Wednesday, December 10, 2008
Written by Kelvin Sovi, Mufulira
Tuesday, December 09, 2008 12:21:31 AM
The concept of privatisation seems to be entrenched in the MMD government’s policies. The MMD conducted an almost unilateral privatisation of state-owned companies. It is my considered view that the quest to have almost all state owned companies in the hands of the private sector somewhat overlooks the importance of having certain institutions in the hands of government. For instance, Zesco and Zamtel, apart from being a source of revenue, play an important role in the security and safety of the nation.
Zamtel is a national communication company. Think for a moment the kind of intelligence communication that passes through Zamtel from our security wings. Would such information be guarded if Zamtel was placed in the hands of the private sector?
The Electoral Commission of Zambia relies on Zamtel to transmit election results. Would the political parties accept the transmission of results via a privately-owned company?
I have serious security concerns over the proposed partial privatisation of Zamtel. In our quest to make money for the country, we should not do so at the expense of either the safety or security of our country.
The solution to the problems being faced by Zamtel does not lie in privatisation. Privatisation is just a concept that equally has advantages and disadvantages and therefore requires a contextual approach. I wish to draw the attention of the government to the following advantages that Zamtel has:
1. Zamtel has enormous assets
2. Zamtel’s market is wide and readily available. Save for the few telecommunication companies that have arisen, Zamtel’s market remains wide.
3. Zamtel has very minimal competition.
The three points above are what make a business viable. The failure by Zamtel to thrive in such an environment can therefore be attributed to its management style. How else can one explain a company’s failure to thrive in a conducive business environment!
The solution therefore lies in restructuring the management team. Zamtel requires an energetic and visionary management team that will transform its operations; a team that will harness resources and invest in modern communication equipment in order to provide a better service. Zambia has capable men and women who can rise to the challenge.
I hope that the government will reconsider its position on Zamtel. Our government should learn from developed nations that have left key companies in the hands of the state.
Fuel prices vs financial crisis
Written by Arnold Ngowani
Tuesday, December 09, 2008 12:25:32 AM
The global financial crisis has and is likely to have devastating effects on African economies including Zambia very soon. The consquences of the financial meltdown are likely to be more severe in Zambia than a good number of other countries in the region. Therefore, countries like Zambia should be more pragmatic and magnanimous in devising strategies of dealing with the global financial slump.
There are a number of factors contributing to the economic stalemate. First, Zambia's fuel prices are the highest in the region. Despite the fact that fuel prices on the international market are pegged at as low as $46 dollars per barrel, in Zambia the price of fuel is still the same as it was when the international fuel price was at $147 per barrel (59 litres).
The fall of fuel prices would have eased the negative effects of the global financial crisis on Zambia. Unfortunately, the cost of production in Zambia is too high because of high fuel prices in the region. Zambia's major export, copper, is being sold at a low price on the international market.
Coupled with the high costs of production due to high prices of fuel, mines are now cutting down on their labour force. The high fuel prices are what the government should address because they have the potential to artificially push the cost of production upwards in the economy.
Once dealt with, this issue can end the loss of jobs. Reduced fuel prices mean a low cost of production in all sectors of the economy. To avoid the severe impact of the global financial crisis, urgent revision of the cost-pricing model being used by the Energy Regulation Board should be expedited so that international fuel prices can reflect on the Zambian market almost at the same time.
Zambia's financial system is so porous that the kwacha fluctuates at will in an event of any external financial disturbance. In this case, the economy is more vulnerable to any external shock as witnessed by the plummeting copper prices pushing inflation up to its highest level this year and as opposed to government's desire of reducing it to a single digit.
Low fuel prices are able to reduce the cost of production, easy the exportation of commodities so that the country can have sufficient forein reserves to stabilise the kwacha, reduce interest rates and lower inflation. This can also be achieved by government's intervetion in strategic price controls of commodities such as fertiliser whose price at the world market has plummeted despite this not reflecting in our local market.
Developed countries are devising bail-out plans to rescue their industries. Price controls of essential commodities such as mealie-meal, fuel and fertiliser should strategically be monitored to reduce the impact of the financial slump on ordinary citizens.
As a country, we should be thinking of ways of changing the building blocks of the financial architecture to safeguard the strides we have made in the past few years.
Cost of fertilizer
Written by Martin Mpakateni Juba, South Sudan
Tuesday, December 09, 2008 12:27:45 AM
We all know that maize is the staple food for Zambia regardless of other foods such as rice and potatoes. At the end of the day, we still end up with nsima made from maize meal.
Now that a bag of fertiliser costs K250,000, how many farmers will be able to grow maize which we all depend on? And for those that will manage to grow the commodity, some on commercial basis, how much profit do they expect to make in return? Who will fix the price of maize? Will the maize price ‘fixers’ take into account the cost of fertiliser? I will not be surprised if the little maize that will be grown ends up out of the country where it may fetch more.
For one to buy a bag of fertiliser, it equals the cost of 5x50kg bags of maize. How sustainable would this really be? The maths does not just add up. Even if one has to grow maize at subsistence levels, it does not make sense as it would still turn out cheaper.
Now that copper prices have plummeted, I hope some people, the so-called technocrats, will wake up to reality and realise that agriculture is the major backbone of our economy.
Written by YB
Tuesday, December 09, 2008 12:29:13 AM
The current challenges our country is facing such as the rising mealie-meal prices, falling copper prices and job losses pose as a litmus test to President Rupiah Banda’s administration.
The adverse effects of these problems are just beginning to show. A considerable number of mine workers have lost their jobs and the number is expected to increase as the global economic recession reaches our door step.
As a country, this entails that their is need to diversify our economy unlike relying heavily on copper whose prices keep on flactuating.
Let’s tap into other sectors like tourism and agriculture to have a balance.
Rupiah's administration should not create an ‘antagonistic’ attitude towards divergent views but should instead consult widely, broaden participation and embrace criticism to mitigate the problems we are facing.
The current administration’s ability to offer leadership in these trying times will mark it’s success or failure.