Transcript of Let The People Talk featuring Mpondela, Kopulande

Transcript of Let The People Talk featuring Mpondela, Kopulande
Written by Continued from yesterday
Tuesday, March 17, 2009 2:12:58 PM

Elias Mpondela continues: Task force is a word that has been used and people are scared of that task force because it relates to arresting people and jailing them. Maybe we need to find another terminology that is devoid of that negative connotation so that we don’t begin to see, here is an opportunity Sam, we have great things here, so task force, I am opposed to it.

Sebastian Kopulande: Sam!

Presenter Sam Sakala: Yes!

Kopulande: Yaa! Let me comment on what our brother Fresher, is he?

Presenter and Fresher Siwale: Yes, Fresher.

Kopulande: ...what Fresher did comment on and unfortunately we heard this from the former finance minister as to his analysis and understanding of the impact, the extent to which the global financial was going to impact on Zambia. And I am just hearing that the World Bank and company did conclude that we were not going to be heavily impacted. I think that is a great misunderstanding of international economic dynamics, it’s an absolute misunderstanding. Now, what are the factors that determine the extent to which an economy can be affected by what is happening in advanced economies? There are a number of factors. The first factor: is the extent to which a country is integrated within the global financial system. The second factor is what is it that you have that you are exporting to the outside world? The composition of your export basket, what is in there? Now, I will demonstrate later how our export basket has made us susceptible to negative impacts of the international financial crisis.

The third factor is the extent to which an economy relies on external capital inflows in relation to portfolio investments. Portfolio investments are relative to investments in government debt instruments meaning treasury bills and government bonds…the foreign direct investments and the extent to which a nation depends on official development assistance.

Now let us look at, let us move one by one these factors; let us look at the composition of our export basket: if you look at the statistic, January 2009. What composed Zambia’s major exports in January 2009, copper and articles thereof constituted K282 billion or 61 per cent of our total exports. Secondly, it’s copper ore and…constituted 18.7 per cent of our total exports. So the two put together is 79.7 per cent, 80 per cent of our export is in copper. Most of the copper that we export is in primary form. Sam, you have heard of international copper prices. Tell me, have you ever heard about international copper wire prices? No! Have you ever heard of international copper bullet prices? No! We have all heard of international groundnut prices. Have we ever heard of international prices of peanut butter? So essentially what I am saying is because we have failed to add value to our products we are highly susceptible to what is happening outside because we are going to be hit by the reduced demand in copper prices or in primary agricultural commodity exports because those prices are not determined by ourselves but by foreign forces. So in the way that we are, we are highly susceptible. Secondly, we depend our economy greatly on foreign direct investment. Look at what is happening in the mining sector, that is shows you the instability of foreign direct investment. What does a foreign investor do? Immediately there are some shocks, he closes the shop and goes. So we have been screaming for many years. Empower Zambians! For Zambians will always be here. Embark on citizens economic empowerment. Let the citizens own the economy or be part to what is happening in the economy or be part of joint ventures with foreign direct investors. Look at our exchange rate. What has played the key role in managing our exchange rate in Zambia? It is portfolio investments. In the address to Parliament in his budget speech, the minister did say clearly that ‘our exchange rate failed to nearly K5000 because portfolio investors withdrew their investment, and what have we done? We have not used even the dollars that have been generated by Zambians to be kept in the Zambian economy so that they can play a role in determining our foreign exchange rate because returns sales from mining companies have been banked in foreign banks and not banked in Zambian banks and therefore I can tell you what I have always said, money has one simple principle, it works where it is. So that means once this money from copper earnings is banked in England, it is the British that are going to borrow that money to grow their economy not the Zambians. So we have been saying for many years, ‘do not allow externalisation of turnover, let the money that is banked, that is earned by exporters be banked in Zambian banks so that it can be accessed by other entrepreneurs in this country to grow their businesses.’

This is not strange! This is not foreign exchange controls we are talking about. We are talking about management. I will give you an example of Malaysia. In Malaysia, once you export, six months later you must prove and show that that invoice, your export invoice, the money is banked in Kuala Lumpur or some other banks within Malaysia. Everybody else does that but here we behave as if we print the greenback [dollar], we don’t. We need to manage our exchange system. We are not saying control, we are saying manage.

Presenter Sam Sakala: It is a gloomy picture really.

Kopulande: It is not that gloomy because there is an opportunity. We will come to that as to how we can reverse these things.

Fresher Siwale: Sam, my opening statement was based on blindness and lack of understanding. My brother here Sebastian has actually amplified what blindness is. In his statement he alluded to the fact that we are dependent on foreign direct investment, in short terms FDIs. Now what about home direct investments, HDIs, where are they? You know when I was young I used to hear elders say umulembwe wachipuba wapwilile mulitumfwe [A foolish person’s okra finished whilst being tasted by other people]. Our position on investment, our policy on investment in Zambia is based on the principle of umulembwe wachipuba wapwilile mulitumfwe because a good example I will give you Sam, you own a car now you lack fuel, you ask Elias here: ‘could you buy fuel for me in the vehicle?’ Then Elias says, ‘yes I could buy fuel in your vehicle on condition Sam I drive the car.’ You agree, you oblige, you go to the filling station, he buys in fuel, you hand him over the keys and he drives away, he leaves you at the filling station. What sort of a person are you? And you fail to call Elias and say ‘bring back the vehicle.’ You say if I call him back then he will stop buying the fuel in the vehicle but what is your return on the vehicle? What is your compensation on the vehicle? All of us know money and technology is fuel for development, so all these you call foreign investors come here with fuel for development. Our vehicle is the land and the minerals below. What is our compensation? If Lumwana [Copper Mine] owns the mine 100 per cent, what is our compensation? If KCM [Konkola Copper Mine] owns that mine, what is our compensation for the land and the fuel? Some bureaucrat told me ‘they pay tax.’

Well, all those who have been to an economic school they know tax is maintenance. Now if on your vehicle, Mpondela is using your vehicle it has a puncture, he mends that tyre but does that accrue to you or to him because he is using that vehicle? Now when these investors pay tax to government, they are just paying maintenance. Now what is our compensation for the vehicle that they are using because we need to shift that compensation from where they are messing up, digging the whole, we will not build houses there, we will not farm there, we will not carry out any activity there so we need to collect that compensation and place it elsewhere so that we are able to replace that vehicle either in the same form or another form. Now because we are not able to see this, they are getting away with it, they are owning the mines and they are remitting money abroad. A good example I will give you Sam is that in 2007 at the peak of copper prices, the donor component in our budget was about 35 per cent or US $ 1 billion. Now the same year Zambia exported metals in excess of US$ 7.5 billion. Now if that money was allowed to come back into this economy it should have created production in excess of US $ 75 billion and we tax production in this economy at 20 per cent, so we should have collected US $ 15 billion from export production.

Now, why should we go and collect US $ 1 billion from the donors and forego US $15 billion? It’s a principle of a foolish farmer.

That is the way we have operated this country, on a principle of a foolish farmer because your elder brother says, ‘if your crop fails I will give you something to survive on until the next harvest.’ So what we do is that we pretend we will plough the field but we will not manage the process which leads to crop failure, then go back to the elder brother, he promised.

Now, how do I put this without offending the British? You know at independence in 1962 not 64 because our leaders Kenneth Kaunda and his group came into government in 1962. [Officially Zambia got independence in 1964]. At the time of independence in 1962, the British knew very well that to hide anything from a black man just put it in a book. So what they did is that they left 26 volumes of laws and they are packed. They themselves the British have unwritten laws. So because we fail to read to open the 26 volumes we even go to Parliament to legislate on already existing laws. We create new laws to contradict the existing laws, so the British at the same time what they did was before they handed over this country, they made sure the Kaundas of this world were made to sign what is known as the Sterling Agreement. Now the Sterling Agreement entailed that when Zambia exported to other countries, say to China instead of the Chinese Yuan being converted into kwacha that export will first be paid to the British economy so it has to be converted into the British Sterling pound then after the British have accessed from those funds then they pay to New York so that it is converted to a dollar before it is converted to the Kwacha. So in essence whatever we do here we work for the British and American and this is 47 years later no one has attempted to look at the way we have operated because we are funding the British system, the American system whereas here they give us aid from the production of our money. A good example is that just two weeks ago I heard the bank governor Dr Caleb Fundanga saying Zambia had US$ 1.3billion reserves. A good question to ask is, ‘where are the reserves kept? Are they at Bank of Zambia or Bank of England? You will be shocked to learn that actually under the Sterling Agreement part of the proceeds from exports shall be retained in England, in Great Britain as reserves. So the US $1.3 billion is actually producing or creating production in the British economy, not in the Zambian economy. So mulembwe wachipuba bane! [So my friends, it’s okra of a foolish person!]

[Everyone on the radio programme laughs]

Presenter: Elias, how do we begin to reverse some of these things that you are highlighting?

Elias Mpondela: I think that Sam, there are so many Bemba terminologies that are being used here and I think that for me, history doesn’t seem to teach us anything at all and the present moment doesn’t seem to be our friend. The present must be our friend because that is where we are and time is space within our reach and we are in control. The present doesn’t seem to be our friend because history doesn’t teach us anything and we don’t seem to relate with history in order to learn. When you see [US President Barack] Obama speaking, he relates first of all what Abraham Lincoln said, what all these other great presidents he sees as his models said and then he takes that and situates in the present and sees how incredible the present can be a friend. We don’t seem to do that. Because we don’t do that, the future cannot even be interrogated because we don’t have. We are not paying attention to the promptings, we are of the past and the promptings of the present therefore the future cannot be interrogated with definiteness because we are a people that don’t want to do that because the moment doesn’t seem to be our friend, it’s our enemy. Although we enjoy in the moment but we enjoy for that moment but we don’t take advantage of what the moments present because we are like blind people, all of us Zambians, in industry, in government. I think that is the way we behave. So great leadership is required, great leadership recognises the opportunities that are available. The opportunities that we have talked about; land and educated human beings they are here and the skilled human beings also now here and what that great leadership does is to inspire the nation to begin to see opportunity as the great leader sees and also empowers them to begin to ignite fire. That we are lacking and I think that there is need for great leadership in this country that inspires, that points to opportunity, that sees and focuses the future and comes back and says, ‘guys let’s move, we need to move.’ Now at the beginning I did indicate that we need a critical mass, all these ministries are full of very highly educated individuals and each ministry has got certain priority areas or focus in that particular financial year. So we have to look at the present. What are our critical areas of focus? How will this be integrated within a crisis in order to bring out the best that we can? If we go as a group, if we go the Lusaka way of business kunamama na kutabana, you know telling lies and running away from each other there can be no solution. But if we begin to sit together, selecting people, I just want to emphasise, because we have met in groups, bigger groups in many things and we take long. This meltdown requires quick response and quick response means that there must be a critical team, thinking on how these quick responses can be generated and how they can be integrated within the critical areas that have been identified, areas of focus and those begin to be tackled. What do I mean immediately in the mind? When the president, the governor of the Bank of Zambia sings a song “diversify”, this song he is singing now is a song we have always sung. What is it that we want to identify on? We talked about land and water and immediately we are talking about the impending food crisis in the market. Why can’t we become a basket of food supply country? We have talked about that several times and there are so many documents. NGOs have gathered and if we look at the money that has been spent on workshops just to talk about food security, ooh they are much more than the Zambian budget. So much money in that industry of having to talk. We are talking about centrality. There is regionalism here. I mean we talk about the country being peaceful, it means our airspace are also peaceful, we are told about radars, new radars that have been acquired to now monitor what is flying. So we are capable of monitoring what is happening in our airspace. So instead of South Africa getting everything and our friends in Kenya, can’t Zambia galvanise and transform its own airports here, the three international airports – the Mfuwe, Livingstone and Lusaka and make them hive of activity? It can be done and there should be people thinking about that. We need to remove this mediocrity that we have embraced. It has become part of our family value, mediocrity; if you don’t apply mediocrity at the family house or economy level then Zambia is not there. We need to remove that. The fear of going into the unknown and fortunately for us, I have said Zambia is the most researched country and Mr Kopulande who has worked in government can attest to that. Let us get those documents and go into them and see what it is that incredible, intelligent young men and women have researched on this country and begin to delve on those so that we don’t just continue to talk how peaceful we are, we don’t just talk how centrally we are. Politics of today should be galvanising of politics of inclusion; inclusion on issues that we all agree on and therefore expanded dialogue, expanded conversations are required. In each political party, there are technocrats, let’s leave politicians to hit each other, let us get our newspapers to begin to highlight major things that are happening. I was in the Copperbelt last week and I visited CEC [Copperbelt Energy Corporation]. What did I hear? There is a story of how CEC is trying to expand their production of electricity because they see potential that even if Luanshya [Copper Mine] and Mopani [Copper Mine] are trying to close up the Konkola deep there is so much investment that has gone in there that it will be very difficult for them to blackout but Lumwana that is up coming on the stream is coming in such a way that it is difficult for them to reverse.

Are you with me? So there is an indication that something is happening. It means that in the hydro investment, we need to be looking at that because there is expectation that production will go up. I am saying there are many things that we need to do but I think for me critical areas of focus must be identified, must be relooked at, critical mass of human beings must now begin to think carefully, spending time just thinking and playing with models and we need quick response to this economic crisis which to me is a great opportunity to Zambia to now trigger at a very fast speed the diversification programme that we have all been talking about.

Presenter: Let me ask this question. These economic zones that you are creating in this country…which bank can I walk in and say I need US$ 500, 000 for me to go and invest in this economic Zone? Your comment?

Kopulande: Sam, before I go to Multi Economic Facility Zones, which is a subject that I am quite comfortable with, let me look at when you asked what do we need to do? Let us start from the bigger picture; your question was what do we need to do to change the scenario so that we improve on all these things that we talked about? For me my approach is to defining what we need to do is by first looking at where we are, what is the structure of our economy, what characterizes our Gross Domestic Product [GDP]? I will give you some numbers Sam. Between the year 2000 and 2008, the contribution of manufacturing to total GDP has been very interesting. In 2000, it was 10.5 per cent, in 2001 it was 10.4 per cent, in 2002 it was 10.7 per cent, in 2003 it was 10.9, in 2004 it was 10.9 per cent, in 2005 it was 10.6 per cent, in 2006 it was 10.6 per cent, in 2007 it was 10.7 per cent and 2008 it was 10.1 per cent. So what have we been saying? What are saying? That for the past nine years, there has been no real change in contribution of manufacturing to our Gross Domestic Product, period. It has remained stable, stagnant at around 10 per cent.

Secondly, if you look at wholesale and retail trade, mind you wholesale and retail trade was boosted with the coming of the Shoprite, Game Stores and all the others. Now look at their contribution to the GDP; in 2000 18.3 per cent that has actually dropped now 16.6 per cent. So the contribution of retail trade to GDP is six percentage point higher than the contribution of manufacturing. So when people are saying we are a trading nation let us take this matter seriously. All you need to do is to go to Central Statistical Office. That is where I went. I didn’t have to go there physically, all I do is go to the [CSO] website, "http://www.zamstats.gov.zm" www.zamstats.gov.zm and you pick these numbers. This is the structure of our economy. Now, we as I have said, we have remained a primary factor dominant economy. If you look at the contribution of the primary sector to GDP that stands at 23.6 per cent in 2000 and it is now standing at 20.6 per cent. In the primary sector! The secondary sector falls lower at 13.6 per cent. Sam, we must learn from what others have done. My best example has always been Malaysia, how Malaysia has changed its economic landscape. Malaysia got its independence in 1957 and its economy was dependent on two sectors; agriculture, palm oil, forestry and fisheries which contributed 45 per cent of GDP and mining of tin and agriculture contributed 45 per cent of GDP and accounted for 61 per cent of total employment in that country.

To be continued

































































































The secondary sector in light manufacturing, building and construction only contributed 11 per cent to GDP and only nine per cent of employment compared to 61 per cent…So the Malaysian government said, ‘No! No! No! This is not correct.’ So they came up with the Malaysian Plan and drove the economy towards manufacturing between 1960 and 1980. They embarked on an import substitution strategy which was in the first Malaysian Plan between 1966 and 1970 and went further to an export oriented strategy in the second Malaysian Plan between 1971 and 1975. What results did they achieve? Manufacturing started growing at a rate of 7.7 per cent between 1971 and 1978. They identified manufacturing growth leaders which were wool processing, palm oil processing, they stopped exporting palm oil, they went into processing of their palm oil, they stopped exporting their raw tobacco, they went into adding value to their raw tobacco. They started actually producing their own textiles, final garments and all that. Instead of exporting their rubber from their huge rubber plantations, they started producing rubber products such as tyres. As at now the manufacturing sector in Malaysia contributes 44 per cent of all jobs that are held in Malaysia. That is how you can change. Therefore, in this country before we are to learn what do we need to do? I have failed to understand that for 45 years, we have been talking about this but there have been no serious moves re-engineering our economy and changing the complexion of this economy. We have not all these years. We start talking about economic diversification only when we are facing a crisis like we are doing now but economic diversification in what direction? Sam, what is our first priority for manufacturing and unfortunately Sam I will come to this later. We talk about economic diversification from the tops of our heads but serious economic diversification has a process and I will talk about what I call the Kopulande Theory of economic diversification. This is the concept that I developed myself which I presented at a conference in Johannesburg as to how, what should be done in diversifying an economy. I was on radio Phoenix in the year 2002 and I presented this thesis and I was on ZNBC in 2002 at independence and presented the same thesis. No one has ever listened and yet when I presented it in Johannesburg a gentleman from African Union said to me, ‘what are you doing in Zambia, you were supposed to be at the African Union telling us how to change the African economies?’ So there is a process that we must embark on. It has to be a systematic process; I will explain the seven, eight stage process with economic diversification. What is needed to be done, probably not at this stage but it is important. Multi Economic Facility Zones, it’s the first serious step going towards industralising our economy, promoting the manufacturing sector. The challenge Sam is exactly what you have said, to what extent do we get Zambians involved in the Multi Economic Facility Zones? What do we need to put in place? Is the law, the threshold limit of US $ 500, 000 really realistic? Today’s interest rates in Zambia is 30 per cent plus. Can you and I go and borrow US $ 500, 000? US $ 500, 000, which is nearly K3 billion now at 30 per cent interest rate and hope to survive? Now those people coming from outside, who are coming to invest in Multi Economic Facility Zones as foreign investors are borrowing at two per cent. In Japan actually interest rates today are 0.1 per cent. So if a Japanese is coming to invest in a Multi Economic Facility Zone in Zambia he is borrowing at 0.1 per cent, a Zambian is borrowing at 30 per cent plus and you are telling him to borrow US $500, 000 to go and put in that Multi Economic Facility Zone, for God’s sake, let us get a little more serious and create conditions, let us revisit that threshold of US $ 500, 000, the initial concept I don’t want to say what it was in Multi Economic Facility Zones. We provided for satellite in the Multi Economic Facility Zones but all that has died over time hence kicking Zambians out because we are all limited to US $ 500, 000. Sam, even I cannot borrow US $ 500, 000. Not at 30 per cent! Not in this kind of banking environment! Here we have situation where we don’t even have financial institutions that are committed to long term lending for industralisation. DBZ [Development Bank of Zambia] has been crying for capitalization. There has been no capitalization. Even this year in the budget, no funds have been allocated for capitalization of the Development Bank of Zambia. Where will Zambians go to get funds from to grow their businesses and contribute to the development of their country?

Presenter: Right, you can be able to join us on this discussion on 22 6841 or 226292. Yes Fresher.

Siwale: Sam, listening to my brother Sebastian Kopulande explaining about these Multi Economic Facility Zones, it makes me sad in that our approach to develop it’s like…[presenter interrupts to pick a call from a listener].

Presenter: Perhaps [before] you finish off, let us pick up this call.

Caller: Good morning Sam and Kopulande good morning?

Presenter: Good morning Proud?

Popular Lusaka caller Mr Proud: Mr Kopulande, I was, we want to say condolence to the rest of Manjata’s as a ruling party from the people of Zambia. We are all sorry we have lost that person [Teddy Manjata who died in a road accident last week]. Including general Tembos. [Former Republican vice-president Lt Gen Christon Tembo who died a week ago]. No matter we can differ politics but when somebody dies you need to say sorry one another. To come to politics of this time we raised a lot of issues during elections time, so what we need from you panelists is to start seeing results from election time. Now if you yourself Mr Mpondela, you start wondering that no here in Zambia, we don’t have manufacturing industry…what about the issue of election, we raised a lot of issues now we need to see the results. What we only see results now is when you go outside the road in Kamwala as if there is no Ministry of Works and Supply. When you to go Soweto Market, as if there is no Ministry of Works and Supply, the whole roads are dead, when you go in prisoner, even at the gate of Parliament there is a pothole now. What we see now, we need results from you. We don’t want any cadres who will go to demonstrate of sacking Magande. We are not going to eat Magande this time. What we need now Mr Mpondela, advise our President to move in compounds to see how people are suffering. We want to see many people in employment. So many people in the Copperbelt are jobless because there is no industry. Not to take cadres to go and demonstrate over Magande. No matter you can remove Magande today as long you can’t mend pothole, the problem still going there. What we want is not to take our President as if he is a cadre now. The President is the President for all. During elections, he said he reconciled with Magande team. What we need now is development. Mr Mpondela advise the President…sugar prices are going up, what is the mistake. Is this the election that will benefit us? The answer is no! What is wrong with dollar, from K3500 to about K6000? Those issues we want our President to start solving. It was broadcast yesterday that he had a meeting with Zambia National Farmers Union officials. There is no employment. We need our President to look at all these matters not to take our President to go and demonstrate. To demonstrate for what? Who is his enemy? The President should start talking. He should bring medicines in hospitals, give vehicles to police officers in Ng’ombe, Garden and Kamwala compound. Those issues we are going to develop the economy of Zambia not just demonstrations by cadres. We want development from our President. Thank you very much.

Presenter: We have got somebody on the line. Hello good morning?

Caller: Yes good morning. How are you?

Presenter: Who is calling?

Caller: My name is Rodgers Ng’ambi calling from Lusaka. First of all I would like to say I have got a lot of respect for Mr Mpondela and Mr Kopulande. These are people who have been distinguished in society and I want to believe them that they can be able to help us a lot. I was saddened to hear that our legislators can go to Parliament and enact laws that are already existing and sometimes contradict with the existing ones, I am very sad. Also to hear that our reserves are kept in England. What I want to know is Mr Kopulande, he has been well connected, when did he realize that there were these loopholes for him to start talking today? I think that he can use his influence to change all these things because I know that he is a person who has been in the limelight for a long time, even now this man is capable of even going to State House and speak. Where has Mr Kopulande been for all these things to be where they are up to now? Can I have a comment from him please? Thank you.

Presenter: Before we lose that you comment Mr Kopulande?

Kopulande: Sam, thank you very much. I have spent the last 18 years very closely linked to government. The last 18 years of my professional life since 1991, I entered government as a senior private secretary to vice-president then Levy Mwanawasa, the late president. I worked there and after that, I went to the Ministry of Commerce [, Trade and Industry] as director of industry and I was then promoted to permanent secretary to Ministry without Portfolio and I am pleased to say, I can say that I was actually permanent secretary for then Honourable Michael Sata presently the president of PF [opposition Patriotic Front]. I then moved to State House as controller and permanent secretary. I left government, then went back as special assistant to late president Mwanawasa. Yes it is true I have been closely associated with government. Now the truth of the matter is if you look at the service positions that I have held, they have been all advisory. When you are an advisor, your duty ends at advising and you are not the decision maker. Civil servants are advisors, yes we have advised…some of our advice have been taken, others have not been taken, so it is not a duty of an advisor to go screaming on Radio Phoenix that ‘no my advice was not taken’ and all that. No! No! No! Our role is to advise. So we have advised, I have advised, I have known these issues for many years, I have written volumes on these issues and I have never been lazy in terms of advising. Why? Sam, because I have had the privilege to have a good exposure both academically and in terms of hands on experience to be able to advise effectively and to be able to do the right thing.

Presenter: We have another caller on the line. Hello? Oh, we have lost the caller. You may continue.

Kopulande:…so at the end of the day, these are issues that we are addressing at every point the nation must be ready to look at itself and be able to devise strategies and ways and means to move forward as a nation.

Presenter: Hello?

Caller: Good morning brother Sam Sakala?

Presenter: Yes Mr Konoso, how are you?

Caller Konoso: Good morning Mr Kopulande?

Kopulande: Yes my friend how are you?

Konoso: Morning Mr Mpondela and Siwale. How are you?

Mpondela and Siwale: Okay, how are you Konoso?

Konoso: I am okay. I think Zambia, when I look at ourselves, we are our own worst enemies. Look at the situation of development. I will give Kasaba Bay as a very good example. Here we are, we have a Republican President and he is proud to bring in a foreigner, a Zimbabwean to take over Kasaba Bay. I thought Mr Mpondela there is doing a good job running a lodge in Lusaka, a very clean, hygienic lodge. Why can’t the President take Mr Mpondela and take over Kasaba Bay so that the money is left in Zambia by Zambians for Zambians? These are little things that make me very suspicious of how are we going to develop if we hate each other like that where it is clear they prefer people from foreign countries to go and take over Kasaba Bay?

That is the way we have operated this country, on a principle of a foolish farmer because your elder brother says, ‘if your crop fails I will give you something to survive on until the next harvest.’ So what we do is that we pretend we will plough the field but we will not manage the process which leads to crop failure, then go back to the elder brother, he promised.

Now, how do I put this without offending the British? You know at independence in 1962 not 64 because our leaders Kenneth Kaunda and his group came into government in 1962. [Officially Zambia got independence in 1964]. At the time of independence in 1962, the British knew very well that to hide anything from a black man just put it in a book. So what they did is that they left 26 volumes of laws and they are packed. They themselves the British have unwritten laws. So because we fail to read to open the 26 volumes we even go to Parliament to legislate on already existing laws. We create new laws to contradict the existing laws, so the British at the same time what they did was before they handed over this country, they made sure the Kaundas of this world were made to sign what is known as the Sterling Agreement. Now the Sterling Agreement entailed that when Zambia exported to other countries, say to China instead of the Chinese Yuan being converted into kwacha that export will first be paid to the British economy so it has to be converted into the British Sterling pound then after the British have accessed from those funds then they pay to New York so that it is converted to a dollar before it is converted to the Kwacha. So in essence whatever we do here we work for the British and American and this is 47 years later no one has attempted to look at the way we have operated because we are funding the British system, the American system whereas here they give us aid from the production of our money. A good example is that just two weeks ago I heard the bank governor Dr Caleb Fundanga saying Zambia had US$ 1.3billion reserves. A good question to ask is, ‘where are the reserves kept? Are they at Bank of Zambia or Bank of England? You will be shocked to learn that actually under the Sterling Agreement part of the proceeds from exports shall be retained in England, in Great Britain as reserves. So the US $1.3 billion is actually producing or creating production in the British economy, not in the Zambian economy. So mulembwe wachipuba bane! [So my friends, it’s okra of a foolish person!]

[Everyone on the radio programme laughs]

Presenter: Elias, how do we begin to reverse some of these things that you are highlighting?

Elias Mpondela: I think that Sam, there are so many Bemba terminologies that are being used here and I think that for me, history doesn’t seem to teach us anything at all and the present moment doesn’t seem to be our friend. The present must be our friend because that is where we are and time is space within our reach and we are in control. The present doesn’t seem to be our friend because history doesn’t teach us anything and we don’t seem to relate with history in order to learn. When you see [US President Barack] Obama speaking, he relates first of all what Abraham Lincoln said, what all these other great presidents he sees as his models said and then he takes that and situates in the present and sees how incredible the present can be a friend. We don’t seem to do that. Because we don’t do that, the future cannot even be interrogated because we don’t have. We are not paying attention to the promptings, we are of the past and the promptings of the present therefore the future cannot be interrogated with definiteness because we are a people that don’t want to do that because the moment doesn’t seem to be our friend, it’s our enemy. Although we enjoy in the moment but we enjoy for that moment but we don’t take advantage of what the moments present because we are like blind people, all of us Zambians, in industry, in government. I think that is the way we behave. So great leadership is required, great leadership recognises the opportunities that are available. The opportunities that we have talked about; land and educated human beings they are here and the skilled human beings also now here and what that great leadership does is to inspire the nation to begin to see opportunity as the great leader sees and also empowers them to begin to ignite fire. That we are lacking and I think that there is need for great leadership in this country that inspires, that points to opportunity, that sees and focuses the future and comes back and says, ‘guys let’s move, we need to move.’ Now at the beginning I did indicate that we need a critical mass, all these ministries are full of very highly educated individuals and each ministry has got certain priority areas or focus in that particular financial year. So we have to look at the present. What are our critical areas of focus? How will this be integrated within a crisis in order to bring out the best that we can? If we go as a group, if we go the Lusaka way of business kunamama na kutabana, you know telling lies and running away from each other there can be no solution. But if we begin to sit together, selecting people, I just want to emphasise, because we have met in groups, bigger groups in many things and we take long. This meltdown requires quick response and quick response means that there must be a critical team, thinking on how these quick responses can be generated and how they can be integrated within the critical areas that have been identified, areas of focus and those begin to be tackled. What do I mean immediately in the mind? When the president, the governor of the Bank of Zambia sings a song “diversify”, this song he is singing now is a song we have always sung. What is it that we want to identify on? We talked about land and water and immediately we are talking about the impending food crisis in the market. Why can’t we become a basket of food supply country? We have talked about that several times and there are so many documents. NGOs have gathered and if we look at the money that has been spent on workshops just to talk about food security, ooh they are much more than the Zambian budget. So much money in that industry of having to talk. We are talking about centrality. There is regionalism here. I mean we talk about the country being peaceful, it means our airspace are also peaceful, we are told about radars, new radars that have been acquired to now monitor what is flying. So we are capable of monitoring what is happening in our airspace. So instead of South Africa getting everything and our friends in Kenya, can’t Zambia galvanise and transform its own airports here, the three international airports – the Mfuwe, Livingstone and Lusaka and make them hive of activity? It can be done and there should be people thinking about that. We need to remove this mediocrity that we have embraced. It has become part of our family value, mediocrity; if you don’t apply mediocrity at the family house or economy level then Zambia is not there. We need to remove that. The fear of going into the unknown and fortunately for us, I have said Zambia is the most researched country and Mr Kopulande who has worked in government can attest to that. Let us get those documents and go into them and see what it is that incredible, intelligent young men and women have researched on this country and begin to delve on those so that we don’t just continue to talk how peaceful we are, we don’t just talk how centrally we are. Politics of today should be galvanising of politics of inclusion; inclusion on issues that we all agree on and therefore expanded dialogue, expanded conversations are required. In each political party, there are technocrats, let’s leave politicians to hit each other, let us get our newspapers to begin to highlight major things that are happening. I was in the Copperbelt last week and I visited CEC [Copperbelt Energy Corporation]. What did I hear? There is a story of how CEC is trying to expand their production of electricity because they see potential that even if Luanshya [Copper Mine] and Mopani [Copper Mine] are trying to close up the Konkola deep there is so much investment that has gone in there that it will be very difficult for them to blackout but Lumwana that is up coming on the stream is coming in such a way that it is difficult for them to reverse.

Are you with me? So there is an indication that something is happening. It means that in the hydro investment, we need to be looking at that because there is expectation that production will go up. I am saying there are many things that we need to do but I think for me critical areas of focus must be identified, must be relooked at, critical mass of human beings must now begin to think carefully, spending time just thinking and playing with models and we need quick response to this economic crisis which to me is a great opportunity to Zambia to now trigger at a very fast speed the diversification programme that we have all been talking about.

Presenter: Let me ask this question. These economic zones that you are creating in this country…which bank can I walk in and say I need US$ 500, 000 for me to go and invest in this economic Zone? Your comment?

Kopulande: Sam, before I go to Multi Economic Facility Zones, which is a subject that I am quite comfortable with, let me look at when you asked what do we need to do? Let us start from the bigger picture; your question was what do we need to do to change the scenario so that we improve on all these things that we talked about? For me my approach is to defining what we need to do is by first looking at where we are, what is the structure of our economy, what characterizes our Gross Domestic Product [GDP]? I will give you some numbers Sam. Between the year 2000 and 2008, the contribution of manufacturing to total GDP has been very interesting. In 2000, it was 10.5 per cent, in 2001 it was 10.4 per cent, in 2002 it was 10.7 per cent, in 2003 it was 10.9, in 2004 it was 10.9 per cent, in 2005 it was 10.6 per cent, in 2006 it was 10.6 per cent, in 2007 it was 10.7 per cent and 2008 it was 10.1 per cent. So what have we been saying? What are saying? That for the past nine years, there has been no real change in contribution of manufacturing to our Gross Domestic Product, period. It has remained stable, stagnant at around 10 per cent.

Secondly, if you look at wholesale and retail trade, mind you wholesale and retail trade was boosted with the coming of the Shoprite, Game Stores and all the others. Now look at their contribution to the GDP; in 2000 18.3 per cent that has actually dropped now 16.6 per cent. So the contribution of retail trade to GDP is six percentage point higher than the contribution of manufacturing. So when people are saying we are a trading nation let us take this matter seriously. All you need to do is to go to Central Statistical Office. That is where I went. I didn’t have to go there physically, all I do is go to the [CSO] website, "http://www.zamstats.gov.zm" www.zamstats.gov.zm and you pick these numbers. This is the structure of our economy. Now, we as I have said, we have remained a primary factor dominant economy. If you look at the contribution of the primary sector to GDP that stands at 23.6 per cent in 2000 and it is now standing at 20.6 per cent. In the primary sector! The secondary sector falls lower at 13.6 per cent. Sam, we must learn from what others have done. My best example has always been Malaysia, how Malaysia has changed its economic landscape. Malaysia got its independence in 1957 and its economy was dependent on two sectors; agriculture, palm oil, forestry and fisheries which contributed 45 per cent of GDP and mining of tin and agriculture contributed 45 per cent of GDP and accounted for 61 per cent of total employment in that country.

To be continued

































































































The secondary sector in light manufacturing, building and construction only contributed 11 per cent to GDP and only nine per cent of employment compared to 61 per cent…So the Malaysian government said, ‘No! No! No! This is not correct.’ So they came up with the Malaysian Plan and drove the economy towards manufacturing between 1960 and 1980. They embarked on an import substitution strategy which was in the first Malaysian Plan between 1966 and 1970 and went further to an export oriented strategy in the second Malaysian Plan between 1971 and 1975. What results did they achieve? Manufacturing started growing at a rate of 7.7 per cent between 1971 and 1978. They identified manufacturing growth leaders which were wool processing, palm oil processing, they stopped exporting palm oil, they went into processing of their palm oil, they stopped exporting their raw tobacco, they went into adding value to their raw tobacco. They started actually producing their own textiles, final garments and all that. Instead of exporting their rubber from their huge rubber plantations, they started producing rubber products such as tyres. As at now the manufacturing sector in Malaysia contributes 44 per cent of all jobs that are held in Malaysia. That is how you can change. Therefore, in this country before we are to learn what do we need to do? I have failed to understand that for 45 years, we have been talking about this but there have been no serious moves re-engineering our economy and changing the complexion of this economy. We have not all these years. We start talking about economic diversification only when we are facing a crisis like we are doing now but economic diversification in what direction? Sam, what is our first priority for manufacturing and unfortunately Sam I will come to this later. We talk about economic diversification from the tops of our heads but serious economic diversification has a process and I will talk about what I call the Kopulande Theory of economic diversification. This is the concept that I developed myself which I presented at a conference in Johannesburg as to how, what should be done in diversifying an economy. I was on radio Phoenix in the year 2002 and I presented this thesis and I was on ZNBC in 2002 at independence and presented the same thesis. No one has ever listened and yet when I presented it in Johannesburg a gentleman from African Union said to me, ‘what are you doing in Zambia, you were supposed to be at the African Union telling us how to change the African economies?’ So there is a process that we must embark on. It has to be a systematic process; I will explain the seven, eight stage process with economic diversification. What is needed to be done, probably not at this stage but it is important. Multi Economic Facility Zones, it’s the first serious step going towards industralising our economy, promoting the manufacturing sector. The challenge Sam is exactly what you have said, to what extent do we get Zambians involved in the Multi Economic Facility Zones? What do we need to put in place? Is the law, the threshold limit of US $ 500, 000 really realistic? Today’s interest rates in Zambia is 30 per cent plus. Can you and I go and borrow US $ 500, 000? US $ 500, 000, which is nearly K3 billion now at 30 per cent interest rate and hope to survive? Now those people coming from outside, who are coming to invest in Multi Economic Facility Zones as foreign investors are borrowing at two per cent. In Japan actually interest rates today are 0.1 per cent. So if a Japanese is coming to invest in a Multi Economic Facility Zone in Zambia he is borrowing at 0.1 per cent, a Zambian is borrowing at 30 per cent plus and you are telling him to borrow US $500, 000 to go and put in that Multi Economic Facility Zone, for God’s sake, let us get a little more serious and create conditions, let us revisit that threshold of US $ 500, 000, the initial concept I don’t want to say what it was in Multi Economic Facility Zones. We provided for satellite in the Multi Economic Facility Zones but all that has died over time hence kicking Zambians out because we are all limited to US $ 500, 000. Sam, even I cannot borrow US $ 500, 000. Not at 30 per cent! Not in this kind of banking environment! Here we have situation where we don’t even have financial institutions that are committed to long term lending for industralisation. DBZ [Development Bank of Zambia] has been crying for capitalization. There has been no capitalization. Even this year in the budget, no funds have been allocated for capitalization of the Development Bank of Zambia. Where will Zambians go to get funds from to grow their businesses and contribute to the development of their country?

Presenter: Right, you can be able to join us on this discussion on 22 6841 or 226292. Yes Fresher.

Siwale: Sam, listening to my brother Sebastian Kopulande explaining about these Multi Economic Facility Zones, it makes me sad in that our approach to develop it’s like…[presenter interrupts to pick a call from a listener].

Presenter: Perhaps [before] you finish off, let us pick up this call.

Caller: Good morning Sam and Kopulande good morning?

Presenter: Good morning Proud?

Popular Lusaka caller Mr Proud: Mr Kopulande, I was, we want to say condolence to the rest of Manjata’s as a ruling party from the people of Zambia. We are all sorry we have lost that person [Teddy Manjata who died in a road accident last week]. Including general Tembos. [Former Republican vice-president Lt Gen Christon Tembo who died a week ago]. No matter we can differ politics but when somebody dies you need to say sorry one another. To come to politics of this time we raised a lot of issues during elections time, so what we need from you panelists is to start seeing results from election time. Now if you yourself Mr Mpondela, you start wondering that no here in Zambia, we don’t have manufacturing industry…what about the issue of election, we raised a lot of issues now we need to see the results. What we only see results now is when you go outside the road in Kamwala as if there is no Ministry of Works and Supply. When you to go Soweto Market, as if there is no Ministry of Works and Supply, the whole roads are dead, when you go in prisoner, even at the gate of Parliament there is a pothole now. What we see now, we need results from you. We don’t want any cadres who will go to demonstrate of sacking Magande. We are not going to eat Magande this time. What we need now Mr Mpondela, advise our President to move in compounds to see how people are suffering. We want to see many people in employment. So many people in the Copperbelt are jobless because there is no industry. Not to take cadres to go and demonstrate over Magande. No matter you can remove Magande today as long you can’t mend pothole, the problem still going there. What we want is not to take our President as if he is a cadre now. The President is the President for all. During elections, he said he reconciled with Magande team. What we need now is development. Mr Mpondela advise the President…sugar prices are going up, what is the mistake. Is this the election that will benefit us? The answer is no! What is wrong with dollar, from K3500 to about K6000? Those issues we want our President to start solving. It was broadcast yesterday that he had a meeting with Zambia National Farmers Union officials. There is no employment. We need our President to look at all these matters not to take our President to go and demonstrate. To demonstrate for what? Who is his enemy? The President should start talking. He should bring medicines in hospitals, give vehicles to police officers in Ng’ombe, Garden and Kamwala compound. Those issues we are going to develop the economy of Zambia not just demonstrations by cadres. We want development from our President. Thank you very much.

Presenter: We have got somebody on the line. Hello good morning?

Caller: Yes good morning. How are you?

Presenter: Who is calling?

Caller: My name is Rodgers Ng’ambi calling from Lusaka. First of all I would like to say I have got a lot of respect for Mr Mpondela and Mr Kopulande. These are people who have been distinguished in society and I want to believe them that they can be able to help us a lot. I was saddened to hear that our legislators can go to Parliament and enact laws that are already existing and sometimes contradict with the existing ones, I am very sad. Also to hear that our reserves are kept in England. What I want to know is Mr Kopulande, he has been well connected, when did he realize that there were these loopholes for him to start talking today? I think that he can use his influence to change all these things because I know that he is a person who has been in the limelight for a long time, even now this man is capable of even going to State House and speak. Where has Mr Kopulande been for all these things to be where they are up to now? Can I have a comment from him please? Thank you.

Presenter: Before we lose that you comment Mr Kopulande?

Kopulande: Sam, thank you very much. I have spent the last 18 years very closely linked to government. The last 18 years of my professional life since 1991, I entered government as a senior private secretary to vice-president then Levy Mwanawasa, the late president. I worked there and after that, I went to the Ministry of Commerce [, Trade and Industry] as director of industry and I was then promoted to permanent secretary to Ministry without Portfolio and I am pleased to say, I can say that I was actually permanent secretary for then Honourable Michael Sata presently the president of PF [opposition Patriotic Front]. I then moved to State House as controller and permanent secretary. I left government, then went back as special assistant to late president Mwanawasa. Yes it is true I have been closely associated with government. Now the truth of the matter is if you look at the service positions that I have held, they have been all advisory. When you are an advisor, your duty ends at advising and you are not the decision maker. Civil servants are advisors, yes we have advised…some of our advice have been taken, others have not been taken, so it is not a duty of an advisor to go screaming on Radio Phoenix that ‘no my advice was not taken’ and all that. No! No! No! Our role is to advise. So we have advised, I have advised, I have known these issues for many years, I have written volumes on these issues and I have never been lazy in terms of advising. Why? Sam, because I have had the privilege to have a good exposure both academically and in terms of hands on experience to be able to advise effectively and to be able to do the right thing.

Presenter: We have another caller on the line. Hello? Oh, we have lost the caller. You may continue.

Kopulande:…so at the end of the day, these are issues that we are addressing at every point the nation must be ready to look at itself and be able to devise strategies and ways and means to move forward as a nation.

Presenter: Hello?

Caller: Good morning brother Sam Sakala?

Presenter: Yes Mr Konoso, how are you?

Caller Konoso: Good morning Mr Kopulande?

Kopulande: Yes my friend how are you?

Konoso: Morning Mr Mpondela and Siwale. How are you?

Mpondela and Siwale: Okay, how are you Konoso?

Konoso: I am okay. I think Zambia, when I look at ourselves, we are our own worst enemies. Look at the situation of development. I will give Kasaba Bay as a very good example. Here we are, we have a Republican President and he is proud to bring in a foreigner, a Zimbabwean to take over Kasaba Bay. I thought Mr Mpondela there is doing a good job running a lodge in Lusaka, a very clean, hygienic lodge. Why can’t the President take Mr Mpondela and take over Kasaba Bay so that the money is left in Zambia by Zambians for Zambians? These are little things that make me very suspicious of how are we going to develop if we hate each other like that where it is clear they prefer people from foreign countries to go and take over Kasaba Bay? That is very wrong and I condemn that action. In fact when that muzungu [white man] comes to take over Kasaba Bay, he should be chased. Talking about the economic development, we cannot ba Mpondela here in Zambia because our production costs are crazy. We have Angola which has cheap oil but nobody wants cheap oil from Angola. We want fuel from Kuwait where it can be hijacked by those pirates in the gulf of Eden in Somalia. They are hijacking tankers. Look at Botswana…it’s a very good country. The Botswana pula is intact; it has not depreciated the way our currency has lost value. In fact the bishops in their pastoral letter, they said the kwacha has collapsed. So it’s really the way we manage our country. We are managed completely wrongly because why is it that our neighbor Botswana is intact? It’s not really affected as much as we are. Petrol in Botswana is five pula which is K3200. Us here petrol is K5800. So meaning I want to do business and a Tswana man wants to do business, automatically when he wants to export his product, he will be able to make a profit. A minibus driver in Botswana will make more money for the family than a minibus driver in Lusaka. So already we are starting from a disadvantaged position. We are already crippled before we even talk about development. Our interest rates as Mr Kopulande said are shocking. All over the world, central banks have cut interest rates to one per cent, two per cent, but here, Zambians we are borrowing from banks at over 30 per cent. Now how do you do business if you are going to borrow money and lose so much money? The way I look at it, the way forward right now since our currency has collapsed we should start using the US dollar like what they are doing in Zimbabwe because the US dollar for now, you may think it’s a job, Zimbabwe was also a strong economy, who ever thought the Zimbabwe dollar would sink that way? There is cholera there; there is cholera here, what is the difference? If you Mr Kopulande had K200 million last year put in a Zambian bank, you would have lost 60 per cent of it, meaning you would have lost K120 million by it sitting in a Zambian bank. If Mr Kopulande you had kept that K200 million in US dollars and you offl