Patronage, cronyism in parastatal appointments
By The Post
Sat 26 June 2010, 04:00 CAT
The appointment of Luambe Mondoloka as new Road Development Agency board chairman and his subsequent rejection by the Engineering Institute of Zambia raises a number of very important questions.
Henry Musonda, the president of the Engineering Institute of Zambia, says the appointment of Mondoloka was unacceptable because he was chief executive officer of Brian Colqhoun, Hugh O’Donnell Zambia, who are road engineering consultants for the Road Development Agency.
Musonda says someone neutral should take over the Road Development Agency board chairmanship and not a person who has business dealings with the Agency.
The problem of corruption and abuse of power will not go away if a lot of attention is not paid to the way appointments are made to the boards and management of state enterprises and other statutory bodies. Most of the problems we are having in our state-owned enterprises and other statutory bodies arise from the corrupt way directors and managers are appointed.
There is strong political input in the appointment of directors and managers of parastatals and other government-owned enterprises. Politically affiliated persons are often appointed to the boards and management of these entities at the expense of professionalism.
And there is a serious lack of transparency in the way these appointments are made; there is lack of defined processes and criteria of selection. And often, there is lack of proper due diligence to determine whether a person is fit to be a director or senior manager of such an entity. Board and top management positions are offered as rewards for political patronage.
There is need for us to look at ways of empowering the boards and managements of these entities by looking at their structure and independence. The central requisite in empowering such boards is to structure them in a way that they can effectively exercise objective and independent judgment.
And by independence, we mean the ability to make impartial decisions without fear or favour. Independence of judgment is an important contribution of a director to the board requiring that the aspect be taken into consideration in restructuring of the board.
The issues being raised by the Engineering Institute of Zambia on Mondoloka’s appointment as chairman of the Road Development Agency arise from concerns of independence. How can the chief executive of a firm that has a substantial consultancy with the Road Development Agency be its chairman? There is need for an independent chairman, that is, a non-executive director who has no business dealings or contracts with the Road Development Agency.
The appointment of directors of state-owned entities should not be aimed at influencing pursuit of political policy at the expense of interests of the Agency. Directors or senior managers who are appointed on the basis of political patronage usually exert direct and undue political interference in the way the entity is run and as such upset board and management dynamics.
Probably, it may also be important to strictly look at the appointment and dismissal of chief executives of state-owned enterprises. In Zambia today, the appointment and dismissal of chief executive officers and other key executives of government-owned entities are the prerogative of ministers.
But we all know that the power to hire and fire the chief executive officer is a key board competence and prerequisite to board effectiveness. It is therefore contradictory to charge the board with responsibility for the state-owned enterprises’ performance with no power to hire and fire executive management.
This political interference amounts to the usurpation of board powers by the politicians running government, who effectively set and drive the strategy of the state-owned enterprises; exercise oversight and monitor management, appoint and dismiss the chief executive officer and approve financial and major capital expenditure projects of the state enterprises.
With management dealing with the day-to-day activities, the role of the board is severely constrained. There is little accountability on the part of management to the board – board discussions are a formality. This results in limited power by the board to police and prevent abuses by management.
And today we have a lot of problems in some of our state-owned enterprises or statutory bodies because of poor clarification of objectives. For instance, as a result of poor clarification of objectives, there is a lot of tension between the Road Development Agency and the National Road Fund Agency. This poor clarification of objectives affords managers discretion to run the entities in their own interest; and allows abuse of discretion by government to meddle in the affairs of these entities for political gain.
There is need to address these state enterprise governance challenges by improving the nomination process and the way the chief executive and other key managers are appointed.
There is need to come up with a mechanism which will ensure that the ultimate selection criteria for the nomination of board members are competency-based. And the power to appoint and dismiss the chief executive officer and senior management should strictly be made a key function of the board; not the ministers, the politicians in control of government.
Independent boards require a sufficient number of independent directors free of conflict of interest who should predominantly be drawn from the private sector and civil society to make the entities more business-oriented. The directors selected should have the relevant competency and experience to the entity’s specific policy objectives. And there should be explicit prohibition of senior members of government or political parties from sitting on such boards.
The concerns raised by the Engineering Institute of Zambia over Mondoloka’s appointment as Road Development Agency chairman have raised important questions not only about corporate governance but also about the role of government-owned agencies and parastatals in our economy, their relationship with government and the ability of either national or corporate executives to define public policy. This confusion has as well raised questions about how seriously the government takes the issue of independence of the boards of government-owned entities.
Theoretically, these agencies or parastatals are enterprises, not government departments, and they should have independent boards with unfettered power to hire and fire chief executive officers and other key executives. In practice, legislation puts the relevant minister in charge of hiring and firing the chief executive officer. This has tended to create space for political jockeying.
This confusion has also been a product of ambivalence within government about the purpose of these top state-owned enterprises’ posts: should they provide great jobs and lots of power for the well connected, those the ruling party seeks to reward? Or should the incumbents be chosen simply on the basis that they are the best people to do jobs that are vital for the economy?
Though this government sometimes talks about efficiency and better services, there is a tendency to cronyism that surfaces in all sorts of areas of Zambian public life, and the tension may be bedeviling attempts to do right by the state-owned agencies or parastatals.
More profoundly, however, the governance troubles at the state-owned agencies or parastatals have been a symptom of a more generalised policy muddle about what the government wants these entities to do and how to get them to do it. As long as the government is not clear on just what kind of enterprise it wants, it is difficult to decide what kind of people should take leadership roles and how they should be selected.
Whether the confusion is about politics or about patronage is perhaps the more interesting, and disturbing, question.
Labels: EIZ, FUMU MONDOLOKA, GOVERNANCE, PARASTATALS
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EIZ urges transparency in energy sector
By Fridah Zinyama
Tue 10 Nov. 2009, 04:00 CAT
THE Engineering Institute of Zambia (EIZ) has called for transparency in the management of the energy sector.
In an interview, EIZ president Henry Musonda said the government must clean up the energy sector as it was important for the country's continued economic growth.
“The way forward in managing the energy sector is to be more transparent and reduce on the involvement of politicians in this sector,” he said.
Musonda said there was also need to put in place a communication system that would allow the public to correct information on what was happening in the sector, instead of having anybody issuing statements about the fuel crisis in the country.
“We cannot have such a vital sector (energy) run in the manner in which we experienced over the past one month,” he said.
Energy minister Kenneth Konga earlier said Indeni Oil Refinery, the country's sole oil refiner, would continue to limp until government made a decision to find an equity partner.
Konga also called on stakeholders interested in setting up a second refinery to do so since the government had liberalised the economy to allow for participation from the private sector.
And Musonda said those given the responsibility of managing the energy sector should take full responsibility of what had happened and resign.
But Konga last week vowed not to resign owing to the fuel crisis that has hit the country, saying he had managed to contain the fuel shortages.
Labels: EIZ, HENRY MUSONDA
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Total blames govt for its Indeni pull-out
By George Chellah, Chiwoyu Sinyangwe and Jane Mwakasungula
Thu 22 Oct. 2009, 04:01 CAT
TOTAL International is pulling out of Indeni Petroleum Refinery because of
the Zambian government's failure to contribute funds towards rehabilitation of the refinery to enable it meet the required minimum safety standards.
And the Engineering Institute of Zambia (EIZ) has noted that
it is not long before a minister and a permanent secretary of the Ministry of Energy is dismissed for mishandling the fuel crisis.
Well-placed sources at the Ministry of Energy and Water Development revealed to The Post that Total International opted to pull out because of the Zambian government's inertia in rehabilitating the refinery to the required minimum safety standards.
Both Total International and the Zambian government hold 50 per cent shares each in the 24,000-barrels-per-day sole refinery.
“Total International has many refineries world over and these several refineries all over the world have what they call minimum safety standards. This simply means that every refinery needs to meet these minimum safety standards to run efficiently and effectively. But Indeni does not qualify at the moment, it doesn't meet these minimum safety standards,” the source said.
“Total has been telling the Zambian government as a partner to inject in some funds towards the rehabilitation of the equipment so that the refinery can meet the minimum safety standards.
"The response from the Zambian government has been very negative so because of that, Total International have decided that they cannot continue running Indeni Oil Refinery because if the refinery caught fire or burns as a result of compromised safety standards, it will be Total International 's image that will be dented worldwide. Therefore, Total International has resolved to pull out purely on account of preserving their image particularly that the Zambian government is not willing to pump in money and rehabilitate Indeni to the requirement safety standards."
The sources disclosed that the Zambian government should not even pretend that they could manage to run the refinery without Total International.
"The government is bragging that they can run Indeni single-handedly, that's a lie! They are merely cheating themselves with such useless talk because they have failed to contribute the amount Total International was asking for to bring back Indeni to acceptable minimum safety standards, so what are they talking about? Total International was requesting for this money as a partner so that together they can rehabilitate Indeni oil refinery," the source said.
"In any case, how are they going to manage if they have failed to run Zamtel? They just want to be using Indeni for raising their campaign funds because even now, we are talking about the shutdown at Indeni but go to Indeni now and you will find that there are no spares for the plant to be rehabilitated during this shutdown. So it's practically impossible for them to even contemplate on effectively running Indeni single-handedly."
Speaker of the National Assembly Amusa Mwanamwambwa on Tuesday ordered energy minister Kenneth Konga to present a ministerial statement this week on the matter regarding Total International and the Zambian government. This was after Chipili PF member of parliament Davies Mwila raised a point of order.
Energy permanent secretary Peter Mumba was quoted in the state owned media as having said that the government was negotiating with Total International to buy the company's 50 per cent shares in Indeni Petroleum Refinery.
He said Total International's decision to sell its stake in Indeni would not affect the supply of fuel.
Mumba said the government had in the last few months engaged in talks with Total to buy the shares although the company had indicated that it had identified a willing buyer of its shares.
And EIZ president Henry Musonda said continued assurances by Konga that the government was in charge did not amount to anything as queues at most service stations had continued.
“That is why EIZ cannot accept the reasons given by the minister on the cause of fuel shortage… It is still fresh in our minds not long ago when a minister and a permanent secretary were dismissed for mishandling the fuel crisis,” Musonda said.
“This is a cause to worry that so many man hours are being lost in queues for petrol. In engineering there is always a schedule of planned maintenance which to every person who drives a car, you will know when you carry routine everyday checks, planned service, major service to replace worn out parts at certain interval like fan belts and timing chains.”
Musonda said the current petrol crisis was an indication that the government had not taken care of the supply chain.
“There is something really wrong which has not been addressed by our government people. If you happen to be in the city of Lusaka, there has been a proliferation of fuel stations in almost all areas,” said Musonda.
“This has seemed a good sign of economic growth and private sector investment and job creation. To add to this there has been an increase in population of motor cars on our roads from the general public and government alike. The increased traffic
congestions is also adding to increasing fuel consumption.”
And key OMCs are still receiving erratic supply of petrol owing to the uncoordinated and erratic inflows of petrol from Dalbit Petroleum Limited and Independent Petroleum Group of Kuwait.
But most key OMCs were cagey and refused to comment on the crisis, referring all queries to the energy ministry.
BP Zambia acting general manager Kenny Muhanga said the country's largest OMC had been receiving the government-sourced petrol but demand was still insatiable.
Muhanga also confirmed that BP Zambia was currently not importing any fuel owing to the absence of the Statutory Instrument (SI) suspending the 25 per cent import duty.
“…The arrangements are still being worked out by the government,” Muhanga said.
Asked whether quick issuance of the SI would have helped BP Zambia to react faster to the crisis, Muhanga refused to comment on the matter and referred all queries to Konga.
Kobil public relations manager Nayoto Kaputa declined to comment on the matter but admitted the OMCs had not had enough petrol stocks.
Repeated efforts to get comment from Konga and Mumba proved futile at press time as their mobile phones went unanswered.
Meanwhile, Council of Churches in Zambia (CCZ) general secretary Reverend Suzanne Matale said there was need for the government to establish the truth about the fuel crisis to avoid instability in the country.
“The truth should be established by government. It owes Zambians the truth. Government should tell the poor Zambians the truth about how long this drama will take. Zambians should not be taken for granted but rather respected as human beings like anybody else.
“This is our country and we deserve to know the truth because it is every Zambian's right,” said Rev Matale.
“Fuel is an important ingredient to any economy. It is the driving engine of any economy. How then does government expect to boost the economy when there is a shortage of man-power and fuel to drive the act?”
Yesterday, Konga was quoted by the Times of Zambia as having said that fuel tankers had arrived in the country but the shortage has persisted in most parts of the country.
Prior to the shortage of petrol, Mumba also assured the nation that the country had sufficient stocks and added that he would resign from his position in the event that the country faced a shortage of the commodity.
In Siavonga Township, residents are crossing to the neighbouring town of Zimbabwe to buy fuel due to the non-availability of the commodity in the area.
A check revealed that motorists were buying a litre of petrol at US $1.23 while that of diesel was pegged at 95 US cents to US $1 .
Labels: CORRUPTION, EIZ, FUEL, INDENI, KENNETH KONGA, PARASTATALS, PETER MUMBA, SUZANNE MATALE
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EIZ urges human resource development
By Mwila Chansa in Kitwe
Monday July 21, 2008 [04:00]
ENGINEERING Institution of Zambia (EIZ) president Dr Mundia Muya has urged the government to consistently and persistently invest in human resource development especially in the fields of science, technology and engineering. And Dr Muya said professional engineers needed to be abreast with new developments in their profession if they are to offer high standards of service to the public.
Addressing EIZ members during the institution's strategic planning meeting in Kitwe on Saturday, Dr Muya said human resource constituted the ultimate basis of any country's wealth.
He added that to succeed in the increasingly knowledge-based global economy, Zambia needed to produce and retain a critical mass of formally educated and appropriately trained people.
Dr Muya said although the economy was growing at the moment, the country was experiencing skills shortages especially at craft certificate, technician and technologist levels.
He said the shortages of qualified personnel resulted in poor and low productivity that manifested in cost overruns and quality shortfalls.
"A quality human resource is primary in wealth creation and the way you ensure quality with respect to human resource development is through education and training. Government is doing well in developing primary and secondary education but the same cannot be said about higher, especially technology-based higher education," said Dr Muya.
And Dr Muya said the rate of change in the world was very fast and that it was important for Zambian engineers to move at the same pace with their colleagues in other countries.
"That is why as an institution, we have resolved that for one to practice engineering in this country, they need to accrue the required number of Continuous Professional Development (CPD) points for their practicing licenses to be renewed," he said. "We all must understand the spirit behind this initiative; there is a law in physics which says 'a body at rest will remain stationary until there is an external force acting on it'. We do not want our members to stagnate."
He said knowledge, just like vegetables, had a shelf life and should be kept fresh all the time.
And Dr Muya emphasised the need for the institution to develop strong civic and professional networks both locally and internationally so as to share ideas with others and influence change.
Labels: EIZ, MUNDIA MUYA
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Prof Chirwa pledges K16.4bn investment in technology park
By Joan Chirwa
Sunday September 02, 2007 [04:00]
UK-based automotive and aerospace expert Professor Clive Chirwa has pledged an investment of up to two million British Pounds (approximately K16.4 billion) towards the construction of a technology park in Lusaka.
And Prof Chirwa has advised Zambians to insist on having investors who will create a supply chain within the country.
During the Engineering Institute of Zambia (EIZ) symposium in Lusaka on Friday, Prof Chirwa said he was in the process of acquiring land in the country where he would put up a technology park.
"The two million pounds approximately K16.4 billion is my own money and I am just waiting on the response from the President Levy Mwanawasa and the Ministry of Lands on where the piece of land will be allocated," he said.
Prof Chirwa, who presented a paper themed 'Creating National Wealth through Engineering Excellence is the Way Forward for Zambia', said the Zambian government should put in place policies that would promote job creation among investors.
Prof Chirwa, who is also editor-in-chief of the International Journal on Crashworthiness, noted that developing the manufacturing sector was a vital route to the creation of employment in the country, considering the high unemployment levels despite having sufficient qualified individuals.
This year's EIZ symposium focused on the role of the engineering profession in fostering national development.
"We have many engineers in Zambia who have got the capability to do things. We need to increase opportunities for our young engineers," Prof Chirwa said. "The manufacturing sector is the saviour for Zambia. If this sector is developed, our engineers will be able to benefit much because they will be able to work."
Prof Chirwa said Zambia urgently requires a policy for re-generation of industry.
"The problem we have is that we have stuck to a colonial framework for prosperity," Prof Chirwa said. "Government has not offered us policy to move from there up the ladder. Forty-three years after independence, we are still at the same level. We have only managed to achieve political independence, economically, we are still far behind."
Professor Chirwa further said the development of the manufacturing sector could also encourage value addition to locally produced goods.
"The 21st Century is Africa's century. Zambia can move towards being one of the richest countries," Prof Chirwa said. "I propose that every time an investor comes into the country, especially those in the mining sector, government should demand that the particular investor creates companies which can process copper within and not outside. That is when we will see people being employed."
He said the government should also create real think tanks like other countries have done to deliver end-user products.
"Knowledge is extremely important for Zambia to have sustainable development and wealth," Prof Chirwa said. "That is why we need to create real think tanks to deliver end products. The Japanese have done it and I believe we can also do it."
Meanwhile, works and supply minister Kapembwa Simbao said Zambia had sufficient qualified engineers that could turn the country's economy around.
Simbao said Zambia had its own qualified engineers that could positively contribute towards the development of the country.
"There is a tendency that anything foreign in this country is superior," said Simbao. "That should not be the case. We need a strong base in this country where engineers will be able to practice effectively."
Labels: CLIVE CHIRWA, EIZ, TECHNOLOGY
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