Chikwanda links Africa's poverty, misery to intellectual bankruptcy
By Henry Sinyangwe
Fri 23 Nov. 2012, 17:40 CAT
ALEXANDER Chikwanda says most Zambians serving in the public sector spend a lot of their time wandering about and showing pomposity instead of addressing real issues.
Launching a book titled
Object-Oriented Development in Africa authored by Musaba Chailunga on Wednesday, Chikwanda who is the Minister of Finance said un-bankable development ideas end up not bearing any fruits.
The Institute for Finance and Economics headed by former Bank of Zambia governor Dr Caleb Fundanga as its president has sponsored the book which touches on various issues concerning Africa's development.
Chikwanda said Africa's misery and poverty has more of its origins in intellectual bankruptcy.
"The book is significant because Africa's misery, Africa's poverty has more of its origins in intellectual moral bankruptcy. Our ideas of development are very un-bankable. When you are given an opportunity to serve in the public sector, our ideas will be to roam the world endlessly and show pomposity instead of addressing the issues. So that's the moral bankruptcy part of it. We don't think deep enough. From what he has said, the book should be for a personal and national agenda," he said.
Chikwanda said there was no other resource which any country has apart from people who are trained and armed with work ethic, vision and commitment.
"We are as successful as our ideas are viable. When our ideas are not viable, then we don't proceed as individuals and as a nation…That's the resource that matters, the rest of the resources are incidental to this," said Chikwanda.
And Chailunga said the solutions to Africa's problems are within the continent, and called for hard work than seeking solutions from outside.
Dr Fundanga noted the need for more books that offer ideas for economic development.
Labels: ALEXANDER CHIKWANDA, BANKING, CALEB FUNDANGA
Read more...
MMD sues Sichinga over ‘fake money'
By Maluba Jere, Namatama Mundia, Chiwoyu Sinyangwe and Gift Cha
Wed 08 Feb. 2012, 14:00 CAT
THE MMD has sued commerce minister Bob Sichinga and the Attorney General for special and punitive damages over allegations that the former ruling party printed fake money amounting to K3 trillion.
And the Bank of Zambia has challenged Sichinga to provide evidence that the fallen MMD government printed and distributed K3.1 trillion in the run-up to last year's elections.
Meanwhile, former BoZ governor Dr Caleb Fundanga regretted the controversy over the ‘fake money' story despite finance minister Alexander Chikwanda explaining that there was currently no fake money in circulation in the country.
The Attorney General has been sued pursuant to state proceedings Act while Sichinga has been sued in his personal capacity and that of being a full Cabinet minister.
A statement of claim filed in the Lusaka High Court, through its national secretary Major Richard Kachingwe, contended that as a political party in government, prior to the general elections, the MMD never printed any money in China whether genuine or fake or counterfeit.
This follows Sichinga's revelations at a meeting in Kitwe recently that the MMD printed fake money amounting to K3 trillion in China.
Sichinga alleged that the said money was distributed to the electorate in rural areas so that MMD politicians could attract votes for themselves.
Maj Kachingwe stated that during the said meeting, Sichinga accused the MMD of having bribed the electorate using fake money.
He said the accusations were published in both The Post and the Times of Zambia headlined; "Rupiah's Government Printed Fake Money - Sichinga" and "MMD Printed K3 Trillion Fake Money" respectively.
Maj Kachingwe said the words attributed to Sichinga and spoken on behalf of the Republic of Zambia were understood to have meant that the MMD engaged in criminal activities with the Chinese government in printing fake money.
He said the words were also understood to mean that the MMD was helped by the Chinese government in the elections and that the party's victory in rural areas was a result of bribery using fake money from China.
Maj Kachingwe further stated that the words were also understood to mean that the MMD had K3 trillion fake money, part of which was intercepted at Nakonde border post.
He added that Sichinga's words were further understood to mean that the MMD destroyed the economy of this country by injecting K3 trillion fake money and that the party was in possession of the said money printed in China.
Maj Kachingwe stated that Sichinga's utterances have far reaching consequences on the MMD as a political party, which was ready to win general elections in 2016.
He said the MMD was being falsely accused and blackmailed before the Zambian people and the international community where it enjoys good standing, having improved the economy of the country by bringing visible and tangible development throughout the country.
"The defendants do not want the plaintiff to exist as a political party because they are inciting the Zambian people through false allegations to rise against the plaintiff and its leadership," Maj Kachingwe said.
He stated that both Sichinga and the Attorney General would be put to strict proof of the allegations levelled against the MMD, saying the words complained of were defamatory and criminal in nature.
Maj Kachingwe further stated that his party had never been called or shown the said fake money, adding that it enjoys a cordial relationship with the people of China. He said Sichinga was tarnishing the MMD's good image by spreading malicious and false allegations against China that it printed fake money to help the plaintiff win the elections.
He said the MMD had sued the government so it can tell the Zambian people and the world at large the truth and with tangible evidence of the K3 trillion.
Other than special and punitive damages, the MMD is also claiming damages, costs and any other relief the court may deem fit.
According to Bank of Zambia, as at January 2012, the total currency in circulation in the country stood at K3,029.1 trillion.
Addressing a meeting with the business community at the Kitwe and District Chamber of Commerce and Industry in Kitwe last week, Sichinga claimed that MMD printed and distributed "fake money" to fund its extravagant election campaign, and the bulk of the money was injected into rural areas.
According to Sichinga, the fake money which he alleged was printed in China, was infiltrated into the country's monetary system including urban areas, and that BoZ and the Ministry of Finance were currently sterilising the notes.
But BoZ head of public relations Kanguya Mayondi condemned the media reports being attributed to Sichinga.
"The Bank of Zambia wishes to note with growing concern, that there have been a number of media reports stating that the former government illegally printed and distributed into circulation bank notes amounting to K3.1 trillion," Mayondi stated in an emailed statement.
"It is further alleged that the Ministry of Finance and National Planning, jointly with the Bank of Zambia, and commercial banks have started withdrawing this illegal money out of circulation."
Mayondi stated that BoZ was ignorant of the presence of any fake money as claimed by Sichinga.
"The Bank of Zambia is unaware of the presence of, and has no knowledge of this fake money. The Bank of Zambia would highly appreciate being furnished with appropriate evidence," stated Mayondi.
"The Bank of Zambia further wishes to assure the general public that the currency in circulation is legal tender, which is duly issued by the Bank of Zambia to commercial banks for distribution."
Dr Fundanga, who was last October ejected from the BoZ top position after almost a decade of leading the Central Bank, said he wanted to avoid the ‘fake money' controversy which was initially stirred by President Michael Sata in the early days of his presidency.
"The only thing I can say is that I don't have a comment because the minister of finance has already spoken on this matter and I don't see anything I can add besides what the minister has said," Dr Fundanga said in an interview. "Furthermore, if there are any more queries, the relevant authorities in the Bank of Zambia can clarify."
Dr Fundanga regretted the conflicting statements of top PF ministers on key policy matters, a move he said was "not helpful".
"If there are any further clarifications to be made, the Bank of Zambia and the minister of finance, who has already made an authoritative statement in Parliament, will clarify…that is the only contribution I can make," said Dr Fundanga. "We cannot be adding more controversy to an important issue. So with all due respect, I have no comment."
Labels: BOZ, CALEB FUNDANGA, KWACHA, MMD, ROBERT SICHINGA
Read more...
Zambia rating affirmed, despite uncertainty
MIKE COHEN
Published: 2011/10/05 07:58:03 AM
STANDARD & Poor’s affirmed Zambia’s foreign and domestic credit ratings at B+ with a stable outlook yesterday,
saying the country’s economic prospects were promising and newly elected President Michael Sata was likely to continue to court foreign investment.Mr Sata defeated incumbent Rupiah Banda in a September 20 vote. Since taking control of Africa’s largest copper producer, he has fired the governor and board of the central bank, dissolved the boards of four state agencies, and scrapped the sale of a local bank to FirstRand .
"We view the smooth handover of power following the recent presidential elections in Zambia as indicative of a maturing of democracy," Standard & Poor’s said yesterday. "While Mr Sata’s victory has increased economic policy uncertainty, we expect any shifts to continue to broadly support investment."
Mr Sata has pledged to extract more money from mining companies to distribute to citizens, create jobs and tackle graft. Companies including Vedanta Resources , First Quantum Minerals and Glencore International operate in Zambia.
Standard & Poor’s warned that Mr Sata may reintroduce a windfall tax on mining companies, raise government spending and cut taxes.
It also expressed concern about political interference in monetary policy following the dismissal of central bank governor Caleb Fundanga last month. Appointed in 2002, he helped bring inflation below 10% for the first time in 30 years. Zambia’s economy has been bolstered by an increase in copper prices and production, with per-capita growth likely to exceed 4% this year and the inflation likely to remain slightly above 8%, Standard & Poor’s said.
Standard & Poor’s first assigned Zambia a B+ rating, the fourth- highest junk-grade rating, in March, which placed it on a par with Kenya and Nigeria. Fitch Ratings gave the country a similar rating the same month.
Bloomberg
Labels: CALEB FUNDANGA, MINING, RUPIAH BANDA
Read more...
Bank of Zambia Governor Caleb Fundanga fired
TIME PUBLISHED - Thursday, September 29, 2011, 8:06 am
Bank of Zambia governor Caleb Fundanga has been fired from his position with immediate effect. Sources have told QFM that the bank governor, who was at the helm of the sale of the questioned procedure of finance bank, was fired earlier this week.
Dr. Fundanga was bidding fairwell to his management and staff at the boz headquaters in lusaka yesterday. Dr Caleb Mailoni Fundanga has served as Governor of the Bank of Zambia since March of 2002.
He was appointed Governor, after serving as Senior Advisor to the President of the African Development Bank in Abidjan, Cote D’voire from 1998.
Dr. Fundanga further served as an Executive Director at the African Development Bank.
Dr. Fundanga also served as Permanent Secretary in the Ministry of Finance for six years at Cabinet Office before finally winding up in the Office of the President as Permanent Secretary in charge of the National Commission for Development Planning.
Dr. Fundanga’s firing is seen as some of the major changes the new patriotic front government is undertaking.
QFM
Labels: CALEB FUNDANGA, FINANCE BANK, RBZ
Read more...
Govt sells Finance Bank
By Chiwoyu Sinyangwe
Tue 13 Sep. 2011, 14:00 CAT
FINANCE Bank Zam-bia has been sold for K27 billion to First National Bank Zam-bia, a bank whose parent, FirstRand Limited provided top officers to run the bank after it was forcibly taken over by the Bank of Zambia last December.
Under the terms of the transaction,
FNB Zambia was to take over about 96 per cent of the total assets of FBZL and the
remaining - "toxic" assets of five loans worth K300 billion would remain with FBZ (under possession) to be administered by BoZ. With this acquisition, FNBZ would leap to become the fifth largest bank in the country from its current position where it is among the smallest.
Finance Bank was seized by the BoZ last year for allegedly breaching financial laws and was then managed by FirstRand. It has about 1,000 employees and 39 branches. FNB already operates in Zambia and has a presence in six other African countries excluding South Africa and Zambia.
BoZ director for bank supervision Lameck Zimba said FNB didn't want to acquire those which had some encumbrances and also excluded certain assets and liabilities which were still in court.
"The new buyer didn't want to acquire those which had some encumbrances, and also when we did an inspection, there was a lot of non-performing loans because there was a lot of insider lending and some of those assets are uncollectable," Zimba said during a media briefing yesterday.
"Taking that into account, the net asset value of Finance Bank at the time the due diligence was done, the net asset value was about K22 billion and then when you take into account those excluded related part advances, excluded first assets, also deferred taxes, you come to the fair value adjustment to treasury Bills and Government Bonds and then you come to the net asset value of K3 billion, and taking into account the intangible assests - goodwill valued...you find that the purchase price comes to K27 billion."
The value should not be looked at in isolation on its own. It has to factor in the fact that the whole set of liabilities which the institution is taking over. They are taking over a lot of liabilities. So you have to look at the net position of the institution after that you look at the asset and their quality, and the burden the institution taking over is taking And BoZ deputy governor for operations Dr Austin Mwape claimed that officers from FirstRand Bank did not influence the decision to award FBZL to FNBZ.
He said the deal was not "plain-sailing" for FirstRand as BoZ's financial advisors - London's Deloitte had helped to give advice on the competing interests which had been expressed which came from other competing banks.
"On the face value, one might have views that probably there was something wrong. The people who were managing Finance Bank Zambia Limited were engaged in their personal capacities and they were employed and reporting to the Central Bank," Dr Mwape claimed.
"To facilitate independence in determining the value, we engaged Deloitte LLP of London, a reputable accounting firm which we retained as our financial advisors in the consummation of the whole transaction. Even the offer that was given by FNB Zambia was subject to assessment by an independent accounting body which had a lot of experience in this matter, and it was only after they had given us the comfort that the value which was offered did meet the normal standards which any other bidder would have put through did we agree."
BoZ secretary said applications for injunctions by FBZL shareholders in the three cases before the courts of law had been dismissed, allowing BoZ to perform its statutory mandate.
Other institutions that expressed interest in acquiring Finance Bank included First Alliance Bank, Eximbank of Tanzania, I&M bank Limited from Kenya, JM Capital and Quantile Capital - both from South Africa.
BoZ governor Dr Caleb Fundanga said, on May 20 this year, FirstRand made an offer in terms of which FNB Zambia would purchase selected assets and liabilities of FBZL.
"Upon agreeing appropriate terms, BoZ accepted the offer by FirstRand Bank on June 30th June, 2011," said Dr Fundanga.
FNB Zambia managing director Sarel Van Zyl said it would take about nine month before the takeover of FNBZL was completed.
He said the transaction would not result in job losses for FNBZL.
Labels: BANKING, CALEB FUNDANGA, FINANCE BANK, FIRST RAND GROUP
Read more...
Eurobond sale on hold
By Ndinawe Simpelwe
Mon 08 Aug. 2011, 11:59 CAT
ZAMBIA will delay the sale of its planned US $500 million Eurobond until after elections in September, says central bank governor Caleb Fundanga. Fundanga told Bloomberg that the debt could only be handled when there was a Cabinet in place.
“The matter has to be put on hold. It requires a Cabinet process to move it forward,” Fundanga said. According to the then finance minister Situmbeko Musokotwane,The Eurobond was to be sold by the end of this month. Zambia is looking to raise funds to build new transport links, and generate and transmit more electricity to the copper mines that drive the economy.
On March 22, Standard & Poor’s assigned the country a B+ credit rating, the fourth-highest grade, with a stable outlook the same as that for Kenya, Nigeria and Paraguay.
“Zambia’s economy remains robust, with mining and agriculture showing expansion, and is unlikely to be disrupted by the election,” Fundanga said.
He, however, said there may be a slight delay in the 2012 budget presentation that was scheduled for October.
Labels: CALEB FUNDANGA, SITUMBEKO MUSOKOTWANE
Read more...
Disparities between the rich, poor will always exist - Fundanga
By Kabanda Chulu in Kitwe
Fri 29 July 2011, 14:00 CAT
DISPARITIES between the rich and poor will still exist despite the reclassification of Zambia a lower middle-income country, says central bank governor Caleb Fundanga. And Dr Fundanga has said Zambia will not fall into indebtedness because government borrowing is within the stipulated limit.
Commenting on the implications of the country’s ascension to lower middle-income status, Dr Fundanga said the reclassification would enhance investor confidence and further boost the investment climate thereby creating jobs and wealth for people.
“In terms of financing, under the new arrangement, it should be noted that government will be able to access more non concessional financing. This is in contrast with the previous status whereby Zambia could only access limited concessional financing which attracted very low interest rates and payable after a long time,” Dr Fundanga said.
“Despite the positive reclassification, it should be noted that the disparity between the rich and the poor will always be there and does exist even in developed countries, so the challenge for government is to implement policies that will redistribute wealth so that inequality is reduced.”
He said the reduction in donor aid should encourage the government and all Zambians to work hard to accelerate economic growth needed for economic development.
“Following reclassification, donors will not give out when you can earn it on your own but we should not feel ashamed that donors will reduce aid, in fact it has been an anomaly that a rich-copper producing country at 47 years after independence is receiving alms and aid,” Dr Fundanga said.
He said many countries, including the bigger economies like the US and China, did not have enough resources to develop their economies.
“Many governments resort to borrowing, which is good if it is for productive purposes but for consumption it is bad hence we need to create activities that will generate income from the borrowed money,” said Dr Fundanga, who is also ZRA board vice chairman. “But right now government is within the limit and soon we shall have increased revenue when all mining companies enter the full tax-paying brackets thus government borrowing will reduce correspondingly.”
Labels: CALEB FUNDANGA, NEOLIBERALISM, POVERTY
Read more...
Fundanga predicts continued economic growth
By Chiwoyu Sinyangwe
Thu 28 July 2011, 13:59 CAT
BANK of Zambia governor Dr Caleb Fundanga says the reclassification of Zambia as a lower middle income country and B+ rating will help to prop up the local capital market.
During the launch of the
Central African Stock Exchange case handbook 2011 sponsored by BancABC, Dr Fundanga said Zambia’s performance was expected to remain positive, driven by strong copper output and favourable commodity prices.
The handbook details performances of stock exchanges of 110 companies in Zambia, Malawi and Zimbabwe. This is the first time the bourses in the three countries have been covered in a single publication.
Dr Fundanga said the macroeconomic environment was expected to remain favourable due to the projected strong external sector, the move he said would help to boost the performance of the Lusaka Stock Exchange.
“The recent B+ sovereign rating assigned to the country as well the reclassification of Zambia as a Lower Middle Income country reflects the country’s recent strong economic performance with GDP growth averaged six per cent over the last five years supported by low inflation and there is positive external sector performance,” Dr Fundanga said.
He said the favourable developments put the Zambian business and government in a good position to access finance for sustained economic growth and improved conditions of living for all citizens.
“In the medium to long term, the prospects for Zambia’s economy are bright,” he said.
“The robust GDP growth momentum is expected to be maintained premised on favourable growth performance in mining, agriculture, construction, tourism, manufacturing amongst other sectors. This will be supported by favourable commodity prices on the international market, government’s investments in infrastructure and expected increase in foreign direct investments.”
Dr Fundanga said inflation was expected to reduce owing to the current huge bumper maize harvest.
“The current growth we are enjoying is broad-based. In the past, we had growth which was just mostly concentrated on mining sector but today we see growth particularly strong in agriculture where the majority of our poor people live,” said Dr Fundanga.
“And if this continues, we expect that a lot more people are going to benefit from the growth we are enjoying and we will continue to enjoy.
Further, inflation is expected to remain in single digits owing to prudent macroeconomic policies and the bumper harvest recorded during the 2010/2011 harvest season which is expected to dampen any negative effects on overall inflation through the food component. Accordingly, interest rates are expected to decline further.”Labels: CALEB FUNDANGA, GDP
Read more...
COMMENT - I want to see the banks present a percentage by percentage breakdown of what the 24% lending rates constitute of. I also want to know why lending rates in Zambia, Malawi, Zimbabwe, etc. are nearly identical. Which to me smacks of collusion, possibly going up to the IMF/World Bank. This is extremely important, because if our economies are being manipulated for someone's agenda (think: globalisation), then there is very little actual sovereignty rested in the elected government. Which means democracy is meaningless. So we need to know why, with their 24% lending rates, the banks are pricing loans out of the reach of entrepreneurs.
Banks have sabotaged local economy - CUTS
By Kabanda Chulu in Kitwe
Tue 12 July 2011, 11:50 CAT
ZAMBIA’s economy has been sabotaged by the banking sector due to the bank’s failure to inject enough liquidity in circulation as a result of higher interest rates, observes the Consumer Unity Trust Society (CUTS) International.
Commenting on BoZ Governor Caleb Fundanga’s concern over low competition in the banking sector, CUTS International Zambia acting coordinator Simon Ng’ona said commercial banks are the only variable that appears not to be responding to the much talked about improved and sustained macroeconomic environment in Zambia.
“For instance, inflation has remained in the single digit rates and this should influence a reduction in some of the charges in the sector beyond what is pertaining, irrespective of the alleged high commercial bank operational costs,” Ng’ona said.
“Real and nominal Gross Domestic Product (GDP) has been growing on the back of a relatively constant velocity of circulation meaning that money supply is supposed to increase proportionally.
However, one is tempted to say banks have to some extent sabotaged the economy due to their failure to inject enough liquidity in circulation due to high interest rates making the whole phenomena a paradox.”
He challenged the Bank of Zambia (BoZ) and the Competition Commission to diagnose the bottlenecks that halt the progressive realisation of the fruits associated with a healthy banking sector.
“Once bottlenecks are identified, remedial measures must be undertaken to redress the situation and there is need to crack down exploitative and possible looming exploitative or abusive behaviour which retard effective competition,” Ng’ona said.
He said when analysing the status of competition using the number of players, now 18 banks, as a variable to measure, one is tempted to conclude and rationally assume that there is competition in the banking sector in Zambia.
“However, to get a clear understanding on whether effective competition has ensued or not, it will also be good to analyse the sector by looking at two variables namely, price and non-price competition.
Analysing the latter, it is evident from recent data and seminal reports released that there have been a proliferation of banks and banking products and services such as ATMs, mobile banking, among other products, which on one hand steers non price-competition,” said Ng’ona.
“However, the source of worry has remained with the pricing structure of these services which hinge on the price competition variable.”
Labels: CALEB FUNDANGA, CUTS, IMF, LENDING RATES, World Bank
Read more...
Competition in banking sector still low - BoZ
By Kabanda Chulu in Kitwe
Sun 03 July 2011, 20:50 CAT
THE banking sector has remained fragmented with insufficient and distorted competition resulting in rigidity of its activities, says Bank of Zambia governor Caleb Fundanga.
And Dr Fundanga has expressed concern that
the increase in financial institutions has not had a significant impact on promoting competition since most of the banks are too small.
During a business symposium for SMEs at the ongoing Zambia International Trade Fair, Dr Fundanga said competition was not strong enough to lead to a convergence of prices that would ensure that banks have more or less the same prices for their services and products affordable to most people.
“This can also explain why finance service providers are not revising their interest rates and charges in tandem with the movements in key macroeconomic indicators such as inflation,” Dr Fundanga said.
“Whereas BoZ is conscious to the fact that the financial institutions are in business and are therefore expected to make profits but there is need to make financial services more affordable in order to promote economic growth and reduce poverty levels in the country since low interest rates reduce the cost of doing business and encourage investments in key sectors of the economy.”
He said BoZ had recognised that competition was an essential element in the effective and efficient operation of a market economy.
“In this regard, the licensing regime encourages entry of players that will foster integrity, innovation and competition while deepening and widening the financial sector and we have a huge list of new applicants wishing to invest and open new banks in Zambia,” Dr Fundanga said.
“The presence of reputable financial intermediaries is expected to increase competition which in turn will lead to an improvement in the quality of domestic financial services and allocate efficiency of financial intermediation will eventually be translated into higher returns for domestic savings and greater efficiency in the pricing of credit and other risks and in the allocation of credit.”
Nevertheless, Dr Fundanga said the growth in the number of financial institutions has not had a significant impact on promoting competition since most banks are small.
“A few banks continue to enjoy an oligopolistic position and this in a way explains why some inefficiency remains in the provision of services,” said Dr Fundanga.
Labels: BANK OF ZAMBIA, CALEB FUNDANGA, COMPETITION, LENDING RATES
Read more...
Namwala MMD rejects Chizhyuka
By Edwin Mbulo
Mon 20 June 2011, 09:30 CAT
NAMWALA MMD has rejected the application by UPND area member of parliament Major Robbie Chizhyuka who is a preferred candidate for President Rupiah Banda. According to MMD source, the constituency results for Saturday might be overturned by the provincial committee which is being pressured to have Major Chizhyuka adopted on the MMD ticket.
"There are a lot of underhand methods here and after he Major Chizhyuka lost to our district chairman, the provincial executive has been receiving a lot of phone calls from State House over the adoption," said the source.
The source said if the MMD went ahead to adopt Maj Chizhyuka against the will of the people of Namwala, the MMD would lose the elections.
?We are likely to lose, unless they allow the process to be transparent and conform to the will of the people,? the source said.
And Namwala district chairman Nelson Mawani confirmed the results of the constituency adoption process saying he polled 11 votes against Maj Chizhyuka?s 4.
"As I told you earlier, I have been preparing for these elections for the last four years. I polled 11, Major Chizhyuka got 4 together with Kelvin Chikwata," Mawani said.
And in Livingstone former minister of home affairs Edwin Hatembo was rejected in preference for a Livingstone businessman Liamba Katombora when he got no vote in his favour.
According to MMD sources, Katombora polled 14 while former Livingstone mayor Grace Shafik polled 5 with another former mayor Jorum Mwiinda polling one vote.
In Mbabala, former Choma district commissioner Laiven Apuleni is unopposed. Apuleni is said to be UPND Mbabala member of parliament Emmanuel Hachipuka?s nephew.
Meanwhile, Bank of Zambia Governor Caleb Fundanga?s wife, Rosaria, has won primary elections in Chilubi for adoption on the MMD ticket after polling 17 votes against former parliamentarian Juliana Chisupa Chipwende?s four votes.
Labels: CALEB FUNDANGA, MMD, ROBBIE CHIZHYUKA
Read more...
Polls will boost economy, says Fundanga
By Chiwoyu Sinyangwe
Wed 01 June 2011, 08:00 CAT
THIS year’s presidential and general elections are expected to stimulate the local economy than hurting it, says Dr Caleb Fundanga.
Key political analysts fear that the run-up to elections might lead to intermittent disturbances in both key economic fundamentals and general state of the economy as some risk-averse international investors hold back their commitment to the local economy.
But Dr Fundanga said the performance of the economy which has seen government raise growth projections for this year to above seven per cent from budgeted 6.8 per cent was expected to continue for the second half of the year despite the forthcoming polls.
The Bank of Zambia governor said the country had a good record of peaceful elections since independence – enough strength to help retain investors’ confidence.
“Ordinarily, people will be campaigning and so forth but there is no reason why the elections should derail current strong economic growth,” Dr Fundanga said in an interview.
“The farmers are out there working in the field, the miners are out there…Whether there are elections or not, I expect the miners to be working. I don’t expect any disruptions. So, even in an election year, we don’t expect to have problems. Those who are producing should continue producing, and on the voting day, they will go and vote.”
He said elections tend to stimulate the economy as political parties tend to augment their expenditure on election-related activities.
“Sometimes, elections even stimulate the economy because there is a higher demand for chitenge material, T-shirts and all sorts of things,” Dr Fundanga said.
“You may find that an election even stimulate the economy. I am sure our friends who are working in the print industry would do a lot more business than in a normal year.People will travel more.”
Dr Fundanga said with the expected surge in copper and maize production, the economic performance was expected to remain robust in the second half of the year, with grain output expected to stem inflation which continued to be fueled by the recent rise in food prices.
The country’s inflation was likely to slow to seven per cent by the end due to a bumper maize harvest causing softer food prices despite its current high levels of 8.9 for this month, according to Dr Fundanga.
“The projections are looking upwards, we expect a higher rate of growth and more jobs being created and that is positive for the country,” he said. “Even you people in the media are going to do more business this year.”
Dr Fundanga, however, feared that higher crude oil prices, partly blamed on unrest in key oil producing regions, would cause some inflationary pressures but was confident that other more positive influences would help to lower inflation.
“Obviously, there will be on the other side other pressures like oil, we don’t know what direction oil prices are going to take,” said Dr Fundanga. “But we are going to have more positive influences more dominant which means we can expect lower levels of inflation.”
Labels: 2011 ELECTIONS, CALEB FUNDANGA, ECONOMY
Read more...
Fundanga, mine taxes
By Daaram Simakungwe
Wed 02 Mar. 2011, 04:00 CAT
Editor,
I am very happy to note that Dr Caleb Fundanga has elected to disassociate the Bank of Zambia (BoZ) from this poor economic situation being perpetrated by President Rupiah Banda.
The BoZ chief has clearly stated that the blame should not be on the mining companies but the decision makers. This is the boldness I expected from Dr Fundanga. I salute you sir.
This confession from BoZ clearly illustrates the failures of President Banda in managing the economy.
How on earth can you develop a country when an industry that accounts for over 80 per cent of Zambia's exports is only contributing 2.2 per cent to the tax revenue?
Why should Rupiah be flying around the world every week using poor Zambians' PAYE tax revenue only?
If Rupiah Banda doesn’t see the need for efficient mine tax system, then he must be voted out.
It proves a point that Rupiah can’t develop Zambia. He is happy to see poor public infrastructure because the treasury has no money.
The MMD government has made Zambians to believe that being poor is a normal thing, driving on bumpy roads is fine, eating once a day if okay, as long as you are not in government.
Our President flies more than any president in the world; doesn’t he feel ashamed to see other countries develop at a better pace than Zambia?
Doesn’t Rupiah feel ashamed that even countries that were war-torn yesterday are doing better than Zambia because of prudent economic decisions?
Finally, I believe the diplomatic confession by Dr Fundanga should be respected by the MMD government on this mine tax issue.
We are a peaceful country that doesn’t need an Middle-East type revolution to bring change.
Daaram Simakungwe,
Durban
Labels: CALEB FUNDANGA, WINDFALL TAX
Read more...
COMMENT - Really, minister Fundanga? Foreign mining companies should not be blamed when they are caught 'transfer pricing' (money laundering) to avoid paying of even the variable profit tax? No way. Also, we can't have politicians whose first reflex is to protect foreign mining companies. And why does Caleb Fundanga never make any sense? "you can’t accuse somebody of not paying tax when they have paid" - what does that mean, when they are caught evading taxes?
Fundanga blames low mining taxes on fiscal regime
By Chiwoyu Sinyangwe
Tue 01 Mar. 2011, 04:01 CAT
BANK of Zambia governor Dr Caleb Fundanga says the low contributions of foreign mining firms to the country’s treasury reflects the current tax regime. Dr Fundanga said
foreign mining firms should not be blamed for their low contributions to the country’s revenue basket.
¨
I have no view on whether the mining fiscal regime is right or wrong . . . it is a complex discussion and
we are not tax experts,¨ Dr Fundanga said. “The question of whether somebody is paying tax or not really depends on the current definition of their tax liabilities.”
The mining sector, which is the country’s economic mainstay, accounts for more than 80 per cent of Zambia’s exports, but only contributes about 9.7 per cent to the gross domestic product and 2.2 per cent to total tax revenue.
Dr Fundanga said there was a debate on the whether the country should restore the windfall tax to help the country tap into the high international metal prices.
“The question of whether they foreign mining firms are paying is neither here nor there,” Dr Fundanga said.
“They are paying what is demanded by the current laws. What is defined as the current tax is an issue that is defined by the government.”
He said foreign mining firms should not be accused of not paying taxes when they had.
“Whether somebody is compliant with the existing tax regulation or not . . . you can’t accuse somebody of not paying tax when they have paid,” said Dr Fundanga.
“Perhaps the question is the regime that is in place. That is is where the debate should be.
Labels: CALEB FUNDANGA, TAX EVASION, WINDFALL TAX
Read more...
COMMENT - I can't follow. The money is lost to the Zambian economy, because farmers don't put it into bank accounts? What kind of weird thinking is that?
Fundanga bemoans lack of banks in rural areas
By Joseph Mwenda
Mon 07 Feb. 2011, 04:01 CAT
THE money paid to farmers during the last crop marketing season will not benefit the Zambian economy unless it is recaptured by the financial intermediators, according to the central bank.
In an interview on Friday, Bank of Zambia governor Dr Caleb Fundanga observed that 67 per cent of people in the rural areas who contributed significantly to the much talked about bumper harvest did not have access to financial services.
“There are a lot of savings in our country which currently are not being mobilised by the banking system, so if we can mop them up… for instance look at agriculture. This year, we said we had a bumper crop. That means we have pumped trillions of kwacha into the agriculture sector but is that money going to be saved?” Dr Fundanga wondered.
He said Zambia would not achieve a more resilient economy if the current low levels of domestic savings were not improved.
“You need to get banks into the rural areas to get that money back into the banking system, that is part of the financial inclusiveness problem. If banks can go into rural areas, savings can be mobilised each time farmers get their income. But if this process is not done properly, we will not develop our economy because there won’t be enough money in the banking system,” he said.
Dr Fundanga said people in rural areas like Chilubi Island were desperate to have a banking institution.
“I will tell you for instance that I have received a letter from Chilubi Island. They are willing to even offer houses to a bank that will go to set up an office there. They are willing to offer an office which can be used as a banking hall,” said Dr Fundanga.
Labels: BANKING, CALEB FUNDANGA, RURAL AREAS
Read more...
Report links corruption to low foreign investment
By Ndinawe Simpelwe
Fri 21 Jan. 2011, 04:00 CAT
CORRUPTION and bureaucracy are some of the inhibiting factors affecting foreign investment in Zambia.
According to the Bank of Zambia (BoZ) 2010 preliminary report on the Foreign Private Investment and Investor Perception in Zambia, corruption, bureaucracy, electricity supply efficiency and cost continued to affect foreign investor decisions.
The report indicated that Zambia received lower amounts of foreign private investment in 2009 as compared to 2007 amounting to US$935.4 million in 2009 from US$1,932.8 million recorded in 2007.
The reduction in the inflow of foreign private investment was also attributed to the global economic crisis as investor profits and sales fell substantially.
The report showed that investors took measures to mitigate the effects of the global economic crisis by exploring new markets, downsizing the labour force and suspending expansionary projects.
The report recommended that the government accurately and consistently capture and monitor foreign private investment in order to maintain macroeconomic stability.
And BoZ governor Dr Caleb Fundanga said despite recording a decline in the foreign private investment, the country recorded an increase in new equity investment inflows.
“New equity investment inflows in Zambia surged to US$419.2 million in 2009 from US$131.6 million recorded in 2007. The substantial increase in new equity investments, despite the effects of the global financial and economic crisis, demonstrates how favourable the Zambian investment climate is in attracting foreign investment,” said Dr Fundanga during the launch.
He was also happy that the government’s diversification efforts were yielding results.
“The survey shows that the concentration of foreign direct investment in the mining sector is reducing as evidenced by substantial FDI in flows to other sectors such as manufacturing, wholesale and retail trade and the tourism sector in 2009,” he said.
Dr Fundanga said evidence from south east Asia and the recent global financial and economic crises showed that foreign private capital if not properly monitored and managed could result in financial instability.
“In light of this the results of the Foreign Private Investment and Investor Perception Survey are important and intended to assist the government to effectively monitor and manage inflows,” Dr Fundanga said.
He called for regular surveys to be conducted in order for the government to have adequate information on a regular basis.
“Zambia has adequate technical capacity to collect, analyse and disseminate data and information on foreign private investment. It has, however, lagged behind in terms of frequency of these surveys compared with some other countries in the region,” he said.
Dr Fundanga said while Zambia was carrying out the third survey, countries like Uganda, Tanzania and Malawi were in their fifth, eighth, and fourth phases respectively.
Labels: BOZ, CALEB FUNDANGA, CORRUPTION, FDI
Read more...
(LUSAKATIMES) Finance Bank: A real test case for Zambia
COMMENT - This pro government article claims that the takeover of Finance Bank was a success, because there was no bank run. What it doesn't address is that the bank was taken over as a punishment, and to deprive the political opposition of funding.
Finance Bank: A real test case for Zambia
By Enock Ngoma
Tuesday, January 4, 2011, 11:10
THERE are many issues that the courts will determine in the matter of possession of Finance Bank Zambia, by the Bank of Zambia recently. But aside from the court battles around this matter, the dust is finally clearing and the public is slowly piecing together the picture of what the central bank has presented as the reasons that compelled it to take possession.
It is clear from the outset that the news that Bank of Zambia (BoZ) had taken possession of Finance Bank Zambia Limited on December 10, 2010 obviously caused shockwaves among many, especially the shareholders in the bank, depositors and of course the general public.
It is not yet clear that the shareholders have responded to the emerging details of alleged violations found by the central bank following the various inspections at Finance Bank. The reasons advanced by the Bank of Zambia are now common knowledge, after the release last week of a Government gazette on the possession.
The shareholders have chosen to exercise their rights and taken the matter to different courts of law in different towns, and the merits of the actions they have taken, and may choose to take in future, will be determined by the courts of law. What have beena matter of enduring public interest since the announcement of the take-over are two questions: Was the BOZ starting a process of “nationalising” Finance Bank Zambia? Secondly, was Finance Bank Zambia hurtling towards closure?
Starting with the second question, the following observations have been made: The prophets of doom were hysterical about a phantom run on Finance Bank, even in the face of evidence that the bank was operating normally. They were incessant about what they predicted would be a run on the bank that would eventually lead to closure and that this would result in eroding the people’s confidence in the country’s banking system.
Nothing of this sort has happened because from the day of take-over, Finance Bank is operating normally at all of its over 30 branches and agencies that are widely spread around the country.
Finance and National Planning Minister Situmbeko Musokotwane and Secretary to the Treasury, Likolo Ndalamei alerted the nation to the structural reason why the much prayed-for run on Finance Bank could not materialise – close to 80 per cent of the more than K3 trillion deposits in the bank were from Government departments, ministries and agencies, with the balance being private companies and individual depositors.
The K250 billion being reported as signal for the run on the bank was, therefore, a small portion of those deposits. The hysteria displayed by these doomsayers, therefore, must have been caused by something other than their concern about the purported run. Further facts may emerge in this saga.
Anyone who has read the ruling MMD manifesto and followed Government policies since 1991 must have chuckled at the embarrassment caused by this assertion. A Government that has conducted such an extensive privatisation campaign cannot justify nationalising a private bank, especially after privatising Zambia National Commercial Bank, which had previously been in its hands. Some group must have been playing with what they regard as the gullible masses!
Finance and National Planning Minister Situmbeko Musokotwane and Secretary to the Treasury, Likolo Ndalamei alerted the nation to the structural reason why the much prayed-for run on Finance Bank could not materialise – close to 80 per cent of the more than K3 trillion deposits in the bank were from Government departments, ministries and agencies, with the balance being private companies and individual depositors.
When announcing the take over of the bank, BoZ Governor Caleb Fundanga said the move was with the full approval of the BoZ directors based on the inspection findings at the bank and in a bid to protect the interests of depositors and other creditors of the bank and to ensure stability of the banking sector in Zambia.The seizure was also decided upon to protect Finance Bank from further damage which had been created by shareholders, directors and senior management staff who had failed in their duties to comply with the law, good governance and management practices.
To ensure that the take-over was smooth and that Finance Bank should not close, the central bank, after extensive consultations with, among others, central banks in the region and the Zambian Government, was assured by the Zambian Government that it would be a guarantor. This simply meant that whatever amount of money would have been withdrawn by big depositors, it would not have an effect on the bank’s liquidity as the Government, as guarantor, would have ensured that adequate funds were available in the bank at all times.
Fortunately, the matter did not even go that far because the BoZ, after taking over and putting in its own appointed management team, has ensured that operations to date are normal and all the anxiety has now simmered.
Like Dr Musokotwane aptly put it, “Finance Bank should now be considered to be in the safest hands and would be handled professionally to allow it to grow and maintain the many branches that it has throughout Zambia.”
Earlier, former Finance Minister Ng’andu Magande had asserted that following the possession by BoZ, Finance Bank was headed for closure.
But Dr Musokotwane brushed these sentiments aside, saying that Mr Magande was playing politics on a matter that required expert views and facts to avoid misleading the Zambian people.
Assuring the nation that closure was not among the options on Finance Bank, Dr Musokotwane urged Mr Magande and other critics to remember that Finance Bank was collecting huge sums of money on behalf of the Government in terms of taxes at most border points.
“The Government would, therefore, be the last to accept the closure of Finance Bank which has been paying its dues to the Government. It can be true that some banks taken over by the central bank have collapsed but this cannot be true for a viable entity like Finance Bank. This bank will not close,” the minister said.
Dr Musokotwane said it should be made clear that the owners of Finance Bank did not own the money held by the bank but it was owned by depositors who needed maximum protection. “Bank take-over is not politics. It happens everywhere in the world. It has happened in the United States, in the United Kingdom and even here in Zambia. There is nothing strange because the idea is just to protect the depositors,” he said.
Simaata Simaata, a well-known banker in Zambia and former director at Finance Bank, said according to the laws on banking, Finance Bank was found wanting and, therefore, the move taken by BoZ was in the best interest of the nation and the customers.
Even the Christian Coalition supported the move taken by BoZ with its spokesperson John Mwendapole advising depositors to have confidence in the decision taken by BoZ as it would curtail unethical activities that would have led to serious consequences for depositors and the national economy.
Director of bank supervision at BoZ Lameck Zimba said insider borrowing involving some shareholders, directors and senior management was one of the main reasons that necessitated the take-over because depositors’ monies were not safe.
Dr Musokotwane said it should be made clear that the owners of Finance Bank did not own the money held by the bank but it was owned by depositors who needed maximum protection.
“If people are giving themselves huge loans in excess of billions of Kwacha, without the approval of the board which are not being paid back, then there is a big problem in that bank. There were several other unsafe and unsound banking practices that left us with no choice but to take possession of the bank.
“What we did not want was to have a repeat of what has happened in the past where by the time we move in, the bank was beyond redemption. That is why we promptly moved in. “And in fact, this was after Finance Bank failed to furnish us with information on various breaches of the law,” he said.
But last week, the public was given the most detailed and extensive rendering of the case that compelled the BoZ to take possession of Finance Bank Zambia. An Enforcement Decision and Order published via a Government Gazette Notice number 97 explicitly spelt out the breaches discovered at Finance Bank that led to the take-over and eventual termination of shareholder interests.
Giving the rationale for the termination of shareholder interests at Finance Bank, the Government Gazette Notice dated December 31, 2010 and signed by secretary at BoZ Mathew Chisunka said the purported holding of shares in Finance Bank by Finsbury, Clarkwell Limited and Mr J A T Samuel was characterised by complex trust and transfer arrangements whose final consequence was that the beneficial shareholding in the bank was not that of the declared entities but converged on the CEO and executive chairman of Finsbury Rajan Mahtani.
The BoZ had reason to believe that the acquisition by Credit Suisse of 40 per cent shareholding stake in Finance Bank appeared to be a lending transaction because of the underlying agreements that were not disclosed to BoZ. Among other things, these agreements guaranteed a return to Credit Suisse on their investment.
As a result of these matters, Finance Bank and certain of its shareholders had violated several pertinent provisions of the BFSA and other regulations in a manner that constituted unsafe and unsound banking practices.
The BoZ considers that the approvals given to certain shareholders to hold shares in Finance Bank were obtained by fraudulent misrepresentation and this necessitated the BoZ to withdraw its approvals on June 4, 2010 in respect of certain shareholders.
Giving the rationale for possession, the BoZ said other than failing and continued failure, and weak corporate governance coupled with risk management systems, Finance Bank through its shareholders, directors or senior management, either collectively or individually, violated various provisions of the BFSA and its Statutory instruments (SI). These included:
* Section 23 (2) (Limitation on voting control) -Dr Mahtani, through Finsbury Investments Limited, with shares held by nominees or otherwise, effectively controlled 56.5 per cent shareholding in contravention of the 25 per cent limit.
* Section 35 of the BSFA (disclosure of Interest) – failure to disclose interests relating to contracts, facilities, proposed contracts or facilities with Finance Bank.
* Section 33 (conduct of directors, chief executive officers and managers) where these failed to act in the best interest of Finance Bank and failure to exercise due care, diligence and skill by allowing indiscriminate approvals and granting of loans to insiders contrary to sound lending practices.
* Section 73 of the BFSA and SI 96 on limitations of granting of loans exposed Finance Bank to a single risk exposure of 62 per cent being an exposure in excess of the statutory limit of 25 per cent of regulatory capital as evidenced by the aggregate exposure of three borrowers, who were Zambezi Portland Limited, Cladava Mining and Ital Terrazzo as a common enterprise.
* Section 77 on unsafe and unsound banking practices where the bank’s lending relationship with insider companies departed from sound lending principles and breaches of banking regulations. In addition, management repeatedly failed to comply with the provisions of the law and recommendations from previous inspection reports.
* Section 52 , breach on credit administration as it failed to keep required credit information on credit files.
* Section 36 (a) and CB circular 01/2009 on submission of prudential return where the bank was issuing false or misleading statements through returns, especially on insider loans classification and provisioning.
* Finance Bank was in breach of regulation nine of SI 97 of 1996 (insider lending) in which it failed to maintain, adduce or procure board resolutions and supporting credit appraisal documentation to evidence participation by other board members in the approval of the loans to all insiders as prescribed.
* It was in breach of regulations 17 (I) and 18 (I) of SI 142 (classification and provisional loans) as it failed to classify non-performing loans and advances as required by regulation 17 (I) and as a result the bank’s provisions fell short of the minimum provisioning requirements as provided for in regulation 18 (I).
* The bank failed to maintain, adduce or procure an effective loan review system, thereby violating regulation 5 (I) of SI 142 (classification and provisioning of loans).
The Gazette Notice concluded that the shareholders, directors and senior management, whether acting individually or collectively, perpetuated breaches of various provisions of the BFSA, other applicable legislation and statutory instruments and that the shareholders, directors and senior management, whether acting individually or collectively were, therefore, not fit and proper persons to discharge their responsibilities in the best interest of Finance Bank.
With the foregoing, the BoZ decided to take prompt remedial measures through possession. The characterisation of this action as nationalisation, therefore, appears to have been an attempt to politicise this action, while the hysterical prediction of a run, and possible closure of the bank, must have been meant to mask facts which may be known sooner than later.
[Times of Zambia]
Labels: BOZ, CALEB FUNDANGA, FINANCE BANK
Read more...
COMMENT - Remember that GDP is merely a measure of economic activity, even when that economic activity is foreign mining companies dragging Zambian copper out of the country without paying for it, or whether it is the government cleaning up their mess. Finance Minister Musokotwane stated that under the current neoliberal system, there will be no significant dent in poverty for at least 30 years.
Economic indicatorsBy Daaram Simakungwe
Fri 31 Dec. 2010, 04:00 CAT
Editor,
As we end the year, we have a chance to analyse the performance of our government, the economy and the general living standards of the Zambian citizens.
It is a fact that as much as we see Bank Of Zambia (BoZ)’s impressive statistics, the poor in Zambia is getting poorer. The employees have no future as the so-called "investors" have casualised the jobs.
Chinese and Indian plumbers and welders are getting work permits in Zambia and our MMD government sees nothing wrong with it.
President Rupiah Banda keeps spending more money on almost weekly foreign trips and MMD-orchestrated by-elections.
This is costing the poor Zambians hundreds of billions of kwacha, money which could have been used on Development.
Today I see no hope for Zambia until the economy starts benefiting the Zambians. BoZ keeps singing misleading MMD songs about Zambia's economy.
What Dr Fundanga fails to tell us is that all the money made by the big "investors" is deposited in their foreign offices and only expense money comes back to Zambia.
In my opnion, Zambia's gross domestic product performance is just paperwork drama which does not reflect the true living standards of the Zambians.
In reality our economy is in recess.
Look at the social standards in Mufulira and Kitwe towns, the roads and general infrastructure.
Mufulira is now a ghost town with rundown buildings.
Mine companies abuse and damage public infrastructure at no cost.
Until the Zambian in Luapula starts enjoying lower prices, better income, the whole BOZ story about our economy makes no sense.
I have never seen a president from a poor country anywhere flying across the world like our Rupiah Banda does.
He must cut down on his expensive trips for the sake of the poor Zambians.
Happy 2011.
Daaram Simakungwe,
Durban
High copper prices
By Gady Mwamba Museka
Fri 31 Dec. 2010, 04:00 CAT
Editor,
The government needs to improve the living standards of the people, most of who are living on less than a dollar per day.
We have many areas the government needs to attend to, like creation of employment.
For once, the government needs to heed advice on the windfall tax because copper prices keep rising as the latest information shows that on the London Metal Exchange, the price of the commodity has risen to a record high of US$9,437.50 a tonne.
We have to ensure that the mining sector is really part of the national development process through its equitable contribution to the taxation in Zambia.
One wonders why the government has remained adamant on this issue and yet there will be a lot of benefits for the Zambian people if we reintroduced windfall taxes.
I hope the government will listen to many voices over the issue of windfall tax.
Gady Mwamba Museka,
Mazabuka
Regionalism in politics
By Felix Tembo
Fri 31 Dec. 2010, 04:00 CAT
Editor,
Allow me to express my displeasure with the comments alleged to have been passed by Hon Moses Muteteka, a deputy minister in the MMD government.
It is unfortunate that the MP chose to lower himself to campaign against Enoch Kavindele on tribal grounds just to win sympathy from the Republican Vice-President who hails from Lalaland in Serenje.
It’s not so long ago when Muteteka was dropped from government, and he became very critical of this government but now that he is back in the comfortable seat, he has opted to forget about the suffering masses.
You can't defend a position because the one holding that it is a tribesmate.
Those sentiments are very dangerous and should not be entertained in this era and time of democracy.
People should be voted in positions on the condition of what they are capable of doing and not on the shape of their nose or which stream they draw their water from!
The honourable minister should apologise to Kavindele and the people of Central Province for misrepresenting them. Should he fail, let the President discipline him by firing him.
What the minister is promoting is division along the region. In short he is insinuating that even if Mulongoti is capable of being vice-president, he cannot vote for him because he comes from the Lambaland and not the Lalaland.
Those are just political offices. Tomorrow you will not be there and someone else will.
Ba minister learn to love your neighbours!
Felix Tembo,
Lambaland
Labels: CALEB FUNDANGA, ENOCH KAVINDELE, GDP, MOSES MUTETEKA, NEOLIBERALISM, REGIONALISM, TRIBALISM
Read more...
Court stops BoZ from selling FBZ
By Chibaula Silwamba
Thu 30 Dec. 2010, 04:02 CAT
THE High Court has granted an injunction restraining the Bank of Zambia from selling Finance Bank Zambia Limited or interfering with its shareholding.
According to a ex-parte order for injunction granted to shareholders – Finsbury Investments Limited (first petitioner), Clarkwell Limited (second petitioner), Job Albert Samuel (third petitioner), Chewe Kanyanta Puta (fourth petitioner and administrator of the estate of Pat Bwalya Puta) and Patrick Chamunda (fifth petitioner) – against the Bank of Zambia (first respondent) and First Rand Limited (second respondent), Ndola High Court judge Munalula Lisimba restrained the central bank and First Rand Limited from interfering with the petitioners’ shares in Finance Bank.
“It is ordered and directed that the respondents Bank of Zambia and First Rand Limited be restrained and an injunction is hereby granted restraining them, whether by themselves, or by their servants or agents or any of them or otherwise howsoever from: (1) interfering with or dealing with in any manner whatsoever with the petitioner’s shares in FBZL; (2) selling FBZL whether as a going concern or its assets until after the inter-parte hearing of the application for the injunction on the 4th day of January, 2011 at 09:00 o’clock in the forenoon or until further order,” the injunction order dated December 28, 2010.
“Penal notice, if you the within named the Bank of Zambia neglect to obey this order, you, Dr Caleb Fundanga, the governor of the said Bank of Zambia will be liable to the process of execution for purposes of compelling the said Bank of Zambia to obey the same.”
In his affidavit, Finsbury Investments Limited chairman Dr Rajan Mahtani on behalf of the four other petitioners, stated that on December 10, 2010, the Bank of Zambia took possession of Finance Bank and terminated the services of the board, chief executive officer and senior managers and the central bank assumed the full and exclusive powers of management and control of the commercial bank.
He stated that the reasons for this action were never communicated to the shareholders. Dr Mahtani stated that on December 11, 2010, he sent a letter to Dr Fundanga expressing concerns over the decision taken by the Bank of Zambia and informed him that the shareholders were ready to meet and discuss with him whatever problems existed at Finance Bank.
Dr Mahtani stated that in the same letter, he indicated that if there were financial problems and breaches of the laws at Finance Bank, shareholders were willing to inject capital and put in measures to ensure the commercial bank complied with the relevant legal provisions.
Dr Mahtani stated that the Bank of Zambia sent a brief to shareholders dated December 22 titled ‘enforcement decision and order’ in which it had purported to terminate their shareholders’ interest in Finance Bank with immediate effect.
“The first respondent BoZ has indicated therein that each shareholder (petitioner) will be compensated for their shares at a value (as at the date of possession of FBZL) to be determined by the court pursuant to Section 84A (g),” Dr Mahtani stated.
“The First Respondent has also indicated that for the avoidance of doubt, each shareholder ceases to be a shareholder in FBZL forthwith and will be given notice when the First Respondent makes an application to court for the determination of the value of the shareholder interest in FBZL.”
He stated that BoZ had tried to justify its decision and that, according to the brief to the minister, the next step in the plan of action was to vest all the shares of Finance Bank in the Zambian government as a temporary measure.
Dr Mahtani stated that the ultimate goal was to split Finance Bank into two – the good bank and bad bank.
He said the good bank would be placed under a different entity and would be available for sale to interested parties with priority given to First Rand Limited.
Dr Mahtani stated that it was necessary to grant the application ex-parte with a return day of the inter-parte hearing because it was highly likely that once aware of this application, BoZ would take steps to frustrate this application.
“There is good reason for this apprehension,” Dr Mahtani stated.
He explained that on December 9, 2010 when he became aware that the Bank of Zambia was going to take possession of Finance Bank in a manner that would be in violation of the provisions of the banking and financial services Act, he applied for an injunction to stop the possession until after the hearing of the matter.
He stated that the court set December 14, 2010 as date for inter-parte hearing but the Bank of Zambia took possession of Finance Bank on December 10, 2010.
Dr Mahtani stated that the shareholders, therefore, started another case in court on December 13, 2010, demanding that the central bank show cause why possession should not be terminated but the ruling had not been delivered as at December 27, 2010.
According to the petition, current shareholders of Finance Bank - the sixth largest bank out of 20 banks in Zambia - are Finsbury Investments Limited (25 per cent), Credit Suisse Investments (40 per cent), JAT Samuels (6.5 per cent), Clarkwell Limited (25 per cent), Pat Bwalya Puta (2.5 per cent) and Patrick Chamunda (one per cent).
Labels: BOZ, CALEB FUNDANGA, FINANCE BANK, RAJAN MAHTANI
Read more...
Sikota slams people condemning Finance Bank takeover
Wednesday, December 22, 2010, 13:2
United Liberal Party (ULP) president Sakwiba Sikota has charged there is lack of patriotism in the manner politicians are reacting on the Bank of Zambia’s decision to take over operations of Finance Bank Zambia Limited (FBZ). Mr. Sikota who is also Livingstone Central Member of Parliament said this to Qfm in an interview in Lusaka today.
He says it is unfortunate that politicians are reacting with emotions on the issue without knowing the facts surrounding the possession in order to gain political mileage.
The ULP leader has further said that people should realize that Finance Bank is an important institution to the country’s development and that the interests of depositors and creditors have to be protected.
Mr. Sikota adds that there is an insatiable desire for political players in the country to rise to power at all costs adding that Zambians should not cause an economic melt down arising from Finance Bank as they will be the ones to lose once the Bank crumbles.
The Bank of Zambia recently took over Finance Bank following the findings from inspections on FBZ between October 2009 and October 2010, where a number of serious breaches of the Banking and Financial Services Act (BFSA) were observed.
BOZ Governor Caleb Fundanga said that the move was taken in order to protect the interests of depositors and other creditors of the bank, and to ensure the stability of the banking sector in Zambia as a whole.
[Qfm]
Labels: CALEB FUNDANGA, FINANCE BANK, SAKWIBA SIKOTA
Read more...
