive Chirwa

Offences, which in my view should only be punishable through disciplinary measures. In fact since he was already fired, that should have been enough. To stretch it and want to spend untold amounts of State resources to prosecute him is what should be condemned.

I can’t see how a CEO of a major company instructing his accountant or financial director to sort out bills for his accommodation, as something out of the ordinary. Has a CEO any powers at all? Someone is simply blowing that accusation out of proportion. On the other hand, if a company like Claver Incorporated Ltd, in which Chirwa is reputed to have interests bided for contracts from ZR, that in itself should not be a crime. Maybe an inside information error, or might be questionable – if proven in a court of law. But definitely what he is accused of does not fall in class of serious corruption cases. To regard a man who had such a promising vision for ZR and meant well, is tragic.

For sure we cannot compare Chirwa’s minuscule allegations to the gigantic cases we have seen before involving ex-presidents; those of Katele Kalumba, Henry Kapoko, Austin Liato, Zambia Airways Saga, the Air Force gate et cetera. In all of these cases ACC and other law enforcement agencies did not move as swiftly as they have done for Chirwa. At least those accused people before him were given some room to breath. Do we have two laws?

For example, the case of Kapoko for theft and money laundering of over K4 billion, took years before it was brought to court. Even where some judges have been suspected to have committed corruptible improprieties, they’ve had to wait for tribunals to be formed to probe their alleged wrong doing. The point is, at least they were not arrested immediately.

Moreover, I don’t know how many people living in ‘gated villas’ built from proceeds of theft and corruption have been harassed. Anecdotally we see that they’re many. Usually nothing happens to them. Chirwa has to pay for their sins. Everybody including Transparent International Zambia has kept quiet or did nothing substantially to curb the loss of State resources.

But why act fast to condemn in the case of Prof Clive Chirwa?

Nobody has an exact answer. But my speculation includes the following scenarios. First, Chirwa’s contract which those employing him never carefully scrutinized embarrassed some people. Chirwa was accused of being too selfish when in fact he was demanding the emoluments contained in the contract.

Also Chirwa annoyed many people at home including the late president Levy Mwanawasa when he announced from UK his intentions to go back home and run for the Office of the President. Many politicians and others at home felt insulted. It was as if he was going to command Zambians to install him. Since, Chirwa has jumped from MMD to UPND and now back to PF. Thus, those at home who are against his political ambitions or are jealous, want to shut him down.

In addition, since Chirwa has got a recognizable international name – those who want to impress money donors, that they’re serious about reducing corruption, these included many NGOs – can connive to sacrifice him.

And last but not least, those running affairs at home, being scared of the Diaspora Voice, would rejoice to see people like Prof Chirwa destroyed. In short, this is some sort of undeclared war between Diaspora and those at home. We saw these anti-diaspora antics during the NCC debate on dual-citizenship. The root cause of this animosity can be traced back to critical comments coming from Diaspora.

No matter how constructive these criticisms might be from Diaspora, it is always shunned upon. Useful ideas, though ignored by the establishment at home, have been suggested by Diasporans. Several issues have been exhaustively discussed in forums including: constitution formulation, economic aid, windfall tax, ag-subsides, bonds & debts, copper double pricing, IT solutions to absorb youth unemployment, health & education topics, tourism, infrastructural development, and of course dual-citizenship to name a few.

Unfortunately, innocent Chirwa has been caught up in this misunderstanding between those who left Zambia for reasons of improving their education or economic wellbeing against those who remained at home. That is, ‘stayeé versus émigré’ as someone put it. Indeed, where two Professors (Chirwa & Sasa) could not even cooperate, and then you have to know that each group is suspicious of the other.

Due to lack of connections with the masters at home, on the part of Clive, it is now Chirwa’s family which is being basically persecuted. And since ‘our people’ have no respect for Human Rights, I am afraid Clive Chirwa is in for a rough ride. Nobody will even put into consideration the fact that his wife in UK is now said to be sick with cancer.

It is these fears which come into play when a Zambian in Diaspora starts thinking about relocating back home. Thus, it is not fair for those with dying parents or relatives to take care of, to be faced with these risks. Given these developments, we therefore appeal to the PF government, indeed to President Michael Sata himself, to review government’s attitude towards Diasporans. Otherwise, who is going to man those many universities and technical colleges talked about? We mean good and just want to help. Cheers!

Toronto, September 14th, 2013

Kaela B Mulenga

zbia@hotmail.com

By Kaela B Mulenga

Benjamin Yorum Mwila (popularly known as BY)
Benjamin Yorum Mwila (popularly known as BY)
Benjamin Yorum Mwila (popularly known as BY) was put to rest last weekend. M.H.S.R.P. As president Michael Sata said, “let us mourn him with respect”. Indeed, Mwila in his own way he was giant of a guy, who will be dearly missed by not only his relatives and friends, but by all Zambians. The question is why is that?

As I mourn him myself many miles across the ocean, I think of BY’s death as a turning point – or that it should be one because of a number of reasons. Biggest of them all, is his patriotism, commitment and love of his country – Zambia. He made impeccable contributions to the development of that country.

BY literally sacrificed his business empire and comfortable life to try and help Zambia move forward. According to those who have insider’s information, it is claimed that – at least for Kitwe, he was in the class of the late Shame Mulenga as being one of the richest. It is difficult to verify this detail.

But what is true is that BY invested a lot of personal wealth in promoting the “multi-party democracy” project started by MMD. As those who were close to him like VJ (Vernon Mwaanga) have confirmed, Mwila spent a buck to sustain MMD. Thank you my friend for doing so; we are all now better off today because of your efforts.

During the late Chiluba, FTJ’s rule, we understand that it was Mwila who was controlling him (the president) from getting extravagant. In other words BY was bitterly against his nephew’s corrupt activities.

Apart from business successes, BY will be remembered for being involved in just about all post-KK political machinations and combinations, all because he always dreamt of making Zambia a better place to live in – a paradise for every body. He first formed Zambia Republican Party ending up with National Democratic Focus. The fact that Zambia has not yet become a place where every Jim and Jack can survive, I am sure worried him even as he took his last breath. The man simply wanted every ordinary Zambian well off. That was the nature of the man – kind of a saint.

Those passing critical comments contend that BY like the likes of Enoch Kavindele, spent too much time trying to become politicians when they should have concentrated on becoming the best Zambian business leaders ever. In our situation, it is not difficult to know why. One obvious reason is that – you cannot sit by while the seat of power is making all sorts of awkward decisions. That is, somehow he had to be involved.

That is why after learning the intrigues of being a successful businessman, Mwila tried very hard (though not quite successful) to master the political ones too. Though it was not to be, but he kept on going. Had he become our president, I have no doubt in my mind that he would have transformed, economy wise, that country to another unimaginable level. Like the late Anderson Mazoka founder of UPND, these are the two outstanding presidents WE NEVER HAD.

While we are making ululations in praising Benjamin Mwila and celebrating his life, I want to remind the young generation of Zambia that – the old guards and caretakers of the country are all dying out one by one. Indeed, BY belonged to the seventy-something generation, which forms the current crop of rulers or decision makers. What does that suggest?

It signals that it is time to change the shift. But this shift won’t change unless the replacement ones – the young generation crowd is prepared to get their hands dirty.

The young but uneducated ones – cadres, have done their part. But we now need the educated, ex-UNZA/CBU/university breed to become active. I am not referring to demonstrations for meal cards or dormitory beds, but to be politically active. They have to be involved in real politicking and party campaign matters. This is different from being involved in just anti-government or establishment protests. In other words, they’ve to come up with survival strategies if the country is to survive beyond the Satas, RBs, etc. They’ve to figure out how to bring about economic emancipation. And nobody is going to do it for them.

But if going by what is happening in the Zambian music industry is an indicator, we know that given sufficient interest – the Zambia youth are capable of delivering and reaching for the clouds. Applying the same creativity and enthusiasm, the youth must invade the Zambian politics. Political decisions and policy, is too important to continue leaving in the hands of “old madalas”.

After all, today’s young generation is lucky because they’re born in virtually a-tribal society, with members like Chanda Hamaundus, Mutale Nalumangos, Smith Phiris, etc. That is even before we factor in tools like social media technology: face book, YouTube, twitter, internet general, radio and print media. Therefore, the young people being in command of these resources and technology should not find it difficult to let’s say, put in power people of their choice.

The only reason why old folks are still in the driver’s seat is because the young are not interested in local politics. There is some improvement however, given the new Young Greens Party. But much more is required. Therefore, with Mwila (BY) gone, I hope that this will send a strong message to all the young people of Zambia. It is in this context that Mwila’s death should help us to switch on the great banner reading – “YOUTH OF ZAMBIA UNITE”.

Here, the unity I am referring to is a serious one and not the funny, Watch Dog type of commentary and language. The comedian type of jokes shows that one is not serious. It is good to laugh once in a while, but for how long should that continue? Let’s emulate Mwila in being serious and committed.

Because now that the nation’s protectors and spokesmen like BY and others like him, the Dominic Mulaisho are gone – who is going to protect Zambia from wolves and those who envy it? Note for instance that the population density in the Great Lakes region of Rwanda, Burundi, Uganda, and Tanzania is growing. As I speak, the encroachment of Rwandise in Mbala/Kasama/Mpika corridor is worsening. Much closer, Kitwe is already overstocked by people from DRC and Angola. [I am sure some are even from Governor Katumbi’s area].

So unless the Zambia youth are vigilant and reflect on what is going on, they would miss the epoch of Benjamin Mwila’s death.

Finally, the youth must be aware of the rural/urban areas divide, environmental degradation symptomized by all kinds of pollution taking place on the copper belt, natural resource depletion occurring now by Chinese and other resource hunters. These are warnings to the youth that – unless they wake up quickly, they will find them selves in a precarious position. They must prepare and be ready now for the Tsunamis of untold proportions coming. The death of Mwila has thus, given us an opportunity to think about these things.

Therefore my friends, while Mwila is gone to rest – we’ve to stand guard and be forewarned that – unless each and every one of us commit like he did to the good of the country, we risk losing it. If we do nothing to safeguard our country, it is just a question of time before we loose it to others in the new world order. KK has always warned us to – “protect what is ours”. Are we ready to emulate our late brother – BY? Condolences and sympathy go to his folks.

Mwila was born on 17th September, 1943 and passed away on 17th August 2013. He is survived by two wives, Maggie and Cordelier, children and grandchildren.

May His Soul Rest in Peace.

Toronto, August 23, 2013.

Kaela B Mulenga
zbia@hotmail.com

Dr Kaela B Mulenga

Kaela Mulenga
Dr. Kaela Mulenga
On the Zambia political landscape, two brand new parties have been formed recently. PP (Peoples Party) led by Mike Mulongoti – a former Minister in MMD government and the Green Party of Zambia (GPZ) whose President is Peter Sinkamba. The latter is of more interest to Zambians, because it appears to have a clear mission with strong motives, and is more focused.

On their website (http://zambiagreens.org/ ) the Green Party articulates the main gist of their platform as being – “to rescue vulnerable grassroots communities – youths and other vulnerable groups, in particular from the jaws of poverty and unemployment by taming and harnessing nature”. Certainly taming and harnessing nature sounds catchy. Targeting sustainable development is also a commendable objective.

Peter Sinkamba
Peter Sinkamba

When you look at it closely, it sounds as if it is KK (Kenneth Kaunda) in 50s mapping out the emancipation of Zambians from the yolk of colonial masters. Truly one has a ‘greens’ feeling examining the way these guys have defined their agenda, which includes: discouraging economic activity which is not sustainable for the future; putting emphasis on green energy generation from renewable energy to replace fossil fuels; and crafting true democracy based on social justice for all communities not only a privileged few.

The Greens want to preach about environmental degradation, and explain to Zambians that – once the environment, biodiversity etc., once damaged, the process is irreversible.

If other Zambian parties can become ideologically based, like GPZ, may be that can discourage people from jumping from one party to another like monkeys. For, no party should accept anyone who does not subscribe to its values. And hopefully GPZ will have a register of their membership unlike I understand PF, where there is no formal membership. You become a member by pronouncement.

I am also happy that the Green Party is born now rather than later (way before 2016) and that its principal target audience is the youth (the so called Young Greens). After all, the future stake of Zambia lies with the young generation. It is them who must answer the call before it is too late and cannot afford to wait until when the country is ruined or becomes environmentally unsalvageable.

In my writings, I have frequently talked about youth involvement in the political life in Zambia. I hope therefore that time has now come when the “youth” are prepared to get their hands dirty and that this GPZ is for real.

But that is as far as I can go in terms of praise – for I know that reaching there (the Promised Land) is an uphill battle. One misconception which must be avoided by the Zambian Greens right away is the problem of overrating yourself. Just because you think that you have issues well catalogued does not necessarily imply that you can achieve them. The tasks stipulated in the mission statement and objectives are not easy to come by no matter how committed one is in today’s world.

To begin with, I have to remind them that – we are yet to find a Green Party anywhere in the world whose performance can act as a model to be emulated by GPZ. Most of them have remained small – usually around 5% of the voting population. This implies that these organizations are essentially fringe parties. In some extreme cases these are protest parties or anti-establishment movements. [Green Peace though not a party, is a good example]. This is not to say that one cannot reconfigure and use this vehicle for achieving political capital.

While articulation of the ‘message’ is good, but unless you can convert it to an electable platform, it doesn’t take you any where. It doesn’t matter how many reputable quotes you come up with. This means that unless you can form a government, no matter how sound your policies might be, you go no where. NAREP is a good example. Its Manifesto is quite clear. Somehow, ideological beliefs must be tied to winning votes. Therefore hopes of forming a mass movement based purely on “green values” ideology alone would be day dreaming – unless as I say if this can translate into votes.

This is where the social media like face book, twitter, and YouTube, would be useful. Barack Obama showed that this is possible.

To be different, Sinkamba’s party must find a way of using “values” to harvest votes. Otherwise it would be like many other young peoples’ parties we have seen come and go. The Dean Mungombas, Siulapwas etc. Some of these people had, likewise, clear messages but lacked connection with the masses who vote. My friend Godfrey Miyanda of Heritage party is one who is quite articulate, knowledgeable and well informed but fails to convince a soul to support him.

Other weaknesses often associated with new parties are: lack of consistency and persistence. If you do not persist, you fail to get the message across. And if you lack consistence, the message never gets traction. Here again, a good example is Fredrick Chiluba (FTJ) during the Kaunda days. Chiluba became persistently critical of KK’s regime until when it fell. He combined charisma with persistence.

Further, since we are talking about youth unemployment, poverty issues, social justice, pollution in Shanties, and saving the environment in general – how can these issues rhyme with the affected groups? If the message can be put across, that’s where the test lies. KK connected well with black Zambians seeking independence from British colonialists. Similarly, can the Green Party of Zambia achieve the same feat? What this is – is simply offering Zambians a realistic plan for economic emancipation. Then perhaps people would jump on board.

When late president Levy Mwanawasa introduced fertilizer packs and banned the importation of GMO maize (corn) from America, he explained to the Zambians that he was doing so to protect local peasants from dumping and biotech companies who wanted to interfere with their livelihood. It worked. He was massively elected in rural areas. Can GPZ trounce PF in a similar fashion, bearing in mind that most people on the copper belt suffer from pollution? We’ve to wait and see.

One also hopes that the seriousness of the Green Party goes beyond pecuniary rewards usually connected to having a party. Donor governance allowances, and other gifts from well-wishers, are some “akalilos” (what Jonas Siakafuswa calls eating), attractive to gamblers. Other small parties before collapsed because the leaders’ main goal became ‘self interest’.

More importantly, the green economy which forms the gist of all green parties everywhere is in many cases, indefensible when it comes to basic “costs-and-benefits” calculations. Many economists fail to come to terms using green economics alone as a tool to deliver best goods and services at the lowest cost. Subjected to market forces, the green economy is the least efficient way to use and exploit natural resources. Ask World Bank and IMF economists and see what they tell you.

In short, there is no technology out there, which can pass the ‘green economy test’ – advanced enough to satisfy all our wants and desires. To complicate matters more, where green policies exist – like environmental laws, legislation and regulations on biodiversity, often, these are not enforced.

As we all know – economics is the study of the behavior of human beings in producing, distributing and consuming material goods and services in a world of scarce resources. It is this tenet which makes many countries around the world including major ones like USA and China skeptical about green economics. These major countries do not support even reasonable greenhouse gas emissions levels, fearing that doing so, would wreck their economies. I don’t see priorities of these nations changing anytime soon.

So even if the green party policies sound grand and promising – so long as the big players are still not on board, the prospective GPZ government may not go very far, if at all they can be elected in the first instance. In Canada, the exploitation of ‘tar sands oil’ in Alberta is always contentious because the debate degenerates into a bigger one – namely, the continued reliability on fossil fuels overshadows environmental issues.

Indeed, major technologies of today – telecommunications, transportation, food processing, etc., all rely heavily on fossil fuels. We are yet to find a cheaper substitute to fossil fuels. Though Zambia is a copper producing country, but where are the electric cars? How do you achieve zero emissions and maintain cleaner environments if the introduction of electric cars would require the whole range of unaffordable infrastructure? It is not easy!

Although countries like South Korea and others are making good progress in terms of ‘green technology development’, alternatives like windmills, apart from not being cost-effective, its capacities is too low, is noisy and are not reliable. Also, we just saw in Japan that nuclear energy can be quite dangerous. Therefore, preaching about the ‘green economy idea’ up until now comes with a lot of obstacles.

In conclusion, while I do appreciate the noble goals, which the Green Party of Zambia may be having like – discouragement of profit maximization which fails to take into account resource preservation and human nature, or economic activities not serving the best interests of society as a whole – in the world of today, the green values are not of priority. And since there are these obstacles, GPZ would best be advised to tread very carefully. For, a heavy dosage of environmental regulations will be strongly challenged.

Unfortunately, the naiveté of the world today blocks people from reacting to things which are even of immediate danger to them. That is why for instance, there are no so many people who worry about hazardous waste, air and water pollution, global warming (also known as ozone depletion) and so on? In Mufulira and other copper belt towns, gas fumes always rains on people but nobody demonstrates. Deforestation is also a common occurrence in Zambia, but where are the remedial measures? The list is long.

And in the larger world out there, man is constantly tampering with biodiversity and ecosystems and nobody raises a finger. UN organs, GEF (global environmental facility) and others are impotent.

Since these things are happening in a large scale and no force is there to stop it, is perhaps the reason why I should sympathize with Mr. Peter Sinkamba and his followers. They are definitely up against bigger forces and challengers. One can only hope that faced with this battle, the GPZ will concentrate and focus only on those things which can enable them to amass enough support for making a difference in the Zambian context. That is, their emphasis must be put only on issues which can get those votes, otherwise forget it. Good luck!

Toronto, July 18th, 2013

Kaela B Mulenga

zbia@hotmail.com

By Dr. Kaela Mulenga

Kaela Mulenga
Dr. Kaela Mulenga

The Zambia Railways (ZR) saga involving the hiring of Prof Clive Chirwa (Chirwa) as its CEO has been playing out like a soap opera in media. The dog fights between, on one hand, Prof Chirwa as the new CEO, and on the other, the Zambia Railways Board he constituted. Each party has been heaping blame on the other of being corrupt and incompetent. End result – was an explosion of sorts.

It has now been announced that although the team set up to investigate Prof Chirwa has cleared him of wrong doing, but supposedly in the national interest, he has been asked to go.

While it has been quite interesting to watch the match, in the real sense, Zambians are not amused because at the end of the day, it’s their money which is at stake. If it is true that after being fired, Chirwa will walk away with a bunch – then peoples’ money will definitely be unduly wasted. We understand that billions of Kwacha will have to be paid out to Chirwa as part of meeting the commitments made by the Zambian government.

What can we learn from this debacle, and whose version of events is believable? As I argued before, I am convinced that Clive Chirwa must have accepted the position because he genuinely wanted to go and help with the revamping of the Zambian transport system – in particular the Zambia Railways. That he found obstacles must have shocked him.

I also hinted before that, his (Chirwa’s) management approach – of linking rewards to production, appeared strange to those colleagues he found at home. Due to that, he immediately met resistance because his idea was to change the way of doing business. I am sure most of members of the Board preferred to continue with the status quo, the Zambian way – a culture of entitlement and receiving perks even when you do not deserve them.

Part of Chirwa’s provocation was his demand of 25% share option as part of his contract. Yet this is quite normal in Western countries’ CEO’s deals. It is considered a form of an incentive to encourage performance and running of a corporation profitably. It is not being greedy as it has been labeled in certain quarters. It perhaps sounds strange because a black Zambian is asking for it.

Neither is being a chairperson for the tender committee abnormal. Those who have made an issue of it have other agendas. That this serves only as PHD (bring him down) as some point out, is now obvious considering the issues being raised in the Zambian media – that, he risks being arrested for corruption. I would say that a witch hunt is taking place against Chirwa because I do not see the “corruption” he is being accused of. To try and scrutinize every single word Chirwa used as a basis for corruption is childish to say the least.

If everything Chirwa did and said in his short duration is tantamount to corruption, you can imagine the scale of it for those who have been in the system for nearly 50 years. Thus, there must be something else behind this onslaught on him. No wonder some people are speculating that – forces are simply blocking his presidential ambitions. That is a shame!

For starters, Chirwa is already a victim of the ever present – friction between those successful Zambians living in Diaspora and those folks running government, political parties, and the system at home. Somehow those at home are suspicious of those outside the country. True colors of these sentiments came out during the Dual Citizenship debate. President MIchael Sata himself made some anti-Diaspora comments on is tour in Europe. Until when the constitution is ratified and signed, this matter will remain unsolved.

Prof Chirwa has been castrated particularly because he exposed the way elites in Zambia cheat, siphon off, and shares the spoils. Without Chirwa’s voice and courageous action, the ordinary people languishing in poverty, would not have known, that while they starve – directors and the top brass are getting K50 million bonuses just for attending meetings. That’s absurd! If anything, this is what should be considered as another form of corruption.

Successful countries are those where the national income is distributed fairly amongst its citizens. Perhaps this is one reason many Zambians are migrating to other countries, where they believe they can have a better chance.

Further, we have learnt from Chirwa’s case that – in Lusaka which is sprawled with many Shanties, there are some people who are living in K70 million per month housing. Unbelievable! Armed with this information, Chirwa figured that – if as ZR CEO he was not entitled to live in a comparable accommodation, who then has the privilege and means to live in these places? Apparently the answer to that was found to be – it was either foreigners or very rich Zambians. This exposure is a tip of the iceberg and should be troubling to Zambians living in shackles and on $2 per day.

Indeed, when did we go back to the segregated pre-independence days, when low density areas were reserved for only the Whites? Are we developing a two-tier Zambia in terms of real estate? The good housing versus the poor ones?

And when it comes to contract law and agreements – again Chirwa’s case is demonstrative. His case has shown that, Zambians either do not understand them and/or do not pay attention, and that is why he is walking away with a big cheque. Those in charge seem not to care about reading them. Is it because the money involved is public and therefore not theirs? We can now see why foreign corporations, mining companies, and individuals have capitalized on this weakness. Because of this carelessness, consequently foreigners constantly make a killing from us or get away on many things to do with contracting.

In short, Zambians seem to have a propensity of not reading between the lines, are not prepared or simply do not mind suffering compliance costs such as those to be paid to Chirwa. How can that be regarded as a proper way to use peoples’ money if officers and senior bureaucrats do not pay attention? Chirwa has been castigated for being greedy yet he made all his demands before he took the job. Why didn’t they renegotiate better and fairer terms at the beginning? Why blame the man after the fact?

In order for Zambia to reach its economic development potential – there are a few things on the “to-do-list”, which are crucial. First, the friction I alluded to above and the misunderstandings which exist between those nationals who went out to better their lives (which is not a crime), and those who remained behind, must end. Otherwise the country would not take advantage of its human capital potential. We have seen that where this harmonization is implemented – like in China, India, South Korea, Singapore, Brazil, Chile, and Argentina – economic development is booming.

We cannot afford to bicker any longer. If we do, we would be losing valuable time, losing global competitiveness, and stifle economic growth. We must learn to solve issues through dialogue rather than engaging in open quarrels. Cooperation yields a win-win situation. At all costs we must avoid kind of a “bangoshe tabekala ichulu cimo” scenario. Otherwise both sides stand to lose.

Equally important, is the realization that – meaningful economic development and true democratization occur only after the majority of citizens are impacted. Therefore, economic growth which is only enjoyed by a few – is not useful. Seeing a few bungalows here and there, or seeing a queue of SUVs on the poor roads, is not a sustainable and poverty alleviation strategy.

Hence, putting emphasis on super class and luxurious villas for a tiny few, or constructing ultra modern supermalls, where only a rich few can afford to shop – is not helpful to many poor people. This is kind of a false development – since it is only rich foreigners, NGO executives and few Zambians who enjoy most of what say, Arcade, Levy Complex or Manda Hill have to offer. Unless of course if we are building Zambia for the benefit of the privileged few.

Rural roads as is envisaged by PF government would be preferable, because these would probably go a long way to benefit the more than 80% segment of the population. But the contradiction is that – these roads cannot be built if the bulk of the development resources are spent in urban areas and on paying top bureaucrats. This is a challenge which the present government would have to face.

Hence, if Prof Chirwa’s case can raise the awareness amongst ordinary people – such that they can begin to hold, not only politicians, but also advisers to account, then that would be a good thing. Otherwise, how this crisis (the persecution of Chirwa) will affect corruption campaign and the flow of Diaspora Zambians back home – to man the many universities and technical colleges planned, remains to be seen. For now, let us just celebrate the crusade of one man. Cheers!

Kaela B Mulenga

zbia@hotmail.com

By Kaela B Mulenga

Kaela Mulenga
Dr. Kaela Mulenga
In several internet forums, I have squared off with MrK (a pseudo name for a Zambian blogger) on issues raised by Dambisa Moyo and people like Bill Gates. Note that – MrK calls himself a ‘socialist’ while labeling all of us arguing with him as ‘neo-liberals’. Currently MrK is issuing comments concerning monopolistic corporations and of course on Dambisa Moyo (DM) and Bill Gate’s (BG) clash.

Also after the news spread that – Konkola Copper Mines (KCM) one of the major mining companies, was thinking of laying off some 2000 Zambian workers – a hot discussion has ensued regarding foreign corporations. There are those who claim that – since most of these mining companies operate as foreign-owned monopolies, they behave as big-headed bully boys who come up with all sorts of threats. From this stand point, these companies are regarded by some people as moral hazards – which tend to behave recklessly because they feel that they are untouchable or emboldened by some protection like agreements. On the opposite spectrum however, others argue that – that’s the price a country has to pay for continuing to rely on foreign enterprises.

Indeed, 50 years after independence, we are no where near self-sufficiency in the running and operation of the mines. MrK a leading opponent of foreign entities argues that apart from the fact that these companies suck development resources from the host country through profit externalization, he thinks that they impede development of local technical know-how. He makes a case that where these companies are to be permitted, they should be heavily taxed. And that the revenue generated from these taxes should be applied to the distribution of income among Zambians. But if that is done, there is a genuine fear that if you impose high taxes and loyalties, you risk scaring away investors since these are hunting for high returns on their investments. What should we do then?

In my view, so long as we have so far failed to diversify away from mining and that the technical know-how to run the mining industry – which is the core of our economic existence, is still commanded by foreign manpower, we’ll continue to depend on foreign corporations. It is therefore unfortunate that even today the general government thinking is that of preference for foreign experts instead of local Zambians. Yet the pool of qualified Zambians exists and is scattered in Diaspora who can be taken advantage of.

As regards MONOPOLY POWER, I have tried several times before to point out, that monopolies consist of the good/desirable versions as opposed to the bad/negative types. Some monopolistic behavior is desirable in a society. For example, utilities for: electricity, and water/sewage plants result in lower average costs, therefore useful. When you have a national grid, delivery of electricity to households becomes cheaper – if the company is run reasonably efficient. Lower cost is possible due to economies of scale. Likewise, telecom optic fiber is best done by a public company. Can you imagine many small companies each competing to offer optic/cable services?

On the other hand, you have bad monopolistic power such as those encouraging collusion when offering their products and services. OPEC at times behaves as a bad monopoly when it arbitrarily raises crude oil prices. Also those monopolies which opt to reduce output below socially desirable levels for the sake of increasing their profits are no good to society.

There are other evils of monopolistic power which can be discussed. Suffice here to say that – you cannot just make a blanket condemnation of all monopolistic tendencies.

When it comes to Moyo and Gates debacle, this is a more curious discussion. I would begin by saying that the two [DM & BG] are different faces of the same coin. They have clashed because both are fighting for the same terrain. First, through charitable aid and economic transfers, propounded by Gates – Africans could be educated; their health improved and people gets fed. It is these people Bill Gates wants to reach and cultivate as consumers of Microsoft products and services. By the way Microsoft is a monopolistic conglomerate.

On the other hand you have Dambisa Moyo, who after condemning government to government and concessionary economic aid – recommends in place, the introduction of strictly private investments. Moyo wants African governments to stop getting government-to-government aid loans and soft borrowing from the World Bank – so that they can go instead on the capital markets to borrow. This is the solution she offers. She believes that this would be better, cheaper, and yield less corruption.

What many people fail to see is the trick and benefits of this switching. Say, if governments switch to raising of money from say through Bond issues – private investment companies like J.P. Morgan, Goldman Sachs, Morgan Staley and others would benefit immensely. To borrow money through bonds, governments would need advisory services of these investment banks, asset management companies, traders and securities consultants, bond experts etc.

Most African governments cannot manage on their own implementing this process. Moreover, there are few corporations on the African continent who can provide this advisory and consultancy services. Obviously experts and knowledgeable people in this area can only be found with companies like Goldman Sachs, a company Moyo worked for. There are many other issues connected with the process of borrowing on the world market. They are too elaborate for the discussion here. Cost and benefit analysis would have to be conducted.

But to simplify the discussion, let me narrate some few problems which are of concern to people like MrK and others. I will group them in what I call – Dambisa’s and Gate’s models.

With DMoyo’s model: at the very least, the process of borrowing from world capital markets involves fulfillments of certain fundamentals. First, there is the necessity of rating countries. A country would have to be rated by one of the three rating agencies – Standard & Poor, Moody’s Investors Service or Fitch’s Ratings. This means that countries would have to play to the tunes of what these rating agencies say.

With international mining agreements fresh in the minds of Zambians, you can appreciate the reluctance of some people. It appeared that foreign investors got an upper hand whenever Zambian government talked about cancellation or review. Adherence to the Rule of Law was often used as cover. Therefore going through rating agencies would pose some problems.

Second, there is the issue of investors earning high returns – usually expecting 10% or above. If expectation of good returns are high, then what happens to those countries with zero or low returns? Would they also be able to borrow from the markets? According to this model, they would go without investments or would earn very little since they would be unpopular to investors. In short, since to qualify for borrowing depends on meeting the demands of investors – it is felt accompli that African countries would be sub-servant.

Even if you would find Africans attracted to the merits of borrowing from the world capital markets, you still have to address the sovereignty and social responsibility issues. For, if assets and natural resources belong to the people, shouldn’t these nationals expect anything from their resources? Is pleasing private capital owners the only thing which counts?

Therefore, you can see that there are those who think that Dambisa Moyo’s proposal would be a worse re-colonization model – since it would put countries at the mercy of heartless private investors, who would not be shy to dump a country as soon as their returns plummeted. Having investors searching for profits is slightly different from Nations looking for colonies. These and other issues are worrisome when considering Moyo’s model.

Bill Gate’s model is not any better. With computers, we already know that once new ones come on the market, the old ones virtually become obsolete. One would have to come up with fresh cash to upgrade or be without. Also many parts and devices are not universally compatible. This is deliberately designed to maximize profits. And to continue making profits, Gates keeps on looking for more customers – emerging markets opens up new opportunities. Dishing out free economic aid is a useful bait.

This incompatibility issue basically makes it theoretically possible for African countries having technology clusters or Islands – one Island belonging to Microsoft, another for Apple, Samsung, etc.

Hence, while Microsoft is fighting for its turf, Samsung are fighting for theirs. Where do we end up? Total confusion. And should the going get tough for a monopolistic multi-national, I would not be surprised to see more hostilities. Therefore feuds like the one we are witnessing between Dambisa Moyo – some spokes lady for “investors’ club”, and Mr. Bill Gates will become more common.

It is also quite possible that in the quagmire, African countries if they don’t comply, would risk being locked out. When elephants are fighting, it is grass which suffers. Using the principle of password, Microsoft or any owner of technology, could in fact lock a country out of its invention. Unless of course one has advanced hackers like China for copying that technology. Genetic biotech companies like Monsanto have already started practicing this idea. “Terminator seed” such as for corn (maize) is protected in the sense that a farmer cannot save this seed for next season’s planting. [It has been made infertile genetically]. Fresh planting seed would have to be bought from the company every single season.

In conclusion, when people like Dambisa Moyo and Bill Gates begin squabbling, we really need to be concerned and analyze and see what lies behind the exchanges. While Moyo looks for more recognition world wide, which would be bringing in lucrative consultancy fees, Gates wants to protect Microsoft market share. I just hope that Africans become fully aware of what is happening so that they can protect and guard their own interests.

Toronto, June 4, 2013

Kaela B Mulenga

zbia@hotmail.com

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