World Bank


UN warns on food price inflation

Pakistani women at subsidised food store 03.03.08

Governments are urged to take action to help ease rising prices

The head of the UN World Food Programme has warned that the rise in basic food costs could continue until 2010.Josette Sheeran blamed soaring energy and grain prices, the effects of climate change and demand for biofuels.

Miss Sheeran has already warned that the WFP is considering plans to ration food aid due to a shortage of funds.

Some food prices rose 40% last year, and the WFP fears the world’s poorest will buy less food, less nutritious food or be forced to rely on aid.

Speaking after briefing the European Parliament, Miss Sheeran said the agency needed an extra $375m (244m euros; £187m) for food projects this year and $125m (81m euros; £93m) to transport it.

This is not a short-term bubble and will definitely continue
Josette Sheeran
WFP

She said she saw no quick solution to high food and fuel costs.

“The assessment is that we are facing high food prices at least for the next couple of years,” she said.

Miss Sheeran said global food reserves were at their lowest level in 30 years – with enough to cover the need for emergency deliveries for 53 days, compared with 169 days in 2007.

Biofuel prices

Among the contributing factors to high food prices is biofuel production.

Miss Sheeran says demand for crops to produce biofuels is increasing prices for food stuffs such as palm oil.

Miss Sheeran said governments needed “to look more carefully at the link between the acceleration in biofuels and food supply and give more thought to it”.

The WFP says countries where price rises are expected to have a most direct impact include Zimbabwe, Eritrea, Haiti, Djibouti, the Gambia, Tajikistan, Togo, Chad, Benin, Burma, Cameroon, Niger, Senegal, Yemen and Cuba.

Areas where the WFP is already seeing an impact include:

  • Afghanistan: 2.5 million people in Afghanistan cannot afford the price of wheat, which rose more than 60% in 2007
  • Bangladesh: The price of rice has risen 25% to 30% over the last three months. In 2007, the price rose about 70%.
  • El Salvador: Rural communities are buying 50% less food than they did 18 months ago with the same amount of money. This means their nutritional intake, on an already poor diet, is cut by half.
  • Anger over rising food prices have already led to riots in Burkina Faso, Cameroon, Senegal and Morocco.

    The BBC is planning a special day of coverage of this issue on Tuesday 11 March, online, on radio and on TV.
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    Livingstone

    The World Bank has given Zambia $20 million to enhance the fight against HIV and AIDS in the country, says World Bank Vice-President for Human and Development Network, Joy Phumaphi.

    The money is in addition to the $42 million already released to the Zambian government since 2003 for its HIV and AIDS programmes.

    The World Bank has decided to hand over the money because of Zambia’s impressive record on programmes that focus on the prevention of HIV infections, unlike other countries that have only focused on treatment.

    Vice-President Phumaphi, who is in Zambia to attend a workshop for former African Heads of State on the HIV and AIDS pandemic, said Wednesday that Zambia was an ideal example for other countries in the Southern African region because it had handled the pandemic well.

    The World Bank would take the lessons learnt in Zambia to other countries to help them improve their anti-HIV and AIDS strategies, she said when she met Southern Province Deputy Permanent Secretary Aaron Zulu.

    Vice-President Phumaphi said the World Bank valued its partnership with Zambia and was impressed with the progress the country had made in improving the economy and creating opportunities in uplifting people’s standard of living.

    Deputy Permanent Secretary Zulu said the province had tremendously benefited from the World Bank through the Community Response to HIV and AIDS (CRAIDS) which funded 115 projects of which 87 had been completed.

    He said the CRAIDS projects were unique because they were run by community members themselves and this instilled a sense of ownership in them.

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    The Zambian Enterprise is not only the largest producer of copper in Africa; it also has a perfect track record to enable it to vie for a “World Class Credit” rating.  

    Usually referred to as “first credit” in economic terms, the rating would enable Zambia to issue international bonds and enter the elite class with incentives similar to those in developed nations. 

    Should this take place, Zambia whose economy currently accounts for only 1 percent of Sub-Saharan Africa’s $544 billion economy, would be the third country on the continent to issue such bonds.  

    “… if we went for a rating, we’d be able to issue a euro-kwacha bond for example … the country will probably seek its debut rating “shortly,” … there has never been a better time than this … with a buoyant economy and a good track record, I think it’s about the right time to subject ourselves to a rating,”… said the Manchester educated and one time professor of economics at the University of Zambia now Bank of Zambia Governor – Dr. Caleb Fundanga without being date specific.

    The European Investment Bank, the finance arm of the European Union, in December 2006 sold 500 million pula of senior unsecured bonds, with settlement and payment in euros, the first-ever international issue in Botswana’s currency, according to Standard & Poor’s Ratings Services.

    South Africa, the continent’s largest economy and Botswana, the nation with the highest rated debt in the continent, are the only southern African nations with foreign currency denominated bonds.

    Zambia has a lot of support and may need to fully capitalize on that support if reality has to come. Out-going World Bank country manager was one of Zambia’s strongest advocates to the same.

    “… Zambia is clearly one of the countries where the impact of debt relief has been massive and could be very clear,” Ohene Nyanin, the former World Bank’s country manager based in Lusaka, said in an interview. “It is a very big fiscal space that has been opened up.”’

    The country’s inflation rate dropped to single digits for the first time in 30 years in April 2006 as the government moved to control spending. Zambia has also benefited from a fivefold rise in the price of copper, which accounts for 53% of the enterprise’s income.

    International bonds are a certificate of debt issued by a government or corporation guaranteeing payment of the original investment plus interest by a specified future date and have the ability to increase cash inflows at an accelerated rate thereby increasing a country’s liquidity.

    classy-daddy-3.gifTwo to three years ago, I introduced a bond phenomenon on Zambia Online and even suggested the issuance of bonds as a debt instrument necessary for capitalizing the New Zambia Airways as a private enterprise.

    It was to be privately driven and ran; some nay sayers rose up to short the idea down but yet even today more experts are vying for a bond rating that would elevate the country’s standing as well as help grow our economy above 7% come next year. 

    It is highly feasible that some critics were new to the subject and saw no benefit to the Zambian Franchise at all … 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.   

    br-01-2.jpgZambia’s reserves were seriously depleted amounting to less than 1% of its foreign debt in 1998 but have since grown with an accumulation equivalent to about 28% of the same in 2006.

    Overall, Sub-Saharan Africa as a whole increased it’s shock absorbers (international reserves) from $21 billion in 1996 to $108 billion last year representing a fivefold growth (see chart) but Zambia’s portion beat this fivefold variable by almost 28 times. This year international reserves for Sub-Saharan Africa are expected to near $131 billion.

    Globally, reserves have tripled on average during the same period and, according to the IMF, even the developing world has failed to match Africa’s stockpiling. What we are seeing here is that the African continent is learning the secret of saving for a rainy day.

    This is a powerful tool and the Japanese were the first to use it such that by increasing their own reserves they were able to boost their own economy.  By 2001, the Japanese held six of the world’s largest banks and the rest is history.

    Increased reserves not only increase a countries purchasing power but they also allow the holding nation to increase its credit rating in the world.

    Most factors that have helped the Zambian Enterprise are debt-cancellation related. But the biggest winner is the work the Zambia Revenue Authority (ZRA) has been doing in the last six years.

    Zambia’s tax regime is highly competitive and some of the expiring tax holidays have also helped increase the tax base. Furthermore, the Bank of Zambia has been doing a fabulous job monitoring inflation, and reducing the money supply.

    Such a combination of factors is attractive to the creation of dynamic economy and it is for the same reason that the world’s largest clearing house is looking at including the Zambian currency as an international medium of exchange once certain of their conditions are met … 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.           

    classy-daddy-3.gifLumwana comes with a lot of serious hidden secrets … despite having been discovered over 70 years ago, it was not fully developed. But why?? Because at the time of discovery, it was learnt that its ore’s copper content was lower than the best grade available in other regions such as those on the Copperbelt. 

    Initial metallurgical studies were mainly focused just on copper and no other mineral contents were premeditated. The Ministry of Mines carried other tests with the help of students from the School of Mines at UNZA in the late 80’s and new discoveries were found … it was this group that issued new metallurgical maps for Zambia showing new mineral reserves around the nation.                                                                                                  

    The study showed that Lumwana is a multi-element deposit with significant gold, cobalt and uranium grades distributed throughout the deposit but the government was too broke to pursue the project due to the ongoing Structural Adjustment Program (SAP) imposed by the World Bank and International Monetary Fund at the time. 

    So, what we have at Lumwana is a total hidden package with just as much copper, as much gold, as much cobalt, and as much uranium – this has been the serious hidden secret of the hidden treasures that lie under the soils of Lumwana making it the world’s largest undeveloped deposits with a 321Mt ore reserve grading at 0.73% Cu and 0.093% U308.  

    This means that once commissioning is completed in mid-2008, Lumwana will be well on its way to becoming the largest copper, gold, cobalt and uranium producing mine in Africa. As we unearth for copper, we would have the benefit of doing the same for gold, cobalt and uranium. 

    This excavation process provides for maximum utility as the economies of scales are exploited to the fullest extent because we would dig for the price of one but sell for the price of four. As we yank out one stone from the ground, we produce four products from it … it can’t get any better than that!!!

    If my memory serves me right, Equinox holds mineral rights for copper and uranium but they should be allowed to extend those to gold and cobalt that way the ore’s extraction may yield the largest benefit. These secretly hidden treasures at Lumwana have the capacity to attrack over a billion dollars ($1 billion) in Foreign Direct Investment (FDI) for the Zambian Enterprise … 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.         

    br-01-2.jpgMMD government scored the lowest grades ever … way below an “F” when it comes to spending on education as a percentage of GDP. This is according to the recent World Bank Report on Zambian migration – causes and effects. Under the UNIP government, education was a real priority and it averaged between 15-20% as a percentage of GDP. 

    “The current skill shortage in Zambia is primarily due to inadequate educational infrastructure and cannot be solved merely by restricting skilled emigration. Government expenditure on education is currently only 2% of GDP, the lowest in Africa and well below the 3.4% average level for least developed countries.  – reveals the Report.

    Just how do we expect the country to move forward … with the current scenarios in place, once all the UNIP educated nationals retire, Zambia will have less skilled manpower of any country on the continent. This is because at least 50% of all graduates leave the nation for greener pastures and there seems to be no aggressive action plan to retain them and or repatriate those abroad back home. 

    The MMD have neglected education since they come to power and it is no wonder the economy has been lagging behind in terms of real GDP growth despite huge FDI (Foreign Direct Investment) inflows ever available. For instance, the World Bank alone has well over $324 million (10 of them worth that much in total) projects in the country but most of these are being run by foreign project managers because no qualified locals are available … 

    John F Kennedy once said, “…let us think of education as the means of developing our greatest abilities, because in each of us there is a private hope and dream which, fulfilled, can be translated into benefit for everyone and greater strength for our nation”. For us at the Zambian Chronicle, education is the fuel that powers innovation and poverty thrives on lack of it. 

    By the time the Mwanawasa administration is over, the MMD would have been in power for 20 years with no new universities, no new colleges; and yet UNIP built all the technical colleges in every province and 2 universities in 2 major hubs within 27 years of leadership.  

    How can you develop a country despite all the goodwill if the locals have no clue how? It is no wonder 68% of our people are still living below the poverty datum line 16 years after the MMD took office according to the same report … 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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