urban population


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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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It is always necessary to know who your competitors are … the Zambian Enterprise has some very serious ones when it comes to being the best destination for investment capital from around the world. 

There is limited cash flow around but unlimited competitors and so new aggressive means and ways have to be available for our Enterprise to increase its competitive advantage.  

The first thing in knowing what needs to be done is identifying those competitors, analyze their strengths and weaknesses then find a way to undercut them.

It is doggy world out there and if we have to be at the cutting edge of this competition, we have to diverse some serious strategic plans to help us achieve out objectives. 

Believe it or not our business unit at the Zambian Chronicle has identified some serious competitors; some in our own backyard while others are up north. Those in our backyard include, Mozambique whose real GDP has been growing at a rate 2% higher than ours.  

This is a serious pace especially that if you considered the fact that US and the Mexican economies were the same in terms of GDP a hundred years ago. However, the US economy was growing at a pace of 1% higher than the Mexican economy and when you factor in power of compounding, the US outpaced Mexico and the rest is history. 

Another serious competitor remains South Africa. To its merit, South Africa can’t be considered a third world nation and capital inflows continue to outpace those of the Zambian Enterprise.

The other nation in our backyard is Angola while Congo’s instability makes us a better destination despite its potential. Up north, Tunisia and Algeria are very serious contenders but for different reasons that can be copied and implemented to help us compete with them. So, here are some things we can do to increase our competitive advantage. 

Ø       Create a tax free zone; choose a province where there are less economic activities and target it as a tax free zone for the next 10 to 15 years. This could be Western, Eastern or Luapula Provinces for instance, just pick one or two. Malaysia did this at the turn of the century and today houses the world’s tallest building even before 911 happened.

Ø       Encourage remittances from nationals living abroad. One reason South Africa, Algeria and Tunisia are outpacing us is because remittances from their nationals living abroad were almost as high as FDI (foreign Direct Investment). In fact, the largest recipients of remittances last year were not the traditional South American countries, it was Sub-Saharan Africans. 

Ø       Lower taxes including VAT if necessary. Lower taxes encourage tax payers to declare more reasonable taxes and discourage tax evasion. This also helps broaden the tax base while those tax savings are easily turned into new investment ventures thereby encourage and or increasing productivity. 

Ø       Deliberate government investment into infra-structure development. One reason Zambia is more attractive is because of its political stability but its greatest disadvantage is lack of infra-structure. Government spending has a multiplier effect seven times larger than that of the private sector. 

Ø       Over 44% of our population lives in urban areas, this is a great asset when compared to Mozambique, Angola and Congo for instance. This is because it would be easier for the Zambian Enterprise to turn this human capital into a highly productive machine than our competitors. 

Our business unit at the Zambian Chronicle will continue to explore more ways as we research issues that will help our Zambian Franchise to be a shining star, because Zambia Is Greater Than Any Single One Of Us … 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.