Happy New Year - 2013

Kwacha Economics wishes you all a Happy New Year. May we move together in the New Year and hopefully be better than 2012.

::: HAPPY NEW YEAR - 2013 :::

Customs Duty Suspension - Sports Euipment and Articles

I have always wondered if people really pay attention to changes to the law especially after the budget is presented. I know everyone has figures of how much they will pay in terms of Pay As You Earn (PAYE), but do we take time to look at other issues as we may have benefits that we miss out. Do tourism enterprises for example know about the suspension on articles for their business? 

I will be doing some highlighting of some important legal changes so that you can benefit from these changes. Let me start with this one.

S.I. No. 94 of 2012 was published on Friday 28th December. This particular S.I. suspends customs duty on sports equipment and articles used in sports. I thought I should look at this one to promote interest of "health" nation. The suspension is from 1st January, 2013 to 31st December, 2016. That's three (3) years of suspension.

This makes it cheaper as when you import these articles, you wont pay customs duty (but will pay for VAT or Excise duty if its applicable). So take time and look for the S.I. and invest in good physical exercise equipment. It is unfortunately that this country has retailers who benefit and will maintain the prices while not paying the customs duty. But if you are informed you can benefit from this little exercise.

New Kwacha

So all the talk about the new Kwacha has slowly died with everyone wondering how it will look, feel and change our economy.

There was that talk about ZMK 100.00 looking exactly like ZMW 100.00 (or if our simplified language K100.00 looking like KR 100.00). The alarm arising because one is useless and the other is the most power note ever!

Well, sadly for con men and women, it will be hard to pass one for the other unless one has not seen them both. Which could be a worry.

Kwacha economics is probably the only blog in love with our currency and should live up to expectations by making sure you see these before you can touch them. 

So here is to the new Kwacha.... a new dawn in Zambian economics. Proudly brought to you by Kwacha Economics:

This is an opportunity to start afresh with fresh notes new political regime (hopefully without primitive cadre mentality).

See the colours adding a value to our money? Thats what is needed to this economy. New notes, fresh ideas and a zeal to progress and be important economically.

I have deliberately removed the serial numbers and made sure all have bands to make sure these are used for the simple purpose of educating each other and not funny ideas.

You will notice that the KR 100.00 is different from the one people are used to and have been piling up for funny activities. Tough luck if we spread the word about the notes

Last Day To Withdraw Money (30th December, 2012)

Today is the last day that ATMs will be working. So if you have no cash, you can only get it on New Year's day.

Bank Holiday on the 31st of December, 2012. No banks or financial institution (including ATMs) will be operating. No ATMs, only cash will be used mailo.

Bank Holiday Pt. 2: Banks, ATMs will be closed

Bank Holiday

December 31st, 2012 has been declared a Bank Holiday. I have heard a lot of people missing this point and some think it is just an intention.

The holiday was declared and a statutory instrument issued to that effect. Moreover, the Re-domination of Currency Bill, was passed in Parliament and is now an Act. So the day is a holiday.

What to Expect on 31st December, 2012

All banks, ATMs and Other financial institutions will remain closed to the public. There will be of course their staff working as the day was declared a holiday for the transition to the new Kwacha (the Re-based Kwacha). All software need to be installed and launched will be done on that day and any short-comings rectified before 1st January, 2013.

So you wont use the ATMs. Of course strategic places like International Airports, Border points will have working ATMs and some banks, but the rest of the country will not. So if you will need money for the usual New Year Eve running around, make sure you have it in cash. For emergencies, run to the Airport! All ATMs will be loaded with the new notes (ZMW and not ZMK) in readiness for 1st January, 2013.

I'm not sure about swiping. You may have to find out on that issue. 

The good news at the moment is that most banks have already started implementing the new Kwacha (ZMW). What is interesting is that some banks (wont mention them) did not plan well on the issue and did not implement critical issues related to the change. Most businesses also did not know that this would actually cost them money to upgrade not only infrastructure but software as well. So the new Kwacha is here, but are we ready to start working with it just now? Coins, new kwacha scent, etc

Do counters have places to place the coins? Do you have machines to count the new notes? Do we have places to get vending machines from? 

Welcome come the new year with the new Kwacha! Kwachaecon will be there for the first notes and will upload as soon as it comes in.

Happy kwacha economy.

Robbed Twice

Zambia's wealth was stolen during the colonial times. Unfortunately, thats not the only time. We have been robbed once before, and are being robbed right now!

Robbed Once

The colocinal masters came with one agenda - get all the minerals they can and any way that they can. They succeeded and got all the mineral wealth when they ruled over Zambia (then Northern Rhodesia). The result has been a totally poor country and the wealth developed Zimbabwe where a small portion was used by the settlers to develop the land they lived in.

But to all that can see what this country has got, will realize that at the time, it was impossible to fight the big guns with bow and arrows. The red Indians tried it and were almost wiped out of a land now called United States of America. We had to fight differently and in 1964, we won a great battle and got our independence. 

We must always remember what we got from this fight. They stole every piece of mineral they saw and gave nothing in return. The greed with which they came with was exhibited in all that they did and could only "leave" when there was nothing else to do. The truth is they never left.

I sometimes ask God why my people had to suffer all this while and yet we had the wealth that every one thinks and dreams about. I subscribed to the Paradox of Plenty to try and explain the inequality that has resulted from Zambia's copper and mineral wealth, it does not comfort me.

Our own people sold the mineral wealth in many forms. The stories of the Litunga and BRE selling all the mineral wealth and got paid for every extraction is a story Zambians should be familiar with. How it happens and the noise that results every year is because the people who benefited from that wealth want a bigger chunk still. None of the other paramount chiefs ever got what the Litunga got for the minerals in form of "salary" or income at one point reaching 8000 pounds a month. That was a direct benefit of stolen wealth by the way. 

They actually have used this as a point of pride here:

The concession entitled Lewanika to receive the payment of £200 annually and 4% on all minerals and precious stones mined in his territory for a period of twenty years.

I don't care if that happened with the agreement of the people. If it just included their own area would be fine to him as king. But they later wanted to increase the land in order to benefit from the same wealth that lay in other people's areas. Just like the greed of colonialists, they also learnt to steal what is not theirs. This is discussed in length here.

The point I want to bring out here is: every time we talk about colonialists robbing our country's wealth and mineral resources we should be honest enough and admit that our very own people aid and guide them on how to do it. In the colonial times, it was chiefs and people around them. They would sign anything as long as it brought something for them in the pocket the deal was done!

Sadly thats the truth.

Second Robbing

We have to know what kind of problems we are facing in the world as Zambia. We still have abundant wealth. We are very rich, sadly we are very very poor.

We have moved to midlle income country - on the few items that have been accounted for. Not accounted for in this country, but whenever some one got wind of what was collected from Zambia. So the wealth and result of that income is economic fiction to you and I. What is sad, is that people who get this wealth will actually declare it somewhere else proudly and share it amongst themselves with pride. Because they declare it there, the taxes are low. We can't see it here and we try to get a little from the stealing by raising taxes, they justify the none declaring of such undertakings as a result of high taxes. Surely there must be honour even among thieves!

Every Zambia in the colonial era knew where and what London was. People even now line up to visit the place. Nowadays, every Zambia should know about Ruschlikon, is a village in Switzerland. Because what this place receives, would change the very face of every Zambia. More so, the pocket of all Zambians. Our taxes would be low if only we got a share of what this village receives. My inspiration is here.

This is interesting as the robbing of our country's wealth is happening at the very time that I am writing this. Again this is aided by our people. Unlike Lewanika, the aiding now is from someone people voted for. I can say it as the London judgement can not be erased. Chiluba facilitated this in many ways. They actually lied about the status of the mines in order to sell it at a lose. But even that, the actual "dirt" from the mines was worth more than the mine was sold for. Least we forget:

"The judge concluded that though Mr. Chiluba had a salary of only about $10,000 a year during his decade in office, he spent more than $500,000 in a single shop, Boutique Basile, in Geneva. The shop owner, Antonio Basile, testified in 2008 that payment for the clothes sometimes arrived in suitcases stuffed with cash.

The goods are now stored in battered metal trunks by Zambia's anticorruption task force. There are piles of designer suits, monogrammed dress shirts and elegant ties, silk pajamas and dressing gowns. But most remarkable are the more than 100 pairs of size 6 shoes, many affixed with Mr. Chiluba's initials in brass. He is just a little over five feet tall, and each pair has heels close to two inches high." Its all here.

Mwanawasa tried to get something out, but died too soon. Conspiracies go here, but I never subscribed to any. Then Rupiah came on the scene and everything died a natural death. Thank God the situation was arrested and he only ruled for 3 years some say. But what happened in those 3 years?

Again, aided by our own people I should repeat.

Case for Nationalisation?

It is always strange to find an economist who subscribes to nationalization. I actually do in this case. We have to realize that mines and mienarl wealth that they bring at such levels call for serious re-thinking. We had the mines in the hands of Government, and now they are in the hands of the private sector. The two bring out one thing I would like all of us to know and think about. The returns from the mines were actually greater when the copper prices were down that when the prices are currently high. If a $10 million return came when the copper prices are low and only $2 million when they are high, it only makes sense as to get them back. After all, at a high copper price, $360 million is paid as taxes in some village in Europe. Thats one fact you have to agree with. But take that with a sharp head, not like the political rhetoric of Julius Malema. You have to get back on a footing that works better for every Zambian.

Regardless of how we do it, there is clear cheating and business conducted with parent company yet a claim of "at arm's length" in Glencore. Did you actually see how our own person laboured to defend a country he works for? I felt ashamed. He was caught unaware.

So if this was to continue, we will get nothing until the mines are declared unfit to mine anything from them. We nationalize, we get enough resources to plough back into the economy and we may actually get more benefits from this resource. America nationalized when the going was tough. We should not adopt economic policies that will not bring anything to the country when we all know how it should be done.

No economics is better than the economics that brings food on the table for all us and not the thieves. 

I believe there is a legitimate call for nationalization in the wake of transfer pricing, hedging and all manner of bad economics at play. Whilst doing that, we should cancel double taxation agreements that favour the west and disadvantage us. Actually, I think double taxation agreements which led to taxes being paid anywhere else apart from Zambia should not only be illegal but never signed and those signed canceled. We should make it a standing order that any shares exchanged on a company in Zambia should be taxed here at the rate applicable. Failure to pay those taxes should automatically trigger Government sanctions.

Moreover, we should setup mechanisms that will monitor and follow all transactions involving Zambia's mineral or other produce.

But nationalization is and will always be the cheaper option as long as we put in place a structure that will run the national resource company prudently and as a full time business.

Glencore

When many Zambians watch this documentary, here, they blood boils with hate. We end up hating the people benefiting from our wealth and the money that is generating. Not that we want to be selfish, but we want our fair share of the profits. 

Glencore has done a lot of harm. Unfortunately like many sad stories out of Africa. Our very own people are involved and at the middle of all this. Look at the man defending Glencore when his own children or grand children will have to ask him twice to what his contribution to this country was when he worked for Glencore.

But one thing we must see from Glencore, is how they used what we called a president to get what they wanted. In return he got hundreds of shoes, jackets, suits and shoes. African fools we end up being!

I have no favour for names like Glencore. I hope to live long enough to see fairness applied on that company. And the link to Bill Clinton makes sad reading that he even said there was no crime committed.

Godfrey Chitalu Vs Lionel Messi

This really looks like an issue for football fans. But think about it. Messi holds the European record now. Chitalu holds the world and probably there is some one who gets closer.

The only difference is the fact that the European media would blow anything that links to them and ignore the other records around the world. Now we have the proof and have provided the evidence. The issue now, is... will they be bold and set the record or ignore it as they always do on matters from non-European countries. We, as Zambia, are not claiming recognition on this matter. We have been looking at this issue long before Messi came on the scene. Records have been collected to prove that fact. We have the name in our heads ringing "ucar" as he was popularly know. He is still regarded as the best player to ever grace the CECAFA tournament and still, that number of goals (yes 107 in one calendar year) has been mentioned. I even remembered an article on the issue in 2010 found here. That's a Uganda site which had the record plastered. Now we have the details we always wanted. Lucky enough they came at they came at the time the world wanted to honour someone else.

Just get that record and let the person who did wonders in Africa be honoured for it.

This is one thing that Zambians should always look at. We work hard, we produce results, no matter how big the obstacle we fight, the great works will be rewarded. We have our great not standing among the greats not because his achievements are easily beaten, but because we have no huge global media to scream on our behalf, 88 clearly looks greater than 107!!! The story has always been the same. Remember at the African Cup of Nations when no one (but a Zambian believed in us? We had to organise ourselves as Zambians to get rid of one member of Super Sport panel who clearly disrespected and insulted us. Only after the win did they see what we wanted to do and delivered that trophy to Lusaka

Now FIFA says it wont back anyone because they don't keep records! Ok we have our records and so does every country that has a claim to how many goals were scored, so lets start the counting my verifying these and see how it goes, maybe when one playing in Europe comes past 107 we will have FIFA backing of the records?

At Kwacha Economics, we feel proud to be Zambia and always will say what "ucar" did should make us know we can achieve the greatness if we put our mind to it. I hope one day, we will have a Kwacha economics story like Godfrey Chitalu's record on an economic achievement from Zambia. This is a local great and should be filed among the local greats.

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Our records have been buried in the achieves for a long time. But every Zambian knew of this record. People are asking why it has taken time and we have only come up with the records now after Messi "broke" the record. Seriously who knew of such a record in Zambia? We were just shocked to hear that Messi is about to break a record of most goals scored in a calendar year! The debate of getting Chitalu's goals recorded and presented to the world has been on going in Zambia since the 90s. The world has ignored this. But we have been talking about this for years. It is even on this blog in 2010! So we have not only made that claim, we have proved it.

So sad that a simple issue of verifying the numbers and setting the record straight has become a popularity contest. All because this is Africa and our records matter little in the world! I don't think so. FIFA should have come up and set the record straight. The western media is actually taking it the wrong way. Imagine if this record was held by a player in southern England! FIFA would have confirmed, named and medals presented. But because the story is coming from Zambia, Africa in a town called Kabwe and on official games, the results are not so official. So to avoid confirming that, it now a no-backing for either. 

I think the world need to come to terms with facts and stop discriminating on the basis of location. 

Godfrey "Ucar" Chitalu has a record that the world should see and keep. Until someone breaks it, we have to live with it. The idea of football those days was not as competitive as it is today is as silly an idea as to claim everyone those days would have invented a light bulb!

Honour those who need to be - and do it fairly.

Statutory Instrument No. 33 of 2012 Errors

There was a lot of talk about errors in the SI 33 of 2012. I know for  fact that the Act referred to was wrong, so this could be a typo or an over-sighted, but did little to disturb the spirit of the law.

Rumours have it that a new SI with amendments has been released. I can confirm that, though, I'm yet to have access to the new SI with the amendments or improvements for me to talk about. Hopefully this will be in a few days as I really need to see what changes came out. Or what modifications have been done.

So I can just confirm the rumours and my sources rarely let me down - hopefully not this time.