Fighting Corruption

The private sector has often been perceived as the champions of promoting corruption in most countries around the world.

There is a premise that the public sector is not corrupt, and civil society is blameless, but suffers the brunt of the negative effects of corruption. These effects include poor health systems, inadequate schooling infrastructure, sub standard roads, hazardous food products, and dangerous buildings and transport systems.

The private sector tends to consider the issue of corruption as a phenomenon that is supported and promoted by imbalances in relationships, whether they are trade or service related. The basic dynamic is that one party requires some action or product from the other party and therein lies the opportunity for corruption to breed and grow.

The private sector point of view in preventing and fighting corruption in Zambia is to minimise the opportunity for corruption to take root or operate unchallenged.

In this regard, in respect to public services, there is need to remove all forms of discretion and replace these instances with processes that are predictable and accountable to the public. Institutions such the Zambia National Tender Board (ZNTB), Lusaka City Council, Registrar of Companies, the Passport Office, the Zambia Revenue Authority, NAPSA, and UTH are constantly challenged by the private sector to develop a Service Charter that can be used by the public to hold the staff in these institutions accountable. ZRA has now instituted an Internal Affairs Unit to monitor, assess and respond to issues relating to staff conduct and performance within the institution. ZNTB is now amending, and possibly revoking, it’s Act, to be replaced by a document that provides the institution with a new mandate with sufficient rules to ensure that transparency and accountability are in the forefront of their processes. In many of these public institutions, the private sector has been invited to dialogue on the mechanisms that can be changed in order to prevent corruption.

The private sector has challenged the ZRA to consider options for using the private sector as anti corruption watch dogs and whistle blowers. The ideas shared with ZRA focus on taking advantage of the tenacity and shrewdness of the private sector and using this aggressive character to fight corruption. A case in point, is to deliberately set a customs duty tariff difference between a wholly packaged product and that of the product coming into the country in either knock down kits, or unpackaged. This tariff discrimination motivates the private sector companies that are packaging or assembling to work tirelessly with the ZRA to ensure that those companies that are importing the wholly packaged or assembled products pay the correct higher customs tariff. This arrangement and its success is motivated by the fact that if the assemblers or packagers allow their counterparts to import their products at lower customs duty rates, then the value adding group will soon be out of business as their competitive advantage will have been eroded.

Private sector business associations have discussed the need for tax payments to be decentralised such that long queues can be avoided on due dates. ZRA has responded by slowly introducing bank managed payment systems for the various taxes.

The private sector has shared amongst its membership the need for all companies to understand the implications of a corrupt environment and the long term costs that it imposes on doing business. This ongoing initiative is promoted through the Institute of Directors, the Zambia Business Forum, the Zambia Association of Chambers of Commerce and Industry, and many other business associations across the country.

The private sector is cognisant of the shoddy quality of projects undertaken in Zambia with public funds. In recognition of this, the private sector was in the forefront of establishing the National Construction Council which is an oversight statutory body for civil engineering works in Zambia.

There is a national recognition that the Zambia Police Service and the Anti Corruption Commission are public watch dog institutions that should be open to all residents to receive and act on issues of corruption. The private sector constantly challenges these two flagship institutions to be professional, accountable and responsive to the public, if they indeed expect the public to have confidence in their services. The ZPS and the ACC are considered to be the first point of contact for any corrupt practices brought to the attention of the public. If these two institutions are perceived to be biased or ineffective, corruption will erupt more aggressively as it will grow unchecked.

Private businesses have invested in community police stations in residential areas, commercial areas and industrial areas to ensure that there is Police presence throughout our society to curb corrupt practices.

The private sector is part of society and society is part of the private sector. This integrated relationship suggests that the fight against corruption cannot be confined to one sector only. Zambians and residents must be challenged to take equity in the social and economic development of the country. A huge paradigm shift must be made such that every individual in the country recognises that public property belongs to us all and we must take responsibility for its well being. Every individual must be made to understand that they contribute to Zambia’s present and future character. Every individual must be an active player in developing the nation.

Mahatma Ghandi once said ‘You must be the change that you want to see in the world’. This is so true for Zambia and Zambians, whether they be public workers, civil society and indeed, the private sector.

Published 27 May 2008

Burning Business

Not too long ago, the identification of a town consisted of a minimum set of public services which included a Post Office, a Police Station, a Hospital, a Church, a School, and a Fire Brigade Station.

When we look at the oldest buildings in any town or city, these relics of public services still characterize the genesis of urban development. In the developed world these old facilities have become museums for the kids to marvel at, as new and more sophisticated installations are put in place to replace these now inefficient buildings and associated equipment.

Old Churches and hospitals are often elevated to tourist attractions, and as we see in Lusaka, the old Post Office at the corner of Katondo Street and Freedom way is now a national monument. This is generally the fate of most old and now historical buildings and equipment as the value is more for capturing lessons learnt and experiences, than functionality in this constantly developing world.

The odd situation in Zambia is that the Fire Brigade Stations around the country seem to have escaped this natural course of evolution. We still have our old Fire Stations running more or less the same as they did in 1964 at the turn of independence. In some cases even the fire engines are now vintage vehicles fit for the museums with little or no functionality except to ferry firemen from one place to another.

Some ten to fifteen years ago, Society House on Lusaka’s Cairo Road was gutted by fire while the Lusaka Fire Brigade with support from the National Airports Fire Tenders and even the Kafue Fire Brigade helplessly made some feeble attempts to put the fire out. The equipment at hand was not adequate to deal with a fire in a multistoried building, and therefore most of the floors above the fifth floor became infernos that were fed by furniture, carpets and worst of all, a keen wind up there above the tree line. The ghost like building still stands with blackened walls like the remains from some war zone. Its current value is that it is now the most expensive giant bill board stand in Africa and markets products for a mobile phone company.

Did we learn any lessons from this experience? Did we use this nasty experience to prepare better to fight future fires?

Another memorable fire broke out on the top floor of Kulima Tower in Lusaka in the premises of the Zambia National Tender Board. Again, there was very little that the fire department could do even with support from their traditional Airport tenders and the whole floor was gutted as we all watched helplessly.

Over the years several fires have erupted at markets in Lusaka, Kitwe, Ndola, and Livingstone, and yet again we had inadequate fire tenders and equipment to prevent the loss of property and lives in these incidents.

More recently, Shoprite on Cairo Road went ablaze in broad daylight and in full view of many Lusaka residents. The usual team of Lusaka Fire Brigade and the National Airports Corporation and any other miscellaneous equipment came to the rescue, but the building which was no more than two floors tall, went up in flames until it could burn no more. Those people that work in the vicinity reported that the fire went on for days before it burned itself out.

Last week, another fire broke out in an office block in Kitwe. The Kitwe Fire Brigade, the various fire services operating in the mining companies, and the Copperbelt Energy Corporation fire tenders rushed to the scene and tried to put out the fire. The equipment was not very functional, the despondent firemen and women just seemed to go through the motions mechanically, and there was a general atmosphere of resignation to the fact that the building would either burn to the ground, or that the fire would somehow burn itself out. Fortunately, the latter proved to be the outcome due to lack of oxygen to feed the fire in the building, and only one floor was gutted.

Last Thursday night I received a phone call in the small hours of the morning from someone who was mistakenly informing me that our shop was burning to ashes in the market. When I told the caller in Nyanja that I did not have a clue about what he was talking about, he promptly apologized and told me that he had dialed a wrong number but that there was a fire in the market. My immediate thought was ‘will there be a fire brigade tender to put the fire out before it destroys goods and buildings belonging to the caller and other entrepreneurs?’ I was not too hopeful about that.

The prospect of fire breaking out anywhere in Zambia must be an Insurance company’s nightmare. The possibility of a limited insurance claim is almost non existent because without proper fire fighting equipment in our towns and cities the expectation is that the fire will wipe out everything flammable. Since the insurance business is all about risk, the premiums for fire insurance must be very high to mitigate against the fact that fires cannot be fought effectively and efficiently in Zambia.

What misery and wastage of resources do fires account for? How many small businesses in the various markets have perished due to fires? How many families move from survival mode with a small business, to destitute mode when their property and goods are burnt to ashes? How many men and women have we seen wailing on television because their homes were burned to the ground due to fire? Fire destroys completely. The only value of the end product after a fire is fertilizer for gardens, as was used in the Chitemene system.

We can all therefore see a strong case for investing in our various Fire Departments and Fire Brigades around the country. It is important for businesses, that fire should be a risk that can be managed. Our insurance premiums will be much lower if the insurance companies can count on our national fire fighting capacity to put the fires out to minimize the damage to property. Fire reduces an asset to ashes therefore it destroys wealth that has been created by hard working people.

It is time now to invest in our public safety with no budget hurdles. Every Zambian wants to live in an environment where he or she can count on the Fire Brigade to come to his or her aid when there is a fire. We have seen how helpless we are to deal with fires over the years. We must act now, because fire is like a disease. You may ignore the treatment and survive, but eventually it will catch you unaware and the price is usually much higher to pay.

Published 20 May 2008

Food Prices

News reports all over the world are reporting that there is a global food shortage on the planet.

Rice, the staple Asian food is in short supply and emergency stocks have to be transported to areas where the need is greatest. Maize, on the African continent is also becoming scarce such that many countries have put a block on exports in order to ensure domestic food security during 2008.

A factor that is exasperating the situation is the cost of energy that directly increases the prices of food worldwide. A barrel of oil is now selling at USD122 thus making transportation a major input in food production and distribution.

Well, if you come from a developed country the situation is not so disastrous since the only change you have to make is in respect to what choice of food you can eat. There is always and alternative when there is money in your pocket to make the various choices.

However, on the African and Asian continents the situation is quite different. The choices are limited and the cash in our pockets is insufficient therefore reducing the number of options away from nshima, beans, meat, fish and traditional vegetables.

Zambia is a country endowed with untold mineral resources, vast areas of arable land, a huge water resource capacity, and able bodied citizens.

One often wonders why we should be suffering from ever rising food prices and at times even a national food shortage.

The Government of the day has various programs to support and encourage agriculture in Zambia in an effort to produce more food to satisfy the local demand and to service the export markets.

A key link in the development chain for food production is that one from producer to consumer via several intermediaries such as consolidators and processors.

This is where our grand plan seems to fall flat on its face.

Year in, and year out, we often read reports of maize being stranded in some province due to lack of transport to markets, or lack of a market in that particular production area.

There is need for us to look at food production beyond the farmer. We need to develop the supply chain from the farmer to the markets through a set of different buying agencies, transportation logistics, and produce trading companies that do this work as a business in itself. We need to support and facilitate various processing and packaging companies to convert our bumper harvests from perishable produce to processed and packaged products that have a much longer shelf life and can be easily transported and sold in various markets.

Some years ago, the United States Government came up with a brilliant idea to support Africa by offering US markets to Africa’s producers of goods and services. This initiative known as the African Growth and Opportunity Act (AGOA) was never taken seriously by many of the African countries and the option to develop their economies and their food production capacity was only discussed at conference tables but very little was done on the ground to actually stimulate and motivate production. Zambia was no exception. Even today the endeavour still stands very much as an opportunity that we are missing and continue to ignore.

This opportunity offered us the ability to market our produce in the US and to process much of it into a value added exportable form. The net result would have been more exports for Zambia and a food security mechanism at the local level to ensure that our food would always be available to all. This abundance of this food in the economy would result in stable and affordable prices.

It’s not too late. Oil prices will continue to increase in the foreseeable future. The population of the world is growing with quite rapid growth coming from Africa. We need to move from clasping our begging bowl and doing the rounds in Europe and North America, to using our brains and resources to make things happen in Zambia.

As the financial sector opens up to more foreign direct investment, the motivation to finance the private sector in agribusiness and agro processing becomes more interesting to our commercial banks and financial institutions.

If the Government can see the opportunities that local trading and processing offers towards developing food security, then a proactive program can be put in place to support, encourage and facilitate this drive through the Zambia Development Agency, the Development Bank of Zambia, and the Citizens Economic Empowerment Commission.

Zambian based farmers are very keen to grow more food, produce more milk, raise more livestock, plant more vegetables and fruit, and develop a budding fisheries sector, if only they can be assured of stable markets for their produce.

The dynamics for rapid development in this sector are already in place thanks to the efforts of the Zambia National Farmers Union and other Business Associations operating in the agriculture sector.

There are many initiatives supported by collaborating partners to increase our food security and to develop some form of self sufficiency. These are at best, complementary efforts to the national agriculture development program, and at worst, a diversion from our own programs in favour of some foreign grants and resources.

Food security and affordable food prices don’t happen by accident. It is a well calculated strategy that requires investment and nurturing, and is the direct responsibility of Zambia and Zambians.

Published 13 May 2008

Building Investment

Lusaka and many parts of Zambia are booming with new construction projects. Malls, shopping centres, fuel stations, hotels, office blocks, schools, houses, apartment blocks, warehouses and factories are springing up everywhere.

Construction in Zambia is recorded as one of the major growth sectors of economic activity over the last five years. This is evidenced by the large investments in cement production currently announced by various investors in addition to the new real estate developments visibly seen.

The number of builder’s hardware shops around the country is another sign that the demand for building materials and fittings is on the increase. There are probably as many hardware shops in Lusaka as there are motor vehicle spare parts outlets.

A prominent Architect in Lusaka recently indicated that the construction industry is undoubtedly the fastest economic vehicle for developing skills, opening new opportunities for value chain businesses, offering mass employment, wealth creation, and the attraction of capital and other businesses to a particular environment or community.

This all seems great news for Zambia and Lusaka in particular, but one asks; what are the bottlenecks and setbacks in trying to develop a booming construction sector in Zambia?

A booming construction sector is obviously as a consequence of other economic activities that compel and attract investment into real estate. A stable and predictable economy, lowering interest rates, relatively free market economic activity, high levels of foreign direct investment, low hassles in obtaining licenses and permits, and an open foreign exchange regime are some of the key factors that motivate long term investments such as in the construction sector.

The bottlenecks in construction at company level revolve mainly around quality and committed human resources.

During an inspection of a construction site it was observed that senior managers were compelled to be on site to manage and monitor progress. When asked why these high ranking staff had to do a foreman’s work, the response was that most artisans walking the streets today who are looking for work, were either ‘chancers’or , were well qualified but not committed to doing the work as demanded. Bricklayers demand to have several ‘person to holder’ helpers who sit around arranging the next block to be laid and preparing the mortar. A more efficient system would be to have two helpers for every five bricklayers. Plumbers use ‘shoprite’carrier bags as thread tape to connect piping and fittings. Much later, when the plumbing starts to leak the price to pay is the removal and replacement of ceramic tiles to access the leaking plumbing in the walls and a huge repair bill. Electricians will overload circuitry and even use smaller cables than that prescribed, in an effort to either save costs or mis-direct material to personal projects. The list goes on.

An assessment of the human resources at a building site shows that the quality staff tends to see themselves as consultants who are not interested in full time jobs but short term attachments. As a result, they will over extend themselves with several parallel commitments, and leave the real work to their assistants who are not qualified, and a poor job is often the end result.

The larger construction jobs require much steel fixing in the concrete pillars and beams. There are not many trained ‘steel fixers’ around and this expertise is often imported from neighbouring Zimbabwe and South Africa.

Taking all these issues into account one must conclude that our local colleges and training institutions are not developing enough crafts people, artisans, technicians, and technologists to cater for the construction boom in the economy. A quick look at the various training facilities in Lusaka reveal that several colleges running under the Ministry of Science, Technology and Vocational Training are fairly well equipped to train good quality carpenters, plumbers, electricians, bricklayers, welders, and mechanics. The throughput of these institutions could be increased if the facilities accommodated evening classes and provided short term courses for specific competencies.

One veteran expert in the construction industry compared the operation of the industry in the 1980’s with the situation today. In the 1980’s and the years before, the construction industry had a strong apprenticeship program that took in bright young Zambians to work under the tutelage of an expert and after a year or so another new expert would have been developed. This system infused short training programs for theory training with the ‘on the job’ practical training that was given on site. The veteran cited the various construction projects developed by the then Yugoslav companies. The Yugoslavs did not speak too much English and therefore usually physically demonstrated how the work needed to be done and the apprentices would ‘learn by doing’. The quality and commitment of such construction workers was second to none and the projects were completed in record time and at a high level of quality.

The veteran noted that when the experts in the construction industry became good English speakers the training evolved to where we are today. The boss barks out the commands and demands, and the workers do what they think he or she wants. What is the result? Misunderstandings, repeat jobs, shoddy work, and so on. This has a direct negative impact on the profitability of the project and pushes wages to lower levels.

Our current challenge is to empower our people with relevant and quality skills and competencies. The writing is on the wall. The mining industry is predicted to double its production within the next five years. There is a regional shortage of cement which indicates that construction is on the increase in Southern Africa. Zambia is planning to build more power stations. Tourism is growing every year. These indicators all point towards more construction and we must start to prepare for the demand for quality human resources in this sector.

My veteran colleague finally commented that construction is probably the fastest way of employing people in mass and creating wealth. In general an Architect and other Civil Engineers will take a month or two to design a big construction project. It will take another month to mobilise the materials for the project. By the fourth month the construction site will be busy with labourers, machinery and many experts working hard to put the drawings into brick and mortar on the ground. Hundreds of people are immediately employed and the skills transfer is immediate. At the end of the day the concrete monument will house business and commercial activities and the economy grows.

Published 6 May 2008