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ü      Create A New People Driven Constitution

The greatest single most achievement the Zambian Enterprise can accomplish for 2008 as a milestone is to produce a new constitution using the National Constitution Conference (NCC) as a vehicle.  

If all stakeholders felt that their constitution provided for equal opportunities, guaranteed civil liberties and protection for all, the enterprise would have achieved strides worth thousands in light years.  

In that regard it is highly palatable that peace loving individuals will give the NCC delegates all the needed support to achieve this milestone. The October 6, 2001 issue of the Economist magazine carried a story about Turkey’s Constitutional Amendments.

“… MANY Turks have long thought of their parliament as a bunch of buffoons interested mainly in making money, not laws. That may change, as the 550-member chamber keeps up a marathon session to pass a set of reforms that are intended to clean the face of Turkey’s constitution and reinforce the country’s still rather wobbly democracy.”

At issue was the fact that both political philosophies represented in the Turkish parliament approved what seemed on paper as the best brand of policies any mid eastern nation would espouse but the ideas only looked great on paper.

We are hoping the great genius minds of the smart people of our enterprise respresenting us in NCC will come up with a document that can stand the test of time. These delegates are the framers; we are hopeful they will envision a Zambia that will be there for centuries to come because they framed the right manuscript on behalf of us all. 

ü      Deliberate Infra-Structure Investment

Infra-structural development is about capacity building and very critical to national development. Without capacity economies don’t grow with healthy veracities.

Capacity enables a country to handle tasks with great ease and lack thereof creates auxiliary derivatives such as development of shanty compounds in the middle of a metropolitan area.  

In this modern day and age infra-structure capacity does not refer to road, railways, subways, modern airports, etc. alone, it also refers communication apparatus such as turning Mwembeshi into a super information highway, for instance. 

It involves well stocked libraries in city centers, schools, colleges and universities with a deliberate attempt to have all these connected to the internet.  Tunisians did it and their population is one of the most literate on our continent, it is no wonder they have poverty levels at 4% of their population with nearly a tenth of natural resources when compared to us. 

It involves well planned town, cities and provinces with town planners whose eyes are on the ball. Japanese planners have 15 year projections with simulations accompanying … it is no wonder they enjoy one of the highest qualities of life in the entire world.  

With a billion dollars in reserves, the Zambian Enterprise has more than enough in it’s back pocket to invest into infra-structure that matters …

ü      Create Economic Zones In Each Province

One of the greatest achievements of the UNIP government was the creation of provincial economic zones deliberately planned to urbanize rural areas. They were not termed that way but their objectives met all the prerequisites of such.  

Livingstone had ITT Supersonic and Livingstone Motor Assemblers, Mansa had Mansa batteries, lead and manganese mines, Chipata had Eastern Industries that made Eagle bicycles, Mongu had canneries and so did Mwinilunga; the copperbelt was an economic engine, the list is endless. 

When the MMD came into power they literately had no clue what they wanted to accomplish except privatization. In fact, they mistook democracy in many instances with privatization. They abolished the office of National Planning because they thought it advocated for a command economy. 

Using other forums at the time we advocated for national planning that had a neo-spin to it, laid down the benefits of such schemes but it wasn’t until the current president came into office that they reinitiated planning mostly tailored on proposal of this author. 

Well planned economic zones not only mitigate urban migration en masse, they also help accelerate national development at exponential rates well across the board.  Besides if you fail to plan, you are in an essence planning to fail …  

One reason, Malaysia stood out among the Asian tigers was because it deliberately initiated economic zones and today the world’s tallest buildings are not in Western Europe nor are they in the Americas but in Central Asia.  

ü      Continue Keeping Macro-Economic Factors Under Control

Macro-economic factors and dwindling investor confidence are always behind corporate underperformance.  Among the macro factors concerns over interest rates, high oil prices, staple commodity prices and jitters over the reserve currency weakness impact economic growth … 

These factors lead to markets savagely punishing companies thus failing to produce the goods and services at optimal capacity. Companies that record profits tend to be tarred with the same brush and their share price don’t respond to their profits.  

When the market starts to focus back on company-specific issues rather than the macro-economic picture and look at those that are turning themselves around, performance picks up. 

There is no doubt that Fundanga at BOZ and Mangande at Finance have been among the best choices our enterprise has picked for their respective jobs but short term gains can easily blur one’s focus. 

It is therefore extremely necessary that they keep their eyes on the ball with the big picture in mind because if we don’t continue keeping the macro-economic factors under check, the unprecedented 85% growth LuSE experienced last year might be lost … 

Strict investment philosophies in the market tend to sometimes make publicly traded companies to under perform but investor confidence makes people start looking at companies showing above average growth so long macro-economic factors are in favor.  

ü      Reform Tax Rules

The old adage of two things one should be sure of being taxes and death remains true to this day. So weaknesses in the institutional framework need to quickly be identified to make necessary adjustments. 

One of the most important factors in good policy-making is the strengthening of the institutions that contribute to it. The tax policy-making process should heavily rely on institutional strength to see it through periods of major transitions such as our Enterprise is going through right now … 

Dealing with enforcement and operational policies is not only a good initiative when it comes to strengthening the treasure, it also helps narrow the role of the other revenue  collecting units thereby reducing excesses while increasing proceeds. 

Parliamentary scrutiny of tax proposals tends to be increasingly ineffective as tax legislation becomes more complex. This is because our current Members of Parliament have no dedicated independent groups of economists and lawyers to support them on budgetary matters. 

Outside the framework of government,  institutions like the University of Zambia’s economic studies should provide virtually more and not just research-based independent economic analysis on taxation policy.  

Business leaders should also be encouraged in the systematic use of consultations, at least on business tax issues. Drawing business in to contribute to the refinement of ideas emerging from government helps fill the gap left by the broader weakness of institutions.  

But business should not be responsible for developing tax policy as this leads to signs of consultation-fatigue. Their role should be limited to consultancy and be used as a barometer that measures what impact tax proposals have on operational efficiencies. 

Given the importance of institutional strength to consistency and stability in policy-making and the classy-daddy-3.gifimportance of that consistency and stability in maintaining economic growth and development, there is a strong case for more comparative inter-jurisdictional work to be carried out on the institutional framework of tax policy-making.  

That’s this week’s memo from us at the Zambian Chronicle … thanks a trillion. 

Brainwave R Mumba, Sr.

CEO & President – Zambian Chronicle

Copyrights © 2008 Zambian Chronicle. All rights reserved. Zambian Chronicle content may not be stored except for personal, non-commercial use. Republication and redissemination of Zambian Chronicle content is expressly prohibited without the prior written consent of Zambian Chronicle. Zambian Chronicle shall not be liable for any errors, omissions, interruptions or delays in connection with the Zambian Chronicle content or from any damages arising therefrom.

Zambian Chronicle is a wholly owned subsidiary of Microplus Holdings International, Inc.

Copyrights © 2008 Microplus Holdings Int., Inc.     

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LUSAKA (AFP) — Zambia’s international reserves hit over a billion dollars this year, the highest figure in the country’s history, the central bank governor announced on Saturday.
Caleb Fundanga said Zambia had recorded 1.1 billion dollars in foreign reserves up from 706 million dollars that the country accumulated in 2006.

“Zambia has continued to record favourable external sector performance resulting in an accumulation of gross international reserves of 1.1 billion in December 2007,” Fundanga said in a statement.

“This is the highest the country has ever accumulated,” he added.

He said Zambia’s economy is expected to grow by 6.2 percent in 2008, while the country’s inflation will remain at the single-digit level.

“The overriding objective of monetary policy in 2008 is to consolidate the gains made in establishing price stability by achieving a third consecutive year of single-digit inflation,” Fundanga said.

Zambia’s inflation rate stands at 8.9 percent.

He said the country will face major challenges next year due to the projected rise in prices of petroleum products at the international market and the higher electricity tariffs in the southern African region.

Copyright © 2007 AFP

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MUMBAI: The Anil Agarwal-controlled Vedanta Resources is close to increasing its stake in Konkola Copper Mines in Zambia to 79.4% by buying out a portion of the Zambian government’s holding.

The London-listed Vedanta, which owns 51% stake in Konkola, wants to increase the stake by buying out Zambia Copper Investments’ (ZCI) 28.4% stake in the largest copper mine there. The state-run ZCCM Investment Holdings holds 20.6% stake in Konkola.

“For the acquisition of 51% stake, Vedanta had paid $48.2 million in 2004. As the valuation of the copper mines doubled in three years, it will be curious to know how much Vedanta would be paying for ZCI’s stake,” said a source close to the development. Senior Vedanta officials said the process of acquiring the stake is on. They declined to reveal further details.

Vedanta has been discussing with ZCI the call option, which was agreed when Vedanta bought a 51% stake from the Zambian government in 2004. The company could not exercise the call option as the two parties failed to agree on the valuation of ZCI’s shares.

Adding fuel to fire, Zambian economists and investment analysts have voiced their opposition to Vedanta’s buy-out of national resource. ZCI has only Konkola stake as its asset at present. Vedanta chairman Anil Agarwal recently announced that the two parties had resolved their differences and that an independent valuation is in progress.

While ZCI chairman Tom Kamwendo was quoted by a Zambian daily, “With the resolution of differences over valuation, the next step for the company is to offer its interest to Vedanta.”

Vedanta shares were hoverng below 2,030 pence on London Stock Exchange on Tuesday, down 1.36% on speculation that ZCI may sell its stake through the Lusaka Stock Exchange. On November 23, the share had shot up 12% on market buzz that a Chinese mining company may buy out the promoters’ stake in Vedanta.

“ZCI’s shares in Konkola are being offered to Vedanta rather than being sold through the Lusaka exchange or sold in any other way because that is the provision of the legal agreement that was reached at the time Vedanta was acquiring its current 51% shareholding in Konkola,” said Mr Kamwendo. On public misgivings about the stake increase, Mr Kamwendo said such concerns were better resolved between the Zambian authorities and Vedanta.

Source: Economic Times

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We did it again!!!! This time by being included on the Wall Street Journal preferred blog list. Last time we earned the Featured Blog title from WordPress and that’s after winning the Blog of The Minute Award. 

The Wall Street Journal is the Gold Standard for the world in financial reporting and for us to be included as of Friday, November 23, 2007.  The article that made us hit the list was Dollar Sets a New Record Low – Money News 

Blog Posts About This Topic • 

Dollar hits Fresh Lows against Euro and Swiss Franc  westranchbeacon.com• 

Dollar Sets a New Record Low – Money News  zambianchronicle.com 

It goes without saying that we have made great strides in presenting ourselves as one of the most trusted sources for objective reporting. We will forever strive to be the best out there … classy-daddy-3.gif

As a privately and an independently wholly owned interactive media, Zambian Chronicle is committed to bringing only the best and most verifiable information to our audience. 

We would like to take this opportunity to thank all our patrons and pundits who give us all the reasons for wanting to be the best there is, the best way we know how. Happy holidays … thanks a trillion. 

Brainwave R Mumba, Sr.

CEO & President – Zambian Chronicle

Copyrights © 2007 Zambian Chronicle. All rights reserved. Zambian Chronicle content may not be stored except for personal, non-commercial use. Republication and redissemination of Zambian Chronicle content is expressly prohibited without the prior written consent of Zambian Chronicle. Zambian Chronicle shall not be liable for any errors, omissions, interruptions or delays in connection with the Zambian Chronicle content or from any damages arising therefrom.

Zambian Chronicle is a wholly owned subsidiary of Microplus Holdings International, Inc.

Copyrights © 2007 Microplus Holdings Int., Inc.   

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ALTThere was a one hour interview on CNBC with Warren Buffett, the second richest man in America who has donated $31 billion to charity. Here are some very interesting aspects of his life:

1. He bought his first share at age 11 and he now regrets that he started too late!

2. He bought a small farm at age 14 with savings from delivering newspapers.

3. He still lives in the same small 3-bedroom house in mid-town Omaha , that he bought after he got married 50 years ago. He says that he has everything he needs in that house. His house does not have a wall or a fence.

4. He drives his own car everywhere and does not have a driver or security people around him.

5. He never travels by private jet, although he owns the world’s largest private jet company.

6. His company, Berkshire Hathaway, owns 63 companies. He writes only one letter each year to the CEOs of these companies, giving them goals for the year. He never holds meetings or calls them on a regular basis. He has given his CEO’s only two rules. Rule number 1: do not lose any of your share holder’s money. Rule number 2: Do not forget rule number 1.

7. He does not socialize with the high society crowd. His past time after he gets home is to make himself some pop corn and watch Television.

8. Bill Gates, America’s richest man met him for the first time only 5 years ago. Bill Gates did not think he had anything in common with Warren Buffett. So he had scheduled his meeting only for half hour. But when Gates met him, the meeting lasted for ten hours and Bill Gates became a devotee of Warren Buffett.

9. Warren Buffett does not carry a cell phone, nor has a computer on his desk.

His advice to young people: “Stay away from credit cards and invest in yourself and Remember:

A. Money doesn’t create man; it is the man who created money.

B. Live your life as simple as you are.

C. Don’t do what others say, just listen to them, but do what you feel good.

D. Don’t go for brand name; just wear those things in which u feel comfortable.

E. Don’t waste your money on unnecessary things; just spend on those who really are in need.

F. After all it’s your life so why give chance to others to rule your life.”

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LONDON, Oct 10 (Reuters) – Newly Africa-focused Russian investment bank Renaissance Capital has launched a stock index covering 11 markets in sub-Saharan Africa, reflecting growing interest in the region, the bank said on Wednesday.

The RC SSA 50 index is made up of 50 equities and represents 62 percent of the total market capitalisation of the domiciled sub-Saharan equity market, at $61.3 billion, Renaissance Capital, also known as RenCap, said in a statement.

The index covers equities in Botswana, the West African regional stock exchange Bourse Regionale des Valeurs Monetaires (BRVM), Ghana, Kenya, Malawi, Mauritius, Namibia, Nigeria, Uganda, Zambia and Zimbabwe.

The base date of the index is Jan. 2, 2007, and the total dollar return of the index since inception is 39 percent, compared with a gain of 29 percent in the benchmark MSCI global emerging equity index, the bank said.

Investors have shown an increasing interest in Africa as they search for higher returns within emerging markets, but lack of liquidity remains a deterrent.

RenCap, a 12-year old firm with brokering, private equity and a $4.5 billion asset management business, told Reuters earlier this year it plans to double its $500 million investment into Africa by next year and aims to help African firms raise capital on global markets.

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By NANCY MWAPE

LuSE abandons plans to link itself to JSE

THE Lusaka Stock Exchange has abandoned an ambitious plan to link with Johannesburg Stock Exchange (JSE)- Securities and Exchange due to cost considerations.

 

Johannesburg Stock Exchange – Africa’s Largest

Last year, LuSE indicated that it was scouting for US$1.1 million to link its operations with JSE Securities and Exchange by this year.

LuSE had also said the World Bank’s International Finance Corporation was studying LuSE’s plan and would fund the project.

But responding to a press query, LuSE general manager, Beatrice Nkhanza, said plans to link with JSE had been abandoned for various reasons among them the cost considerations.

“Plans to link LuSE to JSE have been abandoned for various reasons.

LuSE therefore is going it alone…by sourcing and financing of the system, just like Nairobi, Dar-es Salaam and Botswana,” she said.

Mrs Nkhanza however pointed out that LuSE was in the process of sourcing and installing an automated system and was currently consulting.

She stated the automated system would be operational sometime next year.

Mrs Nkhanza said in the region, only Namibia Stock Exchange was linked to the JSE Securities and
Exchange.

The aim of linking with JSE Securities and Exchange was to integrate network of national securities market in the region.

In 1997 at Livingstone’s Sun hotel, a committee of Southern Africa Development Community Stock Exchange was formed to integrate stock exchanges, make markets liquid and improve their operations.

By last year September, member States that included South Africa, Botswana, Namibia, Malawi, Mozambique and Zambia had harmonised listing requirements.

Getting LuSE linked with JSE securities and Exchange was expected to create a central point for inflow of foreign portfolio investment and enhance LuSE’s exposure to investors.

Other expected benefits included improved liquidity across multiple markets and LuSE being able to be seen on the London Stock Exchange via JSE Securities and Exchange.

Zambia Daily Mail

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