Zambia needs easy financial regulatory regime - Rabo
By Chiwoyu Sinyangwe
Thu 05 Apr. 2012, 13:55 CAT
ZAMBIA needs to develop a regulatory mechanism that is easy to understand and of good international sense to attract more foreign investments, says Rabo Financial Institutions Development.
And Rabo Financial Institutions Development, Rabobank's majority shareholders, says the bank will be "somehow surprised if there was an adverse outcome" on probe into the 49 per cent sale of Zanaco in 2007.
In an interview, Rabo Financial Institutions Development managing director Bruce Dick said in regulating the financial sector, what was important in business or banks or anything else was to ensure that there was transparency and certainty.
"What businesses or banks struggle with is when you create situations that people cannot understand and they can't agree with the logic, the you create uncertainty and you will build in risk premiums which will cost people money because you will end up having to pay risk premiums to attract the money into their businesses because they will accept the volatility and uncertainty," Dick said.
"What we don't want to see develop is a whole lot of regulatory activity that we can't understand and doesn't make good sense in an international environment."
Dick said there was need for political leaders to put in place an environment in which clearly spelt out and easily tailored economic rules are in put in place to ensure businesses thrived.
"What people external to Zambia will look at - institutional or international investors - is that they compare the opportunity to come to Zambia with the opportunity to go some other place, and if they see or find things they can't understand, the money is gonna go somewhere else," he said.
[Did he really use the word 'gonna'? - MrK]
"That is the big challenge for the political environment to make sure that they keep it transparent and easily understood."
[I like transparent and easily understood. The Windfall Tax is the right tax for exactly that reason. - MrK]
And Dick, who is Zanaco's board chairman, said he was confident that the bank's operations would not be hurt by the outcome of the Sebastian Zulu-led commission of inquiry whose report is expected this week.
"I don't think there are issues that Zanaco should be concerned about, if there are any issues that will come out, it will be to do with the sale process vis a vis the shareholder," he said. "That is not an issue for Zanaco."
He said Rabobank's concern is that they have done "everything according to the rules and they would sit there and be somehow surprised if there was an adverse outcome".
"Rabobank is not sitting there squawking in their shoes thinking that some huge event is about to occur because from our Netherlands view point, everything was done in accordance to the rules that were providing in and in an open and transparent way," said Dick.
Labels: CORRUPTION, RABOBANK, ZANACO
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Chitala urges re-negotiation of Rabobank's stake in Zanaco
By Kombe Chimpinde
Mon 20 Feb. 2012, 12:01 CAT
SEIZING Rabobank's 49 per cent stake in Zanaco will be injurious to the country's financial sector, says Dr Mbita Chita.
Commenting on Dr Lubinda Habazooka's recent observation that the reversal of the sale of 49 per cent shares of Zanaco Bank to Rabobank of Netherlands would be detrimental to the country's economic and financial stability, Dr Chitala, who is an economist, said the government must instead
re-negotiate various conditions with the bank in view of the various irregularities cited through submissions presented before the Sebastian Zulu-led Commission of Inquiry that sat to probe the sale.
"When we (Zambians) investigated Zanaco, we found that there was a problem in the transaction. Instead of the Ministry of Finance being at the centre, they transferred the process to the Ministry of Commerce and Industry, while the permanent secretary there became the chairman of the board," Dr Chitala said in an interview.
"So the evaluation of the company also was faulty, where instead of using market criteria, they used a net value of 1983 which was contrary to the Zambia Public Procurement Agency (ZPPA) Act, which stipulates that any evaluation of any company must be based on the market value."
He, however, said those that perpetrated irregularities during the sale of Zanaco, which was sold at U$8.25 million, must not be let off the hook.
"Let those who broke the law be challenged to explain why they did it," said Dr Chitala.
Labels: MBITA CHITALA, PRIVATISATION, RABOBANK, ZANACO
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Rabobank fears for its reputation over Zanaco deal
By Chiwoyu Sinyangwe
Tue 07 Feb. 2012, 13:01 CAT
RABOBANK fears damage to its reputation by the ongoing probe into how it acquired 46 per cent stake in Zanaco, says Netherlands-based corporate affairs director Arnold Kuijpers.
And Kuijpers says Rabobank paid the US $8.25 million it bought Zanaco for, contrary to some witnesses who testified that there is no documentary evidence the Treasury received the proceeds of selling the 2010 euromoney best bank in Zambia.
Meanwhile, chairman of the commission of inquiry Sebastian Zulu yesterday quizzed witnesses on the lack of adequate representation of Zambians on the board of the "truly Zambian bank".
Kuijpers, the first Zanaco board chairman in the post-privatisation era, said the Dutch financial giant wanted to maintain its high reputation levels in each country it had operations in.
"One of the very important issues for Rabobank that do we really engage in this part of the world or any other part, avoiding reputation damage is crucial," Kuijpers said. "We need not to be seen in the Netherlands, United States, in Europe or any other country as a bank that would be involved in practice that would not be fully legal. That creates a huge damage to us."
Kuijpers said Bank of Zambia had provided a waiver for Rabobank to own more than the maximum 25 per cent maximum shareholding restriction for any investor in a commercial bank operating in Zambia.
He presented a letter from BoZ confirming the waiver. And Kuijpers gave a breakdown of how Zanaco paid the sale and purchase price of US$8.25 million in 2007, with the bulk of money deposited into Zambia Privatisation Agency (ZPA) account.
"At the completion date, one of the documents, which is the share purchase agreement has been signed in January of 2007," said Kuijpers.
"At that moment in time, Rabobank was asked to deposit 10 per cent of the consideration equal to US $825,000. It was agreed between the consultant of the government PwC PricewaterhouseCoppers of Kenya and the government that the fee for PwC would be paid at the day completion, but they sued Rabobank instead of government. So, the money being paid at Rabobank at completion was US $8.25 million minus the 10 per cent deposited in January and minus US $665,000 that was paid to PwC for consultancy offered to government and for the remaining amount that was paid by Rabobank was US $6.76 million which was paid into the GRZ privatisation revenue account held at Zanaco, held with account number 003041000000008747 and it was done via an international swift transfer."
And Zulu, who is also justice minister, said a number of witnesses had complained of lack of representation of Zambians on the Zanaco board in the post-privatisation era.
Zanaco is currently owned 46 per cent by Rabobank which is also responsible for appointing three board of directors which includes both the chairman and chief executive officer.
The government owns 25 per cent and nominates two executive directors to the board, while Zambia National Farmers Union which owns three per cent stake in the Bank has one independent board of directors.
The more than three thousand Zambian individuals and institution investors who won the 26 per cent listed stake in the bank have no representation on the board.
This structural setup has rattled some nationalists and ordinary citizens, and Zulu quizzed both Kuijpers and Zanaco managing director Martyn Schouten.
But Schouten explained at the time of privatisation, Rabobank bought the bank together with management rights. Schouten said there was nothing irregular or illegal in the manner Rabobank acquired majority stake of Zanaco.
"Rabobank controls 46 per cent shareholding in Zanaco and its single largest shareholder in Zanaco," said Schouten. "Therefore, it is just logical that the single largest investor who is also a strategic investor should have an important responsibility in the management of affairs of the business."
On the continued absence of shareholder on the board to represent the minority shareholders comprising Zambian individuals and institutions holding their stake in the bank via listed entity on Lusaka Stock Exchange (LuSE), Schouten said: "The board of directors and management are aware of this as it has been an Annual General Meeting (AGM) item in the past and we are currently looking at finding a possible solution which shall be taken to the AGM for discussion."
And former commerce permanent secretary Dr Davidson Chilipamushi said price was not the sole consideration when the government sold Zanaco to Rabobank.
Chilipamushi, who was the last chairman of Zanaco before the contentious privatisation process opposed by key stakeholders like opposition political parties, unions and the church, said there was nothing illegal and irregular about the Zanaco sale.
Labels: PRIVATISATION, RABOBANK, ZANACO
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Valuation of Zanaco wasn't done properly - Kashita
By Kabanda Chulu
Tue 31 Jan. 2012, 13:00 CAT
THE valuation of Zanaco Plc assets was not done properly because
some properties owned by the bank are worth more than the K42 billion (US$ 8.25 million) paid by Rabobank, says Andrew Kashita.
Welcoming President Michael Sata's directive that the sale of Zanaco be investigated to ascertain if the transaction met the criteria of the privatisation programme, Kashita, who was a minority shareholder at the time the bank was sold, said many concerns were raised but the previous government gave no answers.
He said it was a big anomaly to offer the bank for sale in 2007 based on 2004 financial accounts.
"During campaigns for 2006 elections, late President Mwanawasa announced that government has no intention of selling the bank but in 2007, they changed their minds and sold the bank without informing Zambians, including some of us who had minority shares. They also brought the ZNOC debt of K248 billion to Zanaco," Kashita said.
"As shareholders, we demanded to see the evaluation report to understand how the value of shares was determined to arrive at this figure (US$8.25 million) which can amount to certain properties and assets owned by the bank but then finance and commerce ministers Ng'andu Magande and Kenneth Konga respectively, and their team were not cooperative and up to now this report is not available despite the bank having been listed at the stock exchange. So we are totally dissatisfied with the way Zanaco was sold."
He said that irregularities characterised the sale of Zanaco.
"It is fine for Zanaco to have new banking technology but we still feel this deal was not properly done because the criteria used to give four per cent shares to ZNFU was not transparent and it is also costly to have a chairman who lives in Netherlands but board meetings are held in Zambia," said Kashita.
"Minority shareholders were not allowed on the negotiating team and ordinarily, financial institutions in Zambia fall under the finance ministry but Zanaco was placed under the ministry of commerce and the number of directors has been reduced to six, thus lacking countrywide representation. So we hope the Commission of Inquiry will provide answers to these concerns."
And sources at Zanaco disclosed that Rabobank has sold everything including institutional houses and the training centre hostels.
"When a manager is transferred, the bank has to keep him in a hotel whilst looking for a house and when people are being trained they stay in hotels too, which is costly," said the sources.
"Even the US$3 million availed to the bank for training is applied by Rabobank officials from Netherlands who bring in foreign consultants who are not even fluent in English and they have disturbed salary structures whereby some people having similar grades are paid differently."
When asked to comment about the Commission of Inquiry looking into the sale of Zanaco, Konga said he has no comment and that the government was at liberty to launch investigations into any matter.
Former commerce permanent secretary Davidson Chilipamushi, who was board chairman when Zanaco was sold, said the commission would find out if anything was done ‘under the belt.'
"But I am confident everything was done transparently and the negotiating team did their best as records could show at ZDA," said Chilipamushi.
Zanaco was sold in April 2007 for US$ 8.25 million, with Konga assuring that the actual sale price of the bank would be known after three months at the completion of the evaluation of assets.
Konga told Parliament that in accordance with the sale and purchase agreement between government and Rabo bank, 10 per cent of the offer price was received on 22 January 2007 while the remainder was received on 3rd April 2007.
Konga disclosed that Rabo Bank's gross bid on net assets of the bank as at 31st December 2004 was at US$10 million, adding that government would within 90 days appoint an independent consultant to evaluate the net asset value of the bank.
Zanaco's net assets as at 31 December 2004 stood at US$20.5 million.
Zanaco's 49 per cent shares were sold to Rabo Financial Institutions Development, RFID, a subsidiary of Rabobank.
RFID and in accordance with the sale and purchase agreement between the Zambian government and the bank, took over the management and operations of Zanaco after the completion of the sale.
Rabo bank's acquired 49 per cent with the understanding that four per cent will be sold to the ZNFU and in 2009, the government offloaded 25. 8 per cent shares on the Lusaka Stock Exchange.
Labels: ANDREW KASHITA, PRIVATISATION, RABOBANK, ZANACO
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I have no problem with the probe of the sale of Zambia National Commercial Bank -Magande
TIME PUBLISHED - Sunday, January 29, 2012, 2:34 pm
FORMER Minister of Finance and National Planning Ng’andu Magande has said that he has no problem with the probe of the sale of Zambia National Commercial Bank (ZANACO).
Mr Magande said he stands ready to be called upon to answer all queries, but quickly added that as Finance Minister he was not in charge of the actual selling of the bank. He said the President has constitutional powers to order a probe in matters he feels have been marred with irregularities.
President Sata on Friday directed Minister of Justice Sebastian Zulu to immediately probe the sale of Zanaco to establish whether procedure was followed when Dutch bankers Rabo acquired a 49 percent stake in 2007.
“I have no problem with the probe into the 49 per cent sale of Zanaco bank. But what should be understood is that Government acted on a decision that was made in 1998 by the Chiluba government. A decision which was in the best interest of the country looking at the state the banking institution was in,” Mr Magande said.
Mr Magande said in an interview that it was regrettable that the probe has started at a time President Mwanawasa is no more because he will not be there to answer any of the queries that might arise during the inquiry.
He said during the sale of the bank, only 49 per cent shares were sold to Rabo Bank while the rest were offered to Zambians, who have since acquired the shares.
“About 200 Zambians have shares in Zanaco and all the procedure into the sale of the bank shares was explained to Zambians, and to the Patriotic Front led by Mr Michal Sata and Dr. Guy Scott, who presented a petition to me.”
Mr. Magande said, “I explained the position Zanaco was in and the reason the government then decided to sell the institution (partially privatise).” He said he expects people who agreed to the decision to privatise Zanaco when called upon to appear before the commission to be truthful on the matters regarding the state of the bank at the time it was being sold to Dutch banker Rabo.
“The Levy Mwanawasa government acted on a decision that was made in 1998 by the Chiluba government because it was beneficial to the people just like the PF has continued with the MMD-initiated FISP (Fertiliser In-put Support Programme),” he said.
Zambia Union of Financial Institutions & Allied Workers (ZUFIAW) secretary General Joyce Nonde-Simukoko said the probes instituted by President Sata need support from all Zambians to clear suspicions regarding the sale of public institutions in the past.
Mrs Simukoko said people have the right to know how the former government sold public institutions because they are shareholders.
“People appearing on the commission must be able to tell the truth. We do not want people who will go there and tell things to please the President at Zambians; this is the only way to clear suspicions on how public institutions were sold so that the country can move forward.
“There is a lot of gossip and rumour mongering which creates tension in the country on how government operates,” she said. She appealed to the PF government to be transparent by disclosing how much they are spending on the commissions of inquiry and the constitution review because they are accountable to the Zambian people.
Sources within the bank said Rabo Bank bought a total of 49 per cent shares from government. Of the total, four per cent were sold to Zambia National Farmers Union (ZNFU). Government retained 25 per cent while 25 per cent were sold to the public.
And ZNFU executive secretary Ndambo Ndambo has welcomed the probe saying they are ready for the outcome of the investigations. ZNFU has shares in Zanaco. Mr Ndambo said the formation of the commission of inquiry to probe the sale of Zanaco is in the best interest of the nation.
“The President might have information regarding the sale of Zanaco which the public was not privy to during the sale in 2007. As shareholders, we welcome the move on behalf of the farming community,” he said.
[Zambia Daily Mail]
Labels: CORRUPTION, GUY SCOTT, JOYCE NONDE-SIMUKOKO, JOYCE SIMUKOKO, NG'ANDU MAGANDE, PRIVATISATION, RABOBANK, ZANACO
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Courts will determine wrong or right in ZAMTEL sale – Guy Scott
TIME PUBLISHED - Tuesday, January 10, 2012, 8:53 am
Government says it will be up to the courts of law to determine who was wrong or right in the sale of the telecommunications company Zamtel to Libya’s LAP Green.
Vice president Guy Scot has exclusively told QFM that the matter which he said would be a civil litigation would tell who is liable in the Zamtel Sale case after it is heard in the courts of law and all the evidence is given.
The vice president however declined to comment further on LAP Green’s reaction to media reports that government has reversed the sale of Zamtel saying the government would not try anyone through the media.
In a statement availed to QFM over weekend, newly appointed LAP Green board chairman Wafik Alshater said LAP Green will pursue all options and do everything possible to retain its stake in Zamtel claiming the Libyan firm legally acquired its 75% shares in the company.
Meanwhile, The Private Sector Development Association has called on the Zambian government to quickly resolve the issue of the sale of Zamtel to LAP Green of Libya.
PSDA chairperson Yusuf Dodia says government should ensure also ensure that sale of ZANACO to Rabo bank is resolved.
Mr. Dodia says the two companies are very important in far as foreign investment is concerned to Zambia.
The vice president however declined to comment further on LAP Green’s reaction to media reports that government has reversed the sale of Zamtel saying the government would not try anyone through the media.
He says if the government handles the issues very well, and assures confidence in the economy, they will boost foreign investors’ confidence in the country.
He adds that Zambia needs foreign investment as it aids the development of the country.
QFM
Labels: CORRUPTION, GUY SCOTT, LAP GREEN, PARASTATALS, PSDA, RABOBANK, YUSUF DODIA, ZAMTEL, ZANACO
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Government to constitute a Commission of Inquiry to probe the sale of ZANACO to Rabobank of the Netherlands
TIME PUBLISHED - Saturday, December 31, 2011, 10:12 am
GOVERNMENT has constituted a commission of inquiry to investigate the US$8.25 million (about K42 billion) sale of the Zambia National Commercial Bank (ZANACO) to Rabobank of the Netherlands. In 2006, the Government sold 49 per cent shares in Zanaco to Rabobank after protracted negotiations.
As part of the sale and purchase agreement, Rabobank took over management rights of Zanaco while the Government retained its representation in the bank at board level which included three members from Rabobank, two Government representatives and one representative appointed by board members.
The transaction was conducted by the MMD government under late president Levy Mwanawasa.
Meanwhile, Zanaco Managing Director, Martijn Schouten, says the bank would be readily available to help the commission throughout the process and advised customers that operations would remain unaffected during the period of enquiry.
Mr Schouten said the bank acknowledged the announcement of the formation of a commission of inquiry pertaining to the sale of the bank to Rabobank of the Netherlands in 2006.
“Zanaco wishes to confirm its full cooperation throughout this enquiry to assist in offering a transparent and professional outcome,” Mr Schouten said.
Justice Minister Sebastian Zulu confirmed that President Sata had directed him to appoint a team of officials from the Ministry of Justice and experts from the private sector to investigate what transpired during the sale and how the resources were used.
Mr Zulu said in an interview in Lusaka yesterday that the commission, which he would chair, would commence sittings next month.
“We are putting together a team of experts who will include auditors, prosecutors, bankers and consultants because we want to do a good job,” Mr Zulu said.
The minister said during investigations, transactions that would suggest the prevalence of fraud would be handed over to the security wings.
He said prominent politicians who were influential during the sale of the bank would be summoned to give evidence.
The secretariat of the commission had been set up at the Mulungushi International Conference in Lusaka and that the programme of the sittings was still being prepared.
Zanaco’s 49 per cent shares were transferred to Rabo Financial Institutions Development, (RFID) which is a subsidiary of Rabobank.
The opposition political parties at the time, including the Patriotic Front (PF) and trade unions had opposed the sale, fearing the new owner could cut jobs and close branches in rural areas.
They also felt that the $8.25 million was low for the bank which had an attractive asset value with branches spread across the country including rural areas.
Mr Zulu said there would be no malice in the conduct of the inquiry and was not targeted at former Government officials who served in the previous Government.
He said he would use his experience as a prosecutor to engage people who were directly involved in the sale and ensure appropriate action was taken.
[Times of Zambia]
Labels: LEVY MWANAWASA, RABOBANK, ZANACO
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World Bank to boost private agro-sector
By Chiwoyu Sinyangwe
Fri 09 Apr. 2010, 04:00 CAT
THE World Bank has led other key financial institutions in launching a major initiative to boost private sector agriculture in southern Africa to meet a growing demand for food and support economic growth.
And agriculture minister Peter Daka has said broader access to agriculture finance will require both the private sector and governments to bring together public and private finance to high impact interventions.
The initiative, launched in Livingstone on Wednesday, will be spearheaded by International Finance Corporation (IFC), the private sector wing of the World Bank and supported by the European Union (EU).
The European Union hosted a regional agricultural and food security forum from April 6-9 in Livingstone and gathered industry leaders, private and public sector partners, financial institutions, farmer organisations, and civil society groups to discuss ways to support agriculture projects in the region.
And Daka said finding a formula for sustainable partnerships between public and private finance was key to stimulate private sector led agriculture growth in southern Africa.
”Broader access to agriculture finance will require both the private sector and governments to bring together public and private finance to high impact interventions,” said Daka. “Finding a formula for a sustainable partnerships between the two, is what is going to stimulate private sector led agriculture growth in the region.”
The forum, supported by Rabobank from Netherlands and Zambia National Commercial Bank and facilitated by Dalberg focuses on enabling access to finance for emergent and small-scale farmers and on finding ways to improve both the productivity and the quality of goods produced.
Labels: AGRICULTURE, PETER DAKA, RABOBANK, World Bank
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COMMENT - The minister is trying to 'create' a stimulus package by rewording existing policy. Who this is supposed to fool I don't know.
Govt has provided stimulus package, claims Mutati
Written by Chiwoyu Sinyangwe in Chirundu
Saturday, February 14, 2009 4:22:26 AM
COMMERCE minister Felix Mutati on Thursday claimed that the government has provided over K2.3 trillion as economic stimulus package for the country in this year’s budget.
Officiating at the opening of the Zanaco Plc branch in Chirundu, Mutati said the economic stimulus package was in line with initiatives being taken by some other countries to stimulate their economies in the wake of the current global financial crisis.
Mutati explained that while other countries were providing direct financing to stimulate their economies, Zambia’s package was entrenched in the incentives provided for in the national budget.
He said the stimulus package would cost the country in excess of K2 trillion.
“People are asking us; does your government put any economic stimulus package? The answer is yes,” said Mutati.
“The answer is yes. We have in the 2009 budget provided for tax rebates, tax relief in excess of K2 trillion. That in effect is our stimulus package. We have reduced Pay As You Earn (PAYE), by giving concessions to the mining sector so that they can continue to provide employment to our people. We are including the Multi Facility Economic Zones (MFEZ) in the incentives. This is all part of the economic stimulus packages. So, we are not sitting back but we are confronting the challenges and meeting them. “
And Zanaco managing director Mark Wiesssing said the opening of the 53rd branch at Chirundu was part of the bank’s aggressive expansion programme.
Wiesssing said the opening of the branch also allayed earlier fears that the bank would halt the expansion programme after it was taken over by Dutch financial giant, Rabobank Group.
He also disclosed that despite the current global economic predicament, Rabobank Group had continued to post very strong results for growth.
“As of last year, we have posted over 100 per cent profit before tax and K50 billion profit for the prior year. Our deposit base has grown to over K2.3 trillion making it the largest deposit base while shareholder equity stands at K250 billion which is way above the minimum requirement of the Bank of Zambia,” said Wiesssing.
Labels: FELIX MUTATI, GREAT DEPRESSION II, MARK WIESSING, RABOBANK
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KIGALI, Rwanda, June 13 /PRNewswire/ -- Following several rounds of successful negotiations, Banque Populaire du Rwanda (BPR) and Rabo Development signed a number of agreements on June 12th that will give Rabobank a 35% interest in BPR.
BPR, established in 1975, is Rwanda's leading retail bank with a nationwide network of approximately 130 branches and outlets throughout the country. Although BPR recently changed from a co-operative to a corporate structure, it has remained true to its co-operative roots, by retaining its widespread shareholder base of clients from throughout the country. The bank is unique in that over 600,000 client-shareholders jointly own the 65% majority of the bank.
The Rabo Development initiative started four years ago and has built on the long and successful co-operative history and tradition of the Dutch Rabobank Group. Rabo Development's mission is to help financial institutions in developing countries evolve into fully fledged, financially sustainable retail banks with a rural orientation. As part of this initiative, it acquires a minority interest in the capital of the partner bank and assigns senior Rabobank managers to the Board and the Management Team, who work closely with local managers. Rabobank also provides comprehensive technical assistance, allowing it to share its expertise with the partner bank.
Although Rabo Development is the strategic and largest shareholder in most of its ventures, it does not acquire a majority interest, as it wants the partner banks to remain largely locally owned. A good relationship with the local stakeholders and agreement on the mission and strategy of the bank are key ingredients for the partnership. Developing a strong, nationwide branch network and providing rural access to finance are crucial elements of this approach.
BPR will be Rabo Development's 6th partner bank following successful partnerships in Tanzania (National Microfinance Bank), China (United Rural Co-operative Bank of Hangzhou), Zambia (Zambia National Commercial Bank), Mozambique (Banco Terra) and Paraguay (Banco Regional).
The partnership with BPR is very special considering our mutual co-operative roots and the many similarities between our organisations. The Royal Netherlands Embassy in Kigali is showing its support for the partnership by making a substantial contribution towards the technical assistance costs. 'We are impressed by what BPR has already achieved in the recent past,' Arnold Kuijpers, Managing Director of Rabo Development, commented. 'The commitment of the Board of BPR and the support of the Central Bank to accommodate our partnership have been equally impressive.' Mr. Manasse Twahirwa, Chairman of the Board of BPR stated: 'We consider it an excellent opportunity to partner with Rabobank in order to make substantial progress in developing the Banque Populaire du Rwanda in the years to come.'
SOURCE Rabobank Group
Labels: BANKING, RABOBANK, RWANDA
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Rabobank to pay more
By KANGWA MULENGA
RABOBANK of Netherlands will pay more for the 49 per cent shares it has acquired in the Zambia National Commercial Bank (ZNCB) after evaluation of the current net asset value. Rabobank paid US$8.2 million based on the financial position of ZNCB on December 31, 2004. Zambia Development Agency (ZDA) acting director general, Glyne Michelo, said this in a statement in Lusaka yesterday.
"Government and the strategic investor (Rabobank) will therefore commission an independent auditor to determine the net asset value of the bank at the completion date, which will be the basis on which the price adjustment will be made," Mr Michelo said.
He said after reassessment of the value of the shares in the last three years, there would be a price adjustment. “This is provided for in the sale and purchase agreement,” Mr Michelo said. He said Rabobank had also agreed with government that there would be possible relocation of some branches but within a radius of five-kilometres for business reasons.
"During this period, Rabobank is contractually committed to increasing the total number of rural branches by 20 per cent," Mr Michelo said. He said the floating of 25.8 per cent shares on the Lusaka Stock Exchange would afford a broad spectrum of Zambian investors an opportunity to participate in the ownership of the bank through buying of shares.
And Mr Michelo said all workers who lose their jobs after the sale of 49 per cent shares in ZNCB would be paid from the proceeds of the transaction. “Government is committed that retrenched staff, if there will be any, is paid from the proceeds of the sale,” he said. Mr Michelo said if retrenchments were conducted, they would be in line with the normal course of business and in keeping with appropriate manning levels in the bank. “After the acquisition of ZNCB, the investor has only engaged a total number of three expatriate staff who include the managing director, manager for change management and risk manager,” he said.
Mr Michelo said the three expatriates had been engaged under the provisions of a management services agreement, which government and Rabobank signed. “The strategic investor will provide management services and technical assistance to ZNCB for an initial period of three years,” he said.
And Mr Michelo said Government was satisfied that Rabobank would reposition ZNCB as an agricultural financial services provider and developer of new agro-based products to suit rural based farmers.
http://www.daily-mail.co.zm/press/news/viewnews.cgi?category=3&id=1128063253
South persec fails to account for K1.6 bn
By REBECCA CHILESHE
SOUTHERN Province permanent secretary, Darius Hakayobe, yesterday failed to account for K1.6 billion which his provincial administration received from the treasury to buy heads of cattle for restocking. This was when Mr Hakayobe appeared before the Public Accounts Committee (PAC), chaired by Luena member of Parliament, Charles Milupi.
Mr Milupi said the report that Mr Hakayobe submitted was "bad as a lot of things have been unearthed as to how K1, 670,235 245 out of K1, 784,635,245 meant for cattle restocking was misapplied by the provincial administration”. Mr Hakayobe was asked to leave and not return, after he failed to answer queries in the Auditor General's report on irregularities in the procurement of cattle. "There is a variation of funds without authority from the treasury.
This is an extra bad report that we have received. There is nothing for you to go back and do. We don't care whether you lose your job, but we care when poor people do not get what is meant for them," Mr Milupi said. He said the cattle restocking exercise was an important one which should have been given the importance it deserved.
The committee heard how money allocated under the Public Sector Reform Programme (PSRP) for cattle restocking was spent on paying telephone bills, subsistence allowance, including personal loans and workshops.
More than 1,000 heads of cattle bought for distribution to Sinazongwe and Siavonga in April 2006 could not be accounted for because of lack of receipts and disposal details.
Mazabuka District Commissioner, Misheck Chiinda, was also taken to task by the committee for allegedly admitting to having asked to be paid K10 million from a total of K114, 400, 000 in form of a cheque, that was paid to Magoye Small Holder Dairy Farm for the supply of 88 heifers for the district.
Mr Chiinda told the committee that when he went to collect the cattle, he decided to collect only 75 heifers, leaving a balance of 13 costing K15, 600,000.
"The decision to do this was to allow us to borrow K10 million for operational costs," he said.
Auditor General, Anna Chifungula, said there was K1.7 billion meant for the exercise and that the question of lack of funds could therefore not arise.
She said it was forbidden for money released under PSRP to be used for anything other than the intended purpose. "There is no excuse of saying K10 million was needed for operational costs.
All the K1.7 billion was allocated for the purpose of cattle restocking and normally, an amount of 10 per cent of the total allocated amount is included for operational costs," she said. Accountant General, Mike Goma, said Mr Chiinda had no authority to deviate public funds as any variation of budgets needed consent of the Secretary to the Treasury. "This is unacceptable. The people that this exercise was meant for have not benefited at all. You are operating outside the Appropriation Bill and you are also weakening the budgeting system, " he said.
http://www.daily-mail.co.zm/press/news/viewnews.cgi?category=5&id=1117454730
SADC/Comesa urged to harmonise policies
By CHIWOYU SINYANGWE
GOVERNMENT has called on both Common Market for Eastern and Southern Africa (COMESA) and Southern African Development Community (SADC) to work towards harmonising their various economic environments in member states. This is in order to promote and enhance fair and competitive trade within the sub-region.
Ministry of Commerce, Trade and Industry permanent secretary, Davidson Chilipamushi said that in an environment where the 'playing field' was leveled, only goods and services that meet international standards would be traded.
This would result in mutual benefits for all countries involved in trade.
"Regional economic bodies should work towards harmonising macro economic fundamentals in member countries so that it does not have pay to have a strong economy,” Mr Chilipamushi said.
The permanent secretary was speaking in an interview at Lusaka’s Inter-continental hotel.
“ some countries within the sub-region with very weak exchange rates, in their pursuit for foreign currency with goods that do not meet international standards are finding their way into the market mostly through smuggling thereby distorting the whole purpose of fair trade,” he explained.
Mr Chilipamushi cited the European Union (EU) as one economic body that had worked towards harmonising economic environments in member states.
"Off course for the Europeans it took time for them to be where they are but if we are to enhance and promote fair regional trade, we should work towards that objective," he said.
Mr Chilipamushi also said it was difficult for Government to keep tab on the goods and services coming into the country due to the large border areas Zambia shares with her eight neighbours.
He said few border posts and vast border areas had made it easier for inferior goods, most some of which is smuggled by even through rivers to find their way onto the local market
Recently, most stakeholders, especially the manufacturing sector and ordinary citizens expressed concern at the influx of foreign goods coming into the country most of which they said was of sub-standard and was weakening the competitiveness of locally manufactured goods.
Most imported goods that have continued to flood the local market were said to be coming mostly from Zimbabwe which has seen the state of its economy in free fall with inflation rate running at more than 1,500 per cent.
http://www.daily-mail.co.zm/press/news/viewnews.cgi?category=8&id=1152779360
UPND steps into Albidon Zambia Nickle mine
By HENRY CHIBULU
THE United Party for National Development (UPND) in Southern Province has directed councillors in Mazabuka to reduce the portion of land given to Albidon Zambia Limited Munali Nickel Mine to 1,600 hectares until an environmental impact assessment study is conducted on the remaining 500 hectares. Provincial publicity and information secretary, John Chidyaka, claimed that the motion to approve the entire 2,100 hectares of land was hurriedly done because councillors were not given enough time to study it thereby forcing them to support it blindly and ignore technicalities.
Mr Chidyaka said in Mazabuka soon after the protracted meeting that lasted for eight hours on Sunday that the UPND directed councillors to withdraw the motion during their next full council sitting and only approve 1,600 hectares. He explained that the party took such a decision because the Environmental Council of Zambia did not conduct an environmental impact assessment study on the remaining 500 hectares. Mr Chidyaka explained that the resolutions endorsed by all the 20 councillors should not be viewed as a rejection of the project but as one meant to follow procedure.
He said UPND supported the opening of the mine but would not support the passing of resolutions, without taking into consideration the plight of people affected by such development. The meeting was chaired by UPND provincial chairman, Gideon Siakalima, UPND national vice chairman, Philip Maambo, Mazabuka member of Parliament, Garry Nkombo, his Chikankata counterpart Habeenzu Munji and Magoye MP, Benson Mweemba.
Others who attended the meeting are UPND Magoye Constituency officials and all councillors in the district. Mr Chidyaka revealed that the differences between Mazabuka Mayor Edmund Cheelo and Mr Nkombo had been resolved and the two had pledged to work as a team.
But Town clerk Ekan Chingangu said UPND has no mandate to overturn a decision made by the council. He explained it was only the civic leaders that were mandated to review their decision after six months.
Mr Chingangu also dismissed claims by UPND that an environmental impact assessment study was not conducted on the 2,100 hectares.
He said the claims should be dismissed because they lacked merit.
Mr Chingangu said the mine made one application of 2,100 hectares of land contrary to claims by the opposition party that it had applied for 1,600 hectares.
He urged politicians to desist from frustrating well-meaning investors such as the Albidon Zambia Munali Nickel mine, which had shown its commitment by building modern structutres, cultivating fields and provision of cattle to villagers earmarked for resettlement.
Labels: COMESA, CORRUPTION, RABOBANK, SADC, ZNCB
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ZNCB workers have 3 months to know fate
By Kingsley Kaswende
Wednesday April 04, 2007 [04:00]
ZAMBIA National Commercial Bank (ZNCB) employees will have to wait for three months to know their fate now that the government has finally sold 49 per cent of the bank’s shares to Rabobank. ZNCB employees will not know their future until after three months when the new management is expected to launch its business plan. Meanwhile, some minority shareholders, led by their chairperson Andrew Kashita, walked out of an emergency general meeting (EGM), which had met to amend the bank's articles of association, retire the reigning board, and appoint a new board.
At a press briefing announcing the closure of the seven-year long privatisation process of the country's largest consumer bank, commerce permanent secretary Davidson Chilipamushi, who is also the outgoing bank chairperson, said a resolution was passed to dissolve the board and usher in a new one. The new board comprises three officials from Rabobank, including new ZNCB managing director Mark Wiessing, Rabobank managing director Arnold Kuijpers.
Two others namely, Chintu Mulendema and Getrude Akapelwa have been seconded by the government while a sixth one is yet to be appointed. Chilipamushi said the government was happy that the deal had finally been sealed although concerns had been raised regarding compliance to the Banking and Financial Services Act (BFSA), which limits the number of shares any organisation can own in a bank to 25 per cent. Rabobank has been granted a waiver to get round this hitch.
"To assure the concerned parties, the whole process has been followed to the letter," he said. "It is not unusual...Waivers aren't irregular."
Chilipamushi regretted that some minority shareholders, who have often accused the government of sidelining them in the whole process, walked out of the EGM. Chilipamushi accused the minority shareholders of wanting to vote for the furtherance of the transaction by show of hands, when voting was supposed to be done according to the number of shares held. ZNCB has 47 minority shareholders, which meant that they would have carried the day had they voted by show of hands.
However, Kashita said the shareholders walked out because of the disagreements in the way the agenda was going to be run. "With regard to amending the articles of association, we needed to know what we were amending and why and if these details were unavailable we couldn't proceed," he said in an interview. "The articles of the company provide for the retirement of one third of the board by rotation each year. This also required the board to appoint a managing director, but that was not the procedure." Kashita also said the minority shareholders walked out because there were no details on the new board members, security clearance and their background.
Chilipamushi said the minority shareholders had made a personal decision and had the option of selling off the shares if they were not happy. Incoming managing director Mark Wiessing said Rabobank was turning a new page for the future of the bank. He noted that ZNCB had a strong background and social role, which Rabobank wanted to pursue further. "We want to recapture the market share taken up by other banks and we want to make the bank profitable," he said. "We'll improve the services for customers and we want to capture the corporate sector as well."
Wiessing said in the next three months, the bank would present its business plan to drive it into the future. "I have mentioned to the staff that no company can exclude retrenchment but that is not in our philosophy. There may be changes in the way we run our business but there's no master plan around retrenchments so far. All workers will continue to be employees until the time of the business plan," Wiessing said.
And Rabobank managing director Arnold Kuijpers said ZNCB's outlook resembled that of Rabobank and that Rabobank would pursue that route. "We don't care about profitability next year. What we want is to grow the bank to higher heights, both in the rural areas and urban areas," he said. The purchase price of the 49 per cent shares remains a closely guarded secret and the public will have to wait until commerce minister Kenneth Konga addresses Parliament, possibly today.
Labels: RABOBANK, ZNCB
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ZNCB is finally gone, but....
By Editor
Tuesday April 03, 2007 [04:00]
IT is very sad that President Levy Mwanawasa and his government have totally ignored the will of the people over the issue of Zambia National Commercial Bank (ZNCB). While the people of Zambia made it very clear from the beginning that ZNCB should not be privatised, Levy and his government have instead opted to go with the demands of the International Monetary Fund (IMF) that this national bank should be sold. What is more sad, and perhaps an act of insincerity on the part of Levy, is his apparent numbness on this subject even when in August 2005 he agreed with many Zambians that there was no justification for the sale of ZNCB.
But we know that Levy and his government have been under a lot of pressure from the IMF to deliver ZNCB into private hands. And since it appears that the government listens more to the IMF than to its own people, it is not surprising that ZNCB has finally been handed over to foreign investors.
We have been consistent in our arguments against the sale of ZNCB. First of all, we believe that privatisation should not be undertaken for the sake of it or for ideological reasons. We think that every privatisation must make economic sense. We do understand that we need to open up our country to foreign investments in order to fully realise our economic potential.
However, the opening up of our economy should be done in a manner that benefits the local economy. We are saying this because experience has taught us that while we have liberalised our economy so much and opened it to all sorts of investments, the benefits of such liberalisation have not accrued so much to our economy, let alone to the population.
And when we oppose some of these economic decisions such as the sale of ZNCB to foreign investors, we do not do so without a critical interrogation of existing facts. At the moment, we are aware that ZNCB is performing very well in the market.
In terms of markets alone, we know that ZNCB enjoys the biggest market penetration than any bank in this country. On the issue of profitability, recent financial statements show the bank has been doing very well. As things stand today, we know that ZNCB is not inherently fragile. If that were the case, we doubt if there would be any interest in it from foreign investors.
And this is why we have continued to be opposed to the sale of this bank. However, now that the government has completely ignored the will of the people over this matter, we nonetheless still have some observations to make on this transaction, which should not have been allowed in the first place.
It is obviously public knowledge that ZNCB has been sold to Rabobank of the Netherlands. However, it appears that the cost of the business transaction has been kept as a closely guarded secret for a long time now. We hope this is the right time for the parties involved to disclose how much Rabobank will pay for the shares.
A clear explanation should also be given as to how the shares were valued. We are insisting on this because we do not want a repeat of what happened in the mines where Konkola Copper Mines shares were grossly undervalued.
In any case, why did the government opt not to ask for an upfront payment from Rabobank? We have already stated that going by available facts, ZNCB is a very profitable bank. For example, in 2004 ZNCB posted a K9 billion profit, despite a large provision for debts, most of which are on account of government borrowing.
Its statutory requirement in terms of required capital adequacy ratios as at October 2004 was 17 per cent, the fourth after Indo-Zambia (72 per cent), Citibank (37 per cent) and Standard Chartered (21 per cent.) Isn’t it possible to see a repeat of what happened to KCM where Vedanta bought KCM at US $25 million and earned a similar amount in just six months.
Now we understand Vedanta’s shares are well over US$1 billion.
Another contentious issue is that of the future of rural branches. We have heard fears being raised from various sections that Rabobank may not retain the rural branches that are underperforming, thereby eliminating the service nature of the bank. What should be understood is that ZNCB is not just a bank that exists to make a profit, it is also a service organisation that has penetrated areas where other banks have failed to go, where they think they cannot make profits.
In many districts of the country, ZNCB is the only bank available to the people. A good example is the district of Sinazongwe in Southern Province. Before ZNCB opened its office there, we are told workers at Maamba Collieries Limited used to travel 130 kilometres to Choma to access banking services. We understand Rabobank has committed itself to maintaining the rural branches. However, the experience of multinationals is that they tend to pursue profit gambits.
Besides, we have also been told that Rabobank follows its co-operative business model where its branches operate on franchise basis. It is feared that, pursuant to its business model, Rabobank may just franchise the ZNCB rural branches, effectively making them agents operating on behalf of ZNCB. Non-profit making branches will logically fall off. These are some of the questions that need to be clarified today.
When it comes to the future of ZNCB’s employees, let us not forget that this is a bank that employs 1,100 workers. It has not been made very clear whether or not all these employees will be retained with the coming of Rabobank.
It would not be wise to start witnessing retrenchments and job losses as a result of this transaction. If anything, we would want to see the bank expand its operation to serve more of the previously unserved rural markets and create more employment opportunities for Zambians.
These are some of the fears we have had in opposing the sale of ZNCB. But since it seems this is an IMF prescription the government is not willing to reject, we have no option but to live with these realities. We did our best to argue against the sale of ZNCB. And we are still opposed to this transaction.
But since it is now very clear that ZNCB has finally been delivered into foreign private hands, our only hope is that a lot of care will be taken to ensure that this transaction is not just like many of those where the Zambian people have ended up the biggest losers.
Labels: EDITORIAL, RABOBANK, ZNCB
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Govt, Rabobank to seal deal amidst concerns
By Kingsley Kaswende
Tuesday April 03, 2007 [04:00]
THE Zambian government and Rabobank are today expected to seal the deal in which they have agreed for the latter to buy 49 per cent shares in the Zambia National Commercial Bank (ZNCB), amidst concerns on outstanding issues. The government agreed in principle last December that Rabobank should buy 49 per cent in Zambia's largest consumerbank, in the face of widespread outcry and suspicion over the transaction.
The sale of the bank, whose process started over 10 years ago, is understood to be a prescription from the International Monetary Fund (IMF) and has been met with resistance from a cross-section of the Zambian business community, civil society organisations, labour movement and opposition political parties. The association of minority shareholders in the bank has been up in arms against being kept in the dark over the transaction.
Recently, association chairperson Andrew Kashita, who happens to have been the bank's first chairman when it was established in 1969, wrote to commerce permanent secretary Davidson Chilipamushi, the bank's chairman, demanding to be availed the finest details of the transaction. This was a result of the perceived secrecy surrounding the transaction and the cost of the 49 per cent shares, which left everything open to speculation.
In January, sources had told The Post that Rabobank would pay US$10 million. However, Chilipamushi immediately clarified that the figure was the reserve price, and that the true value of the shares would only be known when auditors closed the financial books.
He said the bank's net position had now improved.
Kashita hoped that the sales figure would be announced at the signing ceremony. But he said yesterday that he was due to meet with finance minister Ng'andu Magande to get some clarification on the transaction.
By press time, the meeting had not been concluded. ZNCB is also being sold to Rabobank amidst concerns that it has been sold against the provisions of the Banking and Financial Services Act (BFSA) of 2000.
Section 75 (3) of the BFSA as amended by Act number 18 of 2000 states: "A bank or deposit-taking financial institution shall not acquire an equity interest in any single person, property or undertaking where the value of the bank or deposit-taking institution equity exceeds 25 per cent of its regulatory capital."
Analysts say the government erred at law by allowing Rabobank to hold 49 per cent shares in the bank.
But legal experts yesterday clarified that this provision excludes entities that are publicly listed in countries where they are registered. The expert said this was the reason banks such as Barclays and Standard Chartered hold clear-cut majority shares in their Zambian operations. Rabobank is listed in Amsterdam.
To this effect, Rabobank has been granted a waiver to own more than 25 per cent shares, pending future divesture of the balance.
There have also been concerns about the composition of the board and directors of the bank.
Fears abound that most of the board members would be drawn from the Rabobank Co-operative, but government sources yesterday said only three board members would be from Rabobank.
The source said the major aspect to look out for at today's signing is the composition of the board.
"From my understanding, only three will be expatriates. This includes the managing director and two others. The other three will be local although two will be from the government," the source said.
The source further said the next task would be to change ZNCB's articles so that it complies with the provisions of both the BFSA and the Securities and Exchange Commission. Upon sealing the deal, government will immediately, following legal and financial closure of the Rabobank transaction, be proceeding to offer 25.8 per cent shareholding to the Zambian public and eligible local institutions.
The resultant shareholding would see Rabobank retain 49 per cent shareholding whilst the Zambian government would hold 25 per cent and the Zambian public 26 per cent.
ZNCB, founded in 1969, has a network of more than 50 branch offices in Zambia, making it the country's largest consumer bank. The bank has 1,100 employees. As of December 31st 2005, it had net assets of US$384 million. Objections have also been raised as to how Rabobank's co-operative business model will work with rural branches in Zambia.
Sources say pursuant to its business model, Rabobank would franchise the ZNCB branches, effectively making them agents operating on behalf of ZNCB. Sources wonder how much interest Rabobank will have in some rural branches that are not performing very well.
Labels: RABOBANK, ZNCB
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Magande's democracy
By Chishimba Chilekwa
Thursday March 08, 2007 [02:00]
I could not agree more with your editorial in The Post of Tuesday 6th March, 2007. I wish to add that the Republican Constitution is a political as well as social concern. Politics are an indispensable attribute of democracy and democratic governance. For as long as we do not have the new constitution and long after we have one, it will still be political. The MMD government would do well to recognise this.
For clarity's sake, political herein should be understood to mean "connected with the state, government or public affairs. To suggest that the current floods 'should' affect our new constitution shows how inept the planning of the current government is. Surely, the annual budget has a component for disaster management.
I also want to comment on Magande's reported questioning of the meeting between Sata and Rabobank. Although the current constitution protects the rights of , inter alia, assembly, speech and conscience, the minister thinks we need his permission to speak. And when we do speak, the minister would like us to speak about the youth.
Our speaking on issues of public interest should now be phased. How ridiculous. I wonder what item on the agenda poverty is. The minister clearly does not understand democracy and our constitution.
http://www.postzambia.com/post-read_article.php?articleId=23560
Mining development agreements
By Mwiya Nawa, Lusaka
Thursday March 08, 2007 [02:00]
The arguments advanced by Fredrick Bantubonse of the Chamber of Mines as reported in the Business Post of March 6 are shocking. They are nothing but a justification on how mining companies should continue reaping much while giving the government peanuts in revenue.
His arguments that renegotiating the development agreements will erode investor confidence are not true. Investors in the mining sector are today reaping billions of dollars and if they decided to pull out, it would certainly be on account of other factors and not the renegotiation of the agreements. Renegotiating business deals is a common practice the worldover and there is nothing peculiar about the Zambian case.
In any case, going by the current mineral prices, even if mining firms paid three per cent in mineral royalties, they would still be making huge profits. I agree with him that mining is a long-term investment but it is only true that the incentives that the mining companies have enjoyed from the time they bought the mines have been enough for them to buy machinery and do other reinvestment ventures.
Indeed, as Bantubonse said, Zambia did not enter into the agreements blindly. The agreements were dictated by the conditions at the time which Bantubonse as a mining expert fully acknowledges. But maintaining conditions that were agreed upon when copper prices were low would itself amount to blind reasoning. The government is, therefore, right to ask for more revenue from the mines because the circumstances have since changed.
If the mining companies want to use the threat of pulling out, it won’t work. If they want they can go and gamble and see how they will be quickly replaced by other international mining houses that will find the conditions in Zambia favourable.
http://www.postzambia.com/post-read_article.php?articleId=23562
Political antagonism
By Concerned citizen
Thursday March 08, 2007 [02:00]
I will always salute you The Post team for your good job.
It is unfortunate that the opposition parties and the ruling have always quarelled instead of directing their efforts on developing our nation.
My understanding of the role of the opposition is not to oppose the government of the day but to provide checks and balances and the ruling party must be willing and ready to work with the opposition to foster economic development. It is disheartening to always read how the opposition insults the President.
What is even more retrogressive is the battle in the running of the local councils. Please you people know that when the elephants fight, it is the grass which suffers. My sincere appeal to you the ruling party is that you should just provide the needed funds to run the councils as if they were run by you and opposition do not offer unnecessary opposition, ask yourselves if what you are doing is in the best interest of the nation.
Zambia’s development is concomitant to cooparation but not derogatory and inflamable statements.
http://www.postzambia.com/post-read_article.php?articleId=23558
Youths' plight
By Hilary Mulenga Jr. Ndola
Thursday March 08, 2007 [02:00]
Finance minister’s failure to comment about Rabobank’s meeting with Sata because we should be “talking about youths” makes an interesting reading.
In the first place, I am among the several youths who have been hurt about the manner in which Zanaco has been sold. The secrecy behind the government’s dealings with Rabobank is surely a matter of concern for all. I also understand that Zanaco was born out of the need to help ordinary Zambians and not some foreign investors.
Looking at the plight of the youth in Zambia today, one would expect our leaders to make concerted efforts in protecting this younger generation. Honorable Magande is in a better position to understand that the decisions his government makes, whether right or wrong, have a bearing on the future of this country.
The noise that has been created on the sale of Zanaco is a clear indication that not all is well and more especially for us, the younger generation who will have to bear the brunt of the mistakes of the current administration.
It is in this line that I feel it is a mockery for Honorable Magande to pretend to “talk about the youths” at the expense of not explaining to the nation the very things that are relevant to our future. I even wonder what kind of ‘talk’ the minister is talking about if it is not about addressing issues of unemployment, poverty and destitution that the youth have found themselves in.
Gone are the days when people fell for lip service. What we need now are leaders who are realistic enough more especially in securing a better future for the younger generation. My advice to Magande is that he should serve his breath if he is not ready to address issues of concern such as the sale of Zanaco. Otherwise, his words will be irrelevant to the youth.
Labels: LETTERS, MAGANDE, RABOBANK, YOUTHS
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Magande questions Sata, Rabobank MD meeting
By Speedwell Mupuchi
Tuesday March 06, 2007 [02:00]
FINANCE minister Ng'andu Magande has wondered why Netherlands’ Rabobank went to opposition Patriotic Front to discuss their investment in a country where there is a popularly elected government. And chief government spokesperson Vernon Mwaanga has explained that the share price for Zambia National Commercial Bank (ZNCB) shares to Rabobank was left flexible owing to its indebtedness.
Asked to comment on Rabobank officials' statement during their meeting with Patriotic Front president Michael Sata last Thursday that government had not indicated to them how much the shares in ZNCB would cost, Magande also wondered why everyone wanted to talk about the bank. "Everyone is involved in the issue of the Rabobank, I don't know for what purpose. That's what the President (Mwanawasa) was talking about, choose a moment for everything, we are talking about youths now. So why do you want to talk about Rabobank now?" Magande asked. Reminded that Rabobank was a hot cake (subject), Magande wondered how it could be a hot cake and that if it was a hot and very small cake, who would be satisfied by any explanation. "We explained to you we have not finalised all the details and the PS for commerce even told you that we are going to do a re-evaluation. Now you are saying Rabobank haven't told you what to pay," Magande said.
Magande said Zambians should continue to debate the issue and that no one should have a final voice. "So now Zambians are very happy that a foreign investor who wants to put money in the country can be called by an opposition party and be told I don't like this, I don't like this, you go away, you are happy about that?" wondered Magande who throughout the interview was unwilling to discuss the issue.
Asked from government's stand point, the implication of Rabobank officials' going to discuss the issue of sale of ZNCB with Patriotic Front president Michael Sata, Magande wondered why Rabobank officials were not asked the question. "I just read it in the papers you wrote, why didn't you ask them to say what does this mean? You have gone to an opposition party in a country where you have a government, and a popularly elected government, you go to the opposition to talk about your plans to invest in Zambia, why didn't you ask them? Magande asked.
And Mwaanga said government did not state the ZNCB share price to Rabobank because there was to be a re-evaluation. He said the re-evaluation was on the shares and not the actual sale. Mwaanga explained that the bank was still in a poor state and government thought of completing negotiations of the sale first. "But in so far as the share price is concerned, we had to re-negotiate that because the bank is in better shape now than it was," Mwaanga said. "Initially when they negotiated the sale, the bank was very heavily indebted. For example the bank was carrying a very big debt for ZNOC (Zambia National Oil Company) and they were also carrying a Ramcoz debt which was still in their books." Mwaanga said the debts made the bank look really bad and vulnerable. "But now that government took over those debts, the accounts of Zanaco were cleaned up and they became a lot more attractive than they were," he said.
Pressed on the share price, Mwaanga said the issue was left flexible depending on whether government would take over the debts. Mwaanga said the Bank of Zambia, which was supervising authority of the commercial banks, made it very clear that ZNCB needed recapitalisation without which it would collapse. "That is how the issue of the sale of the shares still went ahead. In fact they (Bank of Zambia) went out of their way to really look after interest of Zanaco outside the normal supervisory framework of commercial banks. If it was just an ordinary bank they would have let it to collapse," Mwaanga said.
He said renegotiations had been going on with participation of Rabobank and that government expects the share price to increase. Asked to clarify the increase, Mwaanga said: "We shouldn't go into that issue. That issue is about to be concluded and that is why you have noticed they have not taken over management of the bank". He said the issues would be resolved quickly. "I have seen the report myself and I think they will be resolved very, very quickly and they will be resolved a lot better than would have been the case if the bank would have been sold with the liabilities it was carrying from ZNOC and RAMCOZ," said Mwaanga.
Labels: MAGANDE, RABOBANK, SATA
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