Thursday 17 June 2010

I Write What I Like....

By Daimone Siulapwa

Guest Writer: Nkonkomalimba Kafunda

Proposal over use of mine dividends causes uproar
Concerns over the distribution of proceeds from Zambia’s mines have continued to take centre stage with the latest coming from prominent North Westerners angry that their province, already lagging in development, will not benefit from money raised from local mining operations.
Zambia Consolidated Copper Mines Investment Holding ZCCM IH, the holding company for government interests in the country’s mining sector announced early in May that an US$18.1 million dividend paid by First Quantum Minerals from profits made at Solwezi’s Kansanshi mine, would be invested in agriculture in Central and Copperbelt provinces, much to the chagrin of natives of the North western province.

Leading the onslaught was former republican Vice President Enock Kavindele who said there was no way resources of the province could be used to develop other regions when the province itself was in dire need of development.

He revealed that local chiefs had surrendered about 200,000 hectares of traditional land to government for purposes of development so if ZCCM-IH was interested in agriculture they could develop that land.

Kavindele compared the suggestion by ZCCM-IH to the Federation of Rhodesia and Nyasaland practice of using Northern Rhodesia’s resources to develop the South. “We cannot go back to the federal government where copper mining in Zambia was used to develop other capitals,” he emphasised.

The former vice President was supported by local chiefs and several other politicians from the area. It is widely accepted that such problems are merely a symptom of a greater dilemma as locals have little or no say in distribution of wealth as they do not control the means of production. Since the demise of ZCCM at the hands of the privatisation process all major mining operations are foreign owned and controlled. Coupled with the fact that these investors are allowed to retain 100% foreign exchange of their earnings anywhere they see fit, only operations money remains in Zambia. In 2007 the Mwanawasa regime introduced a windfall tax to mitigate this problem but this was scrapped, ostensibly due to the global economic crunch which hit a year later, by the Rupiah Banda regime, a move condemned by most industry experts.

The concerns raised by the North Westerners have been echoed by the country’s mine workers union. Union General Secretary Oswell Munyenyembe in a recent press statement urged government to implement already existing legislation which provides equitable share of resources from the mines as well as the reintroduction of mineral royalty tax.

He said there was need for government to particularly implement key provisions of the Mines and Minerals Development Act to enable communities benefit from mineral earnings and to clearly define policy on the use of resources in order to promote national development.
“We are aware that the recent debates over the resources received from First Quantum Minerals Kansansanshi mine is about mineral royalties. We are also aware that companies like Mopani Copper Mines and Konkola Copper Mines pay as much as US$2 million to government coffers per month in taxes. There is need in this regard to come up with clearly defined policies in the use of resources to provide all round national development and laying a strong foundation for the expansion of the Zambian economy,” said the unionist.

Such arguments have brought back to the fore the rationale behind the scrapping of mineral royalties and more recently the refusal by the Zambian government to reintroduce the tax despite recovery of commodity prices with copper trading at almost US$ 8000 per tonne. Experts have said that as the royalties only come into force after prices rich a certain threshold it is irresponsible for government to refuse the reintroduction of these taxes.
The mineworkers union has observed that while other resource rich countries such as Australia and Congo DR were currently in the process of implementing new higher super tax regimes, Zambia was dragging it’s feet adding that the government fears that taxation would scare away investors did not hold water as the union firmly believed that “serious and genuine investors “ could not be scared off by royalties.

This government indecisiveness is not endearing the Banda regime to voters. As the Union observes, employment figures are way below ZCCM Levels and this in the politically volatile copperbelt province. Additionally conditions of service and salaries were significantly slashed during the financial meltdown and have not been restored even though metal prices have been resurgent.

All in all the government is seen to be more pro foreign investor than pro Zambian citizen a perception that could be the undoing of President Banda at elections due towards the end of 2011.

I write what I like…..

By Daimone Siulapwa

Guest Writer: Nkonkomalimba Kafunda

Zambian Parastal’s Privatisation raises eyebrows
Revelations that a consultancy firm will be paid US$12.8 (K65 billion in local currency) by the Zambian government for facilitating the sell of 75% shares in telecoms parastatal Zamtel to a Libyan company, have been meet with shock and indignation in Zambia, Africa’s largest copper producer.

On Saturday June 5, Finance minister Situmbeko Musokotwane signed an agreement worth US$257 million to sell the majority stake in Zamtel to GAP Green Networks of Libya. Of this sale price 5% or US$12.8 million will be paid to Cayman island registered RP Capital Partners. This is in line with a contentious memorandum of understanding signed between government and the RP Capital in 2008.

The transaction has been clouded in controversy from the word go. Independent newspaper the Post in an expose in 2008 revealed that RP capital had links to president Rupiah banda’s son Henry, who had in fact introduced the company to the Zambian government. When then Communications and transport minister Dora Siliya went ahead and signed the memorandum of understanding with RP capital against the advice of the government’s chief legal advisor the Attorney general the public and opposition politicians alike bayed for minister Siliya’s blood.
Subsequently Chief Justice Ernest Sakala was forced to constitute a code of conduct tribunal to determine if there was any illegality in Siliya’s actions, after a complaint was filed by a former communications minister William Harrington. Though Siliya was forced to resign under pressure to pave way for an independent inquiry,l she was reinstated a few months later when the high court overruled the tribunals findings which had found that she had acted illegally. The inquiry had found that Siliya had breached Article 54 sub article 3 of the constitution when she selected RP capital partners to value the assets of Zamtel against advice of the attorney general. The high court on appeal ruled that the tribunal had acted excessively, quashed the tribunals findings and cleared Siliya.

She was, unashamedly, reinstated the same day she was cleared, raising speculation that the deal she had signed was beneficial to people above her.

Zamtel is the oldest phone company in Zambia. It was formed after the break up of the Post and Telecommunication s Corporation which separated into telephone and postal divisions at the end of the 1980’s. With the coming of mobile telephony and the internet age, Zamtel branched into the new areas but with little successes. Cell Z the Zamtel mobile phone division has the tail end of market share while the internet division, Zamtel Online, is generally seen as inefficient at best and down right unreliable at worst. The company, however, has a monopoly on fixed line services.

Normally this would make a solid case for privatization but Zambia’s experiment with privatization in the 1990’s had resulted in poverty and pauperism for the majority of the workforce due to closures and retrenchments. As a result the country’s vibrant civil society and opposition fervently opposed this particular privatisation.
Leaders of the Patriotic Front and the United Party for National Development have, throughout the process of privatizing Zamtel, maintained that they will re-nationalize when they get into office. The two parties are in an electoral pact that has a more than fair chance of unseating the MMD in next years general election.

Following the announcement Patriotic front President Michael sata charged that this was just another form of plunder of national resources and the current regime will one day be called to account.

“They have sold Zamtel because of corruption not for the benefit of Zambian people so the Zambians will not get anything out of this.” Charged Sata in an interview with Post on June 7.
The Zambia Association of Chamber sof Commerce and industry was of a more optimistic view. President Handson Sindowe told the state owned Times of Zambia that the deal created opportunities. He said the transaction was good because government had maintained a 25% stake with options to offload this to the Zambian public through the Zambia Privitasation Trust Fund (ZPTF) and the Lusaka Stock Exchange (LuSE).

Without commenting on the intricacies of the transaction Sindowe said though people viewed the 25%v as small it translated into almost US$100 million.
Apart from the US$257m purchase price LAP Green Networks had agreed to invest an additional 62 million dollars , take over government guarantees of US$75 million and settle redundancy packages for 2,314 Zamtel workers bring the total package to US$394million.
It remains to be seen who the ultimate beneficiaries of this deal are: Certain members of the Zambian government or the Zambian people as a whole.

I write what I like…..Zamtel: More questions than answers…

WE all agree that Zamtel was not the ideal model of a profit-making company.
The privatisation of the Zambia Telecommunications Company (Zamtel)
has always been opposed by civil society organisations and opposition
political parties, and have accused the government of lacking
transparency in the sale of one of the last remaining state-utility

First, Cabinet decided to sell 75 percent of the Zamtel shares and
appointed RP Capital of Cayman Islands, an alternative investment firm
specialising in identifying intermediate and long-term investment
opportunities on behalf of institutional investors and qualified
high-net worth individuals in Eastern Europe, the Middle East, Africa
and India, to evaluate its assets.

However, the evaluation report has never been made public and was a
subject of a tribunal as it was alleged by civil society organisations
that Dora Siliya, then Minister of communication and transport, had
ignored the advice of the attorney general in awarding a $2 million
contract to RP Capital to evaluate Zamtel.

Mumba Malila, the Attorney General, had advised Siliya against signing
a memorandum of understanding between government and RP capital of
Cayman Islands to evaluate ZAMTEL assets. Mumba Malila’s contract as
Attorney General was never renewed. I will leave that to you

Anyhow, government said it cannot make public the valuation report as
it would jeopardize the privatisation process. Government said it
would be wrong to disclose the value of Zamtel as all the prospective
buyers would bid around the value of the assets and frustrate the

Well, we all remember that in 2002, government shelved plans to
privatise Zamtel, opting instead to commercialise it but this did not
work out either as the performance continued to decline.
Zamtel, established about 40-years ago, is encumbered with liabilities
amounting to more than $120 million. It also has an annual operational
deficit of $17 million and is heavily indebted to Government in
unremitted taxes.
A Parliamentary committee on communication, transport, works and
supply in January last year recommended that Zamtel should be
restructured and recapitalised to find a lasting solution.
But it seems this fell on deaf ears, instead government sold 75
percent of Zamtel shares to Lap Green N of Libya at the cost of US$257
million. And President Rupiah Banda now says the sale is not irreversible.

Really? Why the government has decided to turn a deaf ear to the opposition to
sell Zamtel no one knows. We all know the effects that privatization
has had on the social and economic life of this country.
Or have we all forgotten the lessons of Zambia Airways? Did the
Zambians not have a quarrel with the government when they were
liquidating Zambia Airways? How many years down the line have passed
and they are still struggling to dispose of its assets? It is way over
a decade now.

It is easy for government to claim that it will pay all the workers
their due packages, but from past experience, we know that that has
not always been the case. Upto now, we still have former ZCCM workers
who have not been paid.

Further, what guarantee is there that management positions in Zamtel
will be retained by Zambians? Where do they think these Zambians, whom
the country trained at great cost will utilize their skills?
What was wrong with just re-organising Zamtel, putting an efficient
management in place and stopping political interference for it to
succeed? We all know that Zamtel is solid, one just has to look at the
human resource that is there, the buildings and now the optic fibre
that it is putting in place.

With the new owners, we know that a massive staff reduction programme
will need to be carried out. So, when our fellow citizens contribute
to the unemployed, we know who to blame – the MMD Government.

Thursday 3 June 2010

UPND/PF pact launch on Saturday

The pact between the Opposition Patriotic Front and United Party for National Development (UPND) is next Saturday scheduled to be launched in Lusaka.
Pact co-spokespersons’ Charles Kakoma and Given Lubinda have confirmed this development at a joint news conference in Lusaka.

UPND spokesperson Charles Kakoma says the two political parties have had sufficient time to do away with any suspicions amongst the opposition political parties.And PF spokesperson Given Lubinda says launching the pact is a way of renewing the commitment.

Govt refuses to evacuate critically ill Chibombamilimo

Former Deputy minister of Energy Lameck Chibombamilimo is critically ill at his Lusaka residence in Kabulonga.

But despite his ‘very ill and bed-ridden condition, the government has dimissed and rejected pleas to evacuate him for specialist treatment. The MMD Mpulungu MP has kidney complications and he urgently requires a kidney transplant.

The government has reportdely snubbed appeals to evacaute him to India so that he could seek a new kidney. Chibombamilimo, once Northern province minister, is said to be trying to evacuate himself ‘but funds haave dried’.

Last year Rupiah Banda fired Cibombamilimo together with Jonas Shakafuswa from thier resspective posts for what he said was "lack of allegiance to him as the appointing authority."

Mmembe found guilty of contempt

Post Editor-in-Chief Fred Mmembe has been found guilty of contempt of court together with the Post Newspapers by a Lusaka magistrate court.

This is in the case in which Mr Mmembe and the Post newspapers are charged with contempt of court arising from an article authored by US-based Zambian Professor Muna Ndulo titled “The Chansa Kabwela case:A Comedy of Errors

In the allegedly contemptuous opinion piece, Cornell University Professor Muna B. Ndulo described the process against Kabwela as a “comedy of errors” and wrote that the obscenity case, which was widely decried as a politically motivated attack on the newspaper, was detrimental to Zambia’s image abroad.

Section 116 of the Zambian penal code criminalizes speech or writing that could prejudice opinion regarding an ongoing judicial proceeding.

The matter came up for judgment this morning before magistrate David Simusamba. In delivering judgment Magistrate Simusamba said the defence by Mr Mmembe that he was on leave at the time the article was published could not be considered by the court because he was the Editor-in-Chief of the newspaper.

In November last year, Mr Mmembe described his case as a tactic used by tyrannical regime against press freedom. “Contempt of court is a charge that has been used by tyrannical regimes the world over against press freedom,” M’membe told the International Press Institute at the time. “We hope the judicial process will handle the case in a manner that preserves and promotes press freedom.”

Magistrate Simusamba has since reserved sentencing to Friday June 4,2010 at 09:00 hours.

I write what I like….The rehabilitation of Frederick Chiluba

This article – By Guest Writer: Nkonkomalimba Kafunda

3rd June, 2010.

The recent high profile meeting between former president Frederick Chiluba and traditional and political leaders in Luapula province has brought to full circle the complete restoration of Chiluba from political pariah to top insider in the corridors of MMD power.

Ostracised in the Mwanawasa years as kingpin in the plunder of the country’s resources during his eventful ten year reign, Chiluba and his close associates were dragged before court after court charged with stealing hundreds of millions of dollars, property of the Republic of Zambia

Though personally never convicted in a Zambian court, London High Court Judge Peter Smith found that Chiluba and his fellow defendants had embezzled millions of dollars after the Zambian government sued Chiluba and others among them a Law firm, individuals and boutiques in a bid to recover plundered national resources. The judgement can however not be enforced in Zambia as it has not been registered in the local high court due to what can only be described as government inertia.

Some of Chiluba’s associates particularly his wife Regina, fund managers Aaron Chungu and Faustin Kabwe have been found guilty and sentenced to prison terms for various offences and but currently out of prison pending appeals in the high court. In a bizarre turn of legal events, Mrs. Chiluba was convicted by one court for receiving stolen goods from her husband while another acquitted Chiluba the alleged mastermind on all counts.

During his years in the political wilderness Chiluba was loathe to attend state functions preferring to stick to himself comforted by members of Pentecostal clergy with their all too conspicuous bibles complemented by their all too loud proclamations of faith. The former President was a man with friends few and far between, even his former ministers who had pledged undying loyalty in years previously, did not even think of touching him with a ten foot pole.

Fast forward to 2010 and the centre of power seems to have shifted to Serval Road, Chiluba’s official residence as second head of state. The metamorphoses from Zero to hero began soon after President Levy Mwanawasa’s death. Then Vice President Rupiah Banda had no credentials to take over the leadership of the MMD. Seen by many as a very fortunate Unipist who Levy had credited with delivering Eastern province in the 2006 elections, Banda had to consolidate his power, build a nationwide following and generally gain acceptance from the rank and file of the ruling party. Working for him was the fact that the position of party Vice president had been deliberately left vacant by the somewhat paranoid Mwanawasa who had seen usurpers of power in all who had sought that position at the last party convention. Chiluba’s support was seen as cardinal in creating a constituency for RB.

Soon after Banda’s confirmation as MMD candidate politicians of all hues and with varied motives relentlessly campaigned for Banda. The surprising package, though, was Chiluba. Throughout his legal problems and exile from main stream political power, Chiluba had relied heavily on support from the Patriotic Front. It was therefore, surprising to see Chiluba’s campaigning all out for RB as the President is known to his friends. The sensational break with PF’s Michael Sata showed that Chiluba had chosen what was politically expedient over what was morally acceptable.

Speculation was rife that a deal had been made to make Chiluba’s problems with the courts go away in exchange for his political support, which would have the effect of weakening the PF and enhancing RB’s chances of victory. The rest, as the say, is history.