Professional Documents
Culture Documents
Contents
Mwanawasa flirting with a snake - Page 2 Banks - Washing dirty linen - Page 8
Justice Mumba to head ECZ - Page 5 Diplomacy - Levy, Mugabe fights on - Page 13
NCC - Mutilating
Mwanawasa –
flirting with a snake
FOR the last one month, controversy has raged over the “reconciliation” be-
tween President Levy Patrick Mwanawasa and his once arch-rival Michael
the Constitution
Chilufya Sata or ‘King Cobra’. Details of the so-called reconciliation have re-
mained sketchy , plunging their respective political parties into serious internal
gossip. Sata has remained cagey over the deal to the extent that he is avoiding
discussing the matter even with his close party lieutenants. Inside the ruling
Movement for Multiparty Democracy (MMD), the situation is no better. Senior
party officials, most of whom have previously worked with Sata, strongly be-
lieve Mwanawasa is not being strategic in his dealings with Sata. “You can’t
trust Sata,” said Mundia Sikatana, former Minister of Foreign Affairs, who re-
members the day Sata joined the MMD in 1991promising not to occupy any
position. But within a short time, Sata gladly took up successive senior posts BEHIND the scenes lobbying, talks and negotiations are underway to
in the party. So, many MMD members, especially cadres, are unsettled by this get the key civil society and religious bodies join the ongoing National
latest development. Constitution Conference (NCC), which they are boycotting. Stanely
Mhango, President of the Forum for Democratic Process (Fodep) is
Sata is politically astute and playing his game can be dangerous. We gather he
spearheading the initiative, which has so far, proved unsuccessful.
plans to use his ‘reconciliation’ to destabilize the MMD as it picks the succes-
sor to Mwanawasa. That way, he is said to believe, he could re-launch himself
The Oasis Forum, comprising the Council of Churches in Zambia
politically . ‘Mwanawasa is no longer an issue now since he is going,’ Sata (CCZ), the Zambia Episcopal Conference (ZEC) and the Non-Gov-
reportedly told one of his lieutenants when asked about the reconciliation. One ernmental Coordinating Council (NGOCC) has refused to change
of the key agenda items he wants to test Mwanawasa on is the constitution- their mind and join. The Oasis Forum, together with some labour
making process. Sata’s strategy is to push for the reorganization of the ongo- organizations led by the Federation of Free Trade Unions (FFTUZ) in
ing National Constitutional Conference (NCC) to include on their own terms Zambia are demanding a thorough review of the NCC Act, mainly to
the Church mother bodies and the Oasis Forum, which are boycotting. If he reduce government representatives, if they are to join the process.
succeeds , he will claim victory, justify his new partnership and woo the politi- The boycott by these crucial groups may seem to be a failure for now,
cal support of the churches. Also key to the “reconciliation” is his deteriorating
but the impact may be felt once the document is submitted to the Ref-
health. He may need to make a further call on the public purse for future medi-
erendum for adoption. The Oasis Forum plans to campaign against
cal treatment in South Africa, which is fully guaranteed if he remains in good
books with government. His wife, Dr. Christine Kaseba, is believed to be play- the NCC-produced document for lack of credibility. NCC chairperson
ing a vital role in influencing his new course. PF Vice President Dr. Guy Scott Chifumu Banda has pleaded with the boycotting groups to rescind
understands very well the suicidal political game Sata is playing. That is why their decision, knowing too well that the credibility of his draft con-
he had offered that the party refunds government expenses incurred by Sata stitution will be unacceptable among Zambians. Some donor aid
in South Africa. He was ruled out of order. Outspoken PF spokesperson Given agencies have also tried to convince the Oasis Forum and its allies
Lubinda is even more confused over the deal. He was never consulted despite to try and fight from inside the conference, arguing that constitution
being a member of the Central Committee, which is yet to meet to discuss the making is a long battle. NCC Deputy Secretary Newton Nguni met
matter. But PF insiders do not expect anything tangible from such a central
some of the civil society groups to try and get them on board but to
committee meeting since the body is packed with Sata’s place men. Only Scott,
no avail. The resistance has been strengthened by the government
Lubinda and PF chairman of legal affairs Wynter Kabimba could dissent.
move to pack the NCC with mainly unknown pastors and NGO lead-
Some close family members are worried about Sata. They say he has been ers who sympathize with the ruling Movement for Multiparty Democ-
devastated upon finding on his return that his closest and favourite son, Chi- racy (MMD). By and large, the composition of the NCC is considered
lufya, had died. He avoids talking about it, which they say is unusual for Sata. too large for any constructive debate.
Equally, worrying to them, is the fact that he has been issuing media statements
instead of quietly mourning his son until after a certain period. Mutilating the Mung’omba Constitution
Some financiers of the PF have also been demanding a change of manage- The role of the NCC seems misplaced. Recent sittings of the commit-
ment in the party. They want the strangle hold on the party of Sata and Scott
tees of the conference clearly demonstrated a lack of understanding
relaxed and replaced by a more democratic leadership with more party func-
of the role of the NCC. It appears the committees were duplicating
tionaries taking on a role. They also want party funds to be channeled directly
the work already done by the Wila Mung’omba led Constitution Re-
to provinces and districts as opposed to the secretariat in Lusaka. They want
Sata to reconcile with the ‘rebel’ Members of Parliament who defied his order view Commission (CRC), whose Report and Draft Constitution are
to stay away from the NCC. Sata has remained adamant and refused to drop the working documents for the conference. Instead of validating the
charges against the Dr. Peter Machungwa-led lawmakers, insisting that they two documents, NCC has resorted to receiving submissions from the
are indisciplined. Efforts are on going for the two camps to meet
and resolve their differences. A national conference is planned for To pg 3
later this year but few PF members believe it will take off.
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Volume 1 - July 2008 News
minister David Phiri. The ‘Chewa boys’ is their new tag, referring to
NCC - Mutilating the Constitution their tribe, which is also Banda’s lineage. They seem to have played
same people who presented their views to the CRC. This approach their cards well in organizing the party in the Eastern province but
has been criticized by many experts who think the process will now their uncompromising maneuvers angers fellow Easterners. For
be lengthened. “They are mutilating a good document without any sure, Banda is now a key leading candidate for the MMD presidency
reason,” said Joyce Nonde, FFTUZ President, whose organization even though he has consistently refused to be drafted saying he is
decided to stay away from the NCC. The absence of former com- too old for the job. Opposition Members of Parliament like working
missioners who served on the CRC makes it difficult for the NCC to with Banda, who avoids controversy even in parliament. However, his
have institutional memory on the recommendations made in the draft
chances will depend on whether Mwanawasa will openly give him the
constitution. This has led to the duplication of the work by inviting
support and his ability to spread his messages to other areas.
same petitioners to appear and give the same views they provided
to the CRC.
Another old man’s name has recently surfaced within the MMD -Wila
Interesting, some of the consultants who worked with the CRC have
been re-engaged by the NCC to perform the same tasks. The NCC Disraeli Mung’omba (69 years) or WDM as he is fondly known among
needed the services of the draftspersons as opposed to the general his peers. He has not publicly stated his position though some senior
consultants as if they are rewriting the entire documents. For sure, party officials have already started canvassing for his possible entry
the final document that will come out of the NCC will be totally differ- into the race. Mung’omba is not much of a ‘people’s person’ though
ent from the Mung’omba’s widely accepted draft constitution and it is he has impeccable credentials. His main weakness will be in dealing
likely the Referendum will throw it out depending on how organized with grassroots members. “He is a Muzungu (whiteman),” one insider
the Oasis Forum and allies will be. So far, the role of civil society said. But his resume speaks volumes of a man widely unknown by
groups appears confusing and unfocussed. Maybe, it is a wake up the young generation in Zambia. Former Member of Parliament for
call to them to embrace new strategies and leadership. Mporokoso during the Kenneth Kaunda era, Mung’omba is a qualified
lawyer and banker who once served as President of the Africa Devel-
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HIGHTLIGHTS
News Volume 1 - July 2008
From front pg
Emily Sikazwe –
Faces fresh
deportation
VJ, FTJ reconcile go is on his way back after his stint in Windhoek.
Nyirongo, who also once served as Zambia?s
Former President Frederick Titus Jacob Chiluba has Ambassador to Belgium, has been recalled and re-
joined the reconciliation club and has made peace with placed by former presidential aide, Mavis Muyun-
his one time close friend and confidante, Vernon John- da. Muyunda worked as poitical advisor to Presi-
son Mwaanga or ?VJ?. The two fell out after President dent Levy Patrick Mwanawasa from 2001 until she
Levy Patrick Mwanawasa appointed Mwaanga tothe was retired from her post early this year.Zambia?s
position of Information minister, prompting mistrust be- deputy Ambassador to China, Chilufya Kapwepwe
tween the two. At that has also been brought back home after serving for
time Chiluba was having a big fight with Mwanawasa several years in missions abroad. Chilufya, daugh-
following allegations that he stole millions of dollars ter of Zambia?s liberation struggle hero, Simon
when he ruled Zambia from 1991 to 2001. However, Mwansa Kapwepwe, served as deputy High
after a spell in government, Mwaanga equally fell out Commissioner in Namibia before her Beijing ap-
of favour with Mwanawasa and he was unceremoni- pointment. She is being replaced by
ously sacked from cabinet. Thereafter, Mwaanga re- Zambia?s first secretary in Washington.
tired from active politics.The reconciliation of Chiluba Kapwepwe?s ?purge? came at a time when her
and Mwaanga coincided with that of President sister, Chileshe Kapwepwe was also unceremo-
Mwanawasa who made peace with his long-time niously removed as Managing Director of the Na-
archrival, Michael Chilufya Sata of the Patriotic Front. tional Airports Corporation (NAC), in a move the
We hear, United Party for National Development authorities said was to stop her from ?going for a
(UPND) President third term?. Few knew that the principle also ap-
Hakainde Hichilema or ?HH? is making overtures to plied to parastatal chiefs.Zambian Ambassador
Sakwiba Sikota, or ?Saki? to re-join the UPND which to Japan, Godfrey Simasiku, we hear, is probably
he left on the ground of tribalism. Sikota runs the small next on the flight home. Former Central Province
United Liberal deputy minister, Kennedy Shepande will replace
Party (ULP).There are indeed ?no permanent enemies him, so we are told. Shepande, former a member of
in politics but permanent parliament and chief whip of the opposition United
interests.? Party for National Development (UPND) joined the
ruling party in 2003.
Diplomacy - More pack bags
From front pg
Fugitive spymaster in Mozambique
veillance. However, he quietly sneaked out of the country in what the been seen openly checking-in at airports in the Democratic Republic
nation was told an ‘escapee’. But the ongoing deals and counter deals of Congo, Kenya, Rwanda, South Africa and Mozambique as well as
in the fight against corruption raises a lot of questions on his escape. Portugal, Belgium and France without any difficulties.
Over and above, Chungu has been seen flying around European capi-
tals, with a base in Portugal. How did he get the European visa? Many The absence of Chungu in court has, no doubt, made the corruption
ask. More complicated is the fact that his passport was confiscated and cases more complicated. He was at the apex of the corruption allega-
deposited in the magistrate’s court in Zambia as part of his bail tions. However, it also puts his co-accused, mainly Faustin Mwenya
condition. So, how did he get the new passport? Chungu has Kabwe, Aaron Chungu and Chiluba is a precarious situation.
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ILO contends that the proposed law, which President Levy Patrick Mwanawasa But government insists that the Bill is aimed at protecting workers from leaders
said will be passed without changes, is a total violation of international con- who misuse their contributions, strengthen the collective bargaining process
ventions on labour. In particular, the proposed amendment that requires trade by introducing ‘one-union, one-industry’ principle to avoid formation of splinter
union leaders to be employees was ruled to be a violation of Article 3 of the unions and prevent the public from being affected by strike actions in the so-
ILO convention number 87, which promotes freedom of association. No doubt, called essential sectors. Under the proposed bill the minister will have wide
the proposal was targeted at Nonde, an outspoken union leader, who is cur- powers to declare any sector essential. [ok]
rently serving as General Secretary of the Zambia Union of Financial and Allied
Workers (ZUFIAW) despite having retired. Nonde previously worked for the
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Dr. Katele Kalumba or ‘Ka Ka’ is one of the most watched politicians in
the battle for succession. He has been in the race for the presidency for a Who’s who?
longtime now though his close associates say he has given up because of
the protracted cases of corruption against him. He has conspicuously gone
quiet, leaving most key decisions to his deputy Jeff Kande. Kalumba is very Wila Mung’omba – The old man and the medals
popular in the MMD and cadres see him as their messiah. Two key issues
work against his presidential bid. One, he is from Luapula Province, which Wila Disraeli Mung’omba’s (WDM) name is now constantly mentioned in
produced Zambia’s second President Frederick Jacob Titus Chiluba. Most political circles as the potential successor of President Levy Patrick Mwana-
Zambians would love the presidency to rotate to other provinces. Second, his wasa. [See our main story]. Even though he has never openly indicated his
involvement in the corruption cases has terribly dented his image for public
position on the matter, he has become the subject of discussions among some
office. Member of Parliament for Chiengi, Kalumba is one of the longest serv-
Zambians. The bow-tied man and former President of the Africa Development
ing lawmakers in Zambia. He remains a man to watch.
Bank (ADB), is the recipient of six Ordre Nationale du Merit or Order of Merit
medals bestowed on him by the Governments of Ivory Coast, Cameroun, Togo,
Inside cabinet, the battle is even hotter. Of late, Finance Minister Ngandu
Tunisia, Senegal and then Zaire (now Democratic Republic of Congo). He has
Peter Magande appears to be taking a strong lead ahead of his peers. Mwa-
nawasa has a soft spot for him because of his articulation on the country’s also been decorated with the Honour of Distinguished Diplomatic Services by
economic policy. But too, he lacks party grassroots connections. Formerly the Government of South Korea as well as the Honour for Distinguished Ser-
with the opposition United Party for National Development (UPND), Magande vices to Development in Africa by Mercury International.
plays his cards well. He is a media man and journalists love him because he But who is WDM?
does not carry any ‘airs’ around him. Former Secretary General of the ACP
Countries, Magande’s resume is equally impressive. He hails from Southern Born on October 18, 1939, Mung’omba is a Lawyer, Banker and Development
province. Consultant with over 30 years of experience working in Africa, United Kingdom
and the United States. Below are the key positions he has held;
Next in the race is foreign minister Kabinga Pande, a North-westerner.
A journalist by profession, Pande worked as Public Relations Manager at the
Bank of Zambia before he joined politics. He is very friendly and likes associ- • Member of Parliament – Mporokoso Constituency (1973-74)
ating with the grassroots supporters of the MMD. ‘He gives us attention when • Chairman - Public Accounts Committee in Parliament
you are talking to him,” said one cadre. However, his political experience is
very minimal though he strategically won the position of deputy chairman of • President – Africa Development Bank (1980-85)
the MMD at the last convention. Mwanawasa may just back him if he runs • Legal Advisor – Zambian Mission to the United Nations
out of options.
• Counselor – Zambian Embassy in Washington DC (1968-70)
Felix Mutati, commerce minister, personally sells his candidature through his • Partner – Jacques and Partners law firm (1971-74)
impressive articulation of national issues. But odds are against him. He is a
Bemba from Northern Province and it is unlikely that Mwanawasa can give • Executive Director – International Monetary Fund (IMF) (1976-78)
him support. Crucially, he seems to be a ‘show off’ and cadres detest him for • Senior Executive Officer – Standard Chartered Bank London (1979-80)
that. Though he usually helps them once in a while when they are in trouble.
• Legal and Financial Advisor – Zambia Privatisation Team -retained
Home Affairs minister Lieutenant General Ronnie Shikapwasha and Health by the World Bank (1995-98)
minister Brigadier General Brian Chituwo’s candidatures will be the most dif-
ficult to sell. Firstly, they are widely seen as part of the family tree of Mwana- • Member - University of Zambia Council (1988-91)
wasa. Therefore, any perceived family ties to Mwanawasa will disadvantage • Chairman - New Capital Bank Plc (2003 to date)
such a candidate. Clearly, they will not go far. As for Shikapwasha, who calls
himself reverend, some have raised concerns over his leadership when he • Chairman – Constitution Review Commission (2003-06)
was in Zambia Air Force (ZAF). He will have an uphill battle should he decide
to throw his hat in the ring. Mung’omba holds a BA (Economics) degree from Makerere University in Ugan-
da. He is a lawyer and graduate of the Honourable Society of the Inner Temple
in London, holds a Postgraduate Certificate in International and Comparative
Law from the International and Cooperative Law Centre in Dallas Texas, United
States.
7
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Volume 1 - July 2008 Business News
Now the mining sector faces a higher royalty rate (from 0.6% to 3%), higher corporate reduce the ‘upturns’ in the cycle. Given the structure of the windfall tax, for some of
taxes (from 25% to 30%, although losses may still be carried forward according to a pre- Zambia’s mine operators, further upside when LME copper prices rise will be negligible.
determined 75:50:25 formula), and – most significantly - will see a windfall tax imposed This will impact investment on the copperbelt in the long term. For new operators even in
on copper earnings of up to 75%. Moreover, it is the midst of a copper boom, it may well be a choice between additional investment spend
probable that these payments will be made in ZMK, significantly increasing the demand in Zambia, or elsewhere, and the upside elsewhere may be higher.
for ZMK relative to the FX inflows to which the market is accustomed. There is some
possibility that payments might be made in USD to the Zambia Revenue Authority, which Another potential problem with the windfall tax is that it is based solely on the sales
will then convert the proceeds at an average interbank USD-ZMK rate in an off-market price for copper - it does not take into account the fact that different producers face dif-
transaction with the Bank of Zambia, thus preventing the inflows from impacting the ferent costs of production, depending on how the copper is extracted. In some cases,
market severely. A sizeable currency appreciation appears imminent. ore grades in open pit mines have declined and production has been depleted, creating
a need for mining at greater depths. Costs in the Zambian mining sector are in general
Gauging the impact of the sudden ‘windfall’ already higher because of the existence of underground operations (in particular the
Konkola Deep Project which was necessary to prolong the life of one of Zambia’s largest
What will the impact of all of this be? Official attitudes to currency appreciation are still mines beyond 2011). This means that development overheads are also higher. But even
ambiguous. While Zambia, as a net oil importer, will benefit in the near term from a within Zambia, there is wide variation in the depth of the mines. The difficulty with the
stronger currency, other factors are likely to windfall tax is that it discriminates against the higher cost producers, and may discour-
dominate government thinking. Although Zambia plans to reduce its traditional reliance age the development of more marginal producers. In the context of a copper-related
on donor financing, for the moment, the contribution of donors to Zambia’s budget is boom, this is unlikely to matter. Should copper prices correct down in the future, in line
large enough for the authorities to be wary of seeing dramatic and sustained currency with weaker international growth, it might exacerbate Zambia’s vulnerability to global
strength. (The proceeds of the windfall tax have not been included in the 2008 budget). cycles. Clearly, there are various issues that may need to be revisited.
With domestic revenue collection set to surge, Zambia will be able to make rapid prog-
ress in reducing its traditional donor reliance, should it wish to do so. But questions But in the near term, it looks likely that Zambia will go ahead with its plans for the windfall
about revenue sustainability and the optimal means of development financing must still tax. Although royalties are paid monthly, the windfall tax is due at the end of each quarter
be considered). (based on daily LME prices - averaged out for a month). The ZMK has already been ap-
preciating, helped by flows related to a recent telecoms sector IPO. But the continuation
In recent years, Zambia has also tried to boost its ‘non-traditional’ sectors, especially of significant FX inflows looks likely to drive USD-ZMK to even lower levels. The new tax
agriculture and tourism. While we believe that demand for high-end tourism may be rela- regime became effective from the start of this fiscal year -April 1st. With a 3 month grace
tively inelastic with respect to the exchange rate, and that a stronger ZMK may actually period on the windfall tax, ZMK appreciation pressures are likely to be most pronounced
help with the cost of imported inputs for agriculture, such as fertiliser, (to say nothing of between June and September (unless of course the government puts in place corrective
the cost of much-needed infrastructure development), the authorities - under the influ- measures). Given the history of ZMK appreciation in leading portfolio investor interest in
ence of various lobby groups - may not be receptive to this view. There is therefore a risk African markets, global slowdown or not, we could be in for another wave of FX euphoria.
that sharp ZMK appreciation might be met with an official effort to reverse or slow the In the short term, at least. [Courtesy of Razia Khan of Standard Chartered Bank.
currency’s gains. We have incorporated this into our currency forecasts, with a mid-09
10
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Volume 1 - July 2008 Business News
the bank
the figure is showing an upward trend in midyear, Magande’s gered, we are told, by good economic performance mainly
tone changed: “Why do you want to know? Do you use inflation in the mining sector. For instance, copper output shot-up
in your planning at home?” the minister queried the reporter at by 101.6 percent between 2000 and 2007, bringing in more
a recent news conference. foreign exchange on the market. This was further beefed up
by the upsurge in copper prices on the international market.
He is a Zambian resident The earnings from the Non-Traditional Exports (NTEs) tripled,
He has every reason to be riled because recent developments
in South Africa who will BOZ claims [see graph], though analysts argue that this sec-
show that he may miss his much acclaimed target. Reasons?
tor has been badly affected by the strong Kwacha. “Only few
be taking a sabbatical in The ongoing electricity outages, the rising in global oil prices NTEs performed well, the majority did badly,” said Trevor
August this year as a fel- and the food shortages facing the world. These factors are put- Simumba, an economist who has been following the trends.
low of the Weatherhead ting a strain on government’s intention to tightly hold inflation at He argued that cotton and tobacco industries are performing
Center for International single-digit level. Dr. Denny Kalyalya, Deputy Governor of the badly due to the strong currency leading to job loses in rural
Affairs at Harvard Uni- Bank of Zambia (BOZ) in-charge of operations, admitted the areas where the sectors employ a lot of labour and Indeed,
versity, though he will problem, but was quick to point out that the 7.0 percent is still the figures from BOZ show a decline in some of the NTEs in
realistic, “at least for now.’’ recent years.
continue as non-execu-
tive chairman of LOITA. “I “There are challenges in reaching that (inflation) target but we
can’t give up yet,” Kalyalya told members of the Economic As- The country is also enjoying huge savings from lower for-
will be there for one year eign debt servicing after the country qualified for the Highly
sociation of Zambia (EAZ). Many economic pundits agree that
and intend to consolidate Indebted Poor Countries (HIPC) initiative after which the debt
it may be difficult to achieve the 7.0 percent target if the current
the Group’s potential stock decreased to US$2.1 billion as at December 2007 from
trends of power outages and rising global oil prices continue.
base in the US market,” US$7.3 billion in 2001. Foreign Direct Investment (FDI) has
“After all, high inflation is not always a bad thing,” Barclays also picked up in the aftermath of the HIPC debt relief. And
Chinyanta said. A lawyer Bank Managing Director Zafar Masud, chipped in, defending so? It’s a strong Kwacha! But is it good or bad? - That is a
by profession, Chinyanta Magande at the Euromoney Conference. question that still begs an answer.
has over 25 years of ex-
perience in investment
banking, having worked
as Vice-President of Ci-
tibank Africa region as
well as HSBC Africa be-
fore venturing into LOITA.
He is an executive Vice-
President of the Southern
Africa Chapter of the Af-
rica Business Roundtable
(ABR).
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Business News Volume 1 - July 2008
The CAZ advertised for investors to tender for the fourth mobile telephone • CIBV – 78.9%
licence. The tender also raised a lot of questions among investors, includ- • IFC - 1.1%
ing questions over the requirement to pay a non-refundable fee of close to • Zambian Public – 3.4%
US$100,000. And yet the tender was only to run for four weeks. Conspicu- • Celtel Employees – 0.2%
ously, the tender did not talk of bringing Zambians on board as an advantage • Local Institutional investors – 6.3%
in line with the Citizens Economic Empowerment Commission (CEEC). Ru- • Foreign institutional investors – 10.1%
mours flared that some Indian group, with strong political connections, had
been assured of wining the tender. For now, everyone will wait for the long Fuel prices – Going up and up!
battle of EPK who, surely, will not give up without a big fight. But as the fight
goes on, there is a list of investment lobbyist circling government departments “Brace yourselves for high fuel costs,” was the timely warning from Presi-
dent Levy Patrick Mwanawasa. Indeed, Zambians have already started
with proposals for the fourth mobile telephone company.
feeling the pinch over the global rising in oil prices. Finance Minister
Ngande Peter Magande announced measures, insignificant though, of
Celtel – Please try your call later! trying to keep the fuel prices within reach of the majority. He reduced
excise duty on petroleum products with the rate of diesel coming down to
When the shares of Celtel Zambia Limited began trading on the Lusaka Stock 15 percent from 45 percent while petrol was reduced to 45 percent from
Exchange (LuSE) on June 11, 2008, company Director of Finance, Randell 60 percent. Kerosene has been zero rated. The measures will result in
government losing revenue to the tune of K127 billion, Magande said.
Hato, was answering tough questions from customers at a sideline meeting
However, the reduction in excise duty will not in anyway push down the
during the Euromoney conference. Subscribers wanted to know why the com-
pump prices of fuel. Economic experts have questioned the rationale of
pany is expanding so fast but yet the network is performing poorly and annoy- government maintaining the excise duty on fuel when it is scrapping the
ingly so. fuel subsidies. Since October 2007, government has been toping up on
Hato, in a calm and cautious tone, assured customers - some threatened to pump prices in order to mitigate high fuel prices. So far, ZMK 96 billion
abandon the network – that the problems affecting the quality of Cel- has been spent on the fuel subsidies, which government says must be
stopped. Indeed, Zambians must begin preparing for high fuel costs in the
tel had been caused by the delay in moving their call-centre operation
coming months if the rising oil prices on the international market continue
from Central Park to the new building in Lusaka showgrounds. He
with an upward swing.
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Volume 1 - July 2008 Diplomats
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team
lion dollars in Zambia’s mining sector. But international investment advi-
sors doubts the figures especially that Russian investors rarely cuts such
kind of deals in Africa. The Mineweb quoted a South African mining ad-
visor as saying “it sounds like unlikely story to me. Russians never ac-
tually invest their money into Africa, and especially into Zambia.” When
The Zambian government has finally managed to secure a deal on behalf pressed for details, the Russian Embassy in Lusaka opted to remain mute.
of the over 200 supporters of the late former Ugandan President Milton The three Russian companies are said to be exploring the possibilities
of launching Greenfield mining investments, including setting up a multi-
Apollo Obote for them to return home after years in exile. Obote who had
million smelter, a power station, railway line and a mining town with hun-
been a guest of the Zambian government died in October 2005 in a South dreds of houses for mineworkers. The representatives of these companies
African hospital where he was evacuated after an illness. The Ugandan team are due to arrive in Zambia this month to conclude on the negotiations.
has been living in Zambia since 1985 after they fled their country following
the overthrow of Obote’s government by President Yoweri Kaguta Museveni. RusInvest partner (Renova Groupe), ECN Groupe and Aurora Capital are the
three companies said to be interested in Zambia and their key officials have
Home Affairs Permanent Secretary Susan Sikaneta bid farewell to the first
already opened talks with government. Joint ventures with Zambians are the
batch of the returnees on May 21, 2008 at Lusaka International Airport where possibility but the Russian should take not less than 70 percent sharehold-
they boarded a Kenyan Airways flight to Kampala. Most of the Ugandans, ing, Azimov was quoted as saying. “They are interested in huge projects, not
who were given political asylum by then President, Kenneth David Kaunda, small ones,” Azimov said. We understand they have already put in a propos-
al to develop a smelter at Lumwana Copper Mines (LCM) in northwestern
have been living in fear of returning home after they were accused of com-
Province at a cost of US$ 400 million dollars. LCM, due to be commissioned
mitting atrocities during the Obote rule. Now Museveni has agreed to allow
this month, has no smelter and it plans to process its copper ore at the Chi-
them back without facing repercussions even though others are still scared nese-owned Chambishi Copper Smelter (CCS) currently under construction.
and do not trust Museveni.
However, we understand the Russian investors have faced difficulties in
finding mine areas where to exploit because most mineral areas with huge
The United Nations High Commissioner for Refugees (UNHCR) has provided
untapped deposits have already been granted to investors. The Ministry of
US$ 210,000 for the voluntary repatriation of the Ugandans. For the purpose Mines and Mineral development is working out a process of repossessing
of their return, the returnees have been given Voluntary Repatriation Forms the exploration licences issued to investors who have never used them.
(VRFs) issued by the UNHCR since most of them have no valid passports. Luapula province may also be the only available land for the Russians, who
Besides providing transportation to the Ugandans, UNHCR will also assist have also pledged to support sport. Another option which the Russians are
considering is outright purchase of the exiting mines from the current own-
them with small grants to help them during the journey as well as use part of
ers. “This story is too good to believe,” said one mining investor in Zambia.
the funds for re-integration in Uganda. But he was quick to point out that it will make a lot of sense if the Russians
were eyeing Uranium, which has been discovered in most parts of Zambia.
UNHCR said the political, economic and social conditions in Uganda are now
About 30 other Russian investors have visited Zambia in recent months to explore
ripe for such an organized repatriation.
the business opportunities in Zambia. Meanwhile, the Russian government
has disclosed that it intend to strengthen its military cooperation with Zambia.
Executive Issues
Executive Issues
Volume 1 - July 2008 Profiles
Joseph Chikolwa, Chief Executive Officer of Zambia Consolidated Copper must have learnt by now. Banda has been a thorn in the fresh of
Mines- Investment Holding (ZCCM-IH) has been appointed new managing most senior government officials serving in the current govern-
director of Stanbic Bank Zambia Limited, taking over from Larry Kalala who ment. And it was not a surprise that his contract has not been
has become the bank’s chairman. Chikolwa has held key positions within renewed. The reasons given for the non-renewal is that Banda
the financial sector, including that of general manager/ chief executive of- had reached the legal retirement age of 65, ACC said. Com-
ficer of the Lusaka Stock Exchange. He also held senior positions in Zambia missioner Akashambatwa Mbikusita-Lewanika tried to justify
National Commercial Bank Plc, Standard Chartered Bank Zambia Plc and the decision saying it what the ACC Act provided. But the list of
Investrust Bank Plc. retired senior government officials serving in key positions, in-
cluding in the defence and security, is good testimony to expose
Holder of a degree in Economics from the University of Zambia, a master’s government’s double-standard. For instance, Police Inspector-
degree in Finance from University of Wales, a diploma in finance from the General Ephraim Mateyo and Zambia Air Force Commander
Institute of Financial Services, Chikolwa is a fellow of the Zambia Institute General Samuel Mapala are all on contracts. We understand
of Bankers. that Banda was due to get a fresh contract but suddenly things
changed, prompting speculation on the real reasons behind his
Chipwende – Homecoming exit. Ever since he was appointed to steer the ACC, Banda had
been upright in his dealing. His boldness to fight corruption often
Andrew Chipwende had been appointed chief executive officer of the re- landed him in problems with influential people in the current gov-
cently created Zambia Development Agency (ZDA). Chipwende held senior ernment. One prominent case is that of the Drug Enforcement
positions with the disbanded Zambia Privatisation Agency (ZPA), which he Commission (DEC) where he steadily intervened and arrested
later headed before its dissolution. He specializes in policy formulation, pro- key persons, including former Commissioner Ryan Chitoba for
gramme design and strategy development. After his stint at ZPA, Chipwende corruption. Chitoba and his ex-deputy Jacob Koyi are current-
was appointed advisor to the government of Sierra Leone in-charge of priva- ly in court facing criminal prosecution. Chitoba promised t fix
tization, which focused mainly on sector reforms and improving business
Banda. Attempts to discredit him in the media as a corrupt-man
conditions ahead of the country’s privatization programme. We hear he faced
were orchestrated but to no avail. At some point, the Law As-
a big competition at ZDA during the interviews but he emerged the favourite
sociation of Zambia (LAZ) intervened in the matter after Banda,
within government circles.
a lawyer and member of the LAZ, was accused of corruption.
LAZ cleared him after he appealed before one of its commit-
Chewe – Eating with Nigerians
tees. Banda was never short of controversy. He angered the
magistrates’ after he accused them of lacking capacity to handle
David Chewe has been appointed first chief executive officer of Access Bank
high profile cases. Subordinate courts boycotted handling ACC
Zambia Limited, which is a subsidiary of Access Bank of Nigeria. Chewe is
cases until he apologized for his remark. And government has
the current President of the Zambia Institute of Banking and Financial Ser-
now said ‘nix’ to Nixon.
vices. He is a renowned banker who has served at senior and executive lev-
els at Standard Chartered Bank Zambia Plc, Stanbic Bank Zambia Limited,
Barclays Bank Zambia and Zambia National Commercial Bank Plc.
Key Events in July
Mung’omba – The perseverance
Mable Mung’omba has been appointed first director general of the Citizens • Zambia International Trade Fair – [2-8th July 2008]
Economic Empowerment (CEE) Commission. Immediate past president of
the Zambia Institute of Marketing, Mung’omba has over 18 years of experi- • Commonwealth Parliamentary Association –
ence in the private sector where she held senior executive positions, includ-
Africa Region Conference [11-19 July, 2008]
ing that of general manager at former International Chemicals (Z) Limited.
Mung’omba holds an undergraduate degree in Business Administration from
• Smart Partnership Conference – [28 – 31 July, 2008]
the Copperbelt University and three postgraduate qualifications.
She has among other qualifications a Masters in Business Administration
• Commissioning of first phase of Lumwana Copper Mines
with a major in Multinational Finance and International Business, diploma
from the Chartered Institute of Marketing, United Kingdom (CIM) and a Cross (LCM) – Dates to be announced
Sector Partnership qualification from Cambridge University.
She also worked as chief executive for the Africa Health Services, an Anglo
American Corporation subsidiary, before joining the start-up team that led to
the vision and development of Celtel.
15
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Profiles Volume 1 - July 2008
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Executive Issues