President of the deregistered National Democratic Congress Chishimba Kambwili has been formally arrested for criminal defamation of the Head of State.

Mr. Kambwili reported himself at Lusaka Central Police for questioning this morning following a call out delivered to his home yesterday.
He is accused of committing the offense contrary to section 61 of the Penal Code Chapter 87 of the Laws of Zambia.

His arrest follows a video circulating in which he refers to President Lungu in a disparaging manner.

Arriving at the Central Police in Lusaka, the opposition Leader said he is not scared of the attempts by the government to silence him.

And New Congress Party President Peter Chanda who reported Mr Kambwili to Police told Journalists that he felt compelled to report the case because the presidency deserves respect.

The Luapula NGO Forum is disappointed with the statement issued by the Young African Leaders Initiative that Luapula residents have nodded the proposed amendments to the Constitution of Zambia.

Luapula NGO Chairperson Kearns Nsama says Samfya and Chifunabuli are not Provincial Centers of Luapula for CRECO to claim that the people of Luapula have nodded the proposed amendments.

Ms. Kearns said CRECO is not an umbrella Organisation that represents the views of all Organizations hence their views are misplaced.

She said her Organisation recently held a public forum where people rejected the resolutions and wondered which people Mr. Ntewewe is representing.

She has challenged Mr. Ntewewe to stop misleading the nation and confusing people over the NDF resolutions.

Mr Ntewewe today issued a statement that Luapula residents have nodded the proposed amendments to the Constitution of Zambia.

I start firstly by narrating my ordeal as of last night, we had no power since afternoon, so I slept when there was no electricity. I woke up this morning and there was no power, so ironic meaning we had power while we were asleep. I stay in a Komboni so if you went through this last night through to this morning, we should be neighbours!!!

There are so many conflicting reports about why ZESCO has re-introduced this perhaps stage 4 of loadshedding, that its hard to climb through the mire to the absolute truth. Others say it’s water levels and maybe those could be close to the truth!

The rotational power cuts, which are at 8hrs in a day are here to stay. Load shedding is bad news for jobs, investment, food prices. Load shedding is very expensive, not only to ZESCO, because we cannot sell as much electricity as we want to, but also for the country and worse off small holder businesses that survive on electricity.

Failing ZESCO and its resulting loadshedding schedule that is not even being followed may soon be called a “national crisis”. How soon our power supply will become stable again we don’t know seeing that this is only August not yet OCTOBER, but at least we know we should brace ourselves and get prepared, right?

Whatever Minister of Energy Nkhuwa was saying about going to draw water from Congo would to my least annoyance be left for the technicians and engineers for how feasible that is, except to say that this level of load shedding, will tremendously affect the Economy in Zambia terribly especially with the high rising costs of foodstuffs such Mealie Meal.

The interruptions caused by load shedding has a negative impact on the costs of small businesses in various sectors.

This is so because, electricity is an important input cost for many small holder business like salons, barbershops, welders, butcheries, restaurants, business centers etc and load shedding comes at a cost for all in these categories, as they have to make provision to run generators to keep operations going. These may even face unbearable pressure if the costs of maintaining operations increase.

Load shedding, or the lack of power, is causing several businesses to reassess their operations. Stage 4 load shedding is very serious indeed and it will effect basic micro commerce and industry.

While all industries such tourism, mining, manufacturing etc are being impacted, the effect on the compounds is extremely devastating and hence my question, who should be the target of ZESCO’s longer hours of loadshedding, between CHAWAMA compound and KABULONGA or Leopards Hill or Ibex.

Densely populated areas like Wusakile, CHAWAMA, Kyawama, Kaunda Square, Mtendere, Mandevu among others depend more on ZESCO supplied electricity for their little economic initiatives. Unlike those in up-market residential areas which are less populated. Ideally, infact those in places like Woodlands and KABULONGA are more financially able to buy a genset, gas stoves and solar panels for their home use other than in the compounds.

The disruption of economic output impacts on the little out-of-initiatives employment by local residents to themselves, which in turn impacts on household disposable income growth in the compounds. No income means crime, poor nutrition, no healthcare etc.

Sadly, if load shedding is sustained, and if there is no security of electricity supply in the long term, it will be costlier to produce food. Obviously those costs will be passed onto the consumer, eventually in the longer term it will have an impact on food inflation, if it is sustained. Therefore government must find a lasting solution in this coming budget.

So in conclusion, I am of the considered view that if government is concerned about poverty and the hard impact on small survival economic activities in these areas, through ZESCO they may consider loadshedding the compounds lesser hours irrespective of the high levels of consumption. As a matter of fact, it’s not free they will still be paying for it. Otherwise crime will be on the rise and unfortunately those in residential areas will be the target of the crime. It’s a balancing act.

Prince Ndoyi
MMD Youth

Luapula residents have nodded the proposed amendments to the Constitution of Zambia.

The residents have since urged their Members of Parliament, Anthony Kasandwe and Ponde Mecha of Bangweulu and Chifunabuli Constituencies, respectively, to support the amendments the Constitution and resist the temptation to throw away the Bill due to divisive politics from politicians who are opposed to the Bill.

The residents said this during a Public Forum organized by the Young African Leaders Initiative (YALI) at Samfya Town Council Chambers on Tuesday evening.

The Bangweulu lawmaker Kasandwe assured the people of Luapula that his Constituency will support amendments to the Constitution which are meant to improve the governance system and bring sanity in the country.

“Some opposition politicians and civil society organizations are opposing the recognition of chiefs by Government because they are happy to notice the confusions where imposters who manage to get support from a good number of people in chiefdoms can impose themselves or overthrow Chiefs as Government has no part in refusing imposters who overthrow or impose themselves as Chief,” he said.

And the Chifunabuli Parliamentarian Ponde has stated that even though some cross-section of people are rejecting the entrenchment of Christianity in the country, the National Dialogue Forum recognised that Christians want Zambia to remain a Christian nation and allow other people to practice their faith without hindrance.

Mr. Ponde further said the Constitution has provided for mixed member representation system which if enacted, will be an opportunity for women and people who are disabled to participate as MPs and councillors in governing the country.

Meanwhile, YALI President, Andrew Ntewewe, said the reintroduction of deputy ministers will enhance service delivery and bring policy makers closer to the people.
“The costs for maintaining a deputy minister is insignificant as compared to the benefits in service delivery as backbencher MPs are already getting salaries and allowances which will never be gotten if the President decided to appoint any deputy minister” residents unanimously supported the provision to was given by. We however need to strengthen the office of a deputy minister to allow them to perform the functions of a Minister when the Minister is not in office for any other reason,” said Ntewewe.

Deputy Council Chairperson, James Kapilila and Damson Chalwe, Chimana Ward Councillor, said although they are opposed to the election of Council Chairpersons from among councillors, Parliament must objectively debate this provision by analysing the pros and cons in light of the costs associated with by-elections for mayors.

Another resident, Cephas Mwewa, hoped the current constitution reform process would be the last time the Government is spending money on such processes at the expense of developmental programs in communities.

The majority of residents who spoke said the Government must protect the institution of chieftaincy against imposters by withdrawing recognition of persons who become chiefs through dubious means rather than play remain an onlooker in succession wrangles. They have further called on the National Pension Authority (NAPSA) and Government to clarify whether payment of salaries to retired civil servants is done by deducting monies from the retirement package.

“We understand payment of salaries to retired civil servants is putting pressure on the public purse when it pays retirees at the expense of development in rural areas but Government must commit itself to pay retirement package in a fixed time so that retired civil servants and their families don’t become destitute after civil service,” said Reverend Mubanga

Reuters reports that Zambia should show that it is taking measures to fight corruption to unlock donor aid and investments that have been withheld due to graft concerns, the British High Commissioner to the country said on Tuesday.

Britain, Finland, Ireland and Sweden withheld nearly $34 million in aid to Zambia’s social welfare and education sectors in September last year because of concern over financial mismanagement.

Outgoing British High Commissioner to Zambia Fergus Cochrane-Dyet, whose term finishes at the end of August, told reporters that Britain was concerned about the persistent corruption reports in Zambia.

“As I depart with a sense of unease about the direction this country is taking, let me be frank about the UK’s concerns (about corruption),” said Cochrane-Dyet.

“Corruption … (deprives) Zambians of life-saving government resources,” Cochrane-Dyet said.

The British diplomat added that Zambia should examine how its debt soared to unsustainable levels after creditors, including Britain, wrote off the country’s debt in 2005.

And Minister of Information and Broadcasting Services Dora Siliya responded on twitter as: “The fact that outgoing British High Commissioner Dyet can speak freely even as he leaves Zambia is a sign of the freedom of expression upheld dearly by Zambians, which extends to freedom of the media,”

“After three political party changes and six presidents, democracy has taken root.”

The fact that outgoing British High Commissioner Dyet can speak freely even as he leaves Zambia is a sign of the freedom of expression upheld dearly by Zambians which extends to freedom of the Media. After 3 political party changes and 6 presidents, democracy has taken root.

— Hon. Dora Siliya, MP (@Dora_Siliya) August 27, 2019

Police in Chongwe this morning blocked UPND President Hakainde Hichilema from viewing the dried up Chongwe River.

Mr Hichilema, in the company of his party officials had gone to Chongwe to get facts on the ground on the water situation in the area and to work out a plan to ensure water for the people is availed through various means.

The police however moved in quickly and stopped Mr Hichilema from proceeding with his mission stating that he did not have a police permit to view the river.

Mr Hichilema however explained that his visit to Chongwe was to get facts on the ground to enable the party work out possible means of helping the affected people.

He said is disappointed that the Police vehemently insisted that he had no right to visit such places as they are run by the government.

“We couldn’t hold back our compassion arising from widespread reports on how our people in Chongwe district of Lusaka province are suffering due to lack of safe and clean drinking water. Their only source of water, the Chongwe dam has nearly dried up due to drought and other factors related to disturbances of forest reserve recharge areas,” Mr Hichilema said.

“Unfortunately while sympathizing with our people, Police citing the POA stopped us stating that we needed to obtain a police permit in order for us to see how our people are suffering from hunger and thirst. We however advised the officers that we were not fighting them but merely assessing what we could do for the communities which included themselves, to ensure they accessed safe and clean drinking water.”

“Additionally, we stated that our visit was to get facts on the ground to enable us work out a plan to ensure water for our people is availed through various means including sinking boreholes, but the Police vehemently insisted that we had no right to visit such places because they are run by government,” he said.

He added, “Fellow citizens, this is what our country has been reduced to. We would like to state however that no one will stop us from working for the suffering citizens and as such, we will continue striving for the greater good of everyone, including the Police themselves.”

Zambia Police in Lusaka have summoned NDC President, Chishimba Kambwili for questioning. Police delivered a call-out to Kambwili’s residence this afternoon.

The call-out was signed by Supt Stepehn Nkhowani and was received by Kambwili’s daughter, Chanda Katema Kambwili.

According to the notice, Mr Kambwili is expected to avail himself before the police at Lusaka Central Police Station, Room A22, on Wednesday 28th August 2019, at 10hrs for purposes of interviews on an undisclosed matter.

Yesterday Registrar of Societies canceled the registration certificate of the NDC following a High Court ruling of 16th, July 2019, in a matter where some members of the NDC took each other to court.de-register the party.

However, the NDC Leader said that the Registrar of Societies had no powers to deregister his party, adding that the party had not received the deregistration letter, but only came to know about it on social media.

Mr. Kambwili said that the decision by the Registrar of Societies to de-register his party is illegal and an abuse of authority and that the registrar’s pronouncement is not supported by any law in Zambia.

He also wondered why the Registrar of Societies had de-registered the party without engaging the aggrieved parties as stipulated under section 13 of the Registrar of Societies Act.

Meanwhile, Governance, Elections, Advocacy and Research Services (Gears) Initiative Executive Director McDonald Chipenzi has said that the de-registration of the National Democratic Congress is politically motivated.

Mr Chipenzi said that the de-registration the NDC is an assault on the country’s democracy, adding that the decision of the Registrar of Societies is surprising considering that the same office had given the NDC a certificate of registration, an indication that they met all the requirements.

Mr Chipenzi said that before any organization is issued a certificate of registration, they should have a constitution.

Mr. Chipenzi said that there is no justification that the registrar of societies erred to have issued a certificate of registration to a party that had no constitution as per the requirement of Law.

Zambia’s foremost economic expert, Professor Oliver Saasa has said Sales Tax is a short-term response that will kill the mining industry.

In his interview with the renowned publication MiningforZambia, Prof Saasa bemoaned that Sales Tax will be a cascading [or compounding] effect, leading to a situation where, at every point in the chain, you see the same percentage being added as a Sales Tax — either 16% or 9%, for imports or locally produced goods, over and over again.

There has been vigorous debate about Zambia’s proposed migration from the Value Added Tax (VAT) system to a Sales Tax since it was first announced in September 2018. The private sector has since voiced many serious concerns about the change. That the Sales Tax has been postponed several times since January 2019 suggests that the government must also have concerns of their own.

Below is a full MiningforZambia interview with Prof.Saasa:

What has been the problem with VAT to date, and why has there been such an issue with paying VAT refunds?

The principles of the VAT system in Zambia are, of course, exactly the same as those that pertain elsewhere in the world. Because of the way the tax works, the payment of tax refunds is an integral part of a VAT regime. The biggest problem has been that the government has failed to ring-fence funds from which the refunds that are due can be paid.

For the government, whatever [VAT] gets into the kitty is like a profit, and they tend to consume it. When it comes to their obligation to pay VAT refunds, they have no other revenue source, unless they just go straight to the Treasury. When these refunds accumulate for such a long time, the amounts become atrocious. At the moment, we’re talking about approximately $5-600 million collectively owed just to the mining sector.

We hear a lot about the mining sector for the simple reason that they are the biggest taxpayers in Zambia — and so, in terms of refunds, they are owed proportionately much more than companies in other sectors. Secondly, because they’re such a prime player in the Zambian economy, the amounts that are due to them will have a ripple effect across the economy.

When the government realized that the refunds weren’t feasible, they just waited for the financial year to end, and then announced that they were canceling VAT to avoid paying the refunds.
What are the reasons for the postponement of a Sales Tax since January 2019?

The decision to migrate from VAT to Sales Tax was made in September last year. When 1 April came, there had been very little preparation on the part of the Ministry of Finance, so they pushed it to 1 July. Then, there was the change of Finance Minister, and it was pushed to September. However, the new Minister has now said that the 2019 tax regime — which includes the migration from VAT to Sales Tax — will be opened up for discussion with the private sector and all stakeholders, and it may now only come into force on 1 January 2020. So, the debate is still raging.

I think it’s important to understand what the main motivator is for abandoning the VAT that we adopted 25 years ago: It is all about how best the government can run away from meeting its obligations to refund VAT to the mines. There’s no economic reason whatsoever why we should migrate to Sales Tax.
What challenges does VAT pose?

VAT does have some complexities, and one of them is paying refunds. But refunds themselves are not the problem; the problem is how the government has managed them. Apart from the challenges with refunds, there are hardly any arguments that are convincing to experts as to why the government should migrate to the proposed Sales Tax. In fact, the last Minister of Finance came out openly and linked the migration to avoiding the refunding of VAT.

What challenges are associated with a Sales Tax?

One of the challenges with a Sales Tax is the cascading [or compounding] effect. You have a situation where, at every point in the chain, you see the same percentage being added as a Sales Tax — either 16% or 9%, for imports or locally produced goods, over and over again. The total Sales Tax cost to the mines, for example, could be as high as 37.8%. Of course, this will push up the cost of production — and this is not only for the mines but for almost everybody. This means that a number of the taxes that have been brought in will make reinvestment very problematic.

How so?

The whole idea of migrating from VAT to Sales Tax, from the government’s standpoint, is that they want to maximize tax collection and the amount that goes to the Treasury. But, while the cascading effect of Sales Tax would create a semblance of more money going to the treasury through tax collection in the short term, by introducing Sales Tax, you are going to discourage investment in the mining sector. The reason being: the cost of reinvestment becomes higher.

Investors come here in order to harvest returns on their investment. So, immediately when the tax regime is not sufficiently attractive, they’d rather move out and go elsewhere — or scale down.

Another terrible thing for the mines is that — if you look at the average mining company now, especially the new ones — the ore grade is very low. For example, First Quantum Minerals’ Kalumbila mine is an open-pit mine, and the [copper] ore grade is only around 0.5%. That means that they need to pull hundreds of tonnes out of the ground to get a very tiny fraction of copper. But unfortunately, some old mines are shaft mines and are very inefficient. They are nearing their lifespan. An unfavorable tax regime means they will bypass the lower grade ore and, once you’ve bypassed it [at a certain depth], you can’t go back. When the tax regime is not favorable, the mines’ production becomes very wasteful. And ore that has been forgone can never be recollected.

Some experts say that VAT’s major weakness is its (necessary) collection mechanism. What is your view on this?

This is a problem of mismanagement, in my view. Zambia used to have a Sales Tax system, but we migrated away from it because it’s inferior. Many countries in the world have moved from Sales Tax to VAT. It’s a more modern way of doing things.

If we had to compare both systems, they both collect [tax]. In certain sectors, as a government, you may collect a little bit more. But you have to look at the incentives — you can’t only focus on collection. If you negatively impact the goose that’s laying the golden egg, then you end up killing it. And then you discover that in the medium to long term, you will not collect anything.

A good tax must do two things. Firstly, it must benefit the country that is hosting the investment. These are resources belonging to the country, of course, so there’s no question about whether or not mining companies should be taxed. But secondly, while you are taxing, you must allow those mining companies to invest. In fact, there must be an incentive to invest. And the incentive to invest usually is influenced by the nature of the tax regime. If you are over-taxing them, the incentive to invest will not be there — nor will the ability to invest.

In other words, the government must grow the pie, rather than trying to squeeze out more from a tiny pie. In the medium to long term, as a government, you must build in a mechanism whereby you do not eat the so-called “seed” because you want that seed to multiply, so that in the future you see an expansion.

What are the most likely consequences of the proposed Sales Tax for the mining industry and the wider economy in Zambia?

Whether or not Sales Tax will be implemented is still being debated, but if it’s passed in January, firstly, there will be a short term increase in Treasury collections — but there will be a medium to long term reduction in tax payments. That, for me, is a given.

Secondly, we will not see significant mining development in terms of expansion. And that would mean — because the tax regime is not good enough — Zambia slowly falling backwards on its projected growth in the mining sector, which is not good. You are talking about a sector that accounts for more than approximately 70% of export receipts and revenue. That will disturb foreign exchange availability, interest rates, and it will disturb the value of the Kwacha.

The mines also are a major employer, both in terms of direct employment and also mine contractors. The manufacturing sector, whether it is linked upstream or downstream, will be impacted too, including suppliers. All of those areas will be affected negatively if the mining sector dips.

The more you focus on maximizing tax and the less you pay attention to the incentives that are required to allow mining companies to produce more, the less you support the growth of that sector. And that is really the biggest problem that we have in Zambia at the moment.

We urgently need to address the issues with Sales Tax because a cough in the mining sector will give everybody in the country the Flu, so to speak.

See link for original publication: https://miningforzambia.com/sales-tax-will-shrink-zambias-economy-says-prof-oliver-saasa/

President Edgar Chagwa Lungu has arrived in the Japanese capital Tokyo ahead of the Tokyo International Conference On Africa Development TICAD.
The Zambia Air Force plane carrying the Head of State touched down at Haneda International Airport at 10:40hours Japanese time. And several African heads of state have also arrived in Japan to attend the 7th TICAD conference in Yokohama.

The head of state is scheduled to attend the TICAD heads of state summit as well as some side meetings.

President Lungu is also expected to hold bilateral talks with Japanese prime Minister Shinzo Abe and the emperor of Japan Naruhito.

The President will also witness the signing of some Memoranda of co-operation as well as meet some Japanese business people.

Several African heads of state have arrived in Japan to attend the 7th TICAD conference in Yokohama.

Meanwhile Japan has given Zambia about US$3 million grant to procure essential drugs.

The grant is for the Economic and Social Development for the purpose of procuring health centre kits of essential drugs.

Japanese Ambassador to Zambia Hidenobu Sobashima says Japan is aware of a serious need for essential drugs in Zambia.

Speaking during the signing ceremony in Lusaka today Mr. Sobashima noted that the grant is connected to the 7th Tokyo International Conference on African Development -TICAD7- which starts tomorrow.

He said deepening sustainable and resilient society which is one key pillar of the TICAD7 requires for health coverage of which Japan is keen on helping Zambia.

And Finance Minister Bwalya Ng’andu who signed on behalf of Zambia assured the Japanese envoy that the principle of equity will be used when distributing the health kits across the country.

Dr. Ng’andu said government will also ensure medicines are taken where they are most needed especially in rural areas.