ZNCB to provide industrial training to TEVET students
Written by Chiwoyu Sinyangwe
Monday, May 11, 2009 11:42:23 PM
Zanaco Plc has partnered with the Technical Education, Vocational and Entrepreneurship Training (TEVET) to provide industrial training to students from institutions of higher learning. The programme is being pioneered with three local colleges.
The TEVET Learnership Scheme is a binding agreement between training providers, employers and learners and is aimed at providing students with industrial experience. It is also a learning experience conducted under joint supervision of a training provider and an employer leading to a recognised national qualification.
The three colleges that are pioneering this programme with Zanaco are the Zambia Insurance Business College Trust (ZIBCT), Zambia Institute of Business Studies and Industrial Practice (ZIBSIP) and the Zambia Institute of Management (ZAMIM) ñ Chingola campus.
“Zanaco managing director Mark Wiessing said the programme was important as it was in line with the country’s economic empowerment initiatives.
Economic empowerment initiatives are about building people. Empowerment is not just about ownership. It is also to a large extent about employment equity for existing employees but also to build the leaders of the future,” said Wiessing.
Earlier, science and technology minister Gabriel Namulambe said the TEVET Learnership Scheme had a potential to provide sector dialogue on matters of mutual interest with regards to skills development.
Labels: TEVETA, VOCATIONAL TRAINING, ZANACO, ZNCB
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Musonda goes in
Written by Laura Hamusute
Thursday, January 22, 2009 9:48:23 AM
FORMER Zambia National Commercial Bank (ZNCB) managing director Samuel Musonda yesterday went to jail for two years after losing his appeal in the High Court.
And Lusaka High Court Judge Tamula Kakusa threw out Musonda's appeal against his conviction, ruling that he abused his authority and benefited from the transactions in question.
This is in a case where Musonda appealed to the High Court against his conviction by the magistrate court on charges of abuse of authority of office.
In the magistrates' court, Ndola High Court Deputy Registrar Jones Chinyama sitting as principal resident magistrate at the time found Musonda guilty on 44 counts of abuse of authority of office involving about K10 billion.
He accordingly slapped on him a two-year concurrent sentence on all counts. Initially Musonda was charged with 50 counts, but the counts were reduced to 44 after he was acquitted on six counts.
Magistrate Chinyama established that Musonda abused his authority of office when he disbursed money from ZNCB's Suspense Debtors' Account, noting that Musonda ignored consulting the ZNCB board in disbursing the funds and that the house, number four Ingwe Road in Lusaka's Woodlands area which Musonda claimed to have bought was a benefit since it was paid for using money from the Office of the President.
Magistrate Chinyama ordered the forfeiture of Musonda's house, saying it was a benefit from the said questionable transactions.
In mitigation, Musonda through his lawyer Mumba Kapumpa said he was a first offender and a Christian who carried out some of the transactions in good faith.
Later, Musonda was granted bail by the Lusaka High Court after he appealed against his conviction.
Musonda, through Kapumpa, filed 21 grounds of appeal.
Kapumpa contended that the trial magistrate erred in law and in fact when he failed to differentiate between want of authority and abuse of authority in order to understand the ingredients of the offence Musonda was charged with.
He explained that from the records, it was not clear what Musonda was supposed to have done to commit the offence as the magistrate said he did not comply with routine procedure or simply that he initiated the transactions.
Kapumpa further explained that on the contrary, Office of the President (OOP) initiated the transactions.
He described as wrong and contradictory the statement that Musonda made the payments without authority, arguing that a person must have authority before he can abuse or misuse it.
Kapumpa also argued that the trial magistrate ignored Musonda's defence by overlooking the evidence that transactions were made for the greater good of the country.
He pointed out that the lendings were made on sovereign considerations, adding that there was no loss to the bank and that Musonda accrued no personal benefits from the transactions.
Kapumpa contended that corporate law provided that directors dance to the tune of the shareholders with no powers to change their wishes.
He argued in the grounds of appeal that the trial magistrate misdirected himself when he did not take into account the fact that no mens rea [guilty mind] was proved beyond reasonable doubt.
Kapumpa noted that the trial magistrate misdirected himself when he found as a fact that Musonda's house in Woodland's Ingwe Road was a benefit accrued from the transactions, contending that his client acquired the house on a legitimately sourced loan.
He further contended that the magistrate erred in law and fact when he found that Musonda had no power to transact in the way he did without considering that his performance contract gave him wide discretion and sufficient mandate to deal with sovereign requirement of ZNCB's majority shareholder, the government.
But prosecutions lawyer Mutembo Nchito in his submissions, argued that the case involved serious misapplication of government funds and it involved fugitive former Zambia Security Intelligence Services (ZSIS) director Xavier Chungu, former president Frederick Chiluba and Musonda himself.
Nchito contended that the use of government funds was not known and the trail ended with Musonda at ZNCB.
He added that Musonda gave no reasonable explanation as to what happened as people were moving government money in the boots of their cars all over Lusaka.
Nchito also argued that Musonda lent money in an unprocedural manner and although he had authority to lend it, abused it by exceeding the amount he was expected to lend.
He noted that Musonda's Ingwe Road house in Woodlands was a benefit accrued from the transactions, as he did not prove how he paid the loan.
In passing judgment, Judge Kakusa dismissed Musonda's first ground of appeal establishing that the trial magistrate took trouble to address his mind to the abuse of authority charge by having recourse to the dictionary and the evidence on record.
He ruled that Musonda was obliged to follow the ZNCB internal procedures in carrying out the said transactions.
Judge Kakusa established that Musonda had no authority from the Ministry of Finance and the ZNCB board of directors except his assertion that he operated under instructions from then director general of intelligence Xavier Chungu.
He also dismissed Musonda's explanation that he transacted the way he did in a bid to hide some of the transactions from the International Monetary Fund (IMF), saying had it been the case, the government would have found a better financial arrangement for addressing the same.
Judge Kakusa dismissed all of Musonda's grounds of appeal, concluding that the trial magistrate was on firm ground in arriving at the findings on record.
He said Musonda played a role in all the 44 counts [actus reas] and that he had addressed his mind to the nature of the transactions [mens reas].
Judge Kakusa pointed out that clause eight of Musonda's performance contract did not give him any special authority to transact the way he did, describing his conduct as unacceptable.
He observed that although the magistrate only jailed Musonda two years as a result of repaying the funds, repayment of funds was not a defence in criminal law but merely a mitigatory factor.
Judge Kakusa threw out Musonda's appeal, contending that what he did was fraudulent, irregular and he benefited from the transactions in question.
He said in the event that Musonda appealed to the Supreme Court, he had to show extra effort that he bought his house from his own resources.
After judgment was delivered, Musonda's lawyer Kapumpa indicated that he was going to appeal to the Supreme Court against the judgment.
Commenting on the judgment, Task Force on Corruption public relations officer Victor Makai, who attended court, expressed happiness, saying Judge Kakusa had done a thorough job.
Labels: SAMUEL MUSONDA, TAMULA KAKUSA, ZNCB
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ZNCB to source additional funds for oil supplies.
By Fridah Zinyama
Tuesday July 01, 2008 [04:00]
ZAMBIA National Commercial Bank (ZNCB) will have to source for additional funds from the initial US$ 220 million to about US$ 300 million if it is to bring in the crude oil supplies. And energy permanent secretary, Peter Mumba, said negotiations between the government and ZNCB were going on smoothly.
Negotiations to finally conclude the financing of 1.4 million metric tonnes of commingled petroleum feedstock that would be supplied and delivered by the Independent Petroleum Group (IPG) of Kuwait over the next two years started last week.
Only the first phase has been concluded and both parties are expected to meet for the second meeting this week.
In an interview, some sources from ZNCB who sought anonymity said both parties (government & ZNCB) had met last week for just the first leg of negotiations that would determine whether ZNCB would eventually finance the procurement of the crude oil.
The sources disclosed that ZNCB might have to outsource for the additional funds to procure the crude oil from local or international financiers.
“The shortfall was basically caused by the fluctuations in crude oil on the international market,” they said. “At the time of bidding, crude oil was trading at around US$ 100 per barrel, but as of this week, oil had reached an all time high of US$ 140 per barrel.”
The sources explained that energy experts had predicted a further increment in oil prices to as high as US$ 200 per barrel.
“All these factors will have to be considered before any conclusive decision will have to be made,” they said.
Mumba however declined to give any additional information relating to the negotiating points in structuring the deal as he was not part of the negotiating team.
Last week, Mumba had said the government had decided to find independent financiers to bring crude oil into the country because it did not have adequate resources to undertake the venture.
He said the process of procurement had already commenced with the help of the PTA bank.
The government has had to act decisively over the issue of oil as it had the potential to negate all the economic gains that the country has recorded.
To this end, finance minister, Ng’andu Magande last week announced that the government had with immediate effect reduced excise duty on fuel which would result in a loss of revenue of about K127 billion.
Other governments in the region like Mozambique have had to reduce on their excise duty as well in order to safeguard their country’s economies.
Labels: FUEL, ZNCB
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ZNCB seeks partner to procure crude oil
By Fridah Zinyama
Friday July 04, 2008 [04:00]
ZAMBIA National Commercial Bank (ZNCB) managing director Mark Weissing has said the bank will have to partner with other banks in financing of the crude oil which it is currently negotiating with the government. The bank will have to source for additional funds from the initial US$ 220 million to about US$ 300- US$ 400 million due to the constantly fluctuating oil prices on the international market.
Crude oil is currently trading at about US$ 144 per barrel, with high chances of more fluctuations before the negotiations between the bank and the government could be concluded.
During a media breakfast yesterday, Weissing said the deal that the bank had managed to win was quite substantial and would therefore require the bank to partner with Rabobank its parent company, and other banks in order to successfully carry out the deal.
“We have already been involved in the procuring process of crude oil before and we are confident that this deal will be properly handled,” he said.
Weissing said it would be necessary for the bank to form a syndicate that would ensure that they managed to finance the procurement of the crude oil that the government had managed to source from Kuwait.
And Weissing added that the bank had managed to source for more finances meant to increase the bank’s financial portfolio.
“We have managed to get about US$ 35 million from a Netherland financial company that is meant to improve the banks liquidity,” he said. “Of this amount US$ 10 million will be meant for substantial debts whilst the other will be meant for senior debts.”
Weissing added that the bank had put a lot of measures in place in order to ensure recovery of loans from its creditors.
He further added that the Initial Public Offer (IPO) would be expected to be complete in the next three months.
“We will finish working on the necessary measures to ensure that the IPO is completed by September,” he said.
Labels: FUEL, INFLATION, ZNCB
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ZNCB disburses K4bn to peasant farmers
By Joan Chirwa
Monday May 19, 2008 [04:00]
ZAMBIA National Commercial Bank (ZNCB) last farming season disbursed a total of K4 billion to peasant and small-scale farmers in the country through the new Munda Credit Scheme. During the launch of the new Munda Credit Scheme commodity prices for the 2008/2009 marketing season in Lusaka last Thursday, ZNCB senior manager for credit, Cliff Ndhlovu, said the bank would continue to provide cheaper financing for the agriculture sector, based on the farmers’ repayment record.
“The farmers should endeavor to pay back loans for us to continue to lend to the sector,” said Ndhlovu.
And National Association for Peasant and Small-Scale Farmers of Zambia (NAPSSFZ) announced commodity prices for this marketing season, pegging a 50 kilogramme bag of grade A maize at K42,000.
This is the first time in Zambia’s history that a private entity has set up an agricultural commodity price for about 20,000 peasant and small-scale farmers in the country, who are members of the credit scheme set up almost two years ago.
The maize price announced under the new Munda Credit Scheme, is slightly higher than last year’s FRA floor price of K38,000 per 50 kilogramme bag.
Soya bean prices have been pegged at K90,000 per 50 kilogramme bag; K40,000 and K90,000 for a 50 kilogramme of sunflower and polished rice respectively.
NAPSSFZ president Rodgers Phiri said small-scale farmers in Zambia could double food production with enhanced financing to the agriculture sector.
“It is now technically possible for Zambia to double or even treble food production in Zambia under the new Munda Credit Scheme of ZNCB. More jobs in the agriculture sector can be created through the revitalisation of the agriculture credit systems in Zambia,” said Phiri.
And NAPSSFZ’s major buyer ZDENAKIE Limited managing director George Liacopoulos said the company and the association agreed on a cost reflective price, which would give farmers a fair return on their investment.
The government is in the process of announcing commodity prices for the 2008/2009 marketing season as consultations are still being held among stakeholders.
Labels: FARMERS, NAPSSFZ, ZNCB
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Shareholders challenge Magande over ZNCB's net asset value
By Kabanda Chulu
Wednesday February 27, 2008 [03:00]
MINORITY shareholders in Zambia National Commercial Bank (ZNCB) have challenged finance minister Ng'andu Magande to disclose the net asset value of the bank. In April 2007, the government sold 49 per cent shares in ZNCB to Rabobank of the Netherlands at a cost of US$8.25 million and together with the new management, government appointed independent auditors to determine the net asset value of the bank within 90 days of the sale.
Speaking yesterday, ZNCB minority shareholders association chairman Andrew Kashita expressed displeasure at the developments relating to the operations at the bank since it was sold.
“We have been kept in the dark and we don’t know what is happening, we don’t even hold meetings. How come the net asset value of the bank is still a secret although we were told that within 90 days of the sale every transaction details will be disclosed? Now we challenge Magande to avail us the actual net asset value of the bank,” Kashita said.
But Magande said auditing of the bank to determine its net asset value was on course and the board would soon make it public.
“We are not trying to hide anything from the people. It is true the auditing process has taken long but ZNCB is a big bank and the process involves colossal sums of money and huge debt liabilities but we are making progress and soon the board will announce the findings of the audit report,” said Magande. ”And also there is need to clean the balance sheets so that by end of this year, government will offload 25.8 per cent shares at the Lusaka Stock Exchange,” said Magande.
During the handover of the bank, the government clarified that the US$8.25 million figure was the reserve price and the true value of the shares would only be known when auditors closed the financial books because the bank’s net position had improved.
Rabobank also made commitments to offload four per cent shares to the Zambia National Farmers Union (ZNFU) and a further 20 per cent to the public.
But Kashita questioned the criteria used to choose ZNFU for the four per cent shares by Rabobank and why the bank was not offloading the remainder of shares in order to conform to regulations.
ZNCB was sold to Rabobank amidst concerns that the transaction was against the provisions of the banking and financial services Act (BFSA) of 2000 that does not allow institution equity in a financial entity to exceed 25 per cent of its regulatory capital.
ZNCB was founded in 1969 and has a network of more than 50 branch offices, making it the country’s largest consumer bank. The bank has 1,100 employees and as of December 31st 2005, had net assets of US$384 million.
Labels: MAGANDE, PRIVATISATION, ZNCB
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Nonde predicts severe effects of privatization
By Mutuna Chanda
Tuesday October 30, 2007 [03:00]
ZAMBIA is yet to see the harshest effects of privatisation, Zambia Union of Financial Institutions and Allied Workers (ZUFIAW) general secretary Joyce Nonde has warned. In an interview in Lusaka yesterday, Nonde said what Zambia had seen in retrenchments and violations of workers’ rights after the privatisation of what used to be state enterprises was just a tip of an iceberg.
“Privatisation has caused a lot of casualties. The harsh treatment of workers and other evil offshoots of privatization are still coming especially that we as a country have no mechanism to monitor what is happening on the ground, we don’t know what the investors are doing and how they are treating their workers,” Nonde said.
“Countries that have developed are those that have controls and have ensured that investors use their resources for development. Even when they leave if they are foreign investors, they ensure that resources remain for the country’s development but in our case we are not even making an effort to control the situation.”
Zambia embarked on an aggressive privatization programme since the early 1990s and has so far privatised 262 companies out of 284 that had been earmarked.
And Nonde, who recently attended the British Labour Party conference in Bournemouth in the United Kingdom and chaired a group discussion on global rights, reiterated ZUFIAW’s position against globalisation in its current form.
“Globalisation is disadvantaging the weak. Even in the UK, workers are complaining that international companies are taking away their jobs and are giving them to developing countries. Here in developing countries what is happening is that our workers are being exploited. So we see that on both ends globalisation in its current form is only benefiting the rich. It is favouring capital,” Nonde said.
Meanwhile Nonde said ZUFIAW officials last Friday met Zambia National Commercial Bank (ZNCB) managing director Mark Wiessing.
ZNCB was recently privatised by the government and handed over to Rabobank of Netherlands which acquired 49 per cent of the bank’s shares.
Labels: GLOBALISATION, JOYCE NONDE, PRIVATISATION, ZNCB, ZUFIAW
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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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Govt ignored advice on ZNCB sale - LuSE
By Kingsley Kaswende
Wednesday April 11, 2007 [04:00]
THE government ignored advice from the Lusaka Stock Exchange (LuSE) against selling 49 per cent shares in the Zambia National Commercial Bank (ZNCB), The Post has established. LuSE had advised the government via a November 2004 confidential report entitled "Proposed Alternative to the Privatisation of ZNCB" not to sell the shares, but pursue other viable options. The document, seen by The Post over the weekend, noted that the sale of the shares raised several concerns, including that the approach would lead into near if not total takeover of the bank after privatisation. It stated that after the strategic equity partner bought their 49 per cent stake, they would understandably argue that ZNCB needs a capital injection.
"They will issue new shares to existing shareholders to raise the required money to recapitalise the bank. As a result of GRZ/Zambians not having money to inject into the company by subscribing for the new additional shares issued under the rights issue, the (buyers) will take up their 49 per cent share rights and in addition all those rights not taken up by GRZ and Zambian shareholders effectively holding a majority stake in (ZNCB) in one single step," it stated.
LuSE also argued that the sale would neither recapitalise the bank nor strengthen the bank's balance sheet, as the money that the buyers of the bank would pay to acquire its 49 per cent would not end up with the bank, but would be given to the Ministry of Finance and National Planning.
LuSE further argued that the sale would not extract maximum value for government because the position of the government was weakened by other considerations such as timing and the contingent liabilities, which the IMF attached to the sale.
"Consequently, the amount of money eventually paid by the strategic equity partner bears no relation to the fundamentals of valuation - and in particular the earning capacity or expected future earnings of the enterprise or the asset base being sold," the document states.
LuSE advised the government to pursue alternative methods for privatising the bank.
The stock exchange advised that instead of selling 49 per cent of the bank's shares directly to a strategic equity partner, it would have been better for the Zambia Privatisation Agency to allot new shares in the bank. These new shares would then be "sold" to recapitalise ZNCB and simultaneously dilute the government shareholding hence privatising the bank.
However, for a trade in these newly issued shares to take place there must have been an agreed "price" and once these shares were quoted in the primary market they would then need to be listed on LuSE in order to get a true market price for them.
LuSE stated that in order to meet the listing requirements of LuSE, the ZNCB balance sheet would need to have been cleaned up to make the offer attractive to would-be investors.
This would have been done by either doing a debt - equity swap between government and the local institutional investors, which government owes over K250 billion, or forming Collective Investment Schemes (CIS) such as the Share Save Unit Trusts and the Employee Share Ownership Scheme.
Collective Investment Schemes operate on the principle of bringing together individuals and institutions so that a pool of funds is formed and LuSE felt that the net result would be the creation of a larger pool of money which could in turn be invested in designated financial investment assets such as equities, bonds, real estate, bank deposits on behalf of the scheme members.
The other option would have been to auction off non-performing loans, removing them from the banks balance sheet into a special purpose vehicle (SPV).
LuSE advised that if this alternative approach were followed, it would not only have guaranteed good corporate and fiscal discipline through the compliance with listing rules and regulations in line with IMF conditionality, but it would also have provided a very clear "modus operandi" and future direction of the bank in order to allay anxieties and fears within the bank and amongst the various stakeholders.
The LuSE approach would also have achieved a broad ownership of ZNCB including non-bank institutional investors and the general public and in such a manner that control remains in Zambian hands.
"It (provided) for the creation of CISs that afford an opportunity for the key stakeholders of ZNCB such as employees and account holders, a chance to own part of the bank with positive spin-offs.
It (would) introduce a ready and transparent mechanism through which the shares of ZNCB are valued and hence a true market value for its shares is obtained. It would recapitalise the bank with the injection of fresh funds into the bank for it to remain a viable player in the financial sector in Zambia," stated LuSE.
Labels: IMF, LUSE, 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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Businessmen rap commercial bank
By CHIWOYU SINYANGWE
COMMERCIAL Banks last week came under fire from local entrepreneurs who accused them of preventing Zambia from benefiting from the Africa Growth Opportunity Act (AGOA). During a Breakfast Get Together meeting organised by the Zambia Chamber of Small and Medium Business Associations (ZCSMBA) at Taj Pamodzi Hotel in Lusaka, commercial banks were urged to be responsive to needs of local entrepreneurs. Joy Mwambazi, proprietor of Tianshi Distributors said her company in 2003 was offered a contract to supply hospital uniforms to the United States under AGOA but failed because Zambia National Commercial Bank (ZNCB), her bank by then, delayed to release US $27,000 to cover for shipping of raw material despite producing a letter of credit.
Mrs Mwambazi explained that Zambia's exports through the AGOA suffered because the deal her company clinched was a test project for the country's capability to fulfill contractual obligations. She said not only did Zambia lose the contract to a named country but her company was fined by the US based company who contracted them for failing to honour the contract. "ZNCB managers refused to approve only US $27,000 we needed to pay for the raw materials from Pakistan even when we had a letter of credit.
And this deal was our opener to AGOA and was worth US $100 thousand a month which was to run for 3 years with direct employment of 50 other entrepreneurs who in turn would have employed other people. Now the container for raw materials was diverted to Lesotho and as I speak that country is benefiting from AGOA at our expense," Mrs Mwambazi said. And ZCSMBA executive secretary Maxwell Sichula who confirmed the incident expressed disappointment at the failure of most commercial banks to support growth of local entrepreneurs.
Mr Sichula called for reform in the manner commercial banks disbursed funds to his members to enable them contribute to poverty alleviation, creation of wealth and employment in the country. He explained that his organisation fought so hard for the AGOA deal to the extent of 'camping' at the office of Commerce, Trade and Industry permanent secretary, Davison Chilipamushi, who is also ZNCB board chairman , but lamented that by the time the bank's managing director, Mr Likolo Ndalamei authorised the release of the money it was too late. "Joy's case is not the only one, we have so many cases were banks are just proving difficult to help our member improve their businesses despite banking with these same banks. Right now we are also pursuing another case with Barclays Bank about our member who is a glycerine manufacturer and needs money to expand his business," Mr Sichula said.
Another participant Steady Sinkala, proprietor of Stechas Financial Services who labelled commercial bank managers as 'mere front-line staffs' said most managers in commercial banks did not have power to sanction the release of funds to their clients but failed to tell their clients the truth.
But ZANACO manager for marketing and product development Levy Nkoya who apologised for his bank's inefficiency in the failed AGOA deal called for harmonisation of operations between ZCSMBA with banks to avoid similar disappointments in future. Mr Nkoya explained the decision to only the release funds upon the approval of managing director was in line with new banking practices approved by Bank of Zambia claiming that in past some bank managers had abused that privilege.
Stanbic Bank manager for business banking David Katepa also offered the same explanation and urged the meeting to form alliances such as ZCSMBA saying sometimes banks found it riskier to deal directly with individual entrepreneurs who he said some had in the past abused loan facilities.
Labels: BANKING, SMEs, ZANACO, ZCSMBA, ZNCB
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PF instructs its MPs to oppose allocation towards Levy's house
By Bivan Saluseki
Monday February 19, 2007 [02:00]
OPPOSITION PF has instructed its members of parliament to oppose President Levy Mwanawasa’s budgetary allocation towards the construction of his retirement house. And party president Michael Sata yesterday said PF would soon demonstrate at the Danish Embassy over the sale of Zambia National Commercial Bank (ZNCB) to Rabobank. Sata said the members of parliament had also been instructed to oppose both the Lusaka and Chambishi Economic Zones. Sata said the PF members of parliament would oppose the budgetary allocation because Dr Kenneth Kaunda and Frederick Chiluba’s houses should be finished before government could embark on constructing one for President Mwanawasa.
Sata said the allocation of K1 billion towards the construction of President Mwanawasa’s house was an act of desperation and panic. “Levy is panicking but I will look after him. I will still provide him with accommodation,” he said. Sata said the Ministry of Works and Supply should not divert money, which could be used to provide medicine or even complete houses for the other former presidents. He said it seemed President Mwanawasa was panicking as he could leave State House anytime hence his beginning to build a house for himself. Sata said even the K78.6 million for wildlife at State House would be opposed. “The members of parliament must stop that. KK and Chiluba should have a house now. Anyway let him go ahead, we will stop the construction of his house once in power. He will be in the queue just like his friends are. He must remain in the queue for presidential houses. He should not jump the queue,” he said.
Sata said even the whole idea of zones was nonsense and PF members of parliament would oppose it. He said it was ironical that Malaysians who had been condemned during the construction of Millennium Village and extension of Mulungushi International Conference Centre could be brought back to establish an economic zone in Lusaka. Sata said even the Chambishi zone would not be beneficial to Zambians because there were no companies owned by Zambia except the mine or those associated with the mines and owned by the Chinese.
He feared Chambishi would be flooded with many people from China once the economic zone was in place. And Sata said PF would soon demonstrate at the Dutch embassy in Lusaka where the party would handover a petition to the ambassador over its displeasure over the sale of ZNCB. Sata said PF would get the bank once in power and Rabobank Group should have that in mind.
Labels: PF, PRIVATISATION, SATA, ZNCB
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