i eekly Z W

Zambia Weekly
The essence of Zambian news
Week 42 │ 17 Oc tober 2014 │ Issue 205 │ Volume 5 │ w w w.zambia-week ly.com │ FREE
Less children and women dying in Zambia
The preliminary key findings of the important
Zambia Demographic and Health Survey (ZDHS)
2013-14 have been released. This survey is the
main source of development-related indicators in
Zambia. The previous one was carried out in 2007
– making any discussion about development in
Zambia uncertain or even irrelevant due to the
lack of recent figures. The new figures are especially relevant as we approach the deadline for
the 2015 Millennium Development Goals (MDGs).
Key findings
The total fertility rate continues to show a declining trend: Zambian women now get an average
of 5.3 children, the lowest recorded since 1992 –
but amongst the highest in the world (see map).
Child mortality has improved: Infant mortality (deaths per 1,000 live births) has dropped
from 70 in 2007 to 45 in 2013-14 – against a 2015 MDG of 35.7. Under-five mortality (deaths per 1,000 live births) has dropped from 119 to 75 – against a target of 63.6.
Although close to the MDG targets, just over 1 in 13 Zambian children still die before they
turn 5 years.
Immunisation coverage has not
improved: 68% of all children
aged 12-23 months were fully
vaccinated in 2013-14. Immunisation coverage peaked in Zambia
in 1996 at 78%, but has shown a
falling trend since then.
The nutritional status of children under 5 has not improved:
Number of children born by women in a lifetime
The prevalence of underweight
children (too thin for age) was unaltered at 15% from 2007 to 2013-14 (against a 2015 MDG target of 12.5%). Stunting (too
short for age) has on the other hand declined to 40%, from 45% in 2010.
The use of insecticide-treated mosquito nets has improved significantly: In 2013-14, 57%
of all under-five children and 62% of all pregnant women slept under treated nets, up
from 28.5% and 32.7%, respectively, in 2007.
The percentage of assisted births has also improved: Births assisted by a skilled provider
increased from 47% in 2007 to 64% in 2013-14.
These measures have had an impact on maternal mortality (deaths per 100,000 live
births), which has dropped significantly from 591.2 deaths in 2007 to 398 in 2013-14 –
although the 2015 MDG target of 162.3 deaths will not be achieved.
This is the fifth ZDHS – with the previous ones being carried out in 1992, 1996, 2001-02
and 2007. It was carried out by the Central Statistical Office in partnership with the Health
Ministry and the University of Zambia. It is based on interviews with 15,920 households
across Zambia.
!
Human Development Index
The 2014 Human Development Index (HDI) ranked Zambia at 141st out of 187 countries (based on an HDI value of
0.561) – putting it above the average in the category of countries with “low human development” (HDI value of 0.493),
and above the average for sub-Saharan Africa (HDI value of 0.502). Zambia’s HDI value has increased from 0.422 in
1980. The HDI looks beyond Gross Domestic Product to a broader definition of well-being. It provides a composite
measure of three dimensions of human development: living a long and healthy life, being educated and having a
decent standard of living (income). It does however not reflect on other indicators such as inequalities, poverty, human
security and empowerment equally important to a holistic assessment of development. When Zambia’s HDI value of
0.561 is discounted for inequality, it falls to 0.365, illustrating that there are large numbers of vulnerable people who
do not benefit from Zambia’s development.
This week in 10
1. 2015 budget analysis
Zambia Weekly takes a closer look at next
year’s national budget
Pages 6-10
2. Less children and women dying
Child and maternal mortality have dropped
in Zambia – although they are both unlikely
to meet the 2015 MDG targets
Page 1
3. Land to be repossessed
Parliament has given government powers
to repossess land allocated to investors in
suspect circumstances
Page 3
4. Government appoints IBA board
Government has appointed the first ever
board of the Independent Broadcasting
Authority (IBA)
Page 4
5. Dangote sues Shamenda
Dangote Industries in Ndola has sued
Labour Minister Fackson Shamenda for
slander and libel
Page 4
6. Controversial roads delayed
The Landless Corner-Mumbwa Road and
the Pedicle Road, both re-awarded by the PF
government, are delayed
Page 5
7. Speak English!
Mopani Copper Mines has requested its employees to use English within its premises
Page 2
8. UNZA students riot over Kambwili
Students at the University of Zambia (UNZA)
have rioted after Youth and Sports Minister
Chishimba Kambwili told them to shut up
Page 11
9. State House food-taster sues state
Chief Inspector Donald Ngwira has sued
the state for being retired after he allowed a
contaminated pineapple into State House
Page 11
10. Chipolopolo wins a qualifier
Zambia has moved into second place in
2015 AFCON Group F following a 3-0 win
over Niger
Page 11
2 │ Mining and Electricity
Editor’s note
You can only speak English at Mopani
I know it’s that time of the year. We are
not the only ones yearning for the rains to
arrive. So is our groundwater. As a result
Lusaka is currently experiencing its usual
water shortages – and rationing. It is a
common sight to see drums and plastic
containers in bathrooms, not only in private homes, but also at large businesses.
And the problem must be getting worse
– judging from the increasing number of
complaints, not only from townships, but
also from well-to-do neighbourhoods,
where water now has to be brought in by
the tanker-load. This does not come as
news to anyone, least of all to the authorities, who have already initiated a major
upgrade of water supply, sanitation and
drainage in Lusaka as well as a new pipeline to the Kafue River. Actually I am more
concerned about the many new housing
developments in Lusaka. The newspapers have recently been full of adverts
for Nkwashi Community on the (current)
outer reaches of developments in Leopards Hill. Nkwashi intends to develop more
than 8,400 residential plots, several green
parks, a school, a university, a hospital, a
shopping mall and a hotel – all in an area
where residents already are struggling to
extract enough water from their boreholes.
And there are many more similar – albeit
slightly less ambitious – developments on
their way in other areas of Lusaka. I hope
the authorities have a plan for how to supply them with water?
Mopani Copper Mines has requested its employees
to use English within its premises: “It is not good
etiquette to converse in a language that others
in a group cannot understand, and I am asking
everyone to immediately restrain from talking in
their mother tongue when communicating (…)
during work hours. If an employee or contractor is
not able to converse in English, they should not be
working at Mopani,” CEO Danny Callow wrote in an
internal memo on 13 October. He pointed out that
Mopani comprises a large multicultural group of employees – and that speaking in other
languages but English contravened company policy.
This season’s first lightning victim
Gibson Kazhila, 23, has been killed by lightning in Kazhila Village outside Mwinilunga.
Kazhila was together with three other men,
who survived, reported the Daily Mail.
Sakala gets 5 years’ jail
KCM pays CEC
Konkola Copper Mines (KCM) has paid $50 million of its outstanding electricity bill to the
Copperbelt Energy Corporation (CEC). Last month, backed by a court ruling, CEC started
rationing power to KCM, as the mining company had refused to settle its electricity bills
since April 2014 due to a dispute of increased tariffs. As a result Nchanga Underground
Mine flooded – after which government ordered CEC to reconnect KCM and KCM to pay.
• CEC has embarked on an $18 million upgrade of the electricity interconnector between
Zambia and the DR Congo, involving an upgrade of the existing single line by constructing a second line – thereby increase the capacity from 250 MW to 550 MW.
ZESCO in brief
• ZESCO has spent $50 million out of the $69 million given to it in 2013 from Zambia’s first
Eurobond. The money has been pumped into its distribution network (Daily Mail).
• ZESCO has a revenue deficit of $367.44 million. The electricity company explained that
the recent increase in tariffs were insufficient to cover its costs (Post).
ACC sacrifices whistleblowers?
The integrity of the Anti-Corruption Commission (ACC) has been questioned following
reports that at least one employee at First Quantum Minerals has been dismissed, after
he and others reported their superiors to the ACC. The superiors had apparently asked
another employee for a bribe in exchange for reinstating him. The Daily Nation alleged
that the whistleblowers’ confidentially recorded statements had been leaked by someone
at the ACC.
Former Zambia Air Force (ZAF) commander
Andrew Sakala has been sentenced to
five years imprisonment with hard labour
for theft of K1.5 million by public servant
during the 2011 general elections. His two
co-accused, former commanders Wisdom
Lopa (Army) and Anthony Yeta (National
Service), were found not guilty. They stood
accused of having pocketed K1,500,000
otherwise meant for “covert operations”
during the elections. The money was
released to a ZAF, after which Sakala gave
Lopa and Yeta K500,000 each – but this was
denied by the latter two. Sakala appealed
to the High Court.
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3 │ Chiefs
Land to be repossessed from investors
Parliament has unanimously passed
a private members bill to give government powers to repossess land
allocated to investors in suspect circumstances. The motion was moved
by MMD Rufunsa MP Kennedy
Chipungu. The MPs pointed a finger
at chiefs (for illegally selling the
land) and at the Ministry of Lands,
Natural Resources and Environmental Protection (for whitewashing
it by providing title deeds). Lands Minister Mwansa Kapeya explained that government
has commenced the land audit – which it has been talking about since assuming power
in 2011 – to collect data on land use. He also emphasised that people who obtained land
legally will be protected under the laws of Zambia. They will be compensated if government repossesses their lands.
!
History of land in Zambia
Quotes
“
We suggest that the president immediately takes leave of absence from official duty
for a specified period of time to address
whatever challenges have inhibited his
public appearance.
Zambia Council for Social Development Executive Secretary
Lewis Mwape, on behalf of a consortium of Civil Society
Organisations, expressing concern about President Sata’s
appearance and demeanour when opening parliament
(Statement on Lusaka Times 10). The consortium includes
NGOCC, JCTR, CSPR and Action Aid, among others.
Zambia has followed a dual system of land tenure since colonialism. Back then land was divided into the areas most
appropriate for European settlement and all land known to contain mineral resources (Crown Lands), homelands for
the workers on the edge of white farming areas (Native Reserves), and the rest for “the use or common benefit direct or
indirect of the natives” (Native Trusts). Whites were governed by civil law and owned private property, while Zambians
were governed by chiefs under customary law and lived on communal lands.
It is amazing how treacherous people tend
to create animosity even where there
is none. I respect him, Chikwanda, and
our bond will never break, as far as I am
concerned.
After independence, the UNIP government maintained the distinction between the re-named State Lands vested in the
president and governed by government and Trust/Reserve Lands governed by chiefs. The state consolidated its control
over land by passing legislation to allow the acquisition of undeveloped and unutilised lands by the state (1969), by
converting freehold tenure to statutory leasehold (1974), thereby suppressing the market for land, and by restricting
the alienation of land to foreigners (1985).
Finance Bank Chairman Rajan Mahtani (Times of Zambia
15) – after Finance Minister Alexander Chikwanda allegedly
accused Finance Bank of “continually and persistently and
consistently” breaching the Banking and Financial Services
Act, in a secret recording made by the Post Newspapers of the
minister talking to friends at his home. Mahtani spoke when
handing over money to freedom fighters.
In mid-1993, at the behest of the World Bank and IMF, the MMD government set out to reform the system, and in 1995,
the Land Act was passed by parliament following two years of divisive national debate that pitted government against
most civil society organisations, church groups, traditional leaders and the opposition.
The act amalgamated reserve and trust lands into customary areas, and made it possible for land – and not just
improvements – to be bought and sold. All land remained vested in the president, but the act made it more difficult for
the state to repossess undeveloped land. The act was designed to open up more land for investment – and to enable
villagers to use their land as collateral for credit – by making it easier for both groups to acquire leasehold titles to
customary land. However, fewer Zambians than foreign investors have benefitted, partly due to local lack of awareness
of the possibility of conversion, and partly due to the cost involved.
Under the act, almost all land transactions require the consent of the president (on a day-to-day basis delegated to
the Commissioner of Lands) – although it also reduced bureaucratic hurdles (such as presidential consent for all land
transactions) to formalities. Chiefs were only left to govern customary use and occupancy rights based on custom.
In addition, chiefs may only recommend conversions of land in customary areas of up to 250 hectares as outlined in
Land Circular no. 1 of 1985, reinforced by the Lands Act. The chief will still have to seek approval from the local council,
which in turn needs approval from the Commissioner of Lands. Conversion of land above 250 hectares, but below
1,000 hectares, requires the consent of the Lands Minister, and land above 1,000 hectares the personal approval of the
president.
However, chiefs across the country have apparently sold blocks of more than 250 hectares to foreign investors without
obtaining the necessary approvals. Foreign investors are particularly concentrated in tourism and agricultural areas –
with large pieces of land in the northern part of Zambia in particular being sold for agricultural schemes recently.
Chief dethroned in Western Province
The Barotse Royal Establishment (BRE) in Western Province has dethroned Chief Mwene
Chiyengele of the Mbunda People after he refused to appear before the Kuta (traditional
court) to answer charges over land issues. The chief accused BRE of dethroning him for
holding the Cheke-Chambunda Ceremony against the directive of the Litunga (King).
Mwene Chiyengele was installed by BRE in 2010 – but claimed he could only be dethroned by President Sata.
To eradicate the insidious incidences of
poverty, which are a slur on our collective conscience, we will need double
digit growth rates. This will entail major
changes in our mind sets particularly as it
relates to radical improvement in our work
culture, sense of duty and responsibility.
Finance Minister Alexander Chikwanda aiming high when
presenting the 2015 national budget (see page 6-10).
4 │ News
Government appoints first ever IBA board
LCC re-introduces casualisation
Government has appointed the first ever board of the Independent Broadcasting Authority (IBA), comprising former commandant for Intellectual Security Brigadier General Justin
Mutale, accountant Hillary Banda, MD of Izone ICT solutions Hildah Akekelwa, former broadcaster Alphonso Kashulwe, CEO of Opti-Quest Media Corporation Patricia Mwase, ZAMTEL
Chief Marketing Officer Evans Muhanga, former Central Province Education Officer Enita
Hamatumbika, Sustainability Manager at Lumwana Mine Brenda Tambatamba Liswaniso
and Information and Broadcasting Permanent Secretary Bert Mushala. IBA was established
by the IBA Act of 2002. Information and Broadcasting Minister Joseph Katema said the board
had been appointed in line with government’s “hands off” policy on the media – to grow IBA
from its infancy to a formidable organisation that will regulate the broadcasting industry.
The appointment was commended by the Media Institute of Southern Africa (MISA) Zambia
– which pointed out that only now could government claim that IBA was operational. It did
however warn government against political interference.
The Lusaka City Council (LCC) has reverted
the employment of recently employed
council workers to casuals. In a letter, publicised by the Zambian Watchdog, Namukolo Kalufyanya, the council’s director of
human resource and administration, writes
to one of the affected workers: “Following the employment freeze imposed on
government institutions, and due to the
financial situation, it has been decided that
you be reverted to the position of casual
worker with immediate effect”. This comes
at a time when government is clamping
down on casualisation amongst private
investors.
Dangote sues Shamenda
No examination leakages this year
Dangote Industries has sued Labour Minister Fackson Shamenda. Dangote complained
that Shamenda had visited the company’s cement plant in Ndola on 13 September – accompanied by the labour movement and the media – despite being informed that the
MD was not there. Afterwards, on 15 September, it was widely reported in the media that
Shamenda during the visit had accused a Nigerian executive seconded to Dangote of
trying to bribe him – allegedly to turn a blind eye to labour issues. This was followed up
by another article in the Post on 1 October, in which Shamenda claimed that Dangote had
offered him an apology, and that his action would serve as a lesson to other corporate
bodies. Dangote denied both the bribery and the apology – and is now seeking damages
for slander at the visit (spoken defamation) and libel in the media (printed defamation)
amounting to K112,043 + interest – equivalent to the cost of press releases denying the
allegation. Dangote accused Shamenda of fishing for political mileage, claiming that he
knew that the allegation of attempted bribery was untrue. The company further stated
that Shamenda had made his allegation without reporting it to the relevant authorities
and without giving Dangote a constitutional opportunity to respond.
Education Minister John Phiri has stated
that his ministry together with the Examination Council of Zambia (ECZ) has put in
place measures to prevent leakage of examination papers. He told QFM Radio that
there have been no leakages this year. Last
week, several Grade 12 pupils ran amok
after discovering that their examination
papers were different from the fake ones
leaked beforehand. Phiri suggested that
students should concentrate on studying
rather than cheating.
5 │ Tr a n s p o r t
Controversial roads delayed
Jizan Construction, the Chinese contractor reconstructing Lot 1 of the Landless CornerMumbwa Road (see Fact Box), has asked the Road Development Agency for a ninemonth extension to the project. The contractor explained that it had problems sourcing
stones and water, although the Resident Engineer, Stephen Malubila from Ng’andu
Consulting Limited, blamed lack of capacity, including equipment breakdowns, and a ‘few’
management issues, reported the Daily Mail. The project was scheduled to be completed
by November 2014, but the contractor has only completed 13 kilometres of the 65 kilometres.
!
Landless Corner-Mumbwa Road
The reconstruction of the 115-km Landless Corner-Mumbwa Road, which connects Mumbwa to the Great North Road,
was divided into two lots: Lot 1 (65 km from Landless Corner) and Lot 2 (50 km from Mumbwa). Lot 2 was completed
in April 2013 by China Henan at K101 million, but Lot 1 has caused problems. In September 2011, the PF government
cancelled the Lot 1 contract initially awarded by the MMD government in 2010 to Wade Adams, owned by late veteran
politician Ben Mwila, who died in 2013. The PF government said the contract was cancelled due to under-performance,
but Wade Adams sued the Road Development Agency (RDA) for breach of contract – and was awarded compensation
from the RDA of almost half of the K80 million contract. In May 2013, RDA re-awarded the contract – which in the
meantime had ballooned to K175.5 million – to Jizan.
The upgrade of the Pedicle Road in DR Congo will not be completed by November 2014,
as scheduled, as the contractor, Copperfields Mining Services Limited, has only completed
48% of the contract, citing scarcity of materials, which have to be trucked in from Zambia.
The Road Development Agency advised the contractor to apply for an extension, reported
the Daily Mail.
!
Pedicle Road
The Road Development Agency (RDA) re-awarded the K278.8 million upgrade of the Pedicle Road to Copperfields
Mining Services Limited in November 2012. The contractor must have been single-sourced – considering that the RDA
terminated the existing K313.9 million contract less than a month before. That contract was awarded to Fratelli Locci
of Italy in August 2011 by the former MMD government, despite Fratelli having bid K60 million more than the lowest
Chinese bidder. In 2014, Andrew Banda, son of former President Banda, was sentenced to two years’ imprisonment for
having solicited for and received 2% of all contracts given by the RDA to Fratelli Locci. The bribe was paid to Andrew’s
company, AB Logistics, and the judge ruled that Andrew had not convinced him that AB Logistics was providing transport services to Fratelli Locci. Andrew is out of jail on appeal.
The 70-kilometre Pedicle Road is the shortest route between Copperbelt and Luapula Provinces. Copperfields will
upgrade the entire road from Mokambo Border Post to Chembe Bridge, from gravel to asphalt, and construct a bridge
at Lubemba.
!
Train speeds
When government took over Zambia Railways in September 2012 – after cancelling the concession agreement with
Railway Systems of Zambia (South Africa) – the train speeds on the tracks averaged 15 km/h for freight and 20 km/h for
passengers. Since then they have improved to 30 km/h and 40 km/h, respectively – and the desired speeds of 70 km/h
for freight and 80 km/h for passengers shall be attained after full track rehabilitation by early 2016 (statement from
Zambia Railways – which has just asked government for more money to enable it to complete it track rehabilitation).
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Fuel mixed with kerosene?
The Energy Regulation Board (ERB) has
advised that some petroleum transporters
are mixing fuel, petrol and diesel alike, with
kerosene before delivering it to service stations. ERB chairman Geoff Mwape warned
that the perpetrators would not be spared.
The Petroleum Transporters Association of
Zambia accused Tanzanian truck drivers of
being behind the scam.
Local transporters boycott hearing
Local transporters recently grounded their
fleets, accusing government of favouring
foreign transporters – and this week they
walked out of a public hearing organised
by ERB over the same. The Petroleum Transporters Association of Zambia claims ERB
has issued new licences or extended existing ones to foreign transporters in breach
of a government directive. The association
is pointing to Superstar Forwarders Zambia
Limited and Unitrans Zambia Limited. At
the hearing, both companies refuted that
they had contravened any provision of the
ERB Act.
Higer buses banned or not?
Deputy Minister of Transport, Works, Supply
and Communications Panji Kaunda started
the week by announcing that government
had not banned Chinese Higer buses for
being too heavy, as reported last week by
the Daily Nation. He even apologised to Wu
Ming, the proprietor of Higer Buses Limited,
for the inconvenience. Wu explained that
Higer buses are only too heavy when overloaded – and accused an aggrieved transporter, who had failed to pay back a loan to
the company, of being behind the allegations. However, the Daily Nation did not
give up. It explained that it had based its
initial story about the buses being banned
on a statement from Kaunda’s Permanent
Secretary, Joe Kapembwa, and suggested
that the buses’ weight had been understated for registration by the Road Transport
and Safety Agency in collaboration with
Kaunda under government’s lend-a-busto-a-youth empowerment programme
initiated last year. When contacted later in
the week, Kaunda told the Daily Nation that
the ban was indeed in place.
6 │ Focus
2015 budget analysis
Government has presented its national budget for 2015. It is a big
budget of K46.7 billion (24.6% of GDP), up by over 9% from K42.68
billion (30.7% of GDP) in 2014 (and K32.12 billion in 2013). It was a
budget of few surprises, which was received with mixed feelings see later.
2014 budget performance
• The budget deficit (government revenue minus expenditure)
is estimated to end at 5.5% of GDP – against a target of 6.6%
(down from a deficit of 6.5% in 2013).
• At the end of September 2014, external debt stood at $4.7 billion, creeping up from the same time in 2013 ($3.1 billion) and
2012 ($2.5 billion). The net debt comprises 23% of GDP, below
the internationally accepted threshold of 40%.
• Domestic debt, including arrears, increased to K21.9 billion, up
from the same time in 2013 (K18.52 billion) and 2012 (K13.7
billion).
• Balance of payments is expected to register a surplus of $486.0
million in 2014, compared to a deficit of $344.9 million in 2013,
due to improvements in current and financial accounts backed
by higher copper exports and the Eurobond.
• International reserves are projected to increase to $3.2 billion at
the end of December 2014, bolstered by the Eurobond, representing 3.6 months of import cover, in line with IMF’s recommendation of 3 months.
• GDP growth expected to end “above projected 6.5%” (although
target of 7% was set when presenting 2014 budget last year).
• Inflation stands at 7.8% as at September 2014 – against 2014
target of no more than 6.5%.
2015 budget targets
• Real GDP growth of above 7.0%.
• Year-end inflation of no more than 7.0%.
• Increase international reserves to at least 4.0 months of import
cover.
• Increase domestic revenue collections to over 18.5% of GDP
(2014 target: 21%).
• Limit domestic borrowing to 2.0% of GDP
(2014 target: 2.5% of GDP).
• Contain overall budget deficit to no more than 4.6% of GDP.
2015 budget – by sector
(new measures highlighted in bold)
Agriculture, Forestry and Fisheries: Focus on productivity through
extension services (recruitment of 500 extension officers) and
diversification (tailoring the Farmers Input Support Programme to
provide seeds for a variety of crops) – to limit government expenditure on maize. Government will upscale support to conservation
farming, continue irrigation development and push development
of aquaculture (fish). It will also enhance disease control, extension services, restocking and construct insemination centres in the
livestock sector.
Tourism and Arts: Focus on infrastructure, including airports, roads
and electricity, particularly along the Northern Circuit and in Lower
Zambezi and Kafue National Parks.
Manufacturing: All government departments must give preference to locally produced goods. Government will continue to
capitalise the Citizens Economic Empowerment Commission (for
value chain development) and Development Bank of Zambia (for
development of SMEs – with “the greatest potential for job creation”). It will also scale up entrepreneurship training and marketrelevant skills development. Government has embarked on the
design of industrial clusters in each district (to support entrepreneurs) and will continue to promote multi-facility economic zones
and industrial parks.
Mining: Government will reduce its shareholding in ZCCM-IH
from 87% to 60% to comply with listing requirements on Lusaka Stock Exchange that no single shareholder should control
more than 75%. Shares will be offloaded to Zambian citizens.
Infrastructure: Continue to implement flagship road programmes,
including Link Zambia 8000 (22 projects at K9.8 billion covering
2,260 km are under implementation countrywide), Lusaka 400
(otherwise scheduled to be completed in 2014) and road tolling.
Government also expects “rapid acceleration” of Pave Zambia 2000
in 2015. It will continue to support Zambia Railways (both passenger and cargo traffic has increased since government put money
into rehabilitation of rail and equipment) and sort out policy
restraints for TAZARA (there have been reports of a split between
Zambia and Tanzania).
Energy: Further enhance electricity generation capacity (several
projects in the pipeline) and streamline the fuel supply (less
middlemen).
Continued ►
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7 │ Focus
2015 budget... continued
Social protection: Continue redesigning the public pension system
and harmonise the social security legislation. The Social Cash
Transfer Scheme will continue in 2015 (over 145,000 individuals
had been supported as at June 2014), and government will review
some of the other social safety nets to rationalise coverage.
Health: Continue to increase frontline health personnel (from
13,147 currently to over 15,000), enhance infrastructure (training
institutions, district hospitals and health posts) and improve provision of drugs and medical equipment (with all six regional hubs
expected to be operational by 2015). Continue to reduce referrals
abroad through procurement of specialised medical equipment.
a residential estate
now
Education: Focus on infrastructure, especially at secondary and tertiary levels, and on enhancing early childhood education. Upgrade
teacher qualifications, especially in science, mathematics and
technology, and continue to implement the revised curriculum
with emphasis on life skills.
sel
ling
Water and Sanitation: Increase access to clean and safe drinking
water in rural areas from the current 64% to 67% (2014 target:
65%) through more boreholes, wells and water schemes – and
urban access to water from the current 83% to 85% (2014 target:
84%) through rehabilitation and construction of water supply
infrastructure. Increase rural access to sanitation from the current 43% to 45% (2014 target: 48%) through community-based
approaches and construction of institutional sanitation facilities
– and improve urban sanitation facilities. Promote solid waste
management by financing refuse trucks and other equipment for
local authorities – and encourage them to embark on waste-toenergy projects together with the private sector.
Decentralisation: Set up a Local Government Equalisation Fund to
provide a “stable, buoyant and predictable” source of revenue from
central government, which will allocate a minimum of 5% of total
income taxes. Allocations to individual councils will be formulabased to ensure equity and transparency – and conditional on
observance of good public financial management practices and
delivery of essential municipal services.
Parastatals: Review the viability of some grant-aided institutions – with a view to either abolish them or revert them to
central government.
How will it be spent?
(see next page for overview)
According to Finance Minister Alexander Chikwanda, the 2015
budget focuses on economic diversification as well as job and
wealth creation through investment in agriculture, tourism, manufacturing and construction in particular. In this vein, the Farmers
Input Support Programme has had its funding doubled. However,
defence has also received a large increase, although it is not a
growth sector.
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Government also wants to accelerate interventions in the health,
education and water and sanitation sectors – yet health has been
allocated less money as a percentage of the budget than last year.
Water and sanitation has however received a large increase.
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Government has reduced the allocation to social cash transfers,
despite earlier talking about expanding the programme, but has
increased the funding for empowerment.
Debt service is another increasing item in the budget.
The long-term objective of the 2015 budget is to reduce poverty,
which will require double digit economic growth rates, according
to Chikwanda.
Continued ►
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8 │ FOCUS
2015 budget... continued
How will it be spent?
Department
2014
Allocation /
million ZMK
GENERAL PUBLIC SERVICES
10,729.3
2015
% of
budget
25.1
Public Affairs and Summit
Grants to local authorities
626.5
Service of domestic and external debt
% of
budget
12,040.18
25.8%
68.86
0.1%
586.76
1.3%
4.4
1.5
(of which Local Government Equalisation Fund)
Constituency Development Fund
Allocation /
million ZMK
% increase yearon-year minus
inflation (7.8%)
210.0
0.5
210
0.5%
(7.8)
4,672.9
10.9
5,287.84
11.3%
5.4
100
0.2%
Compensation and awards (lost court cases)
Resource mobilisation
428.8
1.0
Infrastructure in new districts/provinces
550.0
1.3
500
1.1%
(16.9)
44.2
0.1
29.26
0.1%
(41.6)
DEFENCE
2,744.3
6.4
3,247.2
7.0%
10.5
PUBLIC ORDER AND SAFETY
2,121.4
5.0
2,180.0
4.7%
(5.0)
11,943.4
28.0
12,746.6
27.3%
(1.1)
55.0
0.1
108.7
0.3
123.7
0.3%
6.0
100.0
0.2%
Constitution-making process
ECONOMIC AFFAIRS
General economic, commercial and labour
(of which youth skills training)
(of which empowerment funds)
(of which Sovereign Wealth Fund (IDC))
Agriculture, forestry and fishing
3,080.0
7.2
1,013.3
2.4
992.9
2.1%
(9.8)
(of which Farmers Input Support Programme)
500.0
1.2
1,083.2
2.3%
108.8
(of which construction/rehabilitation of silos)
179.7
0.4
550.0
1.3
600.0
1.3%
1.3
70.7
0.2%
5,626.51
12.1%
1.9
(of which Strategic Food Reserve (FRA)
Fuel and Energy
(of which ZESCO)
(of which Rural Electrification Fund)
Transport
6,070.0
14.2
5,126.9
12.0
339.8
0.8
ENVIRONMENTAL PROTECTION
165.2
0.4
175.0
0.4%
(1.9)
HOUSING AND COMMUNITY AMENITIES
661.0
1.5
798.7
1.7%
13.0
(of which roads)
(of which rail)
Water supply and sanitation
417.8
1.0
541.0
1.2%
21.7
4,228.4
9.9
4,464.1
9.6%
(2.2)
Drugs and medical supplies
738.7
1.7
753.52
1.6%
(5.8)
Medical infrastructure and equipment
312.3
0.7
268.24
0.6%
(21.9)
298.9
0.7
323.6
0.7%
0.5
8,607.0
20.2
9,433.3
20.2%
1.8
School infrastructure
861.1
2.0
1,069.5
2.3%
16.4
University infrastructure
404.3
0.9
650.0
1.4%
53.0
HEALTH
RECREATION, CULTURE AND RELIGION
EDUCATION
Bursaries
156.5
0.4
200.2
0.4%
20.1
1,183.0
2.8
1,257.8
2.7%
(1.5)
Public Service Pension Fund
754.2
1.8
805
1.7%
(1.1)
Social cash transfer
199.2
0.5
180.59
0.4%
(17.1)
Food Security Pack
50.0
0.1
50
0.1%
(7.8)
42,682.0
100.0
46,666.6
100.0
1.5
SOCIAL PROTECTION
TOTAL
Continued ►
9 │ FOCUS
2015 budget... continued
How will it be financed?
new structure will increase revenues by K1.7 billion. It does not apply to mining of industrial minerals such as limestone.
The 2015 budget aims to reduce the hitherto growing fiscal deficit
through control of recurrent expenditure. Limiting expenditure on
maize marketing, ensuring cost reflective fuel pricing and rationalising capital expenditure will be essential, Chikwanda explained.
He added that government will maintain the freeze on wages (but
lift that on employment) in the public sector.
Other tax changes:
• Increase the presumptive tax for individual operators of public
service vehicles such as minibuses (K3.8 million gain).
• Increases in customs and excise duties (K40 million gain), including in specific duty on refined edible oil to K2.20 / kg, in customs
duty on explosives to 25% and on roofing sheets to 30%, and on
excise duty on imported de-naturated spirits of more than 80%
alcohol from 0% to 125%.
• Remove 5% customs duty on aviation fuel (K6.3 million loss).
Government is increasingly seeking to fund the national budget
through domestic revenues, which constitute 75.2% of the 2015
budget – up from 69.2% in 2014. The revenue-to-GDP ratio is
projected to increase to 18.5% in 2015 from 17.2% at the end of
2014. Conversely the budget is less dependent on donor grants
and external borrowing.
The revenue stream is driven by “a more equitable distribution of
the mineral wealth between government and the mining companies” obtained through a simplified mining tax structure heavily reliant on mineral royalties of 8% (underground mines) or 20% (open
cast mines), as a final tax, up from 6% currently. Processors of ores
and concentrates will still pay the 30% corporate income tax. The
Government will amend the Customs and Excise Act, the Value
Added Tax Act and the Income Tax Act (all three were also on the
agenda in 2013 and 2014) along with the Property Transfer Tax Act
and the Mines and Minerals Development Act. The changes will be
revenue neutral, although they will including finding “an amicable
resolution” to the contentious VAT Rule 18, which has resulted in
government owing mines about $600 million in VAT refunds.
2013
2014
ZMW million
% of total
29,538.54
69.2%
35,104.35
75.2%
1,210.0
2,895.70
6.8%
3,822.68
8.2%
TAX REVENUES
23,536.0
26,643.00
62.4%
31,282.67
67.0%
Income tax
12,809.4
12,966.39
11,793.25
(of which company income tax)
4,788.6
4,046.96
2,399.44
(of which PAYE)
5,018.7
5,132.08
7,466.90
(of which withholding and other)
1,080.2
1,601.65
1,926.91
(of which mineral royalty)
DOMESTIC REVENUES
NON-TAX REVENUES (fees, fines, levies, dividends, etc)
ZMW million
% of total
24,746.0
76.8%
2015
ZMW million % of total
1,922.0
2,185.71
5,936.88
Value added tax (VAT)
6,016.4
8,099.06
6,576.73
Customs and excise
4,710.0
5,577.39
6,974.80
659.2
861.01
903.13
0.0
0.0
2,417.95
5.2%
(of which fuel levy)
EUROBONDS UNUSED
DOMESTIC BORROWING
1,863.4
5.8%
3,501.75
8.2%
3,771.95
8.1%
DONOR GRANTS
1,525.5
4.7%
2,626.63
6.2%
1,213.59
2.6%
General Budget Support
Sector Budget Support
Project Grants
EXTERNAL BORROWING
Programme Loans
Project Loans
TOTAL
599.1
1,083.86
0.00
0.0
0.00
0.00
926.5
1,542.76
1,213.59
4,077.3
2,840.2
1,237.1
32,212.2
12.7%
7,015.12
100%
5,500.00
1,515.12
42,682.04
16.4%
4,158.72
8.9%
100%
1,482.59
2,676.13
46,666.56
100%
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1 0 │ focus
2015 budget... continued
How will it perform?
Commentators generally agreed that it was a more prudent budget than last year’s, calling it “modest”, “neutral” and “ordinary”.
It contained few surprises (partly because it had been leaked to
the Post beforehand) – with large chunks of expenditure being
allocated to already initiated infrastructure projects.
Some praised the overwhelming focus on infrastructure (roads,
railways and energy) for being growth-oriented, especially combined with the reduction in tax on jet fuel, while others criticised
it, arguing that funds should be channelled to poverty reduction
programmes to obtain the desired double digit growth rates.
They argued that the budget was not pro-poor, as government
for the first time in years had not increased the Pay-As-You-Earn
thresholds. Neither did government follow recommendations
to zero-rate VAT on essential food items. The labour movement
was also very unhappy about government maintaining its wage
freeze in the civil service – and talked of strikes and civil unrest.
Nationwide strikes?
The Zambia Congress of Trade Unions (ZCTU) has threatened to
organize countrywide demonstrations if government does not lift
the wage freeze in the civil service. ZCTU has threatened strikes
ever since Finance Minister Alexander Chikwanda imposed an impromptu wage freeze in October 2013 in the face of escalating salary expenses. With effect from 1 September, most of the 120,000
civil servants received pay increases of 40-50% on basic salaries
– but varying from 4% to 200% – with the highest increases going
to the lowest paid workers. Zambian civil servants are currently the
highest paid in the region, with a minimum basic salary of K3,000.
As a result government will spend 52.5% of its revenue in 2014 on
public wages. Consequently, Chikwanda, when delivering the 2015
national budget, said the wage freeze would remain – although he
lifted the recruitment freeze. However, ZCTU pointed out that living costs are rapidly increasing in Zambia – and said it is currently
consulting its affiliates to mobilise workers.
Commentators were generally happy with the allocation to the
education sector (20.2%), but were disappointed with the one to
health (9.6%), which is short of the Abuja Declaration of 15%.
The main novelty – the new tax structure for the mines – was
debated extensively. Commentators generally agreed that it
would increase government revenue in the short-term, but deter
investment in the long term. Others worried about mining companies cheating by over-declaring output from underground
mines and under-declaring that from open pits.
The budget was praised for being less donor-reliant, but many
were concerned about the debt, pointing out that Zambia’s total
debt (foreign + domestic) has surpassed K50 billion, beyond the
2015 budget of K46.7 billion, meaning that Zambia in commercial terms could be considered bankrupt. The opposition UPND
party argued that the PF has increased Zambia’s external debt
from $1.6 billion when they took over in September 2011 to $4.7
billion – by $3.1 billion in 3 years – while it took the UNIP government 27 years to build up a debt of $7 billion.
The reduced allocation to the constitution-making process
confirmed that government may be less interested in producing
a people-driven constitution that it claims.
No more road contracts!
The Finance Ministry has directed the Road Development Agency
(RDA) not to sign any new road contracts, Secretary to the Treasury
Fredson Yamba stated. Old contracts will continue. The new move
is in line with government’s focus on fiscal consolidation, including
reducing its budget deficit, in large parts driven by the many ambitious road programmes underway along with the extra purchase of
maize and public salaries.
IMF to visit Zambia
The International Monetary Fund will visit Zambia in November to
discuss a new programme for financial assistance. After an earlier
visit in June, government asked the IMF to return to discuss an
economic programme, which could be supported by a Fund arrangement – although Finance Minister Alexander Chikwanda has
stated that Zambia does not necessarily need a new loan.
tŚŽ ŝƐ ŚŝƌŝŶŐ ƚŚĞ ƉĞŽƉůĞ ƚŚĂƚ zKh ŶĞĞĚ͍
WƌĞĐŝƐŝŽŶ ZĞĐƌƵŝƚŵĞŶƚ /ŶƚĞƌŶĂƟŽŶĂů ;W͘Z͘/Ϳ ƉƌŝĚĞƐ ŝƚƐĞůĨ ŝŶ ŽīĞƌŝŶŐ Ă ƐƵƉĞƌŝŽƌ ƐĞƌǀŝĐĞ ĂŶĚ ĐŽŶŶĞĐƚƐ ƐƉĞĐŝĂůŝƐƚ ƚĂůĞŶƚ ǁŝƚŚ ůĞĂĚŝŶŐ ĞŵƉůŽLJĞƌƐ ĂĐƌŽƐƐ Ăůů ƐĞĐƚŽƌƐ͘ KƵƌ ƚĞĂŵ ƉŽƐƐĞƐƐĞƐ Ă ĚĞƚĞƌŵŝŶĂƟŽŶ ƚŽ ďĞ ƚŚĞ
ďĞƐƚ ĂŶĚ ĂďŽǀĞ Ăůů ƚŽ ŽďƚĂŝŶ Ă ƉƌŽǀĞŶ ƚƌĂĐŬ ƌĞĐŽƌĚ ŽĨ ƐƵĐĐĞƐƐ͘ KƵƌ ƌĞĐƌƵŝƚŵĞŶƚ ĞdžƉĞƌƟƐĞ ƐƉĂŶƐ ĂĐƌŽƐƐ Ăůů ŝŶĚƵƐƚƌŝĞƐ ĂŶĚ ǁĞ ƉƌŽǀŝĚĞ ĞdžĐĞƉƟŽŶĂů ŽƉƉŽƌƚƵŶŝƟĞƐ ĨŽƌ ĐĂƌĞĞƌ ĚĞǀĞůŽƉŵĞŶƚ ĂŶĚ ďƵƐŝŶĞƐƐ
ƉƌŽƐƉĞƌŝƚLJ͘ tĞ ŚĂǀĞ ĐŽŶƐŝƐƚĞŶƚ ĐŽŶƚĂĐƚ ǁŝƚŚ ŐƌŽǁŝŶŐ ŝŶĚƵƐƚƌŝĞƐ ŝŶ ĂŵďŝĂ ĂŶĚ ƚŚŝƐ ƉƵƚƐ W͘Z͘/ ŝŶ Ă ƉŽƐŝƟŽŶ ŽĨ ƐƚƌĞŶŐƚŚ ƚŽ ĂĚǀŝƐĞ͕ ĞŶĐŽƵƌĂŐĞ ĂŶĚ ĨĂĐŝůŝƚĂƚĞ ƚŚĞ ĞŵƉůŽLJŵĞŶƚ ƉƌŽĐĞƐƐ ĨŽƌ ĐĂŶĚŝĚĂƚĞƐ ĂŶĚ ĐůŝĞŶƚƐ
ĂůŝŬĞ͘ WĞŽƉůĞ ĂƌĞ Ă ĐŽŵƉĂŶLJ Ɛ ŵŽƐƚ ǀĂůƵĂďůĞ ĂƐƐĞƚ ƐŽ ůĞƚ ƵƐ ĞŶƐƵƌĞ LJŽƵ ŚĂǀĞ ƚŚĞ ^d ƉĞŽƉůĞ ǁŽƌŬŝŶŐ ĨŽƌ LJŽƵ͊
͙͘͘ůů LJŽƵ ŶĞĞĚ ƚŽ ĚŽ ŝƐ ƚŚĞ ŝŶƚĞƌǀŝĞǁ͊
tĞď͗ ǁǁǁ͘ƉƌŝĐŽŶƐƵůƚĂŶƚƐ͘ĐŽŵ ൟ ŵĂŝů͗ ƌƚŚŽƌŶĞΛƉƌŝĐŽŶƐƵůƚĂŶƚƐ͘ĐŽŵ | DŽďŝůĞ͗ нϮϲϬ ϵϲϴ ϵϳϱ ϵϲϰ
Harare | Lusaka | Maputo
11 │ Kambwili and crimes
Kambwili sued by 35 former employees
Thirty-five former employees of Mwamona Engineering and Technical Services, a company co-owned by PF Youth and Sports Minister Chishimba Kambwili, have sued Kambwili
for terminating their contracts without notice in March 2014. In 2011, workers at Mwamona accused their employer of illegal dismissals, but Kambwili said the workers had staged
an illegal protest – allegedly because their salaries had been reduced. Mwamona was
established before the PF assumed power. Kambwili remains the company’s MD.
UNZA students riot over Kambwili
Students at the University of Zambia (UNZA) have rioted – after Youth and Sports Minister Chishimba Kambwili told them to “shut up”. The unrest has been brewing since the
students last week tried to besiege the Commonwealth Youth Centre within the university’s campus. The students believe the centre should be used to accommodate lecturers
and students, as it is no longer used by the Commonwealth, but Kambwili refuted that
the centre had closed – and threatened student reporters at UNZA Radio with dismissal
for their negative coverage. He followed up this week by threatening students thinking
about taking over the centre with the “full wrath of the law”. “I don’t tolerate nonsense,”
Kambwili added. Earlier this month he laid the foundation for his unpopularity, when he
told students that it was “not the responsibility of government to educate people”, after
thousands of students were denied bursaries – allegedly leading to one young woman
committing suicide. Two police officers were injured during the riots.
Cop hires another man to write his exams
Musole Musole, a police officer in Kitwe, has been arrested for exam malpractices. Musole
had paid George Chilundika to write a math exam on his behalf – after equipping him with a
fake National Registration Card with Musole’s particulars, but Chilundika’s picture.
The president’s food-taster sues state
Chief Inspector Donald Ngwira has sued the state for being retired in national interest
in the beginning of 2013. Ngwira was deployed to State House when it received five
pineapples from PF member Manyando Liywali. The pineapples were taken for testing at
the Food and Drug Laboratory at the University Teaching Hospital, while Ngwira and two
other officers routinely sampled one of the pineapples before delivering it to the higher
echelons. The laboratory results were however delayed, and when they arrived, showing that the pineapples contained an organophosphate pesticide unsuitable for human
consumption, one of the fruits had been eaten by an unnamed member of the first family.
Ngwira was subsequently transferred from State House, but retired four days later. Ngwira
stated that he had never been given a chance to exculpate himself.
US doctor robbed in Kitwe
An US doctor and his wife, Robert and Teckla Day, have been robbed of K30,000 and
other valuables at gunpoint in broad daylight in Kitwe. Masked robbers had blocked the
couple’s car using their own vehicle on Independence Avenue near the former Eye Ward
Clinic. The couple was in Zambia on a medical mission trip to set up a medical centre at
Chande Baptist Orphanage in Ndeke Township.
Boy abandoned in bush
A young teenage boy believed to be 13-14 years has been found in the bush tied to a tree
in Magoye, Mazabuka District. The boy is believed to mentally handicapped, reported
Lusaka Times. He was found by a passerby. The police suspect he was left in the bush by
his relatives – and asked the public to help trace them, as the boy cannot speak.
Pregnant woman strangled
Eight-month-pregnant Eneless Sakala has been raped and strangled by unknown people
in Ibex Township in Katete, Eastern Province. The police is investigating the murder.
Football in brief
Chipolopolo wins a qualifier
Zambia has moved into second place
in AFCON Group F following a 0-0 away
draw and a 3-0 home win over Niger.
The draw was played on 10 October in
sweltering heat in Niamey, following
delayed travel arrangements and without
defender Stopilla Sunzu, who stayed
behind to bury his sister. The win was
secured at Levy Mwanawasa Stadium in
Ndola on 15 October through goals from
Rainford Kalaba, Emmanuel Mayuka and
goalkeeper Kennedy Mweene (penalty).
The leader of Group F, Cape Verde, has
already qualified to the 2015 Africa Cup
of Nations (AFCON) finals in Morocco –
with 9 points. Zambia and Mozambique
both have 5 points, but Zambia has a
better goal difference, while Niger has
2 points, with the final two match-days
scheduled for mid-November. Although
both Zambia and Mozambique could finish level on points with Cape Verde, the
island nation would secure a place on the
head-to-head rule.
Katongo axed
Chipolopolo Coach Honour Janza has
released the team’s long-serving captain
and national icon Christopher Katongo.
Team manager Lusekelo Kamwambi
stated that the decision was tactical
aimed at boosting team spirit and unity
– with anonymous sources talking of
Katongo questioning Janza and being upset about being relegated to the
bench. Rumours had it that Katongo had
sneaked out of camp in Ndola to spend
a night with his girlfriend in a hotel.
Katongo accepted the move and wished
the team the best of luck, reported the
Times of Zambia.
Shepolopolo out of championship
The Shepolopolo has exited the 2014
Africa Women Championship in Windhoek after losing 0-2 to the host-nation
Namibia and 0-6 to Nigeria. The team will
meet Ivory Coast on 18 October in their
final play-for-pride Group A match in
Namibia.
Zambia Weekly
Editor-in-chief: Camilla Hebo Buus
cabuus@zambia-weekly.com
Mobile +260 977 461 877
Writer: Jo Adeyemo
jo@todayin10.com
Mobile +260 979037000
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