Stability

The Presidential By-election date has been set for October 30 and all relevant political parties have put their candidates in the race in an attempt to finish as number one on polling day.

The business world is looking forward to seeing formal stability in the political sphere by Monday November 3which will mark exactly one month after the interment of the late President Levy Patrick Mwanawasa.

On the ground there has been much controversy and debate in respect to the local airline industry. In addition, the farming sector has lamented at the cost and availability of fertiliser for the forthcoming planting season which is around the corner. On the investment front, we note that some large investments are planned for Nchelenge District in the palm oil agriculture sector. Electricity tariffs have once again come on the table for adjustment upwards. A mining investor has juts completed a feasibility study for the treatment of Uranium in North Western Province. The North Western Railway company is seeking Government support to construct a railway line from Chingola to the Angolan Border.

It is quite obvious that business is taking place and plans are being unfolded every day in various efforts to keep the economy going and constantly looking for new opportunities to exploit.

Much of what is going on in the economy hinges on a stable Government being in place to lend support where required, and to give guidance where necessary.

Government is faced with the fertilizer issue in various ways. Donations of fertilizer by friendly countries could undermine the fertilizer manufacturing companies and importers such that although things may work out alright this year, no private sector investment will go into fertilizer next year. The whole distribution program must be carefully thought out taking into account the businesses that survive on fertilizer and a sustainable intervention so that next year we do not face the same problems. It therefore becomes very important for Government to be calm, stable, and focussed on dealing with these business related matters because one mis-understood decision by Government can send a particular sector spiralling into recession.

It is important to remove the politics from any decision that will impact on business development, and even more important to offer solutions that will be viable, sustainable and that makes good business sense. In this regard a level of stability and professionalism is required that will not tilt the business environment and alter the playing field. Some caution must be exercised when allocating vast resources to any investor, since the size of land or loans may compromise and undermine other players in the sector.

Some investments must be considered with a developmental view. For example the current wrangle to build a railway line from Chingola to the Angolan border is not just a business venture. It is a lifeline for many people in the North Western Province and it will impact on the cost of doing business in the Mining industry in Solwezi and Lumwana. A solid and stable Government will play a very crucial role in selecting the best option for development to benefit the vast majority of Zambians.

The energy crisis is hitting at us every day. We have pages upon pages of power outage schedules printed in the local media informing us of our daily power blues. Now the cost of electricity is being discussed once again with a demand for tariff hikes. Businesses can no longer plan as electricity costs continue to soar. Electricity like oil based fuels, impact on the production costs of almost all industries in Zambia. This issue will not be tackled in any meaningful way until we have a focussed Government in place to assess the situation, make the necessary changes to the administration chain and take the necessary decisions to implement a recovery plan. At the moment we are toying with Private Public Partnerships, World Bank proposals and various options as time goes by and the electricity crisis gets worse every day.

We must acknowledge that any local or new investor wanting to do big things in Zambia will be challenged by the shortage of electricity. This will force them to either scale down their plans or put the whole idea on hold until a solution to cover the power deficit is found. The media highlights new mining operations opening up around the country. We have huge and ongoing investments in the cement sector. There are dozens of new Tourist hotels, lodges and camps sprouting up across the country. The adequate supply of stable power is now a deciding factor for investment in Zambia.

There are many challenges that we must address in order to make Zambia the place to do business in. Most of our requirements are not anything special but plain necessities for any developing economy. We must have proper roads, we must have adequate electricity, we must have cost effective energy resources, we must have functional Government systems, we must have efficient regulatory and monitoring Government agencies, and we must have a vibrant financial services sector.

Many of these requirements are developed on a stable and focussed Government in place.

Published 9 September 2008