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Nkana face a difficult test on Saturday in their bid to halt a two-match winless streak when they visit Faz Super Division leaders and unbeaten Zesco United in a Week 11 match in Ndola.
Nkana travel to Zesco on the back of a dramatic 2-1 home loss to archrivals Power Dynamos last Saturday.
This weekends’ match is part of a line-up of difficult matches awaiting Nkana who following the game against Zesco when visit Kabwe Warriors next week before hosting fellow promoted side National Assembly in Week 13 and later traveling to Green Buffaloes in Week 14.
Zesco meanwhile are the only unbeaten side in the league on 19 points from 10 games.
They come into this weekends’ match having survived a late comeback from defending Super Division champions Zanaco who rally from 2-0 to finish 2-2 at home against the leaders in the two sides’ rescheduled Week 1 match played on Wednesday in Lusaka.
Both Zesco and Nkana will feel little impact from CHAN commitments should have full squads available for them.
However, Zesco will be without goalkeeper Jacob Banda who is on CHAN duty with Zambia in South Africa.
And in the rest of the weekends, Nchanga Rangers visit Warriors, Buffaloes host Lusaka Dynamos, Power Dynamos are home against Forest Rangers, while Zanaco take on City of Lusaka at Sunset stadium.
In Chililabombwe, Konkola Blades host Nkwazi, Assembly take on visitors Red Arrows at Woodlands in Lusaka while Roan United travel to Maamba to face Choma Eagles.
Zambia’s first republican president, Dr.Kenneth Kaunda has challenged African leaders to take responsibility and fight poverty, offshoots of hunger, disease and exploitation that is taking place on the continent despite being free of colonialism.
Speaking at a press briefing in Lusaka yesterday in respect of the climax of the commemoration of the centenary year of the birth of Dr Kwame Nkrumah, Dr. Kaunda observed that Africa is still faced with the challenge of deadly diseases and poverty.
He said there is need for the continent to work together towards curbing these challenges.
And Dr. Kaunda has called on leaders on the African continent to emulate and uphold the legacy of one of Africa’s greatest leaders and Ghana’s founding president, Kwame Nkrumah who stood up and fought against injustice, corruption, illiteracy and disease.
Dr. Kaunda, who is expected to travel to Ghana for the centenary celebration of Nkhrumah’s birthday and Africa freedom day celebrations, says it is important that leaders continue fighting the challenges the continent is faced with in order to attain what Dr Nkrumah fought for.
Dr Kaunda is also expected to address an international colloquial in Ghana from the 23rd to the 25th of May to discuss the life of Dr Nkrumah on the invitation of the Ghanaian Government.
Father Frank Bwalya listening to proceedings during Bishop Mpundu's press briefing in Lusaka
Change Life or Die Zambia Executive Director Fr. Frank Bwalya says revelations of the Auditor General’s Report on the Road Development Agency has justified his criticism of the poor governance record of the ruling Movement for Multiparty Democracy (MMD).
Speaking in an interview with QFM, Fr. Bwalya said his criticism of government has not been out of hatred for the leadership of the party but that it is clear that the MMD government does not have an agenda for the people of Zambia.
And Fr. Bwalya has described as serious and frightening revelations of the Auditor General’s report on the Road Development Agency (RDA). He accused the government of being in the habit of directing the RDA to work on roads whenever there are by-elections even when those particular roads have not been budgeted for in the annual budget. He said it is such directives, given out of selfish motives, that are leading to over expenditure by the RDA.
And Fr. Bwalya has called on Zambians to seriously reflect on the need to reduce the powers of the President if the issues of financial mismanagement are to be dealt with. He explained that reducing the President’s powers is the only solution to the MMD’s alleged pilferage of public funds for their political interests.
[Q FM]
By Francis Muma, PhD Candidate in International Economics and Business at Xiamen University in People’s Republic of China
I HAVE listened with interest to the debate on the windfall tax—a tax which seems to find so much favour in some quarters. We are told that the windfall tax is a one-off, but it seems to me to be spread over a span of corporate years.
Therefore, like most taxes, it will have downstream consequences and an ever-growing tail of expenditure, which will cause considerable difficulties for the Ministry of Finance in future years. Windfall tax is merely a tax levied on any supernormal profit or to use a street language it is simply a tax paid by fat cats.
I believe that the only honest way to raise tax to tackle a difficult situation is by means of income tax.
It is immediate, quick and effective of taxation. I am not sure that to grab a windfall tax just because it is handy is the best way to proceed and I fear that, in the long term, it will be proven not to have been a wise way to proceed. Essentially for any country to raise tax is to increase GDP so that fiscal revenue per GDP (T/GDP) is raised and maximised.
How do you achieve this? This is simple if you encourage investment, but how can you encourage investment if you are creating disincentives for the main drivers of economic growth by coming up with such taxes like windfall tax?
The windfall tax will erode the investment potential of those on whom it is levied. Moreover, despite the fact that windfall tax is consumption based there is no guarantee that this revenue will be effectively efficiently used in the wake of this financial abuse and corruption in most developing nations which is a chronically invested disease. This can be explicit or implicit form of corruption.
I am not particularly in favour of the windfall tax because it is a one-off tax and once the companies have been taxed and are not making any supernormal (abnormal) profit they cannot be taxed again.
On the global economy, none of the tiger economies including China would do anything so rash as to institute a windfall tax on profitable enterprises that have been recently privatised.
The imposition of a windfall tax may cost jobs. It certainly diminishes mines’ profitability and their ability to invest in schemes such as mineral explorations, which is crucial to Zambia’s long-term competitiveness against other mineral producing nations. All those potential consequences are wholly negative.
Proponents of the windfall levy argue that the tax is entirely fair, as it is based on the fundamental principle of social justice. We have seen the size of the profits on which the tax will draw. Given how the tax will be used, it is wholly right and wholly justified. It is a tax which will pay for a future.
It is what the Zambian people so overwhelmingly endorsed in the past ( through their representatives at Parliament).
[pullquote]
Proponents of the windfall levy argue that the tax is entirely fair, as it is based on the fundamental principle of social justice. We have seen the size of the profits on which the tax will draw. Given how the tax will be used, it is wholly right and wholly justified. It is a tax which will pay for a future.[/pullquote]
However, I want to argue that, windfall tax just encourages consumption which is bad for any developing nation, for any growth driven country it should tax more consumption and tax less of investment. Only when you are at higher mass of consumption stage should you tax less of consumption and tax more of investment to avoid consequences of under-heating resulting from deflation effects.
Then there are the people who want a “ windfall tax” on mining companies. Now don’t get me wrong. I have no more love for large corporations than I do for any other bureaucracy, but let’s think about this in terms of sheer economics. Mining companies exist for one reason: to make a profit. That’s usually the reason that any business exists. As such, the owners of said companies like to maintain the same profit as a percentage of the cost of doing business. Put simply, if it costs more to extract copper from the earth, then these companies are going to charge you more for it.
Taxes are just another cost of doing business, and if a mining company’s taxes go up, guess where they’re going to make up for that. If you said, “By raising prices,” congratulations! You just might be qualified to hold a real job. As you may argue that so what if the copper prices go up, since we do not use it as a finished good and in fact we have every reason to benefit. This is entirely wrong, copper prices are exogenously determined, they are outside the model of parameters of producers, it is not the suppliers who determine this price but ‘demanders’ through LME and others in Shanghai.
So by producers of copper increasing the prices will just be uncompetitive and hence out marketing themselves. Above all rising of copper prices has ripple effects on the ultimate finished products that come back to the countries like Zambia as imports such as cables, electrical appliances, phones and other electronic gadgets.
If you said, “By cutting into their profits,” well, you may be stuck with job prospects, as job creation will definitely dwindle, with dwindling of employment there will even be less direct tax revenue to the Government. Therefore, the Government will have no option but to reduce expenditure on health and education.
Furthermore, the Government will just be forced to increase the incidences of tax rate to maintain and maximise tax revenue, so the buck stops at you, as the multiplicity of negative multiplier effects is endless.
About windfall:
(i) A windfall profits tax is unfair and unbalanced. Why not tax the windfall profits of the richest men in Zambia instead, who have made tremendous profits off the Zambian consumers? If we are going to punish people for making money, why not be fair about it and put a windfall tax on the richest Zambians first?
(ii) Many participants in this debate seem to be unaware of the thousands of small royalty interest owners who depend on a modest mining income for their livelihood. A blanket windfall profits tax would create hardship and put many of these small royalty owners into an income tax rate bracket higher than 50 per cent.
(iii) All Zambians can participate in mineral profits through the public stock markets, every Zambian citizen is free to invest in hundreds of publicly traded companies and become partial owners of these companies.
(iv) Mining companies do not control the price of copper or the market for copper. The copper produced by the Zambian based mining companies is a small fraction of the worldwide supply. If you are angry about copper prices you can lobby the Zambian Government to go after CIPEC and strengthen up the cartel.
(v) A windfall profits tax is anti-investment, and goes against the principles of personal property and capitalism that we have pursued.
(vi) A windfall profits tax will hurt hundreds of thousands of employees in Zambia’s mining industry. These people could lose their jobs due to layoffs as a direct result of the windfall profits tax.
(vii) Windfall tax contributes to treasury on average of about less than one per cent of revenue from the mining industry. This is much less than what Government collects from dividends, mineral royalties, corporate tax and personal income tax of mining industry.
(viii) A windfall profits tax will hurt mining investors as it is against the principles of equity taxation and it is tantamount to double taxation.
ZAMBIA will achieve the projected growth of eight per cent in 2010 because of increased investment inflows as global economies recover, Commerce, Trade and Industry Minister Felix Mutati has said.
Mr Mutati said foreign direct investment (FDI) inflows increased to $1.3 billion in the first quarter of 2010 compared with the $195 million that the country recorded during the same period in 2009 and the figure was way above the $1 billion the Government projected for the whole of this year.
Mr Mutati said Zambia would attain the Gross Domestic Product (GDP) growth by the end of this year because the country had recorded significant investments in the areas of mining, construction and agriculture.
Mr Mutati said the accessing of $6.5 billion from the China Development Bank (CBD), $50 million investment in the agriculture sector and other huge inflows from China were serious indicators that Zambia would achieve the growth rate of eight per cent.
“We have seen growth in the construction industry coupled with five million euros (K30 billion) pumped in by the European Commission for agriculture and this gives us confidence that the eight per cent growth is going to be achieved by the end of this year,” the minister said.
On inflation projections, Mr Mutati said the major driver of inflation was fuel but as the country got into the harvest of maize and other crops, food prices would begin to go down.
“The major driver of inflation is fuel as we start harvesting and, as the crops flood the market, we will begin to see prices of food going down because 60 per cent of the content in inflation is actually food-related and we will be in a position to achieve a much lower inflation rate”, he said.
Meanwhile, the Zambian and Tanzania governments are next week expected to sign a development agreement to facilitate the upgrading of the Nakonde and Tunduma border posts.
Mr Mutati said signing the development agreement would make it possible for the two countries to embark on the construction of infrastructure to make the facility a one-stop border post.
Mr Mutati said the development of the one-stop border post would make it easy for trade flow between the two countries.
Speaking when visiting Grant Thornton chief executive officer, Edward Nusbaum called on him at his office in Lusaka yesterday, Mr Mutati said the development of border infrastructure would not only support economic growth but also boost trade relations between the two nations.
Mr Mutati said once the Sixth National Development Plan (SNDP) and Credit Rating were finalised, it would enable Zambia upgrade from Least Developed Country (LDCs) to a Developing Country, which would help to attract more investors as most investors looked for an economy that was developing.
He said the SNDP would outline the developmental programmes that would be undertaken to eliminate poverty and enable Zambia become a non–LDC country to raise the investor perception profile.
“The SNDP is part of the ingredient that is going to boost economic growth. It is important that we move from being LDC to a developing country and that way, we can be able to create more investor confidence,” he said.
And Mr Nusbaum pledged to support Zambia on corporate governance issues.
He said within 12 months, Grant Thornton would organise a conference on corporate governance in Lusaka.
ZESCO has attributed the recent spate of load-shedding in the country to increased consumption and load demand associated with the winter weather and increased economic activities.
Zesco senior manager for marketing and public relations, Lucy Zimba said there was increased consumption during this time of the year because customers tended to use more heating appliances in homes and industries.
Ms Zimba said in Lusaka yesterday that the company was usually faced with the challenge of meeting high demand during the winter months, hence the relative load-shedding exercise.
“This is a winter month and consumption tends to be more than usual for most customers and we have to do load-shedding sometimes,” she said.
She said sometimes there were unexpected disturbances in supply when there was a problem on the network, but stated that the company had not recorded any major utility system failure lately.
Zesco promised to ease load-shedding to Lusaka customers after replacement of the Leopards Hill transformer, but the facility was constrained because of high demand owing to increased economic activities.
The company is undertaking the upgrade of its generation capacity and is currently carrying out the Kariba North Bank extension project to add 360 megawatts to the existing 360 megawatts at the station.
She said there was no major load-shedding in most cases and Zesco was making sure, whenever need-be, load-shedding was spread to avoid disadvantaging some customers more than others.
Ms Zimba said the company had been publishing the load-shedding schedules in the media so that people knew when to expect some areas to be off-supply, which they had been demanding from Zesco.
On Tuesday evening, company managing director Ernest Mupwaya, when asked about the possibility of Zesco increasing importation of electricity instead of load-shedding, said all the countries in the region were facing difficulties.
MINISTER of Labour and Social Security Austin Liato says it is immoral for Patriotic Front (PF) president Michael Sata to try to politicise the go-slow by Lusaka-based Zambia Revenue Authority (ZRA) workers.
And the ZRA management has warned that it will take disciplinary action against any worker who fails to immediately report for work.
Mr Liato said in an interview yesterday that it is unnecessary for Mr Sata to address ZRA workers who are picketing over industrial differences when he is a mere politician.
He said Mr Sata should confine himself to political issues instead of the ZRA workers’ matter, which is essentially industrial.
Mr Liato reminded Mr Sata that the matter at hand is industrial, and there are laid down procedures to follow in any dispute.
The minister warned the PF leader from interfering in such matters, saying he is not a jack-of-all-trades.
Mr Liato urged all the striking workers to return to work immediately as the go-slow is illegal.
He warned that any unionised worker of ZRA who decides to work with Mr Sata will be dealt with in accordance with the law.
Labour minister Austin Liato (l) and his counterpart from energy Kenneth Konga
Mr Liato said although he has not yet received an official report on the go-slow, his office will be proactive and follow the matter with interest to restore order at Revenue House.
Mr Sata took advantage of picketing ZRA unionised workes and rushed to their offices where he addressed them, promising that he will prevail over authorities concerning their grievances.
“Let’s be serious with national affairs. Since when has Mr Sata’s office been resolving labour disputes? He must learn to differentiate between political and industrial issues,” Mr Liato said.
Mr Sata arrived at Revenue House after 11:00 hours and urged the workers to go back to work.
He told union officials to petition management and meet him today at his Farmer’s House office so that he can help them on the way forward.
He told the workers who had gathered around him that they risked being victimised if they continued to stay away from work and could end up losing their jobs.
[pullquote]“Let’s be serious with national affairs. Since when has Mr Sata’s office been resolving labour disputes? He must learn to differentiate between political and industrial issues,” Mr Liato said.[/pullquote]
But union acting general secretary Shadreck Kalunga told Mr Sata that his presence will raise suspicion.
Mr Sata, however, told Mr Kalunga that the whole situation was already political, and urged the union to meet him today, saying he will help them to hire lawyers.
However, as soon as Mr Sata left, Mr Kalunga told the workers that the go-slow was an internal matter and there is no need to involve other people, especially politicians.
“We are glad that Mr Sata has come to visit us, but that is as far as it goes. This is an internal matter, and we are not going to involve anyone other than management,” he said.
And ZRA management has warned that disciplinary action will be taken against any worker who fails to report for work immediately.
ZRA director of research and planning Samuel Bwalya said in a statement yesterday that that the go-slow is unlawful and contravenes the existing collective agreement and negotiation procedures.
“In this regard, all employees are expected to report for work and perform their duties normally. For those who do not oblige, disciplinary action will be taken against them in accordance with ZRA grievances and disciplinary procedure code and the existing recognition agreement,” Dr Bwalya said.
He advised members of the public and all stakeholders that the ZRA offices will be open and operational.
But the workers have vowed not to return to work until their demands are met.
Mr Kalunga said yesterday that unionised workers have rejected the eight percent increment to their salary and housing allowance.
He said the decision to down tools was made after the union rejected the increment management was offering.
The workers, among other things, are also demanding long service bonuses for those who have served over 10 years to be reviewed.
“These negotiations began in January this year, and have not yet been concluded because management does not want to move from the eight percent that they have offered us. We are going to continue with the go-slow until management hears our plight, “ Mr Kalunga said.
A check at Revenue House opposite Kabwe round-about found offices deserted, with most clients being turned back at the gate by security guards.
Most of the workers were found idling or reading newspapers, while some union officials were going round offices to check whether there were some unionised workers that were still in their offices
President Banda has congratulated new British Prime Minister David Cameron on having ascended to the position following general elections held early this month.
Mr Banda said Zambia and the United Kingdom have enjoyed many years of cordial relations based on mutual trust and interest.
This is contained in a statement issued in Lusaka yesterday by special assistant to the President for press and public relations Dickson Jere.
Mr Banda said he hopes Mr Cameron will work with the Zambian government to further strengthen the bonds of friendship and co-operation during his tenure.
“It is in this regard that I desire to work closely with you at a personal, bilateral and multilateral level,” the President said in his letter to Mr Cameron.
Mr Cameron became British Prime Minister after the general elections held on May 6.
And President Banda has sent a congratulatory message to his Austrian counterpart Heinz Fischer for having won presidential elections that took place last month.
Mr Banda said the re-election of President Fischer is an affirmation of the trust and confidence which the people of Austria have in his leadership.
[ Zambia Daily Mail ]
COORDINATORS of the Luapula Province development conference are surprised that detractors are deliberately reacting to a missed statement that did not form part of the resolutions.
Kawambwa Member of Parliament Elizabeth Chitika-Molobeka, Copperbelt Province Minister Mwansa Mbulakulima, Bahati MP Besa Chimbaka said the chiefs and members of Parliament only resolved never to support politicians who insult others.
Ms Chitika-Molobeka said there was no part in the resolutions that talks about supporting President Rupiah Banda but what was clear was that opposition supporters were jittery because they have presidential candidates who seek political gain out of insults.
“We sat from 09.00 hours to 20.00 hours and those resolutions were read by Senior Chief Mushota. We have very intelligent chiefs who will not allow to be detracted by those who do not understand the situation on the ground,” Ms Chitika-Molobeka said.
MMD national secretary Katele Kalumba said in a media release in Lusaka yesterday that the conference exceedingly achieved objectives and expectation.
Dr Kalumba said the primary purpose of the conference was to achieve unity for the people of Luapula in the quest for greater political and economic participation.
Mr Mbulakulima said some people were fighting the outcome of the development conference because of its potential impact on the political standing of the opposition.
[pullquote]“We sat from 09.00 hours to 20.00 hours and those resolutions were read by Senior Chief Mushota. We have very intelligent chiefs who will not allow to be detracted by those who do not understand the situation on the ground,” Ms Chitika-Molobeka said.[/pullquote]
Mr Chimbaka said the opposition were trying to distort a well set agenda that had been set by the conference for political reasons.
Mr Chimbaka said the resolutions had hit opposition supporters in their face because they know that President Banda does not insult fellow politicians and was delivering development to the people.
Meanwhile, Mansa Central Member of Parliament (MP) Chrispine Musosha has refuted reports that he supports allegations that former president Chiluba is creating parallel structure in the MMD.
Mr Musosha said yesterday at a Press briefing that The Post newspaper had twisted the story to suit what they perceived was the way things should be.
He said there were no parallel structures in the MMD and that he was ready to work with Dr Chiluba the way the party was working with him because he was the founder of the party.
First Lady Thandiwe Banda with visitors at State house
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Bank of Zambia of Zambia governor Caleb fundanga and his deputy Denny Kalyalya during the centrals bank's quarterly briefing in Lusaka.
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Boxer Esther (r) Phiri and her sponsor Peter Cottan (c) during a fundraising event in Lusaka
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Community Development minister Michael Kaingu meets women from community clubs in Mongu
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Information minister Ronnie Shikapwasha in toast with Norwegian envoy Kjoe in Lusaka
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Chimwemwe Member of Parliament Willie Nsanda arrives at the Lusaka local court where he was divorced by Phebby Mwamba
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Olympic Youth Development centre consultant Clement Chileshe (l) and sports ambassador Samuel Matete at the sports centre in Lusaka.
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Former Luena Member of Parliament Charles Milupi after launching his new political party in Lusaka.
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President Banda (r), sports minister Kenneth Chipungu (c) and sports administrator Mwamba Kalenga (l) watch the National team players in training in Lusaka
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President Banda talks to national soccer team assistant coach Lucky Msiska (r) in Lusaka.
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President Banda talks to Zambia national soccer team coaches in Lusaka
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SACCORD executive director Lee Habasonda presenting a report on tribal politics in Zambia
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Some clergymen hold the world's biggest Bible when it visited Lusaka.
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Some clergymen hold the world's biggest Bible when the book visited Lusaka
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United Party for National Development spokesperson Charles Kakoma and Mufumbwe MP Lumba during a press briefing in Lusaka.
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Women from community clubs dance with community development minister Michael Kaingu in Mongu
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Zambia National soccer team players in training at Barclays Sports centre in Lusaka.
Chimwemwe Member of Parliament Willie Nsanda arrives at the Lusaka local court where he was divorced by Phebby MwambaPATRIOTIC Front (PF) Chimwemwe Member of Parliament (MP) Willie Nsanda has alleged that he saw Ernest Mwaamba, an employee of the Citizen Economic Empowerment Commission (CEEC) caressing and fondling his former wife Phebby Mumba at a lodge in Lusaka.
And Lusaka Boma Local Court senior presiding magistrate Henry Mwananshiku sitting with senior local court magistrate Juliet Mwila has set May 24, 2010 as judgment day in the case in which Mr Nsanda has taken Mr Mwaamba to court for committing adultery with his former wife.
Mr Nsanda told the court when the matter came for hearing that in February this year someone called him to inform the MP that they had seen his wife with a man drinking beer at Lusaka’s Mutende Lodge.
He said he confirmed with his friend Davies Kapijimpanga, who was drinking from the same place, that Ms Mumba was at Mutende Lodge in the company of some men.
[pullquote]“I received a call on Friday and I took a spear for my protection and booked a taxi to the lodge. At the lodge I saw Mwaamba busy caressing and touching my wife’s waist and what happened after wards I do not know because that was preparation for activities,” Mr Nsanda said.[/pullquote]
This is in a case in which Mr Nsanda 57, of 245 Zekoni Avenue Itimpi, Kitwe has sued Mr Mwaamba 43, of 1349/3 Woodlands for flirting with his then wife Ms Mumba and the MP is claiming for compensation.
“I received a call on Friday and I took a spear for my protection and booked a taxi to the lodge. At the lodge I saw Mwaamba busy caressing and touching my wife’s waist and what happened after wards I do not know because that was preparation for activities,” Mr Nsanda said.
He said on Monday the following week he went to CEEC offices to clarify whether Mr Mwaamba knew a person by the name of Phebby Nsanda but Mr Mwaamba denied knowing any person by that name.
Mr Nsanda said when he further queried Mr Mwaamba’s relationship with his wife, the CEEC employee said he was only keeping the MP’s wife for his friend named Blackson Mwale.
The MP also said he saw his wife along Great East Road with a man who looked like Mr Mwaamba and after confronting his former wife about the incident, she ran away from their matrimonial home taking with her all household goods.
In cross-examination Mr Nsanda maintained that he saw Mr Mwaamba fondling his wife at Mutende Lodge in Lusaka.
Asked if he had any proof to back his allegations, the MP said his eyes were proof enough because he had seen the fondling for himself.
But Mr Mwaamba said in his defence that during the night in question, he was drinking beer from inside the bartenders counter and there was no way he could have caressed the MP’s wife because he was far from where she sat.
Former first Lady Maureen Mwanawasa has apologized unreservedly to the Zambian people and the Government for what she terms as the misunderstanding that has been caused through an interview she gave to the BBC.
Former first Lady Maureen Mwanawasa has apologized unreservedly to the Zambians and the government for what she terms as the misunderstanding that has been caused through an interview she gave to the BBC.
In a statement released to Qfm today following Government’s displeasure at her recent interview with the BBC, Mrs Mwanawasa said she has never requested government to increase her retirement package.
Mrs Mwanawasa explained that she decided to go back to her legal profession and to continue working to meet the needs of her family especially their education.
“I have always and will always treat the gesture by government to provide her with the retirement package as a privilege and not as a right, which she appreciates and is grateful for and that it is incumbent upon her to fend for her family,’ Mrs Mwanawasa said.
She said that the BBC interview was not an isolated incident as has been portrayed that she gave an opinion to a foreign media.
[pullquote]”I have always and will always treat the gesture by government to provide her with the retirement package as a privilege and not as a right, which she appreciates and is grateful for and that it is incumbent upon her to fend for her family,’ Mrs Mwanawasa said.[/pullquote]
The former first lady noted that she is not a selfish person as some section of the society would like to portray and that she takes the government statutory provision as a privilege and not as a right, adding that she cannot disparage the same when she is fully aware of the sufferings of many Zambian.
Mrs Mwanawasa has since assured the public that she would not issue any further comments on issues regarding the demise of her late husband but will find a way to amicably discuss with the Government.
[ QFM ]
Below is the Interview the Former first Lady Maureen Mwanawasa gave to BBC
FINALLY the Auditor General’s Office has issued a final audit report on the Road Development Agency (RDA). The report does not in any way differ with the draft report analysed earlier.
The focus remains on the K1.4 trillion alleged to have been misappropriated. The audit covers the period 2006-2009. The period covers construction of roads during this period.
However, external influences seem to have driven the core purpose of the audit. Following allegations that huge amounts of money were misappropriated, the donor community, being key stakeholders, ensured that a comprehensive technical and financial audit was done.
However, the accusations that monies up to US$250 million (K1.4 trillion) was misappropriated surprisingly turned out differently.
Some members of the donor community complained about Minister of Works and Supply, Mike Mulongoti who they accused of not taking their concerns. Mr Mulongoti’s annoyance was their allegation that the K1.4 trillion was stolen when even the technical and forensic audit proved untrue. Despite the audit findings that revealed the truth, some donors insisted on trumpeting the K1.4 trillion.
[pullquote]Are the recent changes made to the road sector by President Rupiah Banda related to all this? Are some quarters fearful that the good activities happening in the road sector, through the RDA, may bring political fortunes to President Banda?[/pullquote]
The road sector is a key driver in the development of this country. This sector gobbles up to $350 million annually.
It is cardinal that the projects carried out are of lasting value to the country and open up the country to more economic activity.
But there appear to be sinister activities of some donors campaigning for the abolition of the Roads Development Agency (RDA). Are these calls justified?
What about the allegations that RDA had caused Zambia’s biggest corruption scandal amounting to K1.015 trillion in 2008? What are the findings of the forensic, technical and financial audits carried out since its creation?
Are the recent changes made to the road sector by President Rupiah Banda related to all this? Are some quarters fearful that the good activities happening in the road sector, through the RDA, may bring political fortunes to President Banda?
Is there cause to sabotage funding and close the tap to the sector until after 2011?
Members of Parliament who sit on the Public Accounts Committee (PAC) are familiar with various stakeholders and lobbyists persuading them to take certain stands when they are performing their oversight duties.
But when senior members from the donor community of Danida and the European Union (EU) made it clear that the committee should recommend the abolition of the RDA because of a ‘‘damning audit report’’, the MPs were alarmed.
It has now become fashionable for members of the donor community to campaign for the abolition of model and autonomous institutions created to a large extent by themselves.
In recent times, the Central Board of Health (CBOH) stands as a classic example of a model, autonomous and highly efficient body which was abolished for petty, political and corrupt reasons.
While CBOH was a body admired in the region and credited as an efficient vehicle to deliver health services, the body was dissolved with the help and collusion of politicians and some members of the donor community.
In fact, the dissolution of the CBOH cost the country K400 billion which was funded by cooperating partners. Today, the health sector is suffering the effects of that abolition.
Other social service delivery and social programme bodies that have suffered a similar fate are Zambia Social Investment Fund (ZAMSIF), Micro Projects Unit (MPU) and the five bodies that were abolished and merged into the Zambia Development Agency (ZDA).
Over the years, the World Bank has imposed structural reforms of Government.
Donors have convinced people that Government ministries cannot deliver social services and this power should be ceded to autonomous bodies so that Government ministries are left with policy and supervisory functions.
It is for this reason that autonomous bodies have sprung up being run by professionals and performing better than former Government departments.
It is for this reason that members of PAC were shocked by a proposal from the EU for the dissolution of RDA.
Since then, a concerted campaign has been underway with opposition members of Parliament calling for the entire abolition of RDA.
Road Development Agency (RDA)
In 2002, far-reaching changes were made in the road sector with the abolition of the National Roads Board (NRB) and creation of three bodies: The RDA, the Road Transport and Safety Agency (RTSA) and the National Road Fund Agency (NRFA).
Zambia and the cooperating partners comprising the World Bank, European Commission, DANIDA, Japanese International Cooperation Agency (JICA), Nordic Development Fund, Africa Development Fund (ADF) and Germany Development Bank (KFW) launched the ROADSIP I&II programmes to construct, rehabilitate and maintain a core road network by 2013.
RDA was mandated with the construction, rehabilitation and maintenance of the country’s roads infrastructure.
RDA is also mandated with the tendering and awarding of road construction deals. It is also in charge of the construction of bridges and other crossings.
The NRFA is mandated with managing funds mobilised by the Ministry of Finance and National Planning, locally and from the donor community. NRFA is also in charge of supervising and implementing the ROADSIP.
The RTSA implements policies on road safety, traffic management, registration of vehicles and educational programmes.
NRFA reports to the Ministry of Finance and National Planning, while the other two report to Ministry of Works and Supply, and Ministry of Transport and Communications.
The core agency is RDA which manages the 40,000-kilometre core road network in the country. Only 22 per cent of this road network is now paved. Roads are a key driver of economic development and economic growth and RDA is at the centre of this need.
In its short life, RDA has scored milestone achievements and has in its short time built, paved and in some cases completed very important and political projects.
Some of the major road works that RDA has handled are roads such as the Choma-Chitongo, the Bottom Road (Sinazeze), Mutanda-Chavuma, Lusaka-Chirundu, Lusaka-Kabwe, Mongu-Senanga, Chipata-Lundazi, Mumbwa-Kasempa, the Mwanawasa Bridge, and the installation of computerised weighbridges in Kapiri, Livingstone, Kazungula, Mpika and Solwezi.
RDA corruption allegations
The road sector in Zambia has an annual budget of $350 million. Its projects are multi-billion Kwacha ventures and the industry is expected to attract corruption and corruption allegations.
The huge works have mostly been done by a few contractors with capacity for such works. These are Raubex, China Henan, China Geo, China Jiangxi, Sable Transport, and Roads and Pavings.
Raubex, a South African company, has done the Lusaka-Luangwa Bridge, the Livingstone Airport, the Kafue-Mazabuka, the Lusaka- Kabwe, the Chipata-Lundazi and numerous feeder roads.
Shortly after the death of President Mwanawasa in 2008, NRFA which is headed by Raphael Mabenga, issued a detailed complaint to donors (uncharacteristic) that RDA had overprocured contracts of up to K1.6 trillion (in excess of the limit of K600 billion in 2008).
Upon completion of works, RDA issues certificates to NRFA to pay. This has been the problem. NRFA has instead hijacked the powers of RDA and insists on re-inspecting projects before the fund can pay rendering the process provided for in the law for RDA, useless.
Correspondence shows that NRFA has assumed the role of a ‘’whistle-blower’’ and constantly forwarding the details of ‘’suspect’’ payments to donors.
If there are suspected payments, a detailed report should be sent to NRFA supervisors- Ministry of Finance and not donors!
When the audits were commissioned, NRFA quickly circulated draft findings to road sector donors!
In fact the NRFA is reported to have taken RDA chief, Watson Ng’ambi to the Drug Enforcement Commission (DEC) Money Laundering Unit, alleging that Mr Ng’ambi had made a double payment to a contractor amounting to K2.4 billion.
Upon thorough investigations that saw Mr Ng’ambi suffer a highly publicised arrest, DEC found that the so called double payment was, in fact, an administrative error caused by a new junior who duplicated certificates for payments. Mr Ng’ambi was cleared.
Rwanda, the country that is among states in the region that are learning from Zambia on its road sector quickly poached Mr Ng’ambi for his expertise.
DEC discovered that NRFA had actually made similar errors. In their case, actual funds in excess of K3 billion were released to the contractor doing the Chirundu Road and reversals had to be done, only upon discovery many days later yet the NRFA boss was never arrested.
But tables turn, two years later, Mr Ng’ambi is the new Permanent Secretary at Works and Supply.
The Audit
NRFA’s allegation that RDA had overprocured road contracts in excess of K1trillion has set a vicious process in motion with donors demanding a three-year audit of RDA fearing that Zambia had suffered another grand corruption case involving $250 million.
Since then, Government were made to commission a forensic audit spanning the period 2006-2009.
The audits have involved technical and engineering auditors by teams from Europe and Tanzania.
Following the audit findings, the boards of NRFA and RDA were dissolved and Mr Ng’ambi has been recalled from Rwanda to replace Colonel Bizwayo Nkunika as permanent secretary.
Despite the pressure, President Banda has not yielded to the campaign to abolish RDA and fuse it into NRFA.
The Audit Report
The auditor general has commissioned a three-year financial and technical audit of RDA as demanded by DANIDA and the EU.
The Audit was commissioned to ascertain whether procurement procedures were followed in the awarding of contracts, if road projects were administered in accordance with contract provisions and whether the expenditure adhered to the law.
In conducting the audit, the auditors tested accounting records kept at the Ministry of Works, NRFA and at the RDA.
The preliminary draft findings and inspection culminated in a 300-page query. After examining documents, contracts and payment vouchers, the audit has reduced the report to a 99-page final draft.
The audit report shows that documents were not properly filed and were not produced for audit or were tendered to her team after the audit.
Her major findings include the issue that RDA overcommitted Government on road contracts in excess of money appropriated by Parliament. The overcommitment amount is K1,015,817,097,718 (K1 trillion) in 2008. This resulted in cash flow problems for the year 2009.
The audit also established that RDA signed contracts that exceeded the funds provided for resulting in delayed payments and stalled works or incomplete works.
The audit also questioned procurement procedures, failure to supervise the works, poor contract administration, irregular payments, and failure to provide progress reports.
The audit established that from the 18 sample projects it inspected, contractors provided shoddy, poor or below-grade works.
The audit also established that RDA is encumbered with a debt of more than K300 billion carried over from works done earlier by the NRB.
The K300billion was taken up by Ministry of Finance yet the auditors chose to reflect it in the books of RDA.
The works done under the defunct NRB were not properly documented and the board operated under a defective accounting system.
The audit also dealt with minor issues such as conditions of service for staff and the sale of personal-to-holder motor vehicles.
It also shows an outstanding unretired imprest totaling K19 billion. This amount reflects monies released by NRFA for RDA’s regional engineers across the country to carry out withholding maintenance work.
The retirement of this imprest has been rejected by NRFA because RDA chose to buy tools and equipment such as compactors. NRFA insists this is among the breaches in RDA’s mandate.
In some cases, payments to casual workers have been rejected by NRFA.
Donors had decided to strip RDA of all equipment and tools, insisting that road construction and works will be outsourced from independent contractors.
But there are limited and small works such as patching up of potholes and peripheral works that arise time and again and might not require RDA’s rigorous procurement process.
For example, the works for the Pedicle Road tenders showed that it would cost RDA more than K8 billion. However, RDA chose to use their regional engineer to do the gravel works and it only cost the institution K300 million.
Over-procurement of K1.2 trillion
Following the complaint filed by NRFA and circulated to donors, that RDA had over-committed Government to road works totaling K1.2 trilion, this amount excited many and caused the commissioning of the audit of funds from the EU and DANIDA.
In 2008, Parliament budgeted and appropriated for road works a total amount of K685billion, while RDA signed contracts totaling K1.643 billion (K1.6 trillion) resulting in an over-commitment of K1.015trillion.
This over-commitment was caused by RDA being directed to do unbudgetted for roads and bridge works such as Luansobe, Mpongwe, Nansanga Farm Bloc roads and upgrading of selected Lusaka township roads as directed by president Mwanawasa or his committee of ministers.
It also included works such as the Zimba-Livingstone Road when the road became almost impassable. The committee of ministers directed RDA that a 30 kilometre section which had presented the worst patch be done as an emergency case which cost more than 28 million euros.
RDA was directed to construct and finish the Mwanawasa Bridge in Luapula costing the agency more than K48 billion.
The over-commitment is normal in the industry as some road works that are in the annual work plans can be overturned or new projects included as directed or as a result of emergencies such as the wash-away.
Contracts are signed based on the total contract value for the project and not based on the amount appropriated by Parliament in that particular year.
For instance, the Executive has directed RDA to attend to such roads as Kabompo-Chavuma (K300 billion), Mumbwa-Landless (K300 billion), Senanga-Sesheke (K600 billion), Chipata-Mfuwe (K190 billion), and Lundazi-Chama-Muyombe-Isoka (to help the important link of Eastern and Northern Provinces) and sign contracts.
Most works planned for in the annual work plan and submitted to Government and the donor community will always spill over into the next year.
New huge road works require completion time of 18 months to two to five year period.
The process is designed to promote accountability but is heavily cumbersome.
When a project has been earmarked for construction, RDA comes up with cost estimates and advertises for eligible contractors. The adverts have to run for a period of one month as required by the law.
When bids are received, they have to be evaluated and then submitted to the Zambia Public Procurement Authority (ZPPA). ZPPA also has to sit and approve the winning bid.
Then contracts are entered into between RDA and the Contractor. Upon approval and contract signing, the contractor has to be given a period to set camp, mobilise equipment and workers before commencement of the works. All this might take up to six months.
And then there is a window period for construction as contractors have to contend with disruption of a rainy season especially for road construction projects.
Donors have always complained about this process. It is for this reason that even the Budget cycle has been changed from October to January to attempt to mitigate difficulties of implementing the annual Budget.
But NRFA and its senior officers have not helped matters choosing to put spanners in the works and scandalising the process as corrupt.
Correspondence between NRFA and sent to the donor community (DANIDA, EU and the World Bank) but not shared with Ministry of Works and Supply, RDA and Ministry of Finance and National Planning (the parent and reporting Ministry for NRFA), shows that NRFA reported the so called over-procurement and sent a summary sheet of road works and projects procured in 2007-2008 and spilling over to 2009/10.
Correspondence also shows that NRFA has chosen to guide donors before any donor/Government meeting.
For example, the answer given by RDA on the K1.2 trillion over-procurement was dismissed by NRFA insisting to the donors that RDA’s explanation of over-procurement as being the result of the multi-year commitments was not credible.
In NRFA ‘dossier’ to donors, they guided the cooperating partners to use provisions of Zambia’s own Finance Act and Appropriation Act which prohibits any controlling officer to commit Government to expenditure beyond one year, and beyond totals provided for in the Budget.
Yet Government has mid-term and long-term plans that also help provide an important guideline for the president beyond the one year RDA work-plan.
For its projects, RDA receives funding from cooperating partners, Government, through its fuel levy, and other charges slapped on road users. The road fund receives and disburses this money and manages the fund as a basket resource.
Zambia has a road network of 67,000 kilometres and its core road network totals 40,000. The work that lies ahead is huge and the criteria on which roads should be done in priority differ from the president, business, agriculture and trading sectors. And all these stakeholders are competing for limited funds in the basket resource.
The audit, however, ignored road works procured by DANIDA directly without tendering. DANIDA gave Raubex $1 million contract (single sourced) to do Luena Bridge in Western Province.
Raubex went on the site, changed the design of the bridge, and changed the scope of work.
DANIDA also hired Zulu Barrow as supervising engineers. The bridge is now showing serious signs of tear and wear, yet the auditor refused to include such works in their sample projects to be audited.
The Mongu–Shoprite Road was also directly procured by DANIDA but was not subjected to or included in the audit.
Cancellation of Advance Payments
RDA operations were disrupted and complicated when advance payments to contractors were banned.
Contractors were forced to begin to secure expensive financing from banks to complete road works.
This meant that road construction works became more expensive as contractors have to factor in the cost of borrowing.
This also resulted in difficulties for small and medium-scale contractors who had to pledge their personal assets to secure bank guarantees.
Why should private banks pay for the construction of budgeted for public works with secured local and foreign funding?
The construction industry is now regulated with the formation of a peer statutory regulator in the National Council for Construction (NCC). If contractors have acted dishonestly, why not let the NCC takes action and de-register such contractors and not punish the whole industry?
Conclusion
Clearly, the road sector is important. This sector is key to the re-election of President Banda in 2011.
It is, therefore, strange that donors appear to use the audit to attempt to close the taps on funding for the sector and use it to abolish RDA.
The startling allegation that a $250 million corruption scandal had occurred at RDA in 2008 as peddled by the donors has turned out to be a mere cold fact of over-commitment and out-of-work-plan contracts.
The measures taken so far by President Banda appear adequate, but will they forestall the administrative and operational lapses exposed by the Audit?
Any attempts to abolish RDA will bring serious confusion and disruptions to current road projects and the efficient systems designed to deliver successful and gradual construction of a sustainable core road network in the country.
The Government should learn from earlier actions made to abolish bodies such as CBOH that have left both Government and cooperating partners puzzled by their own actions.
The establishment of RTSA, NRFA and RDA was a good move that requires perfection through implementing regular reviews.
Since the road sector handles contracts worth billions, it is important that the audit findings as revealed and recommended are carried out.
However, any attempt to use this audit to deny the sector funding or use it to abolish RDA will be totally misguided as the audit report at both technical and financial level is not as damning as sensationally portrayed.
