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.

Bank Holiday - 31st Dec. 2012

With the re-basing of the Kwacha so close, there is need for strategic plans on the part of government and people/ organisations involved. Software has to be configured to enable the handling of the rebased currency. Coins have to be given special recognition as this has been missing from our economy for some time. All these calls for banks and other inancial institutions to be given time to run around and organise themselves.

Just imagine, if the rebase was to happen today, how many ATMs would cope? What currency would the ATM have? What will happen to the software in banks having to run with rebased and normal currency notes simultaneously?

These are critical questions to any rebasing and the banks and other financial institutions have a perspective which matters on this aspect. The bank system must be ready to handle all possible situations that may rise from rebasing. And that requires time. But then again, we seem not to have time.

So the government came with a statutory instruments to handle such a time that banks need. So 31st December is a full time bank holiday. No banks, ATMs or Financial institutions are supposed to open. They have to sort out their software, ATMs and any other matter that would make the rebasing a challenge. They can best do it without worrying about the clients in the bank or the ATMs. And by the time they finish, only rebased notes will be in the ATMs and that will be 2013!!!

So if you plan on having a good New Year's eve, please have your cash ready as no ATMs will serve you.

I think it is a great idea to make sure all things move smoothly. I know how unbearable things get when you are trying to sort out some items and some clients are on your neck. This should help with the rebasing and we could move smoothly to 2013 and ZMW currency!

Kwacha Redonomination (Rebasing)

The Committee stage of the RE-DENOMINATION OF CURRENCY BILL, 2012 (N.A.B. 8 of 2012) went through Committee Stage yesterday and will have Third Reading today 21st Nov. 2012.

So we can safely say, we have the ngwee to our Kwacha. Kwacha economics has taken another mile stone of maintaining the Ngwee part of it. As far as things look today, we have the ngwee coins in our pockets by 1st January, 2013.

What I like about this whole process is how much economic activity is expected as a result of rebasing. We are being given an opportunity to use the coin in various ways. The simple one coming to mind is the vending machines (typically, we could have been using the 'notes' only type), but I think the coin idea makes people feel comfortable and at ease on a vending machine than notes. But more so as a parking attendant.

What people excited about these prospects highlighted about forget is the economics of just that idea of vending machines - they cause unemployment! Why would a shop owner employ one more person to help with snacks and pay him minimum wage when he can plant a vending machine in the shop and attend to those customers doing other things not snacks? This point is unfortunately the evils of development. We reach a stage we do away with labour intensive Technics and employ machines. I actually think, it would be better to have machines in that way than shop attendants who bring inefficiency to getting a cold drink.

We have to guard against bad outcomes of this rebasing though. Many of our uninformed people will be cheated out of their hard earned kwacha through street "crook-dom". So education (not sensitization which is a word wrongly used in Zambia) has to be intense and to the point. People should know that the value of the kwacha is not touched. Just the face - make up so to say. Good make-up in this case.

So we need to prepare for the new notes and new activities in our economy. The Kwacha has taken a new face and new clothes.

Effects Of No Electric Power On The Economy

I have ignored confronting ZESCO on the issues on power and what they are doing to this economy. But I have noticed, the more we ignore the issue, the worse the situation turns out to be.

So no ignoring and I have put on my fighting gloves as this issue cannot be ignored any further.

Electricity As Power In The Economy

One thing is for sure, in our country Zambia, the issue of power is important as it is the only source of energy for feed our hungry needs for economy progress. Not even our phones would work without power for a week. My laptop cannot be on without power for over two hours - maybe thats why I'm thinking of Asus Transformer with the potential of over 10hrs of no power!

I have bought a laptop charger for my car as I can buy fuel and charge whilst driving. That handles my problem - but only temporarily. The main problem is ZESCO. And since we are not doing anything about, it stays the same.

ZESCO Company or Baby Fed!

I have always wondered what is so special about ZESCO that makes it take us for a ride this long. Then I ask myself, if this company is a public enterprise, it should respect us as the owners and provide the necessary things or we may sell or shut it down. That it exactly what it means. Zambian people own it! So they should control it.

There are two things which shock me about how we handle business in Zambia. And until we find a way to stop this behavior, we will always be in trouble. 

Why? Just look at this:

• We negotiate taxes! We negotiate the birth right of being a nation so we can give people or foreign companies "incentives". The mere fact that this country is peacful and welcomes the investor is an incentive enough. But we go ahead and give then even the little we could have got from them. We need to stop this and move on progressively.
• We spoon feed a company (like ZESCO). It ends up depending so much on government. It gets loans with no plan of how it will repay them. And the debt is stuck on government. Because of that, it over charges the people while companies like mines get "favourable" rates. It may make sense to you but, it does not to me! If this was a company setup logically, it would put rates that make sense from the mines and not hammer the people.
  
  The sad part of this is that, mines get favourable treatment from all over, when they needed to be paying their equal share of the taxes. So you and I pay not only our taxes, but the mines' taxes and the salaries for ZESCO employees. Then power is taken away from our homes and put in the mines for the mines to rip even more wealth. Is this fair?

In doing the above, we have ended up being a failed generation. There is little we can show our children the positive contributions we made to the country. Zambia is in the state it is today because we don't do anything about it.

ZESCO's Tax Contribution

Do we know the tax contribution of ZESCO? I think we should know. We should also know how much loans they contract as we end up paying for this. I don't think it is too much to ask. We own the company. We should know how much taxes it pays, the dividends, then the amount of foregone customs and taxes that ZESCO enjoys. Then we should look at how much we are paying the workers. Its just fair and right for us owners.

Economy Effects
Without power, we can't power up our laptops and make reasonable income. We can't run servers from our houses to power up net-stations in Zambia. So we end up paying for server space in Europe or Asia. This is an out-flow of resources to other countries. Will government get taxes from that money? No way my friend. So we are probably the only country in the world without a ".com" community. And thats just 12-20 volts of power for our PCs and laptops. That partly explains why South Africa has almost every company with .co.za and in Zambia even government institutional websites have".com", ".org" or ".net". e.g. www.zambianconstitution.org (surely we are not even proud of .org.zm.

That is the cost of such critical elements in Zambia's economy like electricity and so on.

Computers people are all over the country. But have no means to be supported. All great .com companies are run and start from homes as it is cheaper and will give you time to start the busines, see the mistakes and then go on a full time scale. With ZESCO in existence, you will be in sane to even think of running your PC without a power backup system. All my websites are hosted in Asia. When they ask me why, I give excuses about not having time to configure and manage them all day. Truth - no there is now way I can run them here without paying through my nose to ZICTA and which ever of our 13 service providers - not sure who many actually host from the 13!

So my .com dream died when I looked at the cost of doing anything in that direction in this country with such power and expenses which favour foreigners and the rich.

Now imagine those with ideas of electronic inventions. Or manufacturing items. We are killed before we even start. Thats is the real effect of such power nonsense.

These are issues that should come into play for every company that receives such unwarranted favorable treatment. I know we all want this to happen to the mines, but surely, why not to every company that seems to know be doing the right thing.

I think we should be given a platform to do this. Not all of us can be politicians in order to put in place favorable business environments for our business. So we need to be looked at as well.

I am a Zambian I deserve Better! And ZESCO is not helping in any way. It should be made to do this just like all mines that feel taxes should not be paid coz they invested in the mines. Yes, but I am a Zambian, I own the minerals. You own the means to extract. If we disagree, you go with your means, I look for someone or I do it myself. But will you find the mineral I own? No! So I deserve better.

I am a Zambian, I Deserve Better!