Executive Issues - January 2009

Volume 7 - January 2009

Volume 7

January 2009

Zambian Airways Faces Collapse As ZSIC management withdraws recommendation to bail-out struggling airline The amount of the debts, which Zambian Airways owes to various creditors, is astronomical to say the least! The latest figure of the debt was slightly above US$25 million and interest was accruing unabated. “The airline is bankrupt…,” said a senior manager in one of the private commercial banks that loaned millions of dollars to Zambian Airlines. The board and management of the airline have tried all sorts of rescue packages that appear to be falling apart. “Liquidation is the only answer but even then, the creditors won’t recover their monies,” risk and compliance manager of a commercial bank said. He said the US$25 million debt is mainly from big creditors but if other smaller suppliers are added, the figure could go beyond US$30 million.”They will need a government bail-out for them to survive,” he disclosed. But it is very unlikely that the ministry of finance will use state resources to keep a private airline in the air in the midst of various national problems affecting the country, especially in the mining industry. The directors of the airline are Post Newspaper Editor and shareholder Fred

Mmembe, Taskforce Prosecutor and Lusaka Lawyer Mutembo Nchito, Hotelier Gaudensio Rossi and Passmore Hamukoma who is the chairman of the Zambian Airways board. We hear three commercial banks are contemplating lifting the corporate veil on the airline so that directors and shareholders should be made personally accountable to pay the debts which have accumulated in recent years. The shareholders of the airline are JCN holdings owned by Nchito and his elder brother Nchima Nchito, Seaboard, a US firm that owns and manages National Milling Corporation (NMC) and the Post Newspapers Limited. The Post Newspaper injected US$3 million in the airline using a loan facility from Investrust, which is still outstanding even though the company has tried to be update by paying funds from the sales of the newspaper. Attempts have been made to woo investors to buy into the airline but most of them have not been impressed with the financial position of the company, which was worsened when the global oil prices had terribly tumbled on the international market and affected most airlines in the world.

Taskforce – Chungu Deal Exposed Chungu’s return raises questions on the taskforce agenda to fight corruption Maxwell Nkole, the chairman of the Taskforce on Corruption, was quick to dismiss the assertions that fugitive former intelligence chief Xavier Franklin Chungu alias ‘XF’ had cut a deal to enable him return home after four years of self-imposed exile. Chungu, who also carries the name of Franklin Kalinga Chungu, returned home on December 3, 2008 from his ‘hiding’ base in neighbouring Mozambique (See Executive Issues July Edition) where he was comfortably living on the sea side. It has emerged that Nkole was in the forefront of trying to cut a deal with Chungu and he personally travelled to Maputo, with an officer from the taskforce, a few days before the October 30 Presidential elections to negotiate with Chungu to return home through an amicable settlement. We hear the government was not aware of these arrangements by the taskforce. Nkole, we have gathered, offered to renovate one of the houses seized from Chungu situated in Kabulonga area so that the former director-general could have been quietly

put under some “sort of” house arrest while discussing the deal. Nkole initially met a close relative of Chungu in Zambia where the plan was mooted and communicated to Chungu in Maputo before his lawyer Nicholas Chanda was drafted into the whole plan. “It was the taskforce or Mr. Nkole to be specific who first made the contact for the meeting. It was unsolicited…,” the source said. It was agreed, according to one of the insiders who were part of the deal that Nkole should travel with Chanda to Mozambique to finalise the terms of the agreement with Chungu. “We were told that the arrangement began before [President Levy Patrick] Mwanawasa died…,” the source said. However, Nkole travelled to Mozambique without the knowledge of Chungu’s lawyer – Chanda -who was supposed to have accompanied him to finalise the agreement. We hear Chungu refused to meet with Nkole in the absence of his lawyer and other officials from government so that the arrangement could be finalized with a state consent. “They

The biggest debt is with Finance Bank Zambia Limited, which has been proving funds to keep the airline floating. But we hear Finance Bank chairman Rajan Mahtani‘s patience with the airline is running dry and may pull the plug. However, he is equally constrained to make any moves without the consent of other creditors who includes the Investrust Bank Plc, Intermarket Banking Corporation and the staterun Development Bank of Zambia (DBZ), which by implications is supposed to be a shareholder in the airline. Investrust Bank Plc, Intermarket Banking Corporation and DBZ syndicated a loan of US$5.5 million to Zambian Airways in 2007, which the airline used to purchase additional aircrafts to add to the fleet. After failure to settle the loans on schedule, DBZ made a decision to swap the loan into equity even though most To pg 2

Contents NAPSA Sacks Boss

- Page 2

Budget 2009: Likely More of the Same - Page 7

Who’s who

- Page 3

Zimbabwe: A Wooden Spoon for SADC - Page 8



Evaluating the Banda Presidency - Page 5

Energy: A New Idea (At Last)

- Page 10

Maize: Export or Perish

Orbituaries

- Page 11

- Page 6

Executive Issues

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NAPSA ‘SACKS’ BOSS

Volume 7 - January 2009

As the company buys controversial Munali Coffee Farm for US$ 7.6 million

Coppers to recover the loan.

Dr. Aubrey Chinyeke Chibumba, the recently “sacked” Director-General of NAPSA, had ignored a set of probing questions sent to him over a questionable investment he made using public funds. Chibumba decided to buy a failing and collapsing coffee farm – Muyubu Farms in Receivership– at a cost of US$7.6 million at a time when coffee farming to collapsing in most parts of Africa. The transaction was concluded on November 14, 2008 through the Receiver – Pricewatehouse Coppers. “This was one of the worst investment for NAPSA, Someone must be made to pay for this waste of public funds,” said one NAPSA manager who had opposed the deal. The board of NAPSA announced the suspension of Chibumba recently and he has been replaced by Stanley Phiri who had been director of finance and investment at the state-run Zambia State Insurance Corporation (ZSIC). NAPSA board chairperson Professor John Lungu, who had defended another similar questionable NAPSA investment recently, announced the changes.

Following the frequent newspaper advertisement of the sale of the farm, very few credible investors showed interest owing to the complicated nature of coffee farming and the collapse of the coffee prices on the international market. We hear the valuation of the farm was put at a lower price than what NAPSA paid, raising questions on the transaction. A set of questions set to the Receiver remains unanswered over the actual value of the farm and the list of bidders who threw in their purchase intention. The deal was further suspicious when it was discovered that Chibumba decided to form a separate company, wholly owned by NAPSA, to be the purchaser of the farm. The newly formed Munali Coffee Company Limited intends to continue with the growing and processing of coffee despite the difficulties the farm was facing. “Buying such a farm is too risky an investment for NAPSA to make. It is not going to them a return…,” an agriculture economist said.

Mubuyu Farms – otherwise known as Munali Coffee – is a classical failed project. The farm, situated 1,600 hectares of land near Mazabuka has been slowly going down following the capricious weather pattern in Southern Zambia as well as the lack of capital injection. A US$10 million loan obtained from Barclays Bank Zambia by the owner Willem Lublinkhof failed to bring the farm to life despite sinking several bole holes to mitigate the drought pattern on the farm. Barclays, the traditional lender to the farm for several decades, appointed a receiver Nitesh Patel of Pricewaterhouse

From page 1

We hear NAPSA has approached Zambia’s agric-giant, ZAMBEEF, to manage the newly acquired farm on its behalf. It is not clear what terms will the management contract contain but Chibumba was recently nominated to sit on the board of ZAMBEEF. NAPSA had also injected ZMK10 billion of pensioner’s funds into the gambling business, Zambian Lotto, on the expense of credible projects in Zambia. The controversial lotto, which is majority owned by Lebanese nationals, was launched barely few months without any track record but Chibumba pumped in the funds to acquire 10 percent of the stake.

Taskforce – Chungu Deal Exposed

Zambia Airways Faces Collapse

minority shareholders objected to the deal. Financial analysts have questioned the Central Bank role in these transactions saying the whole loan facility to Zambian Airways was done without much supervision from the Bank of Zambia. “The liquidation of the Airline will badly affect the financial position of smaller banks like Intermarket. BOZ should have taken a much stronger role in these matters especially that huge funds were moving into a non-viable venture,” he added. As the drama was playing out, the state-owned Zambia State Insurance Company (ZSIC), which had initially expressed an interest to inject US$4 million in the airline, withdrew its earlier position. The board meeting of December 16, 2008, the ZSIC management informed the board members that they had decided to withdraw the recommendation to inject funds in the airline on account of debts. The management informed the meeting that ZSIC could not proceed with the proposed investment because Zambian Airways owed another state-run firm – National Airports Corporation (NAC) over US$2 million and also raised issues of corporate governance within the airline. The airline is also believed to owe around US$2 million to another state-owned National Pensions Authority (NAPSA), which it has failed to service. We gather the deal to pump funds into Zambian Airways using pensioner’s funds was made under the leadership of suspended NAPSA boss, Dr. Aubrey Chinyeke Chibumba. The airline also tried to get funds from another state-run Zambia Consolidated Copper Mines Investment Holdings (ZCCM-IH) but the board rejected to the investment after doing a due-diligence study which showed that the airline was bankrupt. The detailed report, compiled by Gershom Mumba, a former DBZ managing director and an ex-International Monetary Fund (IMF) executive director who categorically stated that the airline was not a profitable venture that would require any prudent investor to put funds in it. However, almost at the same period, the ZSIC investment committee did a report, which stated that the airline was a viable business venture until the board refused to bulge in order to support management. There are credible speculations that the airline has not been servicing the taxes with the Zambia Revenue Authority (ZRA), which complicates the creditor’s positions. Legally, the payment of taxes will take precedence of any creditor if the airline wounds up even though jurists still differ on this position in Zambia.

From page 1

stayed there for a few days and returned without meeting Chungu…,” a source close to the former spymaster disclosed. Nkole confirmed on state television – ZNBC – that the taskforce officers had followed Chungu to Maputo prior to his return but could not give details on the agenda of their trip. Chungu, we are told communicated with his lawyers saying he could not have met Nkole because his tenure at taskforce, including its legal authority, was not recognized by him and his colleagues facing corruption charges. Following the protracted negotiations, which could not materialize, Chungu, on his own volition, decided to return home so that he could “clear himself” of the several criminal charges against him in the subordinate courts. He travelled from to Lusaka via Johannesburg in a business class using South African Airways ‘Airlink’ passenger plane. Contrary to stories that he was spotted by the immigration officers upon entry, Chungu presented himself to the immigration officers and was ushered into the VIP lounge before he was whisked to the office of the Inspector-General of the Police Francis Kabonde. Chungu later explained to Jones Chinyama, sitting as trial magistrate for most corruption cases, that he had fled the country after receiving credible information that he was about to be assassinated by people he did not disclose. He said he was now sure that his life was no longer in danger and decided to return home. Chinyama ordered Chungu to pay ZMK500 million for breaching the bail conditions imposed on him by the court or face six months imprisonment for contempt of court. On arrival, Chungu presented a passport bearing his other names Franklin Kalinga Chungu, a document which is believed to have been issued for operational purposes when he was head of the Zambian intelligence or infamously called ‘Red Brick”. People close to Chungu confirms that the ex-spymaster has often used the names of Franklin Kalinga even in his youth days. The taskforce has since slapped Chungu with charges of using forged documents arising from the use of the said passport and will soon appear in court for trial. Questions have also been raised on how Chungu managed to obtain Visas to enter European Cities at will if his passport was a forged document as alleged by the taskforce. Time will certainly tell on this episode!

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Volume 7 - January 2009

Who’s who Judge Lombe Chibesakunda – The Iron Lady The National Women’s Lobby Group has called for wider national support for the candidacy of Madam Justice Phyllis Lombe Chibesakunda who is vying for a seat on the International Court of Justice domiciled at The Hague, Netherlands. “We need to support Justice Chibesakunda. If she is nominated, the Zambian flag will be put on the world map,” the Lobby has said, adding that her success would motivate young Zambian girls to aim higher. Judge Chibesakunda is seeking a seat on the international court. The candidacy however goes beyond mere gender considerations. Judge Chibesakunda, one of three female judges of the Zambian Supreme Court of Appeal is in many respects a credible and worthy candidate with a rich, well rounded background that goes well beyond service in the judiciary. Positions Held; • Head of the pioneering urban social project, Social Action in Lusaka (SAIL), • Member of Parliament for Matero • Minister of State for Legal Affairs • Solicitor-General of Zambia. • Zambia’s Ambassador to Japan, • High Commissioner of Zambia to the United Kingdom • Judge in charge at the Industrial Relations Court. • Judge in charge of the Ndola High Court. • Chairperson – Human Rights Commission (HRC) of Zambia • Judge – Supreme Court of Zambia Nominations to the International Court of Justice should be finalized soon. What Zambia has in Judge Chibesakunda, is a good candidate with a background that qualifies her for a seat on the court. What was not made clear was how Zambians could advance her cause.

Barclays Bank Fingered in Suspicious Deals Barclays await court outcome but accusations persist nonetheless Barclays Bank Zambia Managing Director Zafar Masud is known for being a media friendly boss but this time around, he could not answer simple and clear questions put to him. His bank is being accused of serious allegations, which needed his response. The controversial Mubuyu Farms was put in liquidation by Barclays Bank after the shareholders defaulted on a loan repayment as a result of the fall in coffee prices on the foreign market as well as the drought that engulfed the southern part of Zambia. The farm was sold to Munali Coffee Limited, a company specifically formed by National Pensions Authority’s (NAPSA) suspended boss Dr. Aubrey Chinyeke Chibumba on behalf of his corporation. Note that at the time of sale, the company had not been incorporated and queries sent to the Receiver at Pricewaterhouse concerning the same remain unanswered as well! Now, here is the allegation against Barclays; NAPSA bought the Mubuyu Farm at a cost of US$7.6 million and appointed ZAMBEEF Plc as managers of the same entity. Barclays Bank through its nominees own a substantial shares in ZAMBEEF and industry experts have raised alarm on this scenario. “Is Barclays, in cohorts with others too quick to pull the plug on financially troubled companies so that it can quickly sell them to big corporations where it has an interest?” the question still begs! “We wish to advise that the matter is currently in court. We shall allow the due process of the law to run its course, whose outcome we shall abide by,” said Webster Malido, spokesman of the bank who replied on behalf of Masud after a protracted enquiry over the answered press query. And as if to add salt to the injury, ZAMBEEF went ahead and appointed Dr. Chibumba as a board member of ZAMBEEF barely weeks after appointing them managers of the controversial Mubuyu Farms. Was he appointed to sit on the board in his individual capacity or what? We hear NAPSA has also shares in ZAMBEEF under the public and institutional investors.

Zambia Qualifies for US Grant Aid…

…Could draw up to $700 million for poverty reduction and infra-structure

for support on account of her performance in fighting corruption and in other developmental areas.

Zambia will be looking for grant aid in the range of US$ 6-700 million from the US Government’s Millennium Challenge Account (MCA). The door is open and the way, clear. Zambia was among three countries, worldwide and the only African one to qualify for grant aid under this scheme this year. Colombia and Indonesia were the other two.

“Zambia passed 18 MCA eligibility indicators, including the crucial corruptionrelated one and this will reinforce the strength of our partnership,” said a senior project official.

The MCA is a US project aimed at reducing poverty through income generation and promotes economic growth in the eligible countries. Zambia qualified

A two- year US$20 million MCA threshold programme that focused on facilitating business registration, countering corruption and improving border management To page 4

Dickson Jere is Presidential Aide

Founder and until now Managing Editor of Executive Issues Dickson Jere has been appointed Chief Analyst(Press and Public Relations) at State House by the new President Rupiah Bwezani Banda as such Jere will be among the top aides to the new President. Jere formally took up his new appointment December 12 after having been sworn-in the previous afternoon.

He was the Lusaka Correspondent of the French news agency, Agence France Presse (AFP). He has worked for The Post in Lusaka and is past President of the Zambian Chapter of the Media Institute of Southern Africa (MISA). In 2003, he was appointed by late President Levy Patrick Mwanawasa as Commissioner on the Mungo’mba Constitution Review Commission (CRC). He will be on a sabbatical leave from the

publication for the duration of his State House appointment. In his absence, associate editor Arthur Simuchoba will take up the role of managing editor of the Executive Issues. Jere joins a team of other new aides who include veteran politician and academician Akashambatwa Mbikusita-Lewanika who is special assistant to the President for Political Affairs, former Agriculture Minister Ben Kapita who is presidential aide for Special Projects and Dr. Richard Chembe, formerly Director at Central Bank, who is a special aide for Economic Affairs. Others include Principal Private Secretary to the President, Dr. Austin Sichinga, who was permanent secretary in the office of the Vice President.

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Volume 7 - January 2009

Evaluating the Banda Presidency – Two Months On!

Two months into his tenure, the new president is quietly beginning to leave his imprint but the national focus has been on his negatives “All politics is local,” so some observers of the political scene have concluded and two months into his tenure, Zambia’s fourth President Rupiah Bwezani Banda may not disagree. His preoccupation this far has been a crowded and pressing domestic agenda. The imperative is no less than to position the country to wither the effects of the global economic downturn. Its effects are real, are beginning to filter through and must be kept at bay. Tackling the escalating food prices, the effects of reduced revenue resulting from the abrupt end of the copper boom, actual and threatened job losses on the mines and other sectors and the reorganization of the administration are issues that have and continue to demand urgent attention. Without some movement in these areas, the country would be in a perilous situation. To the extent that he has not so far moved to shake up or change the administrative structure of his predecessor, he would appear to be something of a gradualist. Except for what was a limited reshuffle, the cabinet and the upper echelons of the civil service remain as before. That has not of course met with universal applause and has continued to be the source of nagging questions of whether or not a new sense of urgency or momentum can be injected without surgical changes in this parameter. President Banda’s first foray into international relations-an official visit to Nigeria- was been derided by some as a waste of time. It raised questions and criticism largely on the premise that the most pressing item on Zambia’s foreign policy agenda has to be Africa’s festering sore, Zimbabwe next door. There could well be something to that. But as expressed, this position does not seem to take sufficient notice of the fact that the Nigerian President Musa Yara’adua had been formally invited and had accepted to be the guest of honour at Zambia’s 44th anniversary of independence on October 24, 2008. There are suggestions that this visit would have doubled as state visit as well-the first ever to Zambia by the new Nigerian leader. In the event, the anniversary was a low key affair. It was overtaken by the death of President Levy Patrick Mwanawasa and events had moved so far that by the time of the anniversary, Zambia was only six days away from the first ever and hotly contested presidential byelection.

Zambia Qualifies for US Grant Aid…

From page 3 was successfully concluded in June 2008 which how Zambia won eligibility for more aid. Top MCA officials were expansive and congratulatory. The CEO John Damilovich described Zambia’s winning of eligibility as “a huge milestone in assisting to improve economic development and reducing poverty. The MCA has formally recognized the Zambian government’s commitment to invest in its people through education, health care, its commitment to the free market, facilitating business, governance and fighting corruption,” said the official statement. Secretary to the Treasury Likolo Ndalamei has recently indicated that Zambia has already initiated consultation on drawing up a work plan for the integrated national five-year MCA programme. It is the government of Zambia that has to drive the application process which has to involve public consultations and the funds will be accessed only after detailed negotiations and signing of the necessary agreements. The funds can be used for infra-structure development and improvement and poverty reduction in line with the goals of the Fifth National Development Plan (FNDP) and other areas. Zambia joins 18 other countries around the world that have completed MCA compacts and a half dozen more that are in the process of negotiations. So far, Tanzania has qualified to access US700 million while Madagascar got US$100 million and Namibia, US$300 million. The MCA is one of the US Government’s innovative foreign assistance programmes aimed poverty reduction. What remains to be seen is how much and how soon Zambia will draw from the facility.

Nigeria was in any case not as bad a destination as it was made out to be. Though, it tends to be seen through the prism of some of its more unscrupulous citizens, it is an African country with a formidable and well established indigenous entrepreneurial class. It is in its own right an economic powerhouse and Nigerian investment in Africa has tended to introduce a new dynamic. Nigerian banks for instance are a hit and are much appreciated in most of West Africa because the range of their products is more accurately informed by objective African conditions. Zimbabwe is of course a burning issue and has to be taken on board. However, the results of the March 2008 elections which were internationally accepted reflected largely an internal political stalemate and certainly were not reflective of any real consensus for change. Even if the opposition had won the run-off, they would have had a hard time of it because they commanded no real majority in parliament. Against this background, only a considered response from Zambia will do and it necessarily shouldn’t be of the “followthe- leader “type. Normalizing the supply and escalating cost of the staple food, maize -meal has clearly been the top priority. Of the newly appointed ministers, Agriculture and Cooperatives minister Dr. Brian Chituwo was the first off the mark. Barely a few days into his new post he announced that Zambia would import white non-GMO maize and that the Food Reserve Agency (FRA) would have to release maize for sale to millers from the strategic reserve. It was the beginning of a concerted push which continues. The matter of increased maize availability on the market to lower mealie-meal prices that had by the time of the October 30 by-election surpassed the K50, 000 mark was the most pressing issue from the outset. The opposition Patriotic Front (PF) kept up the pressure and announced it would mount a country-wide campaign to protest the high prices. Government called for dialogue among all stakeholders instead of demonstrations and President Banda was the fore most advocate of dialogue and not confrontation over the issue which had global connotations. “It is necessary that we work together. My doors are always open. I have never closed my doors to any opposition leader. It is so necessary to talk to each other,” said President Banda speaking at Chongwe, outside Lusaka. That paid off. Cooler heads prevailed. The PF President Michael Chilufya Sata called off the street campaign, opting instead to table proposals on how best to achieve a reduction in prices and safeguard jobs on the mines. He said the PF would give chance to government to implement the proposals it would submit and demonstrations would only be the last resort. Subsequently, the president of the opposition United Party for National Development (UPND) Hakainde Hichilema was to submit his party’s suggestions and ideas on how best to respond to the global economic downturn. The opposition seemed persuaded to give dialogue a chance and not least by the President’s earnestness. How government will build on that new willingness to talk remains to be seen but it seems to have a achieved a thaw and to have won for itself “a decent interval.” More poignantly, mealie-meal prices have began to reduce as a result of measures implemented by government, among them increased monthly supply of maize to millers by the FRA and at a lower price. The FRA now supplies 60,000 tonnes a month up from 20,000 and has pledged a further increase should need arise. “ Since the millers will now be accessing the maize from FRA, there is no reason why they should not respond by reducing the prices of mealie-meal as well since their concern was the cost of maize,” said Dr. Chituwo. Prices are now falling gradually and the supply side is being taken care of by imports from South Africa and there is reason to believe that the situation will remain stable until the next harvest. These measures were corollary to the earlier decision to increase the subsidy to small-scale farmers under the Fertilizer Support Programme (FSP). The IMF is known to have been non too pleased but as things are turning out, the decision from the government’s point of view is apt. For, it is the small-scale farmer who is more likely to sell his crop to the domestic market without contemplating exports which would appear to be new swan song of the “private sector.” Escalating food prices are however merely one strand of the effects of the global financial downturn. The meltdown has seen to a rapid collapse in commodity prices. Metal prices too and copper, Zambia’s main export has been no exception. The copper mines scrambled to adjust and in short order, the copper processing plant at Bwana Mkubwa, Ndola was shut down. Next, the Luanshya mine-a low grade, ill-fated from the start operation also shut down and the mine was rapidly put on a care and maintenance basis to prevent flooding. Upwards of 2000 workers were left high and dry. The situation was particularly dire in Luanshya, a town that revolves around the mine. Closure of the mine meant the virtual death of the town itself after a period of hope that it would survive. President Banda traveled there to meet with management and the unions for a brainstorming session on the way forward. In addition a cabinet level monitoring team that includes Labour and Social Security Minister Austin Liato was constituted to watch the situation on the mines. But there are no easy answers. There are all manner of suggestions including the ‘heretical” one of nationalization like western governments have

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To page 5

Volume 7 - January 2009

Maize: Export or Perish?

News

Government needs to ensure stable supply for the domestic market and not by administrative instruments.

The impression created is of some actors in the “maize field” who were so intent on exporting maize that they held on to it, waiting for an opportunity to export.

The recent statement of the Agriculture and Cooperatives Minister Dr. Brian Chituwo on the “government decision to import 100,000 metric tonnes of nonGMO white maize” made interesting reading:

But there are other strands as well.

… “[at meeting in June 2008] It was … agreed that the private sector, coordinated by the Zambia National Farmers Union, prepares a draft Memorandum of Understanding (MOU) to facilitate the importation of maize stocks…However, the preparation of the MOU did not go through as the private sector demanded for some clauses which the Government was not comfortable with. The most contentious was to allow the private sector to export the maize in case there was more maize by the time the imported maize landed in the country. The Government was not comfortable with this clause as it could have given the private sector express authority to export even the local maize without importing any.” By then, the meeting that was chaired by former joint Minister of Agriculture, Sarah Sayifwanda had arrived at the conclusion that “the country had no maize surplus given the change in national consumption patterns” from 50,000 o 60,000 tonnes and therefore that Zambia needed to take a precaution by allowing the private sector to import maize preferably from South Africa to forestall a shortage. The issue was clearly an imminent shortage and how to forestall it. But somehow and in the same breath, there was also this clear anticipation of an export opportunity for Zambia for the same soon-to-run-out maize! This ambivalence is hard to explain but there has to be an explanation. “The private sector was categorical that there was need to import maize because they did not have enough maize of their own. How come six months later…there is maize available on the local market. Where was this maize stock during earlier discussions? Surely, Government cannot be held responsible for some stakeholders under declaring maize stocks in their possession.” Reading through the Minister’s statement one is left to wonder what the real story behind the high mealie-meal prices of the recent past is. Was it really a part of the global economic downturn or simply the result of the exigencies of the local economy?

Evaluating the Banda Presidency – Two Months On!

From page 4

done to most of the financial institutions! But there is as yet no decision on how to proceed and the stimulus and other relief measures for the mines may come via the budget. There was this assurance from the President though: “What we are considering is that if possible, we ensure that out workers do not remain unemployed. How we are going to do it, we do not quite know yet, but we are definitely making plans to enable our people in Luanshya continue with employment.” That effort continues. The larger picture is that there has been at least a partial review of expenditures leading to a re-designation of priorities. Zambia’s withdrawal from hosting the tenth all-Africa Games scheduled for Lusaka in August 2011 has met with a mixed reaction but is connected to that process. There those who argue that the country has lost a great opportunity to market and put itself on the world map. That could well be so and the withdrawal cannot have enhanced Zambia’s credibility. However, that decision does not appear to have been taken in isolation. Instead it came as part of the re-ordering of priorities. “The combination of the recent presidential elections and the expected fall in revenue arising from the global financial crisis forcefully dictated that the Government chooses between the honour and pleasure of hosting the games and the duty to provide food and social service… Government has decided to shift resources for the hosting of the games that would have been in excess of K800 billion to the identified priority areas such as food production, provision of social services, housing and infrastructure construction,” said Chief Government spokesman Ronnie Shikapwasha. The first two months of President Banda’s stewardship present a mixed picture but one characterized by moves to get to grips with a situation that is potentially a crisis. So far, that has been averted. Whether the emerging approach will do for future crises which promise to multiply as global downturn bites is at this stage an open question.

When the 2008 budget was unveiled one of the earliest complaints about an insufficient allocation came from the Food Reserve Agency (FRA) and the University of Zambia (UNZA). FRA chairman Costain Chilala said almost immediately that the allocation of K80 billion for maize purchases was insufficient and government had to give out more if the strategic national reserve was to exist. There then ensued an exchange between the FRA and the Ministry of Finance. In quite brusque terms, the Minister of Finance Ng’andu Magande said there would be no additional allocation and if the FRA needed more money it could borrow from commercial banks. But Chilala in turn pointed out that this had been done in the past but had only left the FRA with a debt that it was struggling to repay. Unfazed, Magande stuck to his guns and invited the private sector to step into any breach. In the end, the FRA had to make do with the paltry allocation and the result was that it bought only 73,000 metric tonnes bringing the total in the national strategic reserve to 150,000 metric tonnes. The extent to which this inadequate national reserve influenced the price spiral is an open question but could be a factor. The matter of maize exports cropped up again during the Euro-money conference held in Lusaka at which the export ban that was in force then was cast as a primary disincentive to production because it was an administrative instrument that ignored market fundamentals. But crucially maize is the designated staple food of Zambia, though in practice cassava seems to be more widespread and as a crop would appear to be less problematic than maize at least to grow. For that reason Government is on guard twenty-four hours especially as the reaction to any instability in the maize market tends to come from the politically organized urban elite. Thus government finds itself more readily impelled to intervene on the side of consumption ignoring the blatant contradiction of that in the face of sermons about the need for a free market! At the same time, maize is grown by farmers looking to a return, preferably a good one on their investment and they would for that reason sell it wherever it may attract that kind of return regardless of whether or not it is the domestic market. It is clearly the interaction between these two - the Government and the farmerthat will decide whether or not the country will have a steady and stable maize supply or it will forever be fire fighting and on the tenterhooks as in the recent past. The matter goes beyond the private sector’s supposed perfidy or “hidden agenda” or for that matter government’s “high handedness.” It is economic. Clearly, if supply is to be stable and predictable in the main because Zambia still relies on natural rainfall anyway for most of its core agriculture, the final price of maize will have to reflect the cost of production and if those costs are high, maize is unlikely to be cheap however hard the yearning for cheap maize even on the part of government, may be. The official position at least when publicly stated is that maize has to be “affordable” and that has policy implications that still have to be addressed. In a situation where compensation for the burden of production is not enough, government’s intermittent interventions “to straighten up the market” will only add to unpredictability of the market and discourage production. Maize will progressively become a crop whose returns are uncertain and rather than spend sleepless nights calculating what they may be, farmers will simply skip growing it and keep their sanity! So, while intermittent government interventions may please everybody and lead to low retail prices in the short term, long-term they could be damaging leading to a situation where Zambia’s output will consistently be below national consumption. Zambia may in fact be at the crossroads on this very fundamental issue and the primary role in resolving it, is government’s. Agriculture has chronically under-performed since liberalization largely because of so much “unfinished business” in the liberalization chain.

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Volume 7 - January 2009

Budget 2009: Likely More of the Same

The broad objectives of the 2009 Budget will more likely be, as in all recent years, maintain macroeconomic stability. The call from Civil Society has been consistent and is again on the table. It is for a “pro-poor” budget-one that seeks to reverse the abject poverty that still afflicts the majority. So, what the 2009 budget must do is already cut out for it. The devil is of course in the detail. There however promises to be no radical departure in the broad objectives of the 2009 budget due in February from those of the budgets in the past few years. The macro economic objectives should remain broadly to sustain macroeconomic stability; maintain government borrowing at sustainable levels; promote economic diversification; increase investment in human capital and enhance the competitiveness of the economy.

A higher deficit is projected this time because of a limited revenue base and reduced revenues due to the depressed international commodities market. The larger deficit that is almost a certainty by now is likely to be met by traditional means: increased external and internal borrowing. The travails of the mining industry in the light of reduced demand and therefore reduced prices of base metals will also certainly attract some re-think on taxes, levies, tariffs and other costs that have made mining more precarious in the present economic climate. The overall objective is to keep Zambia still attractive to foreign investors even with the international economic chill. However, most Zambians have now come round to the view that contrary to the popular perception, mining is the curse and not the engine of economic growth that it tends to lull the country into believing in

Kwacha Nose-dives Strong demand for the dollar and copper price fall blamed Zambia’s currency, the Kwacha depreciated by 70% during 2008, Standard Chartered Bank sources have disclosed. Most of the decline occurred in the last half of the year. At its strongest, the Kwacha fetched K3, 100 per dollar but fell to as low as K5000 a dollar by the last half.

The depreciation is blamed on massive buying of the dollar by offshore players to fund their US dollar requirement and on the inevitable capital flight in conditions of the uncertainties triggered by the credit crunch. The fall in the price of copper from highs of US$8,000 per tonne to US$2,770 at the end of December 2008 is cited as the other factor. Pundits expect the Kwacha to be stable in 2009 at around K4, 800-K5000.

Maize: Export or Perish? There is for instance, no financial institution devoted to lending to agriculture yet credit and especially seasonal loans are an imperative as is long term finance specifically for agricultural projects. The country is also losing its ability to manage livestock because of declining and poor veterinary services. A clear policy framework, one that addresses the real issues of in this instance, the maize subsector will end the need for the Ministry of Agriculture to be supervising millers instead of mill foremen! It is above all, an enabling environment for increased production of the staple food that is absolutely required. Micro-management of chronic insufficient supply cannot lead to self-sufficiency nor can it assure success even in that Endeavour. But there is reason to hope because something of the required forwardlooking approach is beginning to emerge as regards peasants and small-scale producers. Funding for the Fertilizer Support Programme

(FSP) has been increased. Not everybody is happy, the programme itself would seem to have any number of teething problems and there may be real questions about it. Yet it is a step in the right direction because it attempts to address the matter from the cost of production angle and as the Farmers’ Union once rightly pointed out, this kind of incentive should apply to every maize farmer, not just the peasant. It is true indeed that government intervention must more directly address production bottlenecks and not just the cheap consumption of what may be inadequate. The law of supply and demand will be on the side of government. It is simply that the more the production/supply, the more the price will fall-that is the solid state within which Zambia must eternally perambulate. Outside it, the government will continue to suffer the indignity of supervising millers and the “private sector” in a supposedly liberalized, free-market economy. It doesn’t have to be that way.

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Volume 7 - January 2009

Swaziland: King and Country The small Southern African Kingdom of Swaziland is not so far a fullyfledged. Pariah yet if there is no dialogue soon towards fundamental political reform, it would seem inexorably headed that direction. Swaziland is mostly idyllic. For the most part, it sits atop a landscape of mountains

Budget 2009: Likely More of the Same times of metal price booms.

This has reinforced the conventional wisdom that the sooner the country diversifies and moves away from dependence on mining, the better. That is of course as old as Zambia itself. But there is now once more a renewed focus on diversification of the economy. Finance Minister Dr Situmbeko Musokotwane’s, ministerial statement to the National Assembly on November 28, 2008 was explicit: “Government is considering measures in next year’s budget (2009) to enhance the competitiveness of the economy and promote economic diversification” and that infrastructure development would be given “high priority in the areas of agriculture and tourism.” Bank of Zambia Governor Dr Caleb Fundanga is on record on the need for a new push for economic diversification with agriculture as the centerpiece of it. That again was more or less the theme of Chief Government Spokesman, Information Minister Ronnie Shikapwasha’s press briefing on December 12, 2008 when he said government had prioritized its expenditure to save money and concentrate on selected areas “such as food production, provision of social services, housing and infra-structure construction.” All these are pointers to what lies in store. How this increased shuffling of feet around diversification and poverty reduction will in the long run differ from that of the past remains to be seen. However, for the 2009 budget it is more likely to translate into increased allocations for the agriculture sector and poverty reduction measures. Agriculture and social protection are expected to get some of the highest allocations in the 2009 budget on account of the evident and pressing need to enhance food security and reduce the effects of rising prices on the population. Curbing inflation which at around 15% has once more climbed to a double digit figure will remain a key objective. Measures to reduce it to 10% during the year before further cutting it down to about 9% by 2010 are expected. No change except more prudence and stabilization is expected in the management of the exchange rate. Sectors that will help improve the country’s food production and reduce poverty are set to receive priority in allocations. The 2009 budget is expected to more forthrightly put agriculture at the centre in line with the Fifth National Development Plan (2006-2010) than was the case with the 2008 budget. While that budget remained broadly within the set out framework of the FNDP and the Vision 2030, fears were expressed by some that it did not put nearly enough emphasis on equity and poverty reduction-areas where agriculture is thought to be key. Issues of equity and poverty reduction will undoubtedly have some play in the 2009 budget as will have the overall framework of the FNDP. There cannot be too much of a departure especially as Zambia’s cooperating partners, the donors, have already pledged budget support for 2009 despite the effects of the global slowdown on their own purses. For that reason, Zambia’s 2009 budget will have to be in line with mutually agreed priorities and objectives. A broadly pro-poor budget would appear to be in the offing. How far it will go in addressing the identified needs and the extent to which it will pull Zambia away from the ravages of poverty is of course what will only be clear come budget day.

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and hills interspersed with what are at this time of the year at least, lush rolling valleys. Except for a border with Mozambique, it is completely surrounded by its giant neighbour South Africa. With a population estimated at just over a million, it is mostly neat, in repair and boasts an impressive road network. Mbabane, the capital is built on a series of hills. Stunning residences huddle the hillsides in its leafy suburbs and it has a modern and adequate shopping centre. The nearby town of Manzini is the industrial hub. Its satellite town of Matsapha is the kingdom’s industrial centre. Sugar, pineapples and citrus fruits are among its notable agricultural products. For its size, it has a vibrant economy with what appears to be a growing middle-class. The kingdom is proud of its African heritage and Swaziland is perhaps the closest one gets to an authentic African country still run on ideas informed by the African heritage. It would have been a source of immense pride if it would work. But it doesn’t. In fact, it is the system of government that is the source of growing internal disaffection and now poses perhaps the single most potent threat to Swaziland’s continued stability. As an absolute monarchy, the last in the world, the King, Mswati III is the head of state and the kingdom’s chief executive officer. He is the absolute ruler of Swaziland by a traditional system that effectively defines the country as his fiefdom. He is above the law and the law is largely his command! His dominant position derives largely from Swazi feudal tradition and increasingly nowadays it can only be maintained by constantly stifling and outright warding off of “modernity” including universally adhered to tenets of government. Political parties are for instance, not allowed. With a population that is increasingly eager to participate in governance, that sort of posture by the king and can only come with a price and it a high price indeed that the Swazi monarchy is having to pay for attempting to stem the movement of time. In contrast to the exulted position and prestige that the king must have obviously enjoyed through most of history, the Swazi monarchy today is discredited and damaged perhaps irretrievably. As a result of being the country’s top politician, the King is in popular perception, the first and last villain. Even in matters where he may not have had a direct hand, “the king is to blame.” Clearly, the king is sinking deeper into a quagmire from which he may not extricate himself and could lose everything. “…As long as political power remains in the hands of the king, you and I will never have a say on how the country’s resources should be allocated and utilized,” wrote a columnist in the Times of Swaziland who accurately reflected the frustration of many in the country today. The growing frustration is over many issues but central is the kingdom’s “African system” of government. It is loathed by many. It is seen to interfere with and subtract from the rule of law and fundamentally to deny any meaningful role or participation in the running of the country by anybody other than the king and his placemen. The way the growing army of critics sees it, this system is nothing more than a corrupt dictatorship with the King and not some corrupt politician as the autocrat in-chief. Under the system, effective planning is undermined. By tradition for instance, the King has also to be the kingdom’s most married man and he can marry “as per tradition,” which means in practice, at his and the royal establishment’s whim. He already has a seraglio of 14 wives, but against “tradition” he has of late neglected to take on more wives due apparently to international pressure to end these repeated royal weddings! Few however seemed to begrudge him his many royal wives as such. At issue was the havoc that these marriages caused the kingdom’s capital budget. For sooner or later, the new royal bride has to be ensconced in a brand new royal palace and since there is no schedule, money has to be diverted, usually from the capital budget! The King has many residences and they can’t by definition be ramshackles. They must reflect his status and the Swazi monarchy has To page 8

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Volume 7 - January 2009

Zimbabwe: A Wooden Spoon for SADC Neither the Zimbabwe Government nor the SADC mediator accepts a political role for the UN. But what now SADC? UN Secretary-General Ban Ki Moon would appear not persuaded that the Southern Africa Development Community (SADC) is getting anywhere with its initiative on Zimbabwe. Briefing the Security Council recently he said SADC had effectively taken responsibility for the whole power-sharing arrangement and must now deliver. The UN was being effectively locked out of efforts to resolve the Zimbabwean impasse as “neither the [Harare] Government nor the mediator welcomes a UN political role.” Now, with cholera sweeping through that country leaving as many as over 1,000 dead and the power sharing deal between ZANUPF and the MDC still bogged down in haggling for key cabinet portfolios, the Security Council called for progress in the SADC initiative. The Security Council debate came as the Zimbabwean situation approached a new low. Apart from cholera, inflation is estimated to have risen to 230 million percent, shortages are endemic and even basic food is scarce. But President Robert Gabriel Mugabe remains “stoic” and even defiant. Opening the annual congress of his party in Harare recently he vowed to “never, never surrender.” Insisting that “Zimbabwe is mine,” he made the astonishing assertion that “Robert Gabriel Mugabe was elected by his people!” That alarmed western governments. Nordic countries called for progress in the power-sharing deal. Britain and the US impatiently noted that Mugabe was in total denial. But more was to come. As if suddenly, the US Assistant Secretary of State for African Affairs Jendayi Frazer announced December 21, from South Africa that the US government would no longer support the SADC-brokered power sharing agreement in Zimbabwe. The US was withdrawing support because Mugabe was an impossible obstacle and for as long as he remained the

leader of Zimbabwe there could be no meaningful power-sharing. He had to go first for it to have a chance at all. “We have lost confidence in legitimate power sharing being viable with Mugabe as President. He has lost touch with reality,” said Frazer. She called on him to retire saying his “time was up.” The US move supported by Britain seemed aimed at Mugabe. But in fact as Herman Cohen, Deputy Assistant Secretary of State for African Affairs under President Bush senior told it, it was primarily aimed at stopping South Africa, the SADC mediator in its tracks. As he told it in a recent BBC television interview, South Africa had of late been leaning hard on Morgan Tsangirai, leader of the MDC to accede to all of Mugabe’s stratagems and move in with him in a government of national unity on basically his terms! The west is basically saying, now way to that. It is adamant that power must be genuinely shared. Mugabe’s unbending posture and defiance has convinced major western governments that any government led by him of whatever complexion is unlikely to work and that therefore any power sharing has to await a new leader. SADC that has long cuddled Mugabe and has never so far talked of his departure would appear to be in a crisis. Either it joins the chorus for his departure and pressures him to go or in the circumstances become irrelevant. Outwardly at least, Mugabe is his usual unruffled and dismissive self. But Zimbabwe will pay dearly for his non—chalance. In the short term, no improvement in the country’s political or economic situation will be possible. The US is withdrawing support for rescheduling of the country’s US1.2 billion debts to the World Bank and the IMF and Zimbabwe ravaged as it already is will only sink deeper into debt and poverty. With the political impasse continuing in that unhappy country, the question mark is on the direction that SADC will now take. Its sputtering negotiation has unraveled. What will be SADC’s response; will there be a viable next step at all?

Squeezing Out Impunity Convictions in Arusha as Kenya sets up a tribunal December 2008, may well go down in continental history as marking the beginning of an end to impunity in Africa. In rapid succession, the United Nations Tribunal on Rwanda sitting at Arusha in Tanzania sentenced to life imprisonment, Theoneste Bagosora one of the master minds of the 1994 genocide in which up to 800,000 people were massacred, in a pogrom that outraged the world and has continued to gnaw at its conscience. Bagosora, a Colonel in the old Rwandan Army was found to have been at the head of a committee that plotted the harrowing massacres of ethnic Tutsis and was given the life sentence for genocide and crimes against humanity. In the same month, both the Kenyan President Mwai Kibaki and Prime-Minister Raila Odinga were left with no alternative but sign into law legislation to set up a tribunal to try identified perpetrators of post-election political violence which left 1,300 dead and 300,000 homeless following that country’s failed General election in December 2007. In both these cases, the thrust is to bring to book, those who were behind these events that not only sullied Africa’s reputation and image but fell far below accepted civilized standards. Together with Bagasora, two other commanders in the old Rwandan army were convicted on the same charges and were similarly sentenced to life terms. In Kenya, under the new law perpetrators of the violence may in addition to lengthy jail terms be barred from holding or seeking public office. Under agreements for the power-sharing government signed in February 2008, a commission led by Kenyan Judge Philip Waki was appointed to inquire into the violence and recommended the setting up of a special tribunal with Kenyan and international membership to try perpetrators of the violence. There was some dilly-dallying but pressure mounted on the Kenya Government for action on the legislation and it was recently signed into law. It is a tough one: “The special tribunal will look into the prosecution of people bearing the greatest responsibility for genocide, gross violation of human rights

Swaziland: King and Country From page 7

elements of duality with a strong role for the king mother for instance who must also be taken care of appropriately as have to be the numerous other members of the royal family! Ordinary Swazis have the vote. They elect a National Assembly that meets at Lobamba. But it pales in significant before the king and cannot match his power. The royal budget for instance is merely presented and not debated by the National Assembly and to be elected or nominated one needs to have “caught the king’s eye ” one way or the other. Political parties are outlawed “for the time being” and election to the National Assembly is strictly not along party lines. A “traditional” system governs elections and it invariably leads up to the king! This system has its supporters, some of them die-hards. But it is dissatisfaction and anger that predominates across Swazi society. The King is increasingly in the firing line because as things stand there is no way of avoiding him. Voices are raised to the effect that the king must relinquish power to an elected executive. Allow political parties and generally usher in a system of government in consonant with the 21st century if stability is to

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Volume 7 - January 2009

Editor’s Note - Parole System for Zambia

Parole will provide a window for those who would be victims to prolong their precious lives

Zambia has introduced the parole system to help decongest prisons and as part of a paradigm shift in its criminal justice system. Prison congestion had led to a progressive deterioration in conditions leading to infection of inmates and poor and unhygienic living conditions generally. Many of those who have done time have been released only to die shortly after. In these circumstances, custodial sentences were beginning to operate effectively as death sentences in a system that is supposed to help deviants reform. Through the parole system, the country is opting for a more human rights based model away from a retributive one. There are about 15,000 prisoners today in institutions built for a maximum holding capacity of 5000! Zambia is ranked to have the third most congested prisons on the continent. “The prisons in Zambia were built for a maximum capacity of 5,000 prisoners and have not been expanded since, despite the prison population having increased to the current 15, 000,” said Home Affairs Minister Dr Kalombo Mwansa when launching the system. The minister said the congestion had greatly compromised human rights in prisons. There was inadequate water, food, medicine and bed space. Classification of prisoners according to age and type of crime had become impossible. “Those serving time for the worst crimes are mixed with new offenders or those serving for minor offences, leading to a worsening of criminal behaviour and the perpetuation of crime syndicates,” he observed. Now, under the Parole system, prisoners serving custodial sentences will have the opportunity to appear before the Parole Board for review and depending on the merits, the board will be in a position to commute some of the sentence to a non-custodial one. There is a lot going for this system. Successive studies have established that noncustodial sentences offer better opportunities for rehabilitation and rehabilitation is what Zambian prisons are supposed to be all about.

Religion -

Pentecostals Mark Declaration of Zambia as a Christian Nation

The occasion was used by some to exalt former President Chiluba to Christlike status December 29, 2008 marked the 17th anniversary of the controversial declaration of Zambia as a Christian nation. The occasion was used by some within the Christian movement to exalt the former President Frederick Chiluba who as president made the declaration to a Christ-like status. In reference to his cases in the courts, he was likened to something of a Christ being persecuted and tormented presumably by the devil himself or his forces!

“It is the belief of this government that prisoners should be supported and given a chance to return to their communities in time to reconstruct their lives,” said Dr. Mwansa. The parole system would also stabilize the family unit as often it is the bread-winner who goes to prison leaving the family in a precarious situation without adequate support. “Adverse conditions of incarceration have the potential to reduce one’s life due to disease. Parole in this regard will provide a window for those who would be victims to prolong their precious lives once released,” the Minister said.

Some flyers distributed as part of the observance held at the Cathedral of the Holy Cross in Lusaka listed his achievements and called for a greater recognition of what he did for Zambia and to honour his memory! This was the closest Zambia came to a celebration of the Chiluba years and rehabilitation of his legacy in recent years.

It was time that Zambia reclaimed its able people from the prisons. With that, the Parole System was officially launched and Frederick Chilukutu was named the Parole Board Chairperson. Members of the board are drawn from civil society, the Police, Prison Service, and the Christian Council of Zambia among others. But even with this growing official concern, few new prisons have been built and there is still no talk of building at least one modern prison in line with the paradigm shift that the government seeks. Prisons are not only congested but are outdated as well; virtually all date back to the colonial era. If there has to be a real paradigm shift, it will need to be reflected in the kind of prisons the country has as well.

Swaziland: King and Country

Squeezing Out Impunity

From page 8

and crimes against humanity. Persons convicted of crimes by the tribunal shall in addition to the prison terms be barred from holding public or elective office in Kenya,” the new law states. By some accounts, a secret list of culprits which the commission has refused to reveal already exists and is said to contain the names of a number of prominent politicians and businessmen. The catch was always that if the Kenya Government did not go ahead, the list would be handed over to the International Criminal Court (ICC) for action. From page 8

The setting up of the tribunal had become a virtual condition for aid to Kenya and performance on many bilateral and multilateral agreements came to be conditional on the setting up of the tribunal. The Kenya Government has finally taken the plunge and overall in the right direction as well. The point has to be made that there will be no impunity for anyone. That will perhaps promote responsible actions on a continent not particularly noted for scruples.

The former President mostly cuts a lonely figure. His reputation and image severely dented by the criminal cases in which he is accused of primarily theft of public funds To page 10

From page 8

reign in his ancient kingdom. There are already up to five political parties in the kingdom. They are unregistered and exist largely by default on account of the fact that the same constitution that outlaws them confers on the Swazi people the fundamental constitutional right to freely associate and a political party is by definition an association. Some of these parties now talk of “armed struggle” to “liberate” the country. This agitation is bound to grow, not diminish. But in the manner of most tragic figures in history, the King seems oblivious to the growing discontent within. Most Swazis seemed to have long forgotten any positive aspects of his stewardship. He dutifully presides at traditional ceremonies like the Inca’wala recently. Except for the recent suspension of royal weddings, there is little discernable movement from him. There have instead been recently suggestions of a hardening stance on his part. A draconian anti-terrorism law is in place and the leader of one of the opposition parties Mario Masuku of the Peoples’ United Democratic Movement (PUDEMO) has recently been arraigned under its provisions. However, it is reliably learnt that the action has met with the disapproval of powerful international circles and government may be hard-pressed to proceed. Still, it is an indication of the sort of response that the ruling circles consider appropriate to what are legitimate demands for change. There is so far no indication of willingness on the part of the king and his apparatus for genuine dialogue on the future of the country. They are simply sitting tight until it seems time runs out on them. On the basis of the current state of play, there may be no happy ending to the growing political impasse in that country.

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Volume 7 - January 2009

From page 9

Energy: A New Idea (At Last)

The power debate must move on and focus on alternatives to hydro-power The debate on power triggered off by the necessity to ration electricity since the beginning of 2008 has singularly lacked in new or innovative ideas, going forward. The damage to the economy and to Zambia as an investment destination has continued unabated. Instead, the debate has largely been stuck at restating and recycling the doubtful position that Zambia’s salvation lies in more hydropower stations even though these have a long lead time, are expensive to build and crucially are of no help in times of drought which is projected to recur under conditions of climate change. More hydro power stations has been all the rage and the sound approach of a mix of power sources that complement and supplement each other has received little play. Clearly, even if hydro-power is to remain dominant it must progressively be supplemented and complemented by a cocktail of other preferably renewable sources. There has been little said on alternatives to hydro-power even though they do exist. The level of debate may now be changing. A practical new idea from the Energy Regulation Board (ERB) for the construction of a Heavy Fuel Oil (HFO)-driven electricity generating plant in the vicinity of the country’s only petroleum refinery in Ndola has recently been floated. The underlying rationale is that the plant is the nearest the country can get to a “quick fix” to the current electricity rationing as it can feasibility be constructed within 12 months. ERB Executive Director Sylvester Hibajene has pointed out that the hydro-electricity power stations that we must all wait for will not be coming on stream until 2013 and the country cannot possibly afford to wait until then and continue the unpopular load-shedding in the interim. “We are proposing this new generator because continued load-shedding will

discourage investment and lack of investment can affect the new power generation projects.” As a project, it has of course to be considered strictly on its merits but is a refreshing proposal in any otherwise barren landscape and opens the way to what should done more. Not that HFO hasn’t got its down side. It is a fossil fuel derivative. Its cost fluctuates with that of crude oil and there are suggestions that reliance on it was a factor in escalating production costs at defunct Kapiri Glass whose furnaces were fired by HFO. The proposal nevertheless opens the way to what ought to be done more-practical suggestions on the way forward in order that there begins to emerge a blueprint on the way forward preferably based on alternatives to hydro-power. Hydro power is of course the long term solution. But the short and mid terms remain un-provided for and the already fragile economy can only suffer as it already is as a result of this gap. Would for instance, the costs of “domesticating” solar energy, a resource that is in abundance exceed the costs for the construction of new hydro power stations? Properly harnessed, bio-gas for instance would open the way to rural electrification of at least some areas without drawing on the main national electricity grid. It is in a mix of energy sources and there are several, where salvation lies. The policy framework and package of incentives should begin to more seriously reflect this strategic reality and also the urgency of the matter. The dearth of new approaches and the clinging to hydro-power in the manner of one, who is drowning, won’t help. It will be interesting to see the kind of hearing that the ERB proposal will receive. But whatever it will be, the crying need is for more “savvy” approaches to a shortage that can’t be wished away.

Religion - Pentecostals Mark Declaration of Zambia as a Christian Nation while in office. There were a reported three separate observance services in Lusaka alone. The high level one was on the afternoon of December 29, in the Cathedral of the Holy Cross attended by Chiluba himself. He made an emotional speech which probably sat well with his audience but was distinctly disturbing to many rational people. He said he had made a covenant with God when he made the declaration and that he was “the anointed of God.” More questionable still, he said Zambia had been “cursed” when it voted for the isolation of Israel after the 1973 Middle East war and that it was he who removed the curse when he declared Zambia a Christian nation and renewed ties with Israel! He had the direst of warnings for those who were “insulting” and “calling me names.” God, he warned would crush them because he being the anointed stood on rock that could never be broken. The rant went on. It came on the same day as the President of the Patriotic Front (PF), one time staunch Chiluba ally, Michael Sata delivered perhaps his most direct and unambiguous public rebuke of the former president, as the two men drifted further apart. He is reported to have described Chiluba as “disgraced,” “desperate” and “in a weak position.” Subsequently, Sata was even more cutting t when he said the former president should “shut up. Chiluba would appear to have been anxious to put his own case across. One of the other things that he said was that he was “still clean” and that those who dared to touch him would be “crushed by the Lord.” It is hardly surprising that the anniversary saw such an outpouring of emotions. For, the declaration itself was largely an expression of emotions when it was made. It came at the end of an emotional séance at State House in December 1991 that was attended by the new President as Frederick Chiluba was then and a coterie of bornagain Christians in the new government and around Mr. Chiluba. At the time, it was a flagrant violation of the Constitution of Zambia or at best a nullity because the constitution then clearly stated that the country was

constituted as a secular state. In time, the declaration assumed a life of its own as the “faithful’ mainly from the Pentecostal churches and the “Born Again’ Christians took ownership of it. It became a prime cause with an ever growing calamour for it to be properly enshrined in the constitution so that it had the force of law. There was no end to that call as the sort of “faithfuls” whose conduct has continued to raise questions and change perceptions about organized religion in the country, rallied. It was finally enshrined in the discredited constitution of 1996 which is largely still in force and states that Zambia is a Christian country but which tolerates other religions. Many of the more mainstream and sober denominations notably, the influential Catholics have maintained their distance and even criticized the declaration as unnecessary. But other groups mainly within the Pentecostals remain adamant and the National Constitutional Conference (NCC) still has to decide whether or not it will be part of the next constitution. But judging from the 17th anniversary observances, it would appear that some Christian groups are still anxious to have the declaration retained and for Zambia to be transformed into some kind of theocracy. The main demand seemed to be that December 29 should declared a public holiday in remembrance of the decision by the “man of God- Chiluba.” But there is also the possibility of this movement turning into an out and out Chiluba support and advocacy group. For, it is not without its fanatics and those who see things in broad black and white strokes. Obviously in reference to his court cases, a prayer during the observance cast Chiluba as being “persecuted for making the declaration.” The former President and his legacy are divisive nationally and will remain so the longer his cases remain undetermined. They have been hanging around his and the country’s neck since 2002-long enough for many to now want them to go away so that there is more focus on the present and less on some of the emotional episodes from the past.

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Volume 7 - January 2009

Obituaries Emmanuel Kasonde [1935-2008]

JAPHET AARON BANDA [1943-2008]

Twice Zambia’s Finance Minister, Emmanuel Kasonde was eleven days short of his 74th birthday when he died rather suddenly at the Trust Hospital in Lusaka on December 12, 2008. He had been born at Malole; Kasama on December 23, 1935 and like many of the brightest of his generation was educated at Munali Secondary School and started his working life in the colonial administration as a Labour Officer.

He handled sensitive cases with precision, calmness and composure

He was to rise to the top position of Labour Commissioner after independence before being appointed the first Zambian Permanent Secretary at the Ministry of Finance. He left the public service to go into business in 1971 and built one of the earliest Zambian-owned business empires around his Century Holdings Ltd. He seemed to enjoy the challenges of business and was totally immersed. Unlike many with his background he seemed genuinely apolitical and for many years kept whatever political judgments and views he may have had to himself and rarely volunteered a political opinion publicly. For the duration of his life he was more of a technocrat than a politician. A genial man with a kind disposition, he was well liked and respected by many who knew or met him. For much of his time outside the public service, he alternated between running his businesses and his farm in Malole. His joining what was then the newly formed Movement for Multi-party Democracy(MMD) gave the party a tremendous fillip and had the effect of confirming it as a serious and respectable national political movement. It was only after he had joined the MMD in 1990 that he ventured perhaps his first ever public political utterance and it was a passion plea to Zambians to “put a new man in State House.” It is a message that readily and easily resonated throughout Zambia at the time. In the historic October 1991 general election that marked the end of the one party state in Zambia he was elected Member of Parliament for his home constituency of Malole and was the natural choice for Finance Minister in the new MMD government. It was he who largely laid he groundwork for the changes in economic policy that were to follow and given his business background and his having served at the top administrator at the Finance Ministry, he was eminently suited for the role. For reasons that remain unclear but would seem connected to fear of his stature, he unexpectedly lost his cabinet post in a reshuffle. For a time, he joined the new opposition party, the National Party. He did not however take too active a part in the affairs of that party and seemed to retire back to his businesses which were now largely ravaged by the effects of the Structural Adjustment Programme (SAP) that his successor at the Finance Ministry Ronald Damson Siame Penza was now prosecuting with religious fervour. He returned to the Finance Ministry as Minister in 2002 following the election of the late President Levy Patrick Mwanawasa. The country still needed a man of his stature and background for that position. Kasonde obliged. It was a short-lived and it would seem unhappy stay for a variety of reasons. He departed not a particularly happy man at the turn of events. Only at this time was there a hint of bitterness from this man who seemed in control of his emotions throughout his life. But typically, it did not last. He again retired to his own exertions away from the limelight. Except for his time in public office, he lived a quiet private life, minding his business quietly. He was a devote Catholic and for most of the later part of his life, a widower although he later remarried at a quiet ceremony. He was buried in Malole on December 16, 2008. In his passing, Zambia has lost a gentle giant of a man-one who would have had it fallen to him led this country with quiet competence. MHSRIP.

High Court Judge Japhet Banda (65) was killed in a road accident on the Great North Road on the night of December 18, 2008. He died on the spot from head injuries sustained in a head-on collision with a vehicle traveling in the opposite direction. Four other people were reported killed in the same collision. He was judge in- charge at Ndola and was returning to that city when the accident occurred between Kabwe and Kapiri-Mposhi. Mr. Justice Japhet Aaron Banda had worked for the judiciary since 1971 when he entered service as a “lay” magistrate following his completion of a one-year magistrates’ court at the National Institute of Public administration (NIPA) in Lusaka. Subsequently, he obtained a law degree from the University of Zambia (UNZA) in 1980. He was admitted to the bar 1981 before returning to judicial service as Resident Magistrate. He served successively as Senior Resident Magistrate, Principal Resident Magistrate and Deputy Registrar. He was Registrar of the High Court for three years up to 1991. He was Commissioner of the High court from1991 until his appointment as Judge of the High Court on January 13, 1994. He served for the most part in the Ndola High Court rising to Judge-in-charge before his untimely end. He was a widely respected judge as eulogies from among others, the Law Association of Zambia who said of him that “he had been on the bench for a long time and was one of the most experienced Judges this country has ever had.” It was he who presided over the last treason trial in which about 55 soldiers from the Zambia Army including the late Captain Steven Lungu, more popularly known as “Captain Solo” faced charges of unlawfully attempting to overthrow the Government of President Frederick Chiluba by a coup d’etat. Most received the mandatory death sentence. He served as chairman of the Law Development Commission and in 1997 as chairman of the commission that inquired into Torture in Zambia. He had been a member of Administrative Inquiry into the Administration and Conditions of the Prison Service. He born in Chipata on September 15, 1943 and educated at Chizongwe Secondary School before enrolling in 1963 for a teachers’ course at Malcolm Moffat Teachers’ College, Serenje. Chief Justice Ernest Sakala told the Joint valedictory session of the Supreme and High Courts held in Ndola that the late judge “handled cases despite their sensitive nature with precision, calmness and composure of mind. In his life as a judge, he added great value to the bench, which only posterity will judge.” President Rupiah Banda described him as “a fearless judge who spared no effort to defend the constitution and the rule of law,” he declared. At the time of his death he had attained the statutory retirement age but had been readily granted a three-year contract by the President on account of his record. He was buried in Ndola, December 23, 2008. MHSRIP

Executive Executive Issues Issues

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Volume 7 - January 2009

Throwing in the Towel - 2011 All-Africa Games

The decision left Zambia’s reputation, record and credibility very much in tatters and it will require plenty of time and skill to repair. Until December 12, 2008, the mood was upbeat: effusive government assurances that Zambia would go ahead to host the 10th All-Africa Games in August 2011 came thick and fast; there was much shuffling of feet and more assurances that a cabinet committee overseeing the preparations was hard at work. At the close of a three day consultation on the games held in Lusaka’s Mulungushi Hall at the end of November 2008, Zambia was pronounced to have demonstrated the requisite “political will” to host the games. But that is precisely what seemed to rapidly fizzle out leading to the surprise withdraw. It came completely against the run of events. Zambia seemed to be warming up to the task and when the shock announcement came: “Government,” said the Chief Government Spokesman, Information Minister Ronnie Shikapwasha, “has prioritized its spending plans for 2009 to 2011…to concentrate on a few important programmes. Unfortunately, the hosting of the 2011 All Africa Games is one of the programmes that have been affected.” He said government had decided to shift resources for the hosting of the games to identified priority areas such as food production, provision of social services, housing and construction of infra-structure. With that, Zambia baulked.The decision sent many sports associations reeling, their plans in disarray but more importantly the only sure means of leveraging public funds even for what could be doubtful causes had been removed! But crucially the decision left the country’s reputation, record and credibility as a potential host of a Pan-African sports event very much in tatters and it will require perhaps plenty of time and certainly a lot of skill to repair. Zambia was throwing in the towel for the second time making her among the most unreliable of would-be hosts on the continent. She reneged again in 1988 when her effort to stage the finals of the soccer Cup of African Nations, would not go beyond the destruction of Dag Hammarskjold stadium in Ndola!

Arthur Simuchoba Managing Editor [email protected] +260-977-820626 Robert M. Sichone Associate Editor [email protected] +260-955-799995

This time at least, there has been an undertaking to continue construction work associated with the games at the University of Zambia and other educational institutions around Lusaka for which contracts have already been entered into and if its worth anything, it has also been said possibly for the 100th time that the rehabilitation of Independence stadium in Lusaka will proceed. In justifying the pull-out, great play was made of reduced government revenue as a result of the global financial crisis, costs associated with the presidential by-election of October 2008, the K600 billion that must be found for the scheduled general elections in 2011 and the absolute need for government to reassess the situation in the light of changed global economic realities.

Luyando Yoyo Sales and Administration [email protected] +260-966-628865 Published by Brentwood Public Affairs Limited P O Box 32295 LUSAKA – Zambia

Most of it true of course. But it was also a convenient smokescreen. Zambia’s capacity to host the games even at the best times was near zero. She solely lacks the sports infra-structure to stage such a large and diverse event. Most facilities would have had to be built from scratch and even with increased revenue from mining it was going to be strenuous and perhaps ruinous even. Further, hosting such an event in a neglected, run-down city with broken-down roads and other infra-structure such as Lusaka is steadily becoming and would only have amounted to self-insult. The games were realistically always a bridge too far. The question is why anybody would have thought them possible. The cost would have been debilitating. It kept rising, at the last count it was conservatively estimated at K800 billion! It was set to escalate even further. Zambia found itself under the same pressures as in 1988. Then as now cost was the elephant in the room and there was no way of evading it. Ultimately, it was the question of cost that forced the climb-down. There is a penalty for withdrawing and it is not necessarily an insignificant amount. In 1988, it raised eyebrows. But from what Lt-General Shikapwasha had to say Zambia has all but opted for the fine. But even though the towel is well into the ring, there are questions about this whole episode which go to the heart of how decisions are made in this country. The reasons advanced for withdrawal were from the outset self-evident to pretty much everybody except perhaps government. How did the decision or perhaps more accurately, pretence come about? No consultation or evaluation appears to have occurred. Thus the announcement that it would be Lusaka in 2011 came as a surprise even to Zambia National Olympic Committee (NOC) which said it was unaware that Zambia had put in a bid. There are suggestions that hosting the games was in some kind of exchange for the election of Sonstone Kashiba until then Director of Sport for Zambia to the position of Secretary –General of the Supreme Council of Sport in Africa (SCSA), the body with responsibility for the games. Two things have happened as a result of this climb down. First, Zambia has given itself a really bad name in continental sport and for no good reason. Second, the Government has not shown itself to be cohesive, able to evaluate and coordinate the decisions of its various arms. Instead the picture is one of a setup where random and questionable decisions requiring a second look can be entrenched!

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