Commerce Gazette - Jan-Feb Edition 2013 by Hillbros

P. O. Box 36607 Lusaka - Zambia Tel: +260 211 292 046 Cell: +260 977 872427 +260 955 769767 E-mail: commercegazette@zamtel.zm commercegazette@yahoo.com Web: http://commercegazette.ucoz.com

COMMERCE GAZETTE January - February 2013

Contents FEATURES

On the cover

Martin Sampa, a special research fellow in the School of Agriculture Sciences at the University of Zambia

06 Should Soya be consumed or quarantined? 08 Research by Sampa is a literature review which lacks evidence – Nutrition Commission 10 Kagem Mining moves to brand Zambia’s emeralds on the world stage 10 CSO and government dialogue on trade facilitation constraints 20 Catholic Bishops urge government to be inclusive

NOTEBOOK 09 UNZA responds to Martin Sampa’s Soya bean report 09 FAO ready to assess Sampa’s findings 09 Scrutiny by the wider body of experts is important 13 Persistent late delivery of farming inputs harmful to food security 18 FBZ partners with World Vision Zambia to improve water provision in rural & poor communities

20 19 22

Affordable smart phone launched by Mr Phone NATSAVE spearheads kwacha rebasing education in rural communities

REGULARS 03 Editorial 04 Appointments 14 Corporate eye: Nigeria Triumphs to win Africa Cup of Nations Championship 16 Economic indicators 17 Legal News 19 Spotlight: TIZ asks ZESCO to explain contract to Alstom SA a company blacklisted by the World Bank for corruption 24 African Business News 25 International Business News 26 Quoted 26 Jokes

Editorial

etting to the true of any subject has become a difficult pursuit in today’s world just because there are many truths.

Editor:

Sukizi Sichinga

Advertising & Publicity: Creative Group

The truth to each one of us is relative to how we see and understand things, especially on matters that are beyond most of our comprehension. Italian physicist, mathematician, astronomer, and philosopher Galileo Galilei who played a major role in the Scientific Revolution once said, ‘In questions of science, the authority of a thousand is not worth the humble reasoning of a single individual.’ And it could be at this cross road that we stand today as our lead story ‘Soya Killer or Cure’ opens a Pandora’s box on a subject that some would argue has already been dealt with.

Layout, Design & Photography:

The concerns being raised by Martin Sampa can easily be dismissed for a whole number of reasons among them his faulty methodology. However, on the other hand, Sampa raises interesting concern regarding the monitoring and regulating of our food and ensuring that it is what it says it is.

Contributors:

Sampa’s submission to parliament couldn’t have come at a better time, as Europe is currently facing a horse meat scandal where beef products were substituted with horse meat by manufacturers.

Printers:

This raises the question that if Europe with it highly regulated and monitored public health safety system can fail surely, its possible and highly probable that similar failures could be happening here. Zambians are eating many products manufactured abroad and locally, non the wiser of its composition.

Partner:

Already, the truth in this scandal has shifted, ‘there is no food safety issue,’ manufactures argue ‘the mislabeling of products only means the failure to meet the very high standards expect by consumers’. Indeed, some would argue that deception is the most grievous crime that’s been committed against consumers.

Mutale Chanda Lupili

Florence Bupe

Mission Press

Ministry of Commerce Trade & Industry

And yet there’s much more to consider beyond the basic failure of regulation, Sampa raises concerns that should bothers us even more, why have our communities began to experience cancers in unprecedented levels? Where is it coming from? HIV/AIDs is one explanation what are the other causes? ‘An unbelieved truth can hurt a man much more than a lie. It takes great courage to back truth unacceptable to our times. There’s a punishment for it, and it’s usually crucifixion.’ - John Steinbeck, East of Eden. Good Reading.

Commerce Gazette is published every other month by Creative Group Limited. P. O. Box 36607 Lusaka - Zambia. Conditions of sale and supply: Commerce Gazette shall not, without written consent of the publisher first given, be lent, resold, hired out, or otherwise disposed of by way of trade except at the full retail price of KR 10.00 and it shall not be lent, resold, hired out or otherwise disposed of in a mutilated condition or in any unauthorised cover, by way of trade or affixed to or as part of any publication or advertising, literary or pictorial matter whatsoever.

APPOINTMENTS

eoffrey W. Simukoko was recently elected and appointed as the African representative to the Board of Management of the Chartered Institute of Arbitrators (CIArb) UK.

CIArb is the world’s leading professional body for promoting the settlement of disputes by arbitration, mediation and other private dispute resolution methods. Simukoko’s appointment is in recognition of his contribution to the development and popularization of ‘alternative dispute resolution’ (ADR) which include arbitration, mediation and conciliation in Zambia. Simukoko obtained his bachelor of Law degree (LLB) from the University of Zambia 1973 and has been practicing law since being admitted as an advocate on the 6th of May 1974. He also holds a master of Arts degree (Management Studies) from University of Leeds which he obtained in 1983. He became a member of the Chartered Institute of Arbitrators (CIArb) UK in 2000 and he also has a certificate in arbitration from the Forum for International Commercial Arbitration (FICA-Geneva) which he obtained in 1999. He was accredited a mediator under the High Court of Zambia court annexed mediation after pursuing a course in mediation by Chemonics International Inc. of the USA. Besides his legal and arbitration achievements Simukoko has held executive management positions, and directorships in several companies and corporations in Zambia, among them managing director, Zambia National Building Society (1990 – 1998), general manager, Mansa Batteries Ltd (1986 – 1989), Group Corporation secretary and legal counsel, ZIMCO Ltd, (1989 – 1990), Group company secretary and legal counsel INDECO Ltd, (1983 – 1986) Corporate and Economic Planning manager INDECO (1982 – 1983) and legal counsel INDECO Ltd (1974 – 1982) Simukoko is currently, a managing partner in the law firm Patmat Legal Practitioners. He has audience before the Industrial Relations Court, High Court and Supreme Court of Zambia. He is active in the practice of arbitration, mediation and conciliation and is an accredited tutor of the Chartered Institute of Arbitrators in arbitration courses run by the Zambian Branch on behalf of the Institute. Congratulating Simukoko on his appointment CIArb Zambia branch said, ‘It was proud to have one of its members as the Africa representative on the Board of Management of the Institute and would like to wish Mr. Simukoko the Best of luck on his appointment.’ Simukoko is married to Joyce Nonde Simukoko.

ayaz King, managing director Airtel Zambia since August 2010, will be moving on to take up a special business development project for Airtel Africa a press statement released to Commerce Gazette announced.

King at the helm of the Zambian operation grew the telecommunication services provider’s network in both the urban and rural areas to unparalleled levels. The company currently has 1,089 and 794 telecommunications sites respectively. During his tenure King oversaw tumultuous times when Airtel filed notice of Compulsory Acquisition to Minority Shareholders on February 18, 2011. The minority shareholders challenged the Compulsory Acquisition in the High Court and won on the grounds that Airtel had flouted the law by offering to buy shares from them at ZMK 710 per share without following laid procedures. The court stated that Compulsory Acquisition of shares should be in consonance with the law to attract a fair price. Airtel appealed to the Supreme Court but later discontinued their appeal. Airtel now holds more than 97 percent of the company shares after getting 17 percent more from the 21 percent which were on Lusaka Stock Exchange soon after taking over the Zain Zambia unit. Speaking about the transitions, Jayant Khosla, CEO, Airtel Africa Anglophone Region said, ‘As we continue to leverage Fayaz’s expertise regionally, we would like to congratulate him for the exceptional infrastructure he has put in place. Zambia has always been a key market with great potential for growth within the region.’

January/February 2012

Zambia

COMMERCE GAZETTE For subscription

Zambian Kwacha

debased Est. since

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ZICTA warns Airtel

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E-mail: commercegazette@yahoo.com Tel: +260 211 292 046 | Cell: +260 955 769 767 | 0977 872 427 all eyes on you

Roles and Obligations of Customs Clearing Agents What is a Customs Clearing Agent?

A customs clearing agent is a company which is duly licensed and authorized to undertake clearing and forwarding activities on behalf of his clients with the Zambia Revenue Authority.

• Practices at variance with ZRA Values: The ZRA corporate values include:

- Integrity: Exhibiting the highest standards ofpersonal probity and behavior

Zambia Revenue Authority licenses the Customs Clearing Agent pursuant to Section 182A of the Customs and Excise Act Cap 322 of the Laws of Zambia and Regulation 121 of the Customs and Excise (General) Regulations.

- Professionalism: Performing official duties with skill, care and diligence and providing the public with service and advice in a professional manner

- Fairness: Performing official duties in an impartial manner free of political, personal or other bias

Who qualifies to be licensed as a Customs Clearing Agent?

- Equity: Treating all tax payers, colleagues and members of the public equitably in accordance with the provision of legislation and procedures in force

- Couurtesy: Treating all taxpayers, colleagues and members of the public with courtesy and being sensitive to their rights, duties and aspirations

- Value for Money: Avoiding wastage and extravagant use of resources

Who licenses a Customs Clearing Agent?

Any company duly incorporated and registered under the Companies Act (Cap 388 of the Laws of Zambia) is eligible for licensing as a clearing agent pursuant to section 182A of the Customs and Excise Act. At the time of application, such company must: • show documentary proof of non-indebtness to the authority by way of obtaining clearance letters; and • demonstrate that it will carry on its customs agency business by means of persons of good repute who will act with business integrity and who are conversant with the provisions of the Act and any regulations or rules made under such Act as provided under regulation 124 of the Customs & Excise (General), Regulations.

What is the role of an Agent in the Customs Clearance Process?

The basic role of an agent is to assist the importers or exporters comply with the legal and procedural requirements of the Customs and Excise legal framework. The agent is also expected to have necessary resources and facilities to execute the expected obligations on behalf of their client. In this regard, a duly licensed Clearing Agent is expected to provide the following services: •

Receipt of goods on behalf of the exporter or importer;

•

Storage of such goods in duly licensed Customs Areas pending clearance;

•

Prepare documentation for lodgment with Customs;

•

Lodge Declarations with all supporting documents with Customs;

•

Pay on behalf of the client where such agreement exists, alternatively importer may pay directly to customs and notify the agent;

•

Receive processed documentation from Customs;

•

Deliver cleared Goods to the importer and in the case of exports,dispatch the goods for export as per directions of the principal;

•

Provide a bond security for goods that are to be cleared inland, removed in transit or temporarily imported into the country;

•

Maintain records of the receipt and dispatch of goods and any uncleared goods; and

•

Other incidental services may include bonded warehousing.

If a taxpayer fails to report acts of misconduct, liability is extended to him or her by virtue of section 183 of the Customs and Excise Act. The terms of a license of any clearing agent include conducting clearing and forwarding business with integrity and consistent with the provisions of the Customs and Excise legal framework. Therefore an agent that conducts themselves unprofessionally is clearly in breach of their terms of the license. Therefore the affected taxpayer must immediately report the act of misconduct to customs for investigation and taking of appropriate action that may include revocation of the license as provided for under Regulation 125 of the Customs & Excise General), Regulations. The complaint should be lodged with Station Management, Deputy Commissioners, Commissioner (Customs) or the Commissioner General What taxpayers should do if a ZRA member of staff conducts him/herself unprofessionally?

All taxpayers are entitled to an efficient and professional service as guided by the Zambia Revenue Authority core values and also the Client Charter that is available on the Authority’s website (www.zra. org.zm)

What are the obligations of a taxpayer in relation to services offered by clearing agents? The obligations of a taxpayer include: • To provide authentic commercial invoices and other supporting documents to the agent to facilitate preparation of the Customs declaration and lodgment;

• To pay for the assessed Taxes either through the agent or directly (options available include E-Payment, from any nearest Customs Office, Cash, Cheque) to Customs within the legal time lime of five(5) days from date of assessment • Not to offer any payment to the ZRA officers or agents other than those duly assessed and authorized by the law; and • To cooperate with ZRA officers at all times when required to do so.

What are the rights of a taxpayer in relation to the services offered by a clearing agent? • To demand an official Assessment Notice (which indicates the actual taxes demanded by ZRA) and ZRA receipt for all payments made.

• To appeal if not satisfied with the assessment or any decision made at the station where the declaration is being or has been processed. • To demand an audience with the Station Management if there is a dispute or the agent fails to offer a satisfactory service and blames Customs officials.

What are some of unprofessional conducts being perpetuated in the clearance of goods? Whereas there are a number of highly professional and ethical stakeholders in the Industry, members of the public are cautioned and take note of the following unprofessional activities: • Forgery of commercial invoices: Documents are in some instances forged in order to understate the amounts paid for the goods, freight or Insurance. This results in depriving the Government of the rightful tax revenue;

Where a member of staff conducts him/herself unprofessionally,the taxpayer is entitled to lodge a complaint immediately to Station Manager. Alternatively the taxpayer may submit a complaint to the Zambia Revenue Integrity Committee (ZRAIC) at the following contact details: ZRA Integrity Committee Secretariat 4th Floor, Western Wing P.O. Box 35710, LUSAKA MOBILE +260978 701 701 | TELE/FAX +260 211 237 336

What is ZRA doing to improve its service delivery in the Customs Services Division?

ZRA will continue with its reform and Modernisation Strategy which will result in among other benefits simplified procedures, reduced dwell time at the Borders and high compliance levels. Some of the modernization measures undertaken include:

• One Stop Border Post (OSBP): The OSBP has been successfully implemented at Chirundu and there are plans to rollout this concept to other borders;

• E-Payment: This is an electronic payment method which enables importers to pay in real time directly

to Customs Services for assessed taxes from anywhere where they have Internet access. At the moment, three banks (Access, Citi, Zanaco) are offering the product. ZRA would like all registered Commercial Banks in Zambia to offer this innovative and efficient payment method for taxes. The payment will reflect at the Entry Port immediately the transfer of funds to ZRA is done.

• Integrated Cashiering (i-Cash): This is a convenient way to pay for assessed taxes which enables importers to pay directly from any nearest Customs office, regardless of which Entry Port for the goods. Members of the public can simply ask for Assessment Note Number and Amount for their transaction from the Clearing Agent. The payment will reflect at the Entry Port immediately cashier issues a receipt • Pre-Clearance: This is a facility which enables importers to clear Customs formalities for their goods

before the cargo physically arrives at the border. Members of the public are encouraged to utilise PreClearance

• Customs Accredited Client Program (CACP): This facility enables importers who have been

assessed to be a ‘low risk’ based on the set eligibility criteria to enjoy preferential and fasttracked clearance at the Borders. Companies are encouraged to apply for this facility in order to minimize delays at the Borders.

• Advance Ruling: An importer can apply to ZRA to seek guidance on the classification of the products that he/she intends to import in advance before the arrival of the goods;

• Frauds: ZRA deals with complaints by members of the public of being swindled by ‘Agents’ at the Borders. Please note that not everyone who is found at the Border is a registered Agent. In this regard, members of the public are advised to mitigate the temptation of sending money to ‘strangers’ when they have an option to pay for the assessed taxes directly to ZRA. • Corruption: This vice is being perpetuated in the clearance of goods by some unethical importers, Clearing Agents, Customs Officials and staff from Other Government Agencies

What should a taxpayer do if a clearing agent conducts him/herself unprofessionally? Please note that section 183(3) of the Customs & Excise Act states that: Any person who appoints an agent to carry out any requirements of this Act on his behalf shall be responsible for any action of his agent while acting on his behalf and shall be liable to prosecution for any contravention of the Act committed by his agent while acting on his behalf.

• Motor Vehicle Tax Calculator: ZRA has provided a calculator on the website to assist potential

importers of vehicles to simulate in advance how much taxes they will pay for the type of vehicle they intend to import into Zambia. The Motor Vehicle Tax Calculator can be accessed on the ZRA website: http://www.zra.org.zm As a long term Modernisation strategy, the ZRA is working towards further simplifying its business processes and becoming an electronic Customs (e-Customs). To attain this goal, one of the initiatives underway in the year 2013 is the upgrade of ASYCUDA++ system to AsycudaWorld, which is a web based platform which will enable importers to conduct business with Customs at anytime, from anywhere in the World and using any device as long as it has access to the Internet. This is simply an inclusion into the Customs Clearance process of electronic commerce (e-Commerce) concepts which are already practiced by importers in Zambia, when for example, one orders a car or any other goods using the Internet.

For other enquiries ZRA General Line: +260 211 381 111 / 0971 281 111 This is a Zambia Revenue Authority Education Programme Commerce Gazette | Jan-Feb Edition 2013 05

Should Soya be

consumed or quarantined?

arely do parliamentary committee hearings in Zambia cause headline news, and if they do the matter is usually on topical subjects such as corruption in the auditor generals reports, the constitution making process and political conduct.

However, Martin Sampa, a PhD candidate’s submission to the Parliamentary Committee on Health caused tremours among the public and in the corridors of policy makers when it made the news.

Raising Concern

Interestingly, the subject matter that caused this commotion was none other than the highly regarded soya bean. In the blink of an eye, Martin Sampa told the parliamentary committee that his research findings show that the innocuous soya bean which has become part of Zambia’s health diet is in fact listed in the Poisonous Plant Database and is responsible for the alarming rate of diabetes, breast and cervical cancers in Zambian women.

Sampa whose specific area of specialization is tuberculosis told the parliamentary committee that he found that patients who were given soya bean based protein tend to develop allergies, asthma and other conditions. It is through this discovery that he looked at soya’s effects on other diseases including cancer that resulted in his conclusion of its harm. Emphasizing soya’s listing as a poisionous plant Sampa said, ‘it can induce tumors, cancers and disrupts the hormonal balance in the body. It also has effects on disrupting cellular integrity’. ‘These cancers, which in the recent past were either very rare or completely unheard of in our communities have become common occurrences.

‘Diet is one of the emerging risk factors for breast and cervical cancer. It’s a key area, which requires adequate research attention,’ Sampa said. Referring to his research paper findings, Sampa told the parliamentary committee that ‘Soya is now part of our health diet and is found in most off shelve foods such as mealie meal, biscuits, instant soups, margarines, cooking oils and bread from the groceries and supermarkets. These are available to every consumer who is completely unaware of its toxicity.’ Martin Sampa is a Special Research Fellow in the School of Agriculture Sciences at the University of Zambia

Quantities consumed detrimental legislation needed

Sampa says that it is ‘regrettable’ that the ‘precautionary principal’ is being disregarded on soya which is being ‘portrayed as the ultimate health food’.

Table: Summary of other detrimental effects of soya consumption in different age groups GROUP

Sampa told the parliamentary committee headed by Dr Brian Chituwo, who sat with three fellow parliamentarians that, ‘The quantities of soya in these various forms being consumed in Zambia is many times higher than in the traditional Asian diets aside from the latter also being mostly fermented types. Fermentation is more effective in removing the soya toxins other than the roasting or boiling, which is being practiced by the food industry in Zambia’. He cautioned that the, ‘Consequences of the lax in legislative oversight in the food processing industry, is that the nation is experiencing a rapid increase of cases of leukemia, high blood pressure, diabetes and stroke in addition to the high rates of breast and cervical cancer’.

REFERENCES

Infants

Retarded growth, interference with proper development of the infant’s thyroid, brain and reproductive systems

Casanova, et al (1999), Divi, et al (1997), Fort, et al (1990), Setchell, et al (1997), Harrison, et al (1999), Santell, et al (1997)

Children-Girls

Indication of early puberty at 6 to 8 years of age

Irvine, et al (1988)

Children-Boys

Homosexuality tendencies, growth of breasts, reduction in male fertility

Rapp (1996)

Women

Breast cancer, fibroids, beards, cervical cancer

Casanova, et al (1999), Harrison, et al (1999), Mead (2010), Santell, et al (1997)

Pregnant women

Babies born with both female and male organs, malformed reproductive tract

Levy, et al (1995)

Men

Reduced testicular function, reduced testosterone formation, hair loss, prostate cancer, swollen prostate

Divi, et al (1997), Fort, et all (1990), Keung (1995), Kumi Diaka J, et al (1999), Risbridger (2001), Setchell, et al (1997), Zhong, et al (2000)

Adults

Alzheimer’s disease, irritability, mood swings, fat gain, food allergies, asthma

White, et al (1996a, 1996b)

All Ages

Possible link to the rapid increase of cases of leukaemia, high blood pressure, diabetes and stroke in the low income groups and children

‘Presumably, this is being done to overcome protein deficiency’ Sampa said. ‘It is fed to infants as part of their high-energy protein supplement (HEPS) in the under-five clinic programmes. It’s also increasingly becoming a standard protein of choice in boarding schools. It has been incorporated into the HIV/AIDS nutritional regimes, and soya is now routinely added to commercial mealie-meal, wheat flour, sausages, polony and milk products.’

EFFECTS

Explaining the research

artin Sampa was the only witness to giving testimony before the Parliamentary Committee on the morning of February 1. During the hearing Hon Chifita Matafwali, Bangweulu MP asked him how he had conducted his research. Hon Likando Mufalali, Senanga MP wanted to know if there were other countries that consumed soya beans in the same quantities as Zambia and what were the imbalance in the body if any? ‘The research is evidence based. There is no conclusion which is being given here without giving a reference. So, this is a Meta analysis. You can’t take a human being and start experimenting on him.’ Sampa said that human studies were not allowed on ethical grounds. Therefore, he ‘looked at the disease pattern over a period of time. ‘They are not communicable diseases, in other words, you don’t pass breast cancer or diabetes to the next person, it is not sexual transmitted or airborne. The only alternative when you get such high levels of diseases incidences is to look at the diet and ask what has changed in the diet which could be an indicator of what is happening now? How far do we look back, is it 5 or 10 years prior to this situation? Because these cancers were not common in our own time as they are common now.’ Other trends, Sampa told the parliamentary committee show that these diseases are more common in urban than in the rural areas. ‘When we accumulate evidence on that, then you refer back to parallel countries, in 2005, the Ministry of Health in Israel issued a directive that soya products should not be fed to children under the age of 18. Obviously there was a strong scientific basis for that, they didn’t fully

06 Commerce Gazette | Jan-Feb Edition 2013

release what the directive was all about but it is in effect up to date. ‘In Germany soya milk is given to infants who are allergic to cows’ milk, and in cases were the mother is unable to breastfeed. However, this is done under prescription from a medical doctor and yet, in Zambia anyone can walk into a shop, purchase soya milk and start giving it to a child.’ The reason Germany prohibits soya milk to infants was due to the high estrogen levels found in it, which is equivalent to a child taking 5 birth control pills and yet a woman only takes a single pill daily. Sampa said the Chinese community who are the pioneers of using soya used it as a fertilizer crop. Eventually, they worked out a way of removing the toxins and started fermenting it. They consume it in small quantities equivalent to how Zambian consume chili. ‘What we have done is, we have adopted food from Asia which is eaten as a condiment in small quantities and brought it here and made it a multipurpose to cure everything. ‘We are abusing the food… Even the Americans are given indicators that you can’t consume this quantity of soya but in Zambia we are consuming almost 10 times above the allowed quantity. As a consequence of this there are hormonal changes, which are unpredictable.’ Women Sampa said grow breads while men develop breasts. Sampa argues that if soya is indeed a health product that had no side effects, developed countries would not regulate it.

Soya consumption

is driven by commercial entities

Hon. Dr Brian Chituwo

Hon. Likando MufalalI

e said Zambia’s consumption of soya beans is being than 45 grams daily, ‘it is completely surpassed by the many driven by commercial entities. He exhibited numerous sources of soya that somebody is eating’, therefore ‘beyond products sold in supermarkets and groceries that certain levels it becomes toxic’. contain soya. Sampa said soya’s estrogen is the same as the estrogens found Reading the labeling on some of these products Sampa in women. pointed out misleading ‘health claims’ which he said might induce ‘innocent people’ to buy them. ‘This is false adverting.’ ‘On one side it’s part of health but estrogen also have been In addition he illustrated that some of the products do not recognized as one of the biggest risk factors in breast cancer. mention soya on the labels but specify it as E322, a description The isoflavones, which are in soya, are the culprits.’ most people would not recognize to mean soya. When pressed by Dr Chituwo to show more human research Sampa’s presentation seemed to indicate that just looking at which could have shown an appreciable difference in the the local soya production and consumption is not adequate health for instance, between a group of people that grew up on as Zambians are consuming large quantities of imported beans against another that has grown up eating soya, Sampa products which contain soya. said two senior American Food and Drug Administration (FDA) scientists, Daniel Sheehan and Daniel Doerge, both specialists He said that while the recommended intake of soya is less in estrogen research have already done research on animals.

Hon. Chifita Matafwali

Hon. Munji Habenzu

He said they wrote a letter challenging claims that soya is healthy. ‘We oppose this health claim because there is abundant evidence that some of the isoflavones found in soya includes genistein and econo a metabolize of daidzen, demonstrates toxicity in estrogen sensitive tissues and in the thyroid. This is true for a number of species including humans. Taken together, the findings presented here are self-consistent and demonstrate that genistein and other isoflavones found in soya can have adverse effects in a number of species including humans. Animal studies are the frontline in evaluating toxicity as they predict with good accuracy adverse effects in humans.’ Sampa said despite the American scientist’s finding with the availability of research funding he could still follow up the research in Zambia in areas where we are lacking in the oversight.

Question and answer –

Silent regulatory bodies –

whose agenda could Sampa be pushing? uring the morning’s hearing, Sampa requested to answer some questions in camera as he believe that some of the issues raised by the parliamentarians bordered on national security.

However, the visibly reassuring chair, Dr Chituwo, assured Sampa of immunity while testifying before the committee thus ensuring that the public and media present could have a full understanding of the presentation. With this encouragement Sampa answering questions raised by Hon Mungi Habenzu, Chikankata MP and Hon Mufalali on whether people should stop consuming soya and if government should ban its consumption in Zambia, appealed to the committee to invoke the ‘precautionary principle’. ‘We are not setting a precedent as other countries in the EU already have these regulations in place. So we need to follow the precautionary principal and say, until this is fully studied and understood, at least for children, we can follow the examples of were they are not allowing children under the age of 18 to have access to soya.’ Sampa told the committee that boarding students were particularly at risk ‘because they are in the developmental stages’ and are consuming soya at breakfast through porridge, at lunch through relish and nshima and at supper in chunks. Hon Mufalali wanted assurance that the presentation Sampa was making was not part of a political, economic or social war agenda aimed at misinformation due to the rise in competition. ‘What assurance is there that you are not part of a global campaign against soya?’ ‘I am quite aware that soya has a very big lobby. We are talking about Monsanto. We are talking about huge interests; it even pertains to GMO foods because most of the soya now is GMO.’ Sampa contended that his interest is motivated by his research which indicates that our high intake of soya products causes diseases. He gave the example of the consumption of cooking oil, a 750ml bottle, ‘is supposed to be consumed by a family of 6 over a period of one month …yet it is consumed in 2 to 3 days. When you are using oils like sunflower, the body will withstand that abuse. But when you make the mistake of using soya with its toxicity, you can imagine what it is doing to our families,’ he said. ‘The disease burden, which the country is facing at the moment, is beyond normal levels. Strokes are now common occurrences. Every other person has high blood pressure; the other one has diabetes and so on. It smacks as something of a conspiracy but we don’t want to go into those. It is better to have something based on evidence and there is sufficient evidence on soya beans that we are abusing, and at the same time we are seeing the repercussions now.’ Hon Habenzu said Sampa’s findings were ‘worrying’. Pointing to a product displayed he said ‘It is a substitute for meat in the compounds like Kanyama and other areas.

food is national security

on Mufalali asked Sampa if he thought they are enough regulatory bodies that are qualified to check these (imported and local) items displayed, so that they can be able to control or protect the citizenry from toxics that could be contained in them.

Naming a milling company, Sampa alluded to the fact that the current mealie meal we buy from this company is mixed with soya bean. ‘Nobody controls that. They are adding soya beans without asking for anybody’s permission to do that. You can’t tamper with our staple food. If I go to buy mealie-meal it should be mealie-meal. State security is at risk because we have opened up the food industry to foreign companies and anybody with any agenda. ‘In western governments there are protective bodies for this because, when you are talking about food and national security, food is actually national security. ‘An oversight body should be part of the Zambia Intelligence Service as a wing so that we are able to monitor (our food) because this now pertains to biological warfare. You come and poison food, people die slowly and they won’t trace it back to the food they are eating. ‘You can not exclude genocide because some of these things are pertaining on genocide. When somebody consumes soya, the effects are seen 20 years from the time they consume it. And it’s also passed on through genetics. The offspring will have that effect of something, which they didn’t directly consume themselves. That’s how serious the situation of soya is.’ What was alarming to hear is that the firm or individuals involved in manufacturing these products could be immune from prosecution due to the lack of legislation. Sampa reiterated that due to the regulatory systems in the European Union, food packages must state the ingredients in each food. This is not done in Zambia and when it is, it is misleading. He told the committee that more scrutiny and control of packaged foods was required. He said existing bodies like the Zambia Bureau of Standards will take a product and match the list of ingredients on the package with the analysis. ‘When that is satisfied, as far as they are concerned, it is ok.’ They do not look at the quantities of ingredients or its effects in the context of our Zambian diet. ‘It is important that the committee also considers how we can extend and build the capacity to monitor what is coming into the country because at the moment we are very vulnerable.’ Sampa said treatment for cancer was ‘largely if not exclusively focused on the various cutting edge medical techniques however, his submission seems to suggest that Zambia should look at the diet to prevent and minimize the increase of cancers and other diseases on the population. His testimony was a call that ‘prevention is better than cure’ and maybe even more importantly ‘buyer beware’.

Commerce Gazette was unable to get comments from the Ministry of Health, Ministry of Agriculture, World Health Organization and Zambia National Farmers Union as the necessary sources to comment on the matter were unavailable.

Commerce Gazette | Jan-Feb Edition 2013 07

Research by Sampa is a

literature review

which lacks evidence – Nutrition Commission

‘Traditionally, you have to process it. You have to put it in running water in the traditional system. That is to get rid of toxic substance so that when you cook it that toxic substance is denatured.’

In no uncertain terms, Dr Masi did not mince any words when asked by Commerce Gazette to comment on the revelations by Sampa.

‘Similarly, there are certain elements within soya bean that can be toxic but those actually are denatured through the process of preparation.’

he National Food and Nutrition Commission of Zambia executive director, Dr Cassim Masi, in an interview with Commerce Gazette could not have been more forth right in his opinion of Martin Sampa’s research publication.

‘I am just looking for a term to simple discredit the report. The report itself does not provide evidence on the association of the consumption of soya beans as against the negative effects in terms of the well being of a human being.’ Dr Masi said that Sampa’s research had ‘massive deficiencies’. He explained that Sampa’s approach in conducting and releasing the report was less than professional, as he did not follow the scientific method. ‘In the scientific method you need to define what the hypothesis is. When you define the hypothesis, from that hypothesis then it helps you to collect the data. When you collect the data then you have to find a way to analysing the data. Once you do your analysis then it gives you some sort of conclusions. The conclusions may be inconclusive or you may again re-design your research to fit your new hypothesis. That is how we usually conduct services. ‘If you look at what was presented in terms of evidence, what the student did was simply to provide people with what we call literature review.’ Dr Masi further dismissed the report as a literature review because he said Sampa had referenced other studies which were out dated as they were published from 1951 to 2000. ‘Now, you can’t use that,’ he said. Dr Masi said Soya in fact has a lot of benefits. ‘Most of our children today have come out of malnutrition because of soya bean. Soya bean is probably the cheapest source of protein. It’s affordable to so many people and it’s got so many proteins. It’s the same product that is being used in animal feed.’ Nonetheless, Dr Masi cautioned that ‘every food has got the potential to be dangerous if the recommended preparations are not followed or when it is not preserved and utilised properly’. He gave the example of cassava which is not normally consumed raw.

Research needed peer review

sked if he had reviewed or read Sampa’s work beyond the news media reports, Dr Masi said it was brought to his attention in January through a letter and document from the Ministry of Health to whom they are ‘mandated to advise on food and nutrition activities in the country’. Acknowledging that he had not evaluated Sampa’s research or had any direct communication with him, Dr Masi nonetheless said with regard to the document he had received he expected the findings to be based on research carried out on rats to show how they react to continuous consumption of soya bean. ‘Sometimes research is thrown out because of the manner in which you have conducted it. There is what we call the Ethics Committee that grants permission especially if you are going to apply your research on human subjects. ‘The Ethic Committee gives guidance on how the research would be done and how the results will be handled.’ Referring to Sampa as a student in the School of Agriculture Science at the University of Zambia, Dr Masi said the university also has a role to play in the research and should have made a statement on the finding of their student as he references the institution on his document. ‘This is a product that is coming from UNZA into the community. So, basically the science element is what we want to see. And so far, I don’t think the student has been able to provide those.’

Dr Masi said cooking, fermentation and heating denatures the toxic elements in soya beans. He said it was important to be cautious when making allegations against food products as similar accusations have been leveled against other foods including salt which is believed to cause hypertension. ‘Sodium Chloride, which is salt, has been implicated in raising high blood pressure.’ He indicated that however studies of food samples and blood analysis would have to be carried out in order to confirm or deny the allegation against excessive use of salt. Referring back to Sampa’s report Dr Masi advised ‘I can tell you just take that report and put it into a dustbin. There is no evidence and don’t be alarmed. ‘The claim by the student has made us very unhappy because it has caused serious alarm to those people that have been consuming soya bean and to the industry and that’s the reason why if you look in the papers people are questioning.’ He added that ‘The National Food and Nutrition Commission of Zambia also have research that demonstrates that soya bean actually reduces levels of cancer.’

Science is progessive

ational Food and Nutrition Commission of Zambia’s head of Research and Planning, Musonda Mofu reiterated that because the research came from literature review that was carried out decades ago, contradicting evidence has since been found in more recent research. It is this evidence that the National Food and Nutrition Commission of Zambia rely upon. ‘Science is progressive,’ he said. Mofu asked why the World Health Organization has not issued a directive against Soya if is harmful. Asked to comment on the point Sampa made that it was the Soya quantities consumed that was harmful, Mofu conceded that there are parameters to consider. He said there are recommended daily intakes or allowances which can be consumed to get the benefits of a food product. However, Mofu said, ‘Zambia does not even consume the required quantities of soya beans. Zambia consumes very low amounts at a global level as a country.’ Clarifying the consumption levels of soya even further Mofu said he was considering the quantities grown, imported, exported and aggregately how much goes to the livestock sector and how much remains for human feeding.

Dr Masi said the scope of the research was ‘complex’ and ‘complicated’ and could not be done by one person. He said it needed supervision from various schools such as agriculture, medicine and food science among others.

08 Commerce Gazette | Jan-Feb Edition 2013

Every food has got the potential to be dangerous if the recommended preparations are not followed or when it is not preserved and utilised properly.

No shift in Commissions position

Dr Cassim Masi

the Food Legumes Project and the first president of this country launched that project.

‘I think the problem here is his inability to demonstrate the harmful nature of consuming that material. What he is giving is his own opinion and that is what we are having a problem with. We are not going to form policy based on somebody’s opinion,’ Dr Masi said.

Mofu added that when products come into Zambia they are ‘adopt and adapt to our local conditions’.

ooking at the quantities consumed by humans, Commerce Gazette argued that Sampa’s point to the Parliamentary Committee was that given the current lax in regulations on soya bean, it was difficult to quantify the intake of soya by Zambians as Sampa illustrated through numerous packaged items exhibited that they were consuming it in various forms such as, butter, cooking oil, biscuits, mealie meal and bread without being aware of doing so.

‘Once we concluded all the necessary studies, we looked at recipes and started a pilot project in Luanshya, it was remarkable to see the benefits of soya beans. So, I’ll not agree that we did not do the background work on soya beans. A lot of work was done. Mount Mukulu Reseach did a lot of work in terms of breeding, seed multiplication and so on’

He added that for him to shift his position he needs the evidence or science that would produce consistent results even when conducted in another country.

He said given the many concerns raised the Commission could design a multi-sector study at government level involving all the key players to evaluate the evidence that is available and any gaps in the literature to update Zambia’s position as a country.

Mofu said the guideline of the United States’ Food and Drug Administration was that ‘with the current evidence, it does not warrant any claim of the negative effects of soya beans’.

Dr Masi cautioned that studies are long term project which cannot be concluded in six months. Individuals are followed over a period of time after which a statement can be made.

Mofu added that during the first republic before soya beans products were being produced there was a project at the Commission examining it.

Currently, the National Food and Nutrition Commission of Zambia is conducting a National Food Consumption Survey, which will quantify how much food people consume. This will enable the Commission to know the quantities of soya beans that Zambians consume and empower it to make informed decision on the status of consumption of various foods, Mofu said.

‘We ran that project for 5 years just to look at what is soya beans, what does it contain, how can we use it, how beneficial can it be and so on. The study was called

The National Food and Nutrition Commission (NFNC) is a statutory body that was established in 1967 by an Act of Parliament, Chapter 308, Cap 41 as an advisory body to the government on all matters concerning food and nutrition. Its broad objective is to promote and oversee nutrition activities in the country, primarily focusing on vulnerable groups such as children, pregnant women and nursing mothers. For administrative and operational purposes, the NFNC is responsible to the Minister of Health.

Dr Cassim Masi, NFNC executive director has over twenty years of consolidated experience managing projects in sustainable agriculture, food security and livelihoods, health and HIV/AIDS, youth and rural community empowerment and development. He has been chief executive for the institution since 2009 and is responsible for controlling all the operations of the institution in order to fulfill its mandate of enhancing optimal food and nutritional status of the Zambian population. He has

been involved in the formulation of national action plans as well as policies. He has also been exposed to, and performed leadership and management roles in different organizations. He has a wide range of experience working with government line ministries, bilateral and UN agencies, and NGOs.

Musonda Mofu, NFNC head Research and Planning is a public nutritionist with over 15 years experience in public nutrition programme management, community nutrition, nutrition programme design and food composition policy synthesis and analysis.

old Zambian school children, Trends in under-five year old severe malnutrition admissions to Zambian hospitals. Others include, Selenium deficiency in Zambia: A meta analysis, The use of Zinc in diarrhea case management in Lusaka urban health clinics: Limitations and options for improvement. He has also conducted a number of investigations on nutritional anthropometry, nutrition behaviour and food intake.

He has also authored and contributed to a number of documents including but not limited to: Determinants of cassava consumption among adults in Southern Zambia, Prevalence of overweight and obesity among 6 to 11 year

Dr Masi holds a doctor of Philosophy degree (Ph.D.) in Plant Science from University of Nebraska, USA.

Musonda Mofu holds a master of Science degree in Nutrition and Health from Wageningen University in the Netherlands.

UNZA responds

to Martin Sampa’s Soya bean report

he University of Zambia (UNZA) weighed in on what has now become the highly controversial report ‘Soya is Linked to Breast Cancer, Cervical Cancer and Diabetes’, authored by Martin Sampa, a PhD student from the School of Agricultural Sciences, at the campus.

Remarking on Sampa’s presentation to Parliament, the university says that, ‘In a letter to the National Assembly’, Sampa had ‘indicated that his submission on soya was in his individual capacity as a researcher and did not in any way represent the position of the university over the issues addressed’.

In a press statement by Dr K. E. Yambayamba UNZA registrar, released to Commerce Gazette, experts from the university said ‘They are not yet in possession of this report and therefore they are not able to give any professional opinion on the matter.’

The university further stated that Sampa’s PhD studies at their institution ‘are on an approved research topic that is different from the one presented in the Soya bean paper’.

The statement however says that the university wished to inform the general public that ‘Sampa is a bonafide registered PhD student in the Department of Animal Science, School of Agricultural Sciences. ‘He is working on a research topic that is focused on discerning metabolic pathways and metabolites determining wasting in animals when they are sick. The work mainly involves desk search in literature and no feeding trails have been conducted under the auspices of this study in the school or anywhere else.’

Dr K. E. Yambayamba

In what appears to be a response to calls from critics and members of the public that the UNZA should have ensured that their student’s work was fully researched and released only after being subjected to proper scientific methods, UNZA confirmed that, ‘The university has a procedure for the approval of research, conduct of the investigation and dissemination of the results.’ It however said, ‘Personal opinions or research results from elsewhere cannot be ascribed to the University of Zambia.’

FAO ready to assess

Sampa’s findings

ric Chipeta a programme officer with the United Nations Food and Agriculture Organization (FAO) confirmed to Commerce Gazette that there is a project under formulation being carried by the institution primarily focusing on the value chain for soya beans.

Eric Chipeta Programmes Officer

Among FAO’s aims is to make sure people have regular access to enough high-quality food to lead active, health lives. It is mandated to raise levels of nutrition, improve agricultural productivity, better the lives of rural populations and contribute to the growth of the world economy. In this regard the FAO shares its experience, expertise and knowledge to achieve results and impact on the ground by providing early warning of food crises, detecting and preventing transboundary threats to food production, health and the environment among other responsibilities. Chipeta said that FAO was not aware of the recent revelation made by Martin Sampa on soya beans nor had it received any circular that gives them a ‘different statement to indicate that soya is a crop that may not be promoted’.

Chrispine Kapunda – Monitoring and Evaluating Officer

Without dismissing Sampa’s report findings, Chipeta was interested to know the methodology used and the extent to which it had been peer reviewed by other researchers. Pointing to Dr Sondashi’s drug that made certain claims on the treatment of HIV/AIDS, Chipeta said those claims were under investigation by researchers and its finding would be disclosed to the public upon conclusion. He said similarly, Sampa’s claims needed to be validated. ‘Yes, we have seen a lot of incidence of cancer in this country but how is he able to link the cause because there are other countries that are consuming this. Are we seeing the same prevalence there? So, we have to check the statistics of our soya bean consumption compared to other countries and also check the incidence and the prevalence of cancer in those countries and then maybe we may begin to learn because this is more or less a case study,’ Chipeta said.

Millens Mufwaya – Agronomist

He added that the problem could be how soya bean is processed rather than its composition having toxins, ‘such a claim would be ground breaking and would generate a lot of interest from researchers’. He cautioned that it was essential to remember that cancer had other causes including chemicals added to food. Chipeta emphasized that the discussion was currently based on speculation and it was important that the report was accessed in order to make progress on this matter. ‘Our institution believes in working with other institutions, working with academicians, working with civil societies to make sure that we push the agenda of food security at the same time we don’t promote technologies that would have a negative effect on the people.’ Adding to the discussion Millens Mufwaya, FAO agronomist said soya bean is not common in the small scale rural village farming system in Zambia but is grown mostly as a commercial crop and targeted to the stock feed and oil extraction industries.

Scrutiny by the wider body of experts is important

eorge Sikazwe, a health expert and academician advices that Martin Sampa’s report needs to be studied before ‘people make conclusions’. He said this in an interview with Commerce Gazette. ‘The extent of the study I think will have to be scrutinized and analyzed.’ He said special attention should to be paid to the ‘methodologists used’ and ‘the sample size’ among other things, as it is cardinal to the report. ‘Some people react badly to water. Anything has those bad reactions but it’s the extent of how far this affects the bigger community.’ Sikazwe said assuming the findings were as expressed by Sampa to Parliament, they ‘would definitely have created internal debate and reactions’ among academicians.

‘What actually puts me off is why he should not work with fellow academicians and fellow experts but go to politicians in parliament?’

is what you believe in. Therefore, if you make a mistake in your analysis of the conclusion on your findings, definitely it should not be a crime. But, the crime comes in when you use it before it is scrutinized by the wider body of experts and you start alarming people then maybe that becomes unethical. But, otherwise, he’s free to his opinion as an academician.’ ‘Soya can be replaced if it is contributing to cancers.’ Sikazwe said there is a lot of cancer awareness, which could explain the rise in the number of cases reported and diagnosis by both patients and medical staff. He indicated that Zambian’s lifestyle has also changed, with urban communities leading a less active life style and consuming more junk food, including more soya products that are said to precipitate cancer. ‘If the findings are that soya consumptions leads to the risk of getting cancer then the product definitely has to be taken off the shelves because there should be other protein sources that should replace soya. Sikazwe said, ‘Basically, soya is just a source of plant protein. There are a lot of these. Even ordinary beans has got similar properties and a few others could be scrutinized for processing into products that have been sourced from soya bean.’

Echoing Dr Cassim Masi, National Food and Nutrition Commission of Zambia executive director’s sentiments, Sikazwe said, ‘ethical procedures’ should have been followed. ‘I don’t think the Ethics Committee would allow dissemination of the scientific report in a political forum before it is dealt with conclusively by experts.’ Sikazwe said Sampa has ‘academic freedom’ to express himself if that is what he believes in. ‘There is what is called academic immunity. That implies that you can study any phenomenon and your findings should not be held at fault at all because that

Explaining soya’s popularity in comparison to other protein products Sikazwe said it is ‘malleable, workable and can easily be processed as an ingredient into many products. It is very stable to store and in terms of production it’s a relatively easy crop to grow’ producing larger quantities unlike ordinary beans. ‘But foremost, it is very easy to produce. So, those factors combined, make soya very available and since we are a poor nation, we need a lot of protein. There is no cheaper and more available source of protein. And probably because of that, that’s why the Ministry of Health pushed for the soya consumption.’

Commerce Gazette | Jan-Feb Edition 2013 09

Kagem Mining moves to brand

Zambia’s emeralds on the world stage Gemfields has invested over US$100 million in it first 3 years of operation since acquiring the mine in 2008. And in Lufwanyama, Kagem Mining had embarked on investing in training of its personal which includes geologist, mining engineers, processing engineers as well as a marketing team that will ‘put Zambian emeralds and colour gemstone at the forefront of the world’s fine jewellery industry’. ‘Kagem employs approximately 650 people in Zambia, including permanent staff and contractors, of which only 46 or 7% are expatriates.’ Government intervention has not assisted small scale miners Harebottle, attributes gemstone mining’s poor performance to governments around the world who have excluded large scale miner from the sector in favour of their local small scale miners.

ambia is the home of the world’s largest emerald mine located in Lufwanyama, owned by Kagem Mining, a subsidiary of UK-listed Gemfields plc in joint venture with the Zambian government. With a share holding of 75% against government’s 25%, Kagem and Gemfields chief executive officer, Ian Harebottle at a press briefing in Lusaka said, ‘Kagem Mining produces approximately 20% of the world’s global rough emerald supply, with worldwide production estimated at US$500 million (ZMW2.6 billion) annually’. Harebottle is a man on a mission with a passion for his work and a clear vision of where he wants to see the Zambian emerald industry headed – to the top, and as world leaders in the coloured precious stone sector. ‘Gemfields operates in a very competitive sector against many other luxury goods, among them cars, watches, branded clothing and handbags.’ And despite Zambian emeralds being equivalent in beauty to Columbians’ they are out priced twice in value in comparison to the Columbian emeralds which are viewed as world’s premium due to their branding. Investment ‘Kagem Mining’ Harebottle says, ‘has now embarked on a new phase of its business strategy,’ that will primarily replicate the success of the diamond branding by mining giant De Beers, to the Zambian emerald mined by Kagem. Harebottle says, Kagem has helped push rough emerald prices up ten-fold in the last three-and-a-half years thanks to a worldwide focused and consistent marketing campaign aimed at increasing demand for Zambian emeralds.

This, he says has resulted in gemstone production becoming ‘erratic’ and ‘unpredictable’ triggering inconsistent pricing depending on the supply volumes. Ironically, Harebottle says rather than empower the small scale miner who lacks equipment, capital and skill, it has disadvantaged him. The sector became ‘very fragmented with the small scale miners making the least profit’ and therefore paying less tax, if at all. By way of assisting small scale emerald miners Kagem has created an assistance programme titled Smack that provides free technology expertise to them, as part of its Corporate Social Responsibility initiative. Transparent and ethical business ‘The emeralds are sold to international buyers at world class auction venues overseen by Zambian government officials and with all of the revenue received from these auction sales repatriated back to Zambia, helping boost the country’s foreign earnings, and with royalties paid on the full and final auction prices attained.’ Harebottle emphasizes that Kagem Mining is not only out to build a successful business but is seeking to ensure that their achievement are viewed in the light of ‘upholding the highest standards of business ethics’ that ‘benefits the employees, suppliers and shareholders’. Focusing on Kagem Mining’s effort to increase production Harebottle says, the company continues to re-invest around ZMW150 million into the mine each year ensuring the company’s success. ‘Kagem is the most scientific and technologically advanced colour gemstone mine in the world. In order to glean just 1kg of gemstones, five million kgs of earth and rock are excavated.’

ambia is facing many challenges in its efforts to boost its export portfolio and increase export volumes, Board chair Love Mutesa, CUTS International-Lusaka, said at a meeting on trade facilitation. ‘Export diversification, border control, infrastructure inadequacies, administrative bottlenecks and non-tariff barriers are some of the issues that require immediate attention if Zambia is to boost its trade performance in the region and the rest of the shrinking global village,’ Mutesa said. The meeting brought together civil society organisations (CSO) and government policy makers with the objectives of enhancing the knowledge of non state actors on recent developments and challenges in trade facilitation for Zambia. It also aimed to strengthen policy engagement and advocacy efforts of non state actors on trade facilitation specific to Zambia for 2013 and beyond. Mutesa said, ‘Without being kept fully up to date with current undertakings in trade related issues, non state actors would have very limited useful engagement with government.’ He noted that while the Economic outlook for Zambia has continued to be dynamic with varying developments particularly in the trade arena, ‘Zambia still primarily exports raw materials from the mines and in both 2010 and 2011 its annual trade balances were in excess of K8.8 billion. Among the efforts being made to improve trade facilitation, Zambia is stepped up its analytical work, diagnosis and studies, through the Diagnostic Trade Integrated Study (DTIS) outlining the nations trade challenges and possible solutions while including an action matrix to provide timelines for achievement of set goals. Other efforts by government which are integral to trade promotion including infrastructure programmes such as the Link Zambia 8000 project which aims to construct 37 roads across the 10 provinces of Zambia covering 8,201 kilometres of road over 5 years at a total cost of K28.4 billion. During his keynote address deputy minister Commerce, Trade and Industry, Hon. Richard Taima, MP said, The Link 8000 Zambia project that will connect outlying areas of Zambia to all provinces which will eventually boost domestic and international trade’.

10 Commerce Gazette | Jan-Feb Edition 2013

KAGEM Quarterly Summary to Dec-12

Units

Jun11

Sep11

Dec11

Mar12

Jun12

Sep12

Dec-12

TOTAL

Gemstone Production (Emerald+Beryl)

million carats

10.8

4.9

3.9

4.9

7.3

7.9

6.6

46.4

Ore Production (Reaction Zone)

'000 tonnes

21.7

24.0

17.5

20.8

40.7

30.5

23.1

178.2

Grade (Emerald+Beryl/ Reaction Zone)

carats/ tonne

500

205

222

236

181

259

288

261

Waste Mined (including TMS)

million tonnes

1.4

2.2

1.6

2.7

2.6

2.2

14.9

Total Rock Handling

million tonnes

1.4

2.2

1.6

2.8

2.6

2.2

15.1

124

Units

Jun11

Sep11

Dec11

Mar12

Jun12

Sep12

Dec-12

Kagem Total (Cash) Operating Cost

USD million

3.5

7.2

7.0

6.0

9.8

8.5

7.7

49.8

Gemstone Unit Cost (E+B)

USD/carat

0.32

1.46

1.80

1.23

1.34

1.08

1.16

1.07

RZ Unit Cost

USD/RZ tonne

160

301

400

291

242

280

333

280

Rock Handling Unit Cost

USD/tonne

2.4

3.3

3.2

3.7

3.5

3.3

3.4

3.3

PRODUCTION

Stripping Ratio KAGEM Quarterly Summary to Dec-12

TOTAL

CASH COSTS

ACCOUNTING COSTS Kagem Operating Cost **

USD million

3.9

3.4

4.2

4.0

4.4

24.0

Gemstone Unit Cost (E+B) **

USD/carat

0.79

0.87

0.85

0.57

0.50

0.66

0.52

RZ Unit Cost **

USD/RZ tonne

162

193

200

104

130

189

134

Rock Handling Unit Cost **

USD/tonne

1.8

1.5

2.6

1.5

2.0

1.6

**Note: With effect from July 2011, Gemfields adopted a new accounting policy whereby all waste moving costs are capitalised and are then subsequently amortised when the ore corresponding to that waste is mined. As of 31 December 2012, approximately USD 22.4 million of waste moving costs have been capitalised and will be amortised later when the associated ore is mined.

In its three month period quarter report ending 31 December 2012 Kagem Mining saw strong production of 14.5 million carats at a grade of 288 carats per tonne. During this same quarter Gemfields had cash of USD 27.9 million and has a total debt outstanding of USD 7.9 million. In addition to the Kagem emerald mine, Gemfields has a 50 percent interest in the Kariba amethyst mine in Zambia. The company also owns controlling stakes in highly prospective ruby deposits in Mozambique and various licenses in Madagascar including ruby, emerald and sapphires deposits.

Other trade facility measures being implemented and envisaged to be implemented include: the establishment of one-stopborder-posts; simplified trade regimes; border management authority; and establishment of intercountry markets. These, Taima said, will make the movement of goods and people from one point to another simpler and quicker, and encourage the conducting of trade, thereby enhancing efficiencies and profits. ‘Currently Ministry of Commerce is working with COMESA to develop the National Trade Strategy whose overall objective is to contribute to the realisation of the goal set by the vision 2030.’ Finnish Ambassador Pertti Anttinen said, ‘The cooperation with Finland is aimed at boosting Zambia’s economic growth and strengthening her trade and competition capacity at micro and macro-levels. ‘Zambia has set its self an ambitious Vision 2030. This is still quite a manageable period of time in which to conduct growth forecasts, set development aspirations and address the challenges, identify key policy, introduce structural reforms, and observe the effects of policy changes,’ Anttinen said. He said, ‘Zambia needs to make consequential but important decisions to advance its economic agenda and improve the incomes and quality of life in the country.’

Anttinen commended the one stop border posts as commitments Zambia has made for trade facilitation at regional (COMESA and SADC) and International Level (WTO). ‘Gone should be the days that private sector and specifically cross border traders can tolerate unexpected delays, and the consequent additional expenses in the movement and release of their products and services.’ Sajeev Nair, Competition and Business consultant spoke on nontariff barriers which have continued to limit access of locally produced commodities to foreign markets.

Noting an old saying that ‘It is rather easy for a foreign company to conduct business transactions in Zambia than a Zambian registered company’, Nair said foreign direct investment incentives are not adequately tied to small and medium entrepreneurs linkages and sourcing of goods and services from local companies. He said the procurement system in both public and private institutions needs drastic reform to enable local producers and suppliers to enter the system and benefit. ‘There are undue barriers that hinder the entry of new suppliers, - technical specifications, previous experience, evaluation of procedures, etc. - This is in addition to a lot of tenders still being tailor made in a manner to suit a particular supplier, many a time a foreign supplier.’ He said that high borrowing costs despite recent lowering of interest rates continued to be a barrier to trade. He added the recently introduced local preference procedures under the Citizen Economic Empowerment Commission are yet to be analysed.

Commerce Gazette | Jan-Feb Edition 2013 11

Programme of events – Francophonie Week 2013 Opening Night and Photo Exhibition « Essence of the Wild » +Lyrica l surpri Photos by Fabrice Palacio se 19h00 – Admission free

Saturday 17th March

Sport : Pétanque tournament (French bowling) Sunday 17th March Location : Kilimanjaro Cafe 09h00 – Admission free Dictation competition Monday 18th March Minimum age 16 years 15h00-16h00 – Admission free Theatre – Tsungai 19h00 – ZMW 40 – ZMW 35* Children’s photo competition based on two themes :‘unique’ and ‘team’ Judging and prize giving 18h00 Photos will be on display from 18th to 23rd March – Admission free Inter-school competition Tuesday 19th March Poetry, theatre, creative writing and art and design Music workshop with Rajery, master of the Vahila 8.00-15.00 – whole day reserved for 20 partner schools Competition – the Golden Quill Pen Wednesday 20th March 14h30-16h30 – Admission free Open to students of the Alliance Francaise and university students Drawing competition 14h30-15h30 – Admission free Open to children and teenagers Concert Rajery 19h30 - ZMW 50 – ZMW 45* Evening of music and dance performed by the Alliance Francaise

Thursday 21st March

18h30 – Admission free Cinema night Friday 22nd March 18h00/19h30/21h30 ZMW 20 – ZMW 15* Closing night concert - Dobet Gnahore Saturday 23rd March 20h00 : ZMW 50/ZMW 45* & Tombola « French-style Brunch” on Sunday, Sunday 24th March from 11:00 am till 14:00 pm : ZMW 155 Location : Southern Sun Ridgeway | * AFL members Unless mentioned otherwise, all events take place at Alliance Francaise of Lusaka

Persistent late delivery

of farming inputs harmful to food security

Nigeria Triumphs to win Africa Cup of Nations Championship

imely delivery of farming inputs such as seeds is crucial to ensuring a good harvest. The delivery of adequate and timely inputs by the government is important to many small-scale farmers who continue to heavily rely on the Farmer Input Support Programme (FISP). This is why the delivery of farming inputs continues to attract attention from both the government and non-governmental stakeholders, says JCTR. The persistent late delivery of farming inputs to small-scale farmers is a cause for serious concern. What is worse is that late delivery of inputs seems to be the order of the day year after year. In previous years, the provision of these inputs has not been timely much to the dismay of the farmers. We are well aware that steps have been taken by the government to resolve this problem. However, small-scale farmers have, during the current 2012/2013 farming season, yet again been subjected to the late input delivery. The delay in accessing farming inputs has a potential ripple effect that may translate into poor harvests, shortages of foods such as mealie-meal and price hikes, observes JCTR’s Social Conditions Programme Manager, Daniel Mutale. The prevailing rate of input delivery possess a danger to both household and national food security as it may eventually lead to a repeat of high mealie-meal prices, witnessed in 2012, which were unaffordable to the poor majority. The cost of living as measured by the JCTR’s Basic Needs Basket (BNB) for the month of January 2013 for an average family size of five living in Lusaka stood at K3,469,680 (KR3,469.68). Compared to BNB for December 2012 which was recorded at K3, 532,100 (KR3, 532.10), this shows an average reduction of K62, 420 (KR62.42). The observed reduction in the BNB can be attributed to, among others, price decreases in the cost of mealie-meal by K6000 (KR6) from K60, 900 (KR60.90) to K54, 900 (KR54.90) in December 2012 and January 2013, respectively. Nonetheless, late delivery of farming inputs may lead to the long-run offsetting of the short-term reduction in the cost of living resulting from decreased mealie-meal prices. The JCTR, therefore, calls government to overhaul the current farming input delivery system because it is not only ineffective but can also harm household food security through poor harvests and eventually high food costs.

y all accounts Nigeria deserved to win the CAF title after they eliminated the favourites Ivory Coast, and finalist Burkina Faso made short measure of Ghana another team that pundits expected to reach the finals.

Meanwhile, defending champion Zambia had hoped against the odds of retaining their CAF title won in a memorable penalty shoot-out last year against Ivory Coast. But Zambia could not repeat the feat. Playing in group C, Zambia’s Chipolopolo drew all their games beginning with a zero tie against Ethiopia in their first game, scoring a goal each with Nigeria in their second game and ending on a zero tie in their final game against Bukina Faso. This resulted in Zambia’s Chipolopolo holding third position which saw them eliminated from the African Cup of Nations (AFCON) 2013 championship at group stage together with Ethiopia who placed fourth. As Nigeria and Bukina Faso advanced to the quarter finals little did we realize that group C held the two teams that would outplay their contenders, only to meet again and clash in the finals. The journey to the top for Nigeria was not smooth sailing, maligned by their supports at home for selecting a team comprising of majority local based players whom few believed could win. Nigeria’s head coach Stephen Keshi had to contend with every arm chair critic telling him what he needed do and whom he needed to select in order to have any chance of winning the African Cup of Nations title. Keshi must have known that having taken this bold move and putting up with naysayers his head was on the chopping on his return home depending on the showing his team made. In fact, Keshi is reported to have handed in his resignation to the Nigerian Football Federation, NFF, following the team’s win on grounds that the body lacked faith in him. Nevertheless, Nigeria’s poor display in the group stage must have given Keshi a lot to think about. It is rumoured that the Nigerian Football Federation, NFF, not inspired by their team’s play during the first stage had booked return tickets for them even before their quarter final game against Cote d’Ivoire. However, the NFF has since dismissed these claims as mere media speculation following their success. ‘The NFF never planned to sack Keshi as the head coach or the technical crew in its entirety,’ Chief Emeka Inyama, chairman of the NFF Media and Publicity committee said at a press conference. ‘We do not have anything against people jumping on the train of success after the Super Eagles became champions of Africa. Success has many fathers. But it is uncharitable to try and take anything away from the Federation that worked day and night to achieve the success.’ President Goodluck Jonathan intervened in the matter instructing Sports minister, Bolaji Abdullahi, to resolve the tiff that saw Keshi withdraw his resignation to remain as national team coach of the Super Eagles until 2014 when the World Cup qualifiers resume in March. Nigeria’s perfomance in the Africa Cup of nations improved with the knock out stages which saw the Super Eagles shock favourites Ivory Coast in the quarter finals with a 2-1 win. They cruised to a 4-1 win over Mali in the semis to reach the African Cup final for the first time since 1994, 19 years ago. Sensing that the wind of victory was within their grasp, Nigeria edged out Burkina Faso with a 1-0 win to lift their third Afcon crown. Sunday Mba, one of the six local league players picked by Keshi, gave the Super Eagles their only goal of the game in the 40th minute on February 10. Their victory was that much sweeter following the lack of confidence shown in them back home. The win places coach Stephen Keshi into the record books as he equals the feat of late Egyptian Mahmoud El Gohary by winning gold medals as a player and a coach. The Super Eagles were rewarded with a $1.5 million first prize for their Africa Cup of Nations triumph. Nigeria, also moved 22 places up in the latest Fifa rankings for the month of February to stand at number 30. Burkina Faso 2013 Afcon losing finalists moved up 37 places to 55th after became the lowest ranked team ever to make the ultimate match of the Afcon. Their performance is seen as a success at the games as they outperformed all expectation short of carrying the trophy. Despite disappointment in the much favoured Ivory Coast not reaching beyond the quarter finals, they remained the number one ranked team on the continent moving up to the 12th position on the world rankings their highest placing to date. The Elephants haven’t been able to break through and win the African Cup trophy since 1992. Fourth at the Afcon, Ghana are ranked second on the continent and 19th in the world, just one place behind Brazil. Zambia has dropped eight places to 47 on the Fifa rankings from 39 prior to Afcon. They became the first CAF Africa Cup of Nations holders to be knocked out in the first round for 21 years.

Commerce Gazette | Jan-Feb Edition 2013 13

Zambia passes CAF trophy to Nigeria

Stephan Keshi , Nigerian head coach

Zambia verses Ethiopian

Having been placed in the same group as reigning champions Zambia and giants Nigeria, the Stallions were always going to have a tough task of qualifying for the next stage, but they impressed to win the first place in the group.

Defending champions Zambia dropped out of the Africa Cup of Nations with a whimper as they drew their final Group C game against Burkina Faso 0-0. Zambia’s Collins Mbesuma (left) squandered the best chance of the match in Nelspruit.

Daniel Amokachi lifts Stephan Keshi after the Super Eagles win AFCON 2013

Nigerian team celebrates its victory

Nigeria›s

As Nigeria prepar was on Chelsea’s during the compe

The entir South Af

Herve Renard , Zambian head coach

Disappointed Mayuka

geriaâ&#x20AC;şs Sunday Mba celebrating after winning Burkina Faso

prepared to battle Burkina Faso in the Africa Cup of Nations final the spotlight lseaâ&#x20AC;&#x2122;s Super Eagle, Victor Mose (in green) and his magnificent breakthrough competition.

A disappointed Zambian fan after his team was eliminated from the tournament

e entire soccer field was covered in rainbow-coloured material and the performers assembled to form the uth African flag

The Confederation of African Football (CAF) finalized with the Broadcast Rights owners and the Broadcasting Organization of Nigeria, BON, that the 2013 AFCON Final match be beamed live on local TV stations in Nigeria, CAF Secretary General, Hicham El Amran, told a media conference in Johannesburg.

A scene from the closing of the Afcon 2012

January Inflation decreases to 7.0 percent

The Annual Food and Non-food Inflation Rate

The annual rate of inflation, as measured by the all items Consumer Price Index (CPI), decreased by 0.3 percentage points, from 7.3 percent in December 2012 to 7.0 percent in January 2013. This means that on average, prices increased by 7.0 percent between January 2012 and January 2013. The decrease in annual inflation is attributed mainly to decreases in some food prices.

The annual food inflation rate was recorded at 7.6 percent in January 2013 compared to 8.4 percent recorded in December 2012. This implies that there was a 0.8 percentage point decrease in annual food inflation. The annual non-food inflation rate increased by 0.2 percentage points from 6.1 percent in December 2012 to 6.3 percent in January 2013. Annual Inflation Rates: Food and Non Food Items

Annual Inﬂation Rate January 2012 - January 2013 8 7

Total

Food

Non-Food

Weight

1 000.00

534.85

465.15

Jan '11 - Jan '10

6.3

4.2

8.6

Feb '11 - Feb '10

6.5

4.3

9.1

Mar '11 - Mar '10

6.6

4.1

9.4

Apr '11 - Apr '10

6.3

3.7

9.2

May '11 - May '10

6.3

3.5

9.5

Jun '11 - Jun '10

6.1

3.8

8.7

Jul '11 - Jul '10

6.9

5.0

8.9

2011

6 (Percentage)

Period

5 4 3 2 1 0

Composite

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sept

Oct

Nov

Dec

Jan

Aug '11 - Aug '10

6.5

5.8

7.3

6.4

6.5

6.6

6.7

6.2

6.4

6.6

6.8

6.9

7.3

7.0

Sep '11 - Sep '10

6.6

6.1

7.3

Oct '11 - Oct '10

6.7

6.3

7.2

Nov '11 - Nov '10

6.4

6.0

6.8

Dec '11 - Dec '10

6.0

5.3

6.6

Jan '12 - Jan '11

6.4

6.1

6.8

Feb '12 - Feb '11

6.0

5.5

6.5

Mar '12 - Mar '11

6.4

Apr '12 - Apr '11

6.5

6.4

6.5

May '12 - May '11

6.6

6.8

6.3

Jun '12 - Jun '11

6.7

7.1

6.2

Jul '12 - Jul '11

6.2

6.3

6.0

Aug '12 - Aug '11

6.4

7.3

5.5

Sep '12 - Sep '11

6.6

7.5

5.6

Oct '12 - Oct '11

6.8

8.2

5.4

Nov’12- Nov’11

6.9

8.0

5.8

Dec '12 - Dec '11

7.3

8.4

6.1

Jan '13 - Jan '12

7.0

7.6

6.3

Movements in Annual Inflation Rates for CPI Main Groups

82.4 7.0 7.5 6.9 6.0 6.3 6.2 7.4 7.8 8.9 9.7 8.5 6.2 7.0 7.7 7.7 8.9 8.6 7.9 6.9 7.7 6.3 6.1 6.5 6.5 5.9

8.2 6.4 7.7 6.5 6.7 7.2 7.1 6.3 4.5 5.2 3.2 6.1 5.6 8.1 7.4 7.4 6.2 5.6 4.5 5.4 6.2 6.9 7.5 5.5 5.1 4.1

Miscellaneous Goods & Services

Health

114.1 17.2 18.2 18.3 16.1 18.3 16.0 15.3 7.2 7.7 6.2 6.4 6.1 6.1 4.8 4.9 5.7 5.3 5.4 5.3 4.5 3.5 4.9 5.0 7.0 6.1

Restaurant & Hotel

Furnishings, HouseholdEquip.., Routine Hse Mtc

80.8 4.4 5.9 7.6 9.5 9.4 9.6 10.0 10.6 9.0 8.5 8.7 8.2 9.3 8.1 7.9 6.4 6.0 5.4 5.6 5.0 5.7 4.3 6.7 6.5 6.7

Education

Housing, Water, Electricity, Gas & Other fuels

15.2 1.4 2.6 2.1 2.9 5.0 5.3 4.8 3.6 3.8 4.6 4.0 2.0 2.4 2.9 3.5 2.4 3.3 3.6 5.2 5.0 5.9 3.7 5.0 5.9 6.8

Recreation & Culture

Clothing & footwear

534.9 4.2 4.3 4.1 3.7 3.5 3.8 5.0 5.8 6.1 6.3 6.0 5.3 6.1 5.5 6.4 6.4 6.8 7.1 6.3 7.3 7.5 8.2 8.0 8.4 7.6

58.1 12.9 13.8 8.0 -0.1 3.5 5.4 0.6 4.2 5.9 0.2 2.8 7.5 0.4 3.0 5.6 0.4 5.2 2.9 0.5 4.4 3.4 0.4 6.8 7.2 0.3 7.4 6.4 0.0 7.0 8.4 0.4 7.8 6.7 0.6 7.8 9.2 0.5 7.7 8.5 1.1 8.0 8.9 1.3 7.7 7.8 1.2 8.1 7.2 1.2 8.0 6.6 1.1 7.1 7.3 1.0 8.1 5.9 1.7 7.2 3.4 1.7 5.2 6.0 2.2 5.7 4.9 2.3 4.1 4.6 1.7 2.1 3.3 1.4 4.2 3.6 1.3 4.1

26.6 6.0 7.4 9.3 8.1 7.4 9.2 8.2 7.2 8.2 8.4 9.4 9.0 8.6 9.6 7.9 8.2 9.3 8.5 9.6 9.8 9.5 9.2 9.0 8.8 13.9

3.4 8.2 8.3 9.5 8.5 7.4 8.4 5.5 8.4 6.3 5.5 6.4 3.9 5.2 5.2 3.0 3.3 3.2 2.1 4.6 2.6 4.2 4.6 3.5 5.0 5.8

49.7 6.3 6.4 6.5 6.3 5.8 4.8 5.5 5.1 4.5 4.8 3.0 4.8 3.1 3.8 4.7 5.6 6.3 6.6 6.8 7.2 7.7 7.6 7.6 6.6 8.3

Communication

Alcoholic beverages & Tobacco

1000 6.3 6.5 6.6 6.3 6.3 6.1 6.9 6.5 6.6 6.7 6.4 6.0 6.4 6.0 6.4 6.5 6.6 6.7 6.2 6.4 6.6 6.8 6.9 7.3 7.0

Transport

Food & Non-alcoholic beverages

Jan '11 - Jan '10 Feb '11 - Feb '10 Mar '11 - Mar '10 Apr '11 - Apr '10 May '11 - May'10 Jun '11 - Jun '10 Jul '11 - Jul '10 Aug '11 - Aug'10 Sep '11 - Sep '10 Oct '11 - Oct '10 Nov '11 - Nov '10 Dec '11 - Dec'10 Jan '12 - Jan '11 Feb '12 - Feb '11 Mar '12 - Mar '11 Apr '12 - Apr '11 May '12 - May'11 Jun '12 - Jun '11 Jul '12 - Jul '11 Aug'12 - Aug'11 Sep '12 - Sep '11 Oct '12 - Oct '11 Nov '12 - Nov '11 Dec '12 - Dec'11 Jan '13 - Jan '12

All Items

Between January 2012 and January 2013, the annual rate of inflation increased for Alcoholic Beverages and Tobacco; Clothing and footwear; Transport; Education; Restaurant and hotel and Miscellaneous Goods and Services. The annual rate of inflation decreased for Food and non-alcoholic beverages; Housing, water, electricity, gas, and other fuels; Furnishings, Household Equipment and Routine Household Maintenance, Health; Communication; and Recreation and culture. Annual Inflation Rate: CPI Main Groups

2012

0.0 0.2 0.0 0.1 0.2 0.0 0.3 7.3

0.0 0.2 0.0 0.1 0.4 0.0 0.4 7.0

Onion, large Cooking oil Bread Sugar Tea, powder Eggs Salt Milk (fresh) Sub-total

2011

2012

Period Jan '11 - Dec '10 Feb '11 - Jan '11 Mar '11 - Feb '11 Apr '11 - Mar '11 May '11 - Apr '11 Jun '11 - May '11 Jul '11 - Jun '11 Aug '11 - Jul '11 Sep '11 - Aug '11 Oct '11 - Sep '11 Nov '11 - Oct '11 Dec '11 - Nov '11 Jan '12 - Dec '11 Feb '12 - Jan '12 Mar '12 - Feb '12 Apr '12 - Mar '12 May '12 - Apr '12 Jun '12 - May '12 Jul '12 - Jun '12 Aug '12 - July '12 Sep '12 - Aug '12 Oct '12 - Sep '12 Nov ‘12 - Oct ‘12 Dec '12 - Nov '12 Jan '13 - Dec '12

Total 1000.0 0.7 0.7 1.1 0.6 0.3 0.0 1.2 0.6 0.4 -0.2 0.1 0.5 1.1 0.3 1.5 0.7 0.4 0.0 0.7 0.9 0.5 0.1 0.2 0.8 0.8

Food 534.9 1.1 0.5 1.0 0.6 -0.1 -0.6 1.5 0.1 0.3 -0.2 0.4 0.6 1.8 -0.1 1.9 0.5 0.3 -0.4 0.8 1.1 0.5 0.4 0.2 1.0 1.1

2 Kgs 3 litres 1 loaf/day 6 Kgs 1 Kg 2 Units 1 Kg 4x500ml

Kwacha 145,000 3,000 4,500 9,100 372,000 210,000 1,750,000

Housing (3 bedroom) Sub-total

Quantity 2x90Kg bags 10 tablets 4x400g 1x500ml

Total for Basic Needs Basket

Item Education Grades 8-9 (User+PA/year) Grades 10-12 (User+PTA/year) School Uniform (grades 8-12) Health (clinic) Registration (book) Self referral (Emergency Fee) Mosquito Net (private)

Between December 2012 and January 2013, Non-food inflation rate decreased by 0.1 percentage points from 0.6 percent in December 2012 to 0.5 percent in January 2013.

Weight

6,000 34,400 5,200 14,400 35,000 8,000 2,900 5,200

Commodity Charcoal Soap (Lifebuoy) Wash soap (Boom) Jelly

The month - on- month food inflation rate was recorded at 1.1 percent in January 2013 compared to 1.0 percent recorded in December 2012. This implies that the monthly food inflation rate increased by 0.1 percentage points.

Contributions of different Items to overall inflation

January 2013 4.0 0.1 0.6 0.8 0.5

(A) COST OF BASIC FOODS ITEMS FOR A FAMILY OF FIVE IN LUSAKA Commodity Kwacha Quantity Total Mealie Meal (breakfast) 54,900 2x25 Kgs 109,800 Beans 18,000 3 Kgs 54,000 Kapenta (dry) 51,400 2 Kgs 102,800 Bream, smoked 52,000 1 Kg 52,000 Beef (mixed cut) 25,800 4 Kgs 103,200 Dark Vegetables (green) 4,700 4 Kg 18,800 Tomatoes 5,700 4 Kgs 22,800

The Month on Month Food and Non-food Inflation Rate

Of the total 7.0 percent annual inflation rate in January 2013, food products accounted for 4.0 percentage points, while non-food products accounted for a total of 3.0 percentage points. Percentage Points Contributions of different items to Overall Inflation December 2012 4.4 0.1 0.6 0.9 0.5

JANUARY 2013

Source:CSO,PricesStatistics,2013

ITEMS Food and Non-alcoholic beverages Alcoholic beverages and Tobacco Clothing and footwear Housing, Water, Electricity, Gas and Other fuels Furnishings, Household Equipment, Routine house maintenance Health Transport Communication Recreation and Culture Education Restaurant and Hotel Miscellaneous Goods and Services All items

Performance update January 2013

Non-Food 465.2 0.2 0.9 1.1 0.6 0.7 0.6 0.9 1.1 0.4 -0.1 -0.2 0.3 0.3 0.6 1.0 0.8 0.5 0.5 0.7 0.6 0.4 -0.3 0.1 0.6 0.5

12,000 41,280 156,000 43,200 35,000 16,000 2,900 20,800 K 790,580 (KR 790.5800) Total 290,000 30,000 18,000 9,100 372,000 210,00 1,750,000 K2,679,100 (KR2,679.1000) K3,469,680 (KR3,469.6800)

Kwacha

Item Transport (bus fare round trip) KR 400 - KR 600 Chilenje - Town KR 650 - KR 1,000 Chelston - Town KR 100 - KR 200 Matero - Town Fuel (cost at the pump) KR 3 - KR 5 Petrol (per litre) KR 5.50 Diesel (per liter) K R30 - KR 120

Kwacha KR 8 KR 8.6 KR 8 KR 8.155 KR 7.566 KR 5.154

Total for Basic Needs

(D) SOME COMPARATIVE FIGURES OF WAGES ‘Take Home Pay’ Profession

Payslip

Teacher

K 1,695,174.82 to K 2,725,990.49

Nurse

K2,418,245.99 to K2,798,245.99

Secretary in Civil Service

K1,633,715.49 to K2,749,227.15

Average Monthly Income in Urban Low - Cost Area - CSO

K 1,403,000 (2010 Living conditions survey)

Total for previous Months Dec 2011 Jan 2012 Feb 2012 Mar 2012 Apr 2012 May 2012 Jun 2012 Jul 2012

Amount

Aug 2012 Sep 2012 Oct 2012 Nov 2012 Dec 2012

K 3,456,360 K 3,455,500 K 3,450,060 K 3,475,720 K 3,475,720

K 2,904,150 K 2,968,280 K 2,996,120 K 2,935,680 K 2,907,540 K 2,909,820 K 3,395,660 K 3,445,000

This survey was conducted on 30th January, 2013 by the Social Conditions Programme of the Jesuit Centre for Theological Reflection. Average prices were calculated on the basis of prices gathered from retail outlets at Northmead, Shoprite (Cairo Road), City Market, Chawama, Chainda, Kabwata, Matero and schools, clinics/hospitals and filling stations around Lusaka. The January Basic Needs Basket is approximately US$646 based upon an average middle exchange rate of 5.3672KR per US$ at the end of January.

Jesuit Centre for Theological Reflection, P.O. Box 37774, 10101 Lusaka, Zambia Tel: 260-211-290-410 Fax: 260-211-290-759 E-mail: basicjctr@jesuits.org.zm Website: www.jctr.org.zm Location: 3813 Martin Mwamba Road, Olympia Park, Lusaka

Source: CSO, Prices Statistics, 2013

Market Indicators and Commentary

1 Month 3 Month 6 Month

% 0.215 0.3153 0.526

Inflation Oct '12

% 6.8

2 years 10.98 3 years 12.75 5 years 13.5 7 years 14.48 10 years 16.5000 15 years 16.6000

Benchmarks

USD Fed rate UK BOE rate EU ECB rate

0.25 0.50 0.75

Nov '12

% 6.9

Commodities Commodities

Current

YTD % Change

4.97 8.85 0.16 20.4

Equity Markets Equity Indices

LuSE FTSE 100 DOW JONES NIKKIE

10000 9500

9000 8500 8000 7500 7000 6500 6000

01/06/11

01/08/11

01/10/11

Current

3,647.49 5,866.82 13,025.58 9,458.18

YTD % Change

-11.00 5.00 6.00 12.00

01/12/11

01/02/12

01/04/12

01/06/12

01/08/12

01/10/12

Copper prices have traded the $7500-$8000 per tonne range over the past 3 months with the rise in the price capped by continued worries over the Euro zone crises, high chinese inventories and the looming U.S. fiscal cliff.

USDZMK

5400

COPPER (USD/MT) 7978 1702.14 GOLD (USD/OZ) Brent Crude Oil (USD/BRL) 112.22 CORN ($/BUSHEL) 758.75

91 days T'Bill Yield

Daily Copper Price

10500

6 4 2 0

5200

start of year

Current

LuSE

4,091.94

3,647.49

-11%

FTSE

5,572.28

5,866.82

12,287.04

13,025.58

8,455.35

9,458.18

12%

5000 4800 4600 4400 4200 01/11/11

01/02/12

01/05/12

01/08/12

01/11/12

Kwacha has given back all the gains made as a result of the introduction of SI33, the currnecy has traded a 5100 -5300 range since October '12.

16 Commerce Gazette | Jan-Feb Edition 2013

Jun Aug Oct Dec

Libor

8.9807 12.2401 12.49 13.0044

Govt. Bonds

Jan

91 - days 182 - days 273 - days 364 - days

Rate

Money Markets

DW Jones Nikkei

Legal News U.S. Blocks Deal Between Top Beer Distributors

alk about a buzz kill.

The Justice Department has filed a lawsuit to block a merger between the first and third largest beer distributors. The 27-page civil antitrust lawsuit, filed in the U.S. District Court for the District of Columbia, challenges Anheuser-Busch InBev’s acquisition of Mexican brewer Grupo Modelo, which makes Corona Extra. In a conference call with reporters, Bill Baer, assistant attorney general in charge of the justice department’s Antitrust Division, said that the $20.1 billion deal ‘is a bad deal for American consumers’ because retail prices of beer would rise if the $20.1 billion sale goes through. Together, ABI , which sells 200 brands including Budweiser and Stella Artois, and Modelo control about 46 percent of annual beer sales in the United States. MillerCoors, the second largest beer firm,

accounts for about 29 percent of nationwide sales, according to the Justice Department. Last year, national beer sales hovered around $80 billion. Although the Belgium-based ABI has a 50 percent non-controlling stake in Grupo Modelo, in June 2012 ABI agreed to pay a 30 percent premium to Grupo Modelo’s share price for the remainder of the shares. Combined, the new company would have annual sales of about $47 billion, and employ 150,000 workers in 24 countries. ‘The loss of this head-to-head competition would enhance the ability of ABI to unilaterally raise the prices of the brands that it would own postacquisition, and diminish ABI’s incentive to innovate with respect to new brands, products and packing,’ according to the lawsuit. ABI did not return phone calls from ABC News. ABC News

Image credit: Joe Raedle/Getty Images

Indiana Farmer Takes on Seed Behemoth Monsanto; Justices Skeptical of Farmer’s Claim

ernon Bowman travelled to Washington from his Indiana farm to hear the Supreme Court justices discuss his challenge to seed behemoth Monsanto, but the 76-yearold found himself seated too far back in the chamber to follow the arguments. But he reiterated what his lawyer had argued: He said the seed company was wrong when it sued him in 2007 for patent infringement. At issue is a dispute over the patent for a soy bean seed developed by Monsanto that is resistant to the powerful weed killer Roundup. Farmers pay a premium price for the seeds and enter into a contract with the company. Farmers who use the special seeds must buy new seeds for subsequent planting seasons.

Vernon Bowman

knowing what variety I have planted. However, most of the soybeans I have purchased turned out to be resistant to Roundup.’ In 2007, Monsanto sued Bowman for patent infringement. Bowman’s lawyers argued that the patent does not cover the purchase from the grain elevator. In the highly technical lingo of patent law Bowman’s lawyers say the patent is ‘exhausted’ once the patented article is sold. A lower court entered a judgment of $84,456.20 in Monsanto’s favour. Inside the Supreme Court, several of the Justices seemed skeptical of Bowman’s claim.

‘Why in the world would

For years, Bowman has purchased the seeds from Monsanto for his first crop and he has abided by the technology agreement.

anybody spend any money to try to improve the seed if as soon as they sold the first one anybody could grow more and have as many of those seeds they want?’ Chief Justice John Roberts asked

But like some other farmers, he sometimes plants a second crop of soybeans in a practice called ‘late season planting.’ Because the late season planting is risky due to a short growing time and the threat of drought, Bowman didn’t want to invest in the expensive soy bean seed for the second planting.

Walters said Monsanto’s theory is that any farmer who grows a soy bean seed is ‘infringing the patent but for the grace of Monsanto. And that’s a lot of farmers in this country, when we have over 90 percent of the acreage’ that uses the so called ‘Roundup ready’ seeds.

He had an idea: He would save money and buy a mix of unlabeled seed from a grain elevator, hoping that most of it would be Roundup resistant. After harvesting that crop he would save the progeny and replant it.

He reiterated that his client had always abided by the rules for his first planting, but chose to save money and go to the grain elevator for the risky second planting.

Monsanto argues that the restrictions are necessary to protect the company’s investment and its patented technology. According to Monsanto, the seed is now being used in more than 90 percent of soybeans grown in the United States. But its popularity has also generated lawsuits: By 2010, Bowman’s lawyers say, Monsanto had filed 136 infringement lawsuits against 400 farmers and 53 small businesses.

‘I didn’t look at it as a loophole,’ Bowman said outside court today. He said the Monsanto patent was abandoned once the soybean reached the grain elevator. Bowman did not hide his actions from Monsanto, asking the company to provide legal guidance. In 2007 he wrote to the company: ‘I have been buying soybeans from an elevator for planting after wheat. There is no way of

Bowman’s lawyer, Mark P. Walters.

Several of the justices focused not on the purchase of the seed from the grain elevator, but the replanting of those seeds for subsequent crops. ‘You know, there are certain things that the law prohibits. What is prohibited here is making a copy of the patented invention. And that is what he did. So it’s generation 3 that concerns us,’ Justice Stephen Breyer said.

‘The Exhaustion Doctrine permits you to use the goods that you buy,’ Justice Sonia Sotomayor said. ‘It never permits you to make another item from the item that you bought.’ Assistant to the Solicitor General Melissa Arbus Sherry argued on behalf of the Department of Justice in support of Monsanto. ‘If the concept is the sale of a parent plant exhausts the patent holder’s rights not only with respect to that seed but with respect to all the progeny seed’ then patented protections would be eviscerated, she argued. Monsanto lawyer Seth P. Waxman said the company would never have commercialized its invention and ‘never would have produced what is, by now the most popular agricultural technology in America’ if the patent had been so easily exhausted. Supporters of Bowman say the case highlights a troubling and dangerous situation in which a handful of large agrichemical corporations own a large share of seeds. ‘The essence of the case is this: who should control and own seeds, the very product of life,’ said Debbie Barker, whose group Center for Food Safety has filed a friend of the court brief on behalf of Bowman. ‘Corporations are saying that they own seed, but in fact seeds have been bred, exchanged and saved by farmers over the centuries.’ But Scott McBride, a partner at Chicago-based law firm McAndrews, filed an amicus brief on behalf of universities eager to ensure innovative biotechnology continues to be made available for the public benefit. ‘If the Supreme Court were to side with Bowman, existing biotechnology patents would be devalued, and the incentive to innovate in biotechnology going forward would be severely harmed,’ he argued. The Supreme Court decision could affect many areas of biotechnology, including vaccines, DNA and treatments for cancer, he said. As for Bowman, he says he’s not afraid of losing. ‘I know it’s a possibility,’ he said. ‘I have one good thing going for me: I’m poor as nothing, I was lucky when they brought a suit against me that I was broke anyway. ‘ ABC News

Commerce Gazette | Jan-Feb Edition 2013 17

FBZ partners with World Vision Zambia

to improve water provision in rural & poor communities

inance Banks Zambia’s (FBZ) commitment to uplift the standard of living, sanitary and hygienic environment for the vulnerable continues to bring joy to the less privileged in our society. In keeping with its corporate social responsibility (CSR) initiative FBZ partnered with World Vision Zambia to assist the people of Kalomo with clean water through the provision of a borehole. Barkat Ali, FBZ’s managing director speaking at the handover ceremony where he flagged of the construction of a well to the people of Kalomo in Simwendanduli Village said 11 more boreholes will be sunk within the next two months in 10 other identified locations. FBZ will be investing ZMK 423 million in the borehole exercise during 2013.

From left: Kalomo District Commissioner, Omar Munsanje, FBZ MD Barkat Ali, World Vision Zambia national director Michael Veitenhans and FBZ’s Helen Lunda.

Emphatically articulating the bank’s CSR initiative Ali said, ‘this is an initiative that is close to my heart. ‘We want to give back to the communities that we live and work in by contributing towards the promotion of good health and wellbeing. ‘We identified various areas in Zambia that had communities that do not have access to clean water thus leading to disease, opportunistic infections and early loss of life, a plight affecting our children, especially children under the age of 5. ‘As Finance Bank Zambia we are providing water to the communities, schools and hospitals in rural and urban areas particularly those areas where water is not available and where the communities have to walk long distances to get water.’ FBZ’s donation of boreholes in the rural areas will significantly alleviate the plight of rural women who are usually responsible for collecting water from long distances. The women can utilize their time doing other activities that would add to their earnings and so improve their socio economic conditions. District Commissioner Omar Munsanje who was the guest of honour at the occasion expressed his joy at the drilling of the borehole in Kalomo. Munsanje said FBZ and World Vision Zambia’s assistance would have a direct bearing on government efforts to attain the Millennium Development Goals by 2015, specifically the MDG number 7 aimed at ‘improving access to clean and safe drinking water to the majority of the people in the low income group’. The Mukango Water Project is set to transform the lives of over 300 households by sinking 11 boreholes not only in Kalomo but also Choma, Monze, Chipata, Lusaka, Kaoma, Kasama, Katete, Mbala, Mpika and Mwinilunga,’ said Michael Veitenhans, World Vision national director. Among the guests at the ground-breaking ceremony was Request Muntanga, Kalomo Central, MP.

18 Commerce Gazette | Jan-Feb Edition 2013

Request Muntanga, Kalomo Central MP

TIZ asks ZESCO to explain contract to Alstom SA

a company blacklisted by the World Bank for corruption

ransparency International Zambia’s executive director Goodwell Lungu has written to the Zambia Electricity Supply Corporation (ZESCO) managing director Cyprian Chitundu requesting for ‘justification’ and ‘details’ for awarding of the tender for works on generators at Kariba North Bank power station to Alstom SA. In an interview with Commerce Gazette Lungu said, ‘Transparency International Zambia is interested in knowing how and why Alstom SA was awarded the contract on the generators at Kariba North Bank power station’. We want to state that this announcement was rather surprising considering the allegations that have been raised. Lungu said he was sure that Chitundu is ‘aware of the serious corruption allegations and subsequent debarring of Alstom SA for three years by the World Bank in 2010’.

‘ZESCO being a public parastatal company fully owned by Zambians needs to be accountable to the public. ‘We are requesting that ZESCO avail us any relevant information related to the transaction, for instance the minutes for the procurement or tender meeting at which the decision to award the tender was arrived at, including the procurement procedure or guidelines for the company.’ Lungu appealed to Chitundu to ‘protect the image of ZESCO’ by explaining the contract ‘as this deal has the potential of damaging its reputation’. ‘It has always been our stance that public institutions should not only fight against corruption and abuse of office but even the perception of these vices.’

Affordable smart phone launched by Mr Phone

Zambian start up company, Mr Phone Business Center, has grown in leaps and bounds and has attracted foreign direct investors, Data Wind and Tekaccess in a partnership that has launched the UBI Slate 7CZ, a tablet smart phone, that is envisaged to change the ICT landscape for Zambian consumers. The UBI Slate 7CZ is not only for entertainment and games but is an educational device that gives users access to internet connectivity where ever they may be.

‘This is a commendable initiative

by Data Wind, Tekaccess and Mr Phone to make available a device that is affordable to the users including students,’

said Dr Muyenga Atanga permanent secretary, Ministry of Transport, Works, Supply and Communications. ‘Our commitment as government to the development of the economy through ICT innovations cannot be over emphasized. This is clearly demonstrated by the approval of the ICT policy as a priority sector in the national development plan. The sector is an enabler of social and economic development.’ Mr Phone Business Center was founded by Friday Tembo, a Zambian businessman who recalled his aspirations when he began his business. ‘My passion for technology has been around for as long as I remember and I worked hard in every job I had before I earned enough to realize my childhood goal of starting my own technology business. There are those few who believed in me and gave me opportunities to grow my business and myself.

‘Children in Zambia now have an opportunity to own an affordable piece of technology and bridge the digital divide between them and the children of the west. The UbI Slate 7CZ will enable users to have low cost access to internet among other benefits. Telecoms experts predict smartphone shipments to Africa are set to rise. A report by the International Telecommunication Union (ITU) said there were about six billion subscriptions at the end of 2011 compare to nearly seven billion people on earth. The study found that almost one billion subscriptions were in China. Sim cards used in a tablet or to access the internet on a laptop computer have yet to be counted. In developed countries, 70 percent of the population is online, compared with 24 percent in developing regions. These are relatively modest numbers, which would mean that there would be a surge in numbers of mobilebroadband subscriptions in developing countries in the near future. The launch of the UBI Slate 7CZ tablet by Tembo shows his business astute to lay the groundwork for wider adoption further down the line. His realizes that for mobile broadband to replicate the mobilecellular explosion and bring more people online, besides the extension of 3G network coverage the price for the smart phone have to go down even further. Tembo told Commerce Gazette that his smartphones, tablets and other mobile devices will be the first online experience many people in Zambia will use to connect to the internet. ITU figures show that smart phone penetration in Africa is led by Nigeria with 41 percent, followed by South Africa with 31 percent and Kenya 7 percent. Usage has grown from a base of 90 million in 2005 to a current estimate of 450 million handsets in 2012.

This, Tembo said, has motivated him and shown him the value of helping others.

Commerce Gazette | Jan-Feb Edition 2013 19

Catholic Bishops urge government to be inclusive T

he Zambia Episcopal Conference released their pastoral statement on government’s performance in 2012.

In the statement they discussed a number of varying concerns that affect the Zambian people.

Registration of all mobile SIM cards

To restore confidence the pastoral statement urged that the nation deserves answers and inform to avoid unhealthy speculation and rumours.

Human Rights

‘We demand the government to respect and promote human rights,’ the bishops said.

On the business front the bishops comment on the call by government through the Zambia Information and Communication Technology Authority (ZICTA) for all mobile phone users in Zambia to register their SIM cards with service providers or risk having them deactivated.

The statement said the Constitution of Zambia guarantees all people in the country fundamental human rights and freedoms.

According to ZICTA, the move is meant to deter criminality in Zambia and would be in accordance with the Information Communication Technologies (ICT) Act No 15 of 2009 and the Statutory Instrument on the Registration of Electronic Communication Apparatus No. 65 of 2011.

Among the rights Zambians enjoy are the right to life, freedom of expression, freedom to association, movement and conscience. The government has therefore an inescapable obligation to promote and respect the human rights of citizens. This obligation also extends to citizens to respect each other’s rights.

While the intention to deter criminality and control abuse of communication technologies is noble, they called upon the Zambian government to put in place legal guarantees for the protection of personal data and privacy.

The Judiciary

The pastoral statement said there has been persistent discourse on the state of the judiciary with respect to its independence and impartiality. There are also many unresolved questions of public interest that have been left hanging and unanswered by the Executive. For example, when shall we see progress on the much talked about reforms in the judicial system? What is the current status of the Judge Chikopa Tribunal that was appointed last year? Why do we still have an acting Chief Justice and deputy Chief Justice? When are these structural issues going to be resolved?

20 Commerce Gazette | Jan-Feb Edition 2013

The bishops said, ‘Despite having instruments and institutions designed to promote and protect human rights, the human rights situation in Zambia is deteriorating in a manner that is causing worry. Examples include the arbitrary use of power by government officials; intimidation and threats of arrest against leaders and individuals who speak against government; deportations and even threats to our own Catholic priests for sermons seen as critical of government’. The Constitution making process The bishops bemoaned that ‘up to now a people driven democratic constitution continues to elude us as a nation’. ‘This’ they said, ‘is in spite of colossal amounts of money and time that have been gobbled and wasted on this exercise. The Patriotic Front (PF), in their pre-September 2011 election campaigns promised the Zambian people a new constitution within ninety days of their accession to power. Today, sixteen months down the line, little progress, if any, seems to have been made on the constitution.’

Despite having instruments and institutions designed to promote and protect human rights, the human rights situation in Zambia is deteriorating in a manner that is causing worry. Examples include the arbitrary use of power by government officials; intimidation and threats of arrest against leaders and individuals who speak against government; deportations and even threats to our own Catholic priests for sermons seen as critical of government .

The bishops said there are public misgivings on the current constitution-making process, in part, due to the following reasons: a)

The refusal of the current administration to give the constitution-making process a legal framework that would protect the process and the content.

The uncertainty and lack of a roadmap and a predictable timeline on the process has also led to doubts about the sincerity of government on the constitution. From the time that the Technical Committee started work on the constitution, several deadlines for completion of the process have been promised and missed. Currently we have a new deadline of 30 June 2013. We hope that this new milestone will be upheld and honoured.

The non-publication of the projected budget for the entire constitution making process: This state of affairs is unacceptable because it goes against the need for government’s accountability on expenditure. Government needs to exhibit transparency in this matter.

Uncertainty on the referendum question: The people of Zambia deserve better. We need a categorical assurance of a Referendum by the Executive because that is what the Zambian people want and this is what they were promised by the current administration.

The need for more consultation

The bishops urged the government to carry everyone along when important decisions are being made. They said that in the recent past unprecedented government decisions and actions were being made by way of decrees. However, though the constitution gives powers to the Republican President to make decisions even by decree, it is desirable and sometimes necessary to consult, as this facilitates prior understanding and appreciation of issues and guarantees success at implementation stage, the bishops said. This was particularly notable they said in the case when government has announced the creation of new political boundaries and governance structures. Another case of the absence of consultation is in the areas of education. The Education Act governs the government–church relationship in the education sector. As major stakeholders, the bishops said they are dismayed by the growing tendency for unilateral pronouncements, circulars and directives coming from government functionaries. Some of these directives have far-reaching consequences in the manner Catholics run schools and sometimes border on matters of policy. Government would do well to consult with key local partners and stakeholders on such matters e.g. issues to do with school fees in our schools. Similarly in the area of health, a Memorandum of Understanding (MoU) governs the Catholic Church’s relationship with the government. The bishops said it is disheartening to see major decisions such as the realigning of their medical institutions to new government ministries taken without due consultation. NOTE: Efforts by Commerce Gazette to get government’s response to the pastoral statements from ZANIS have failed as Commerce Gazette has been advised that ZANIS is not mandated to subsidize private publications in news gathering for their profit making initiatives.

Commerce Gazette | Jan-Feb Edition 2013 21

NATSAVE spearheads kwacha rebasing education in rural communities By Florence Bupe he announcement by the Bank of Zambia (BoZ) of a currency switchover, early last year, was received with a lot of anxiety followed by intense preparations for the transition.

The currency shift involved knocking off three zeros from the old currency, which had K50,000 as the highest denomination. The new currency class has K100, K50, K20, K10, K5 and K2 notes. The shift has also seen the re-introduction of coins for low value denominations. Prior to the currency switchover, the Bank of Zambia worked with other stakeholders in the bank and non-bank financial segments to sensitise the masses on the new currency values and features. The National Savings and Credit Bank’s (NATSAVE) main mandate was and continues to be the enhancement of financial inclusion in Zambia, especially for the usually excluded rural population. NATSAVE is one of the institutions that has been actively involved in educating the rural communities on the kwacha rebasing exercise, and now, two months into the use of the new currency, Natsave spoke to a few of its customers, particularly in their rural branches, to gauge their understanding of the new kwacha notes. Random interviews were done with a few of its customers and community members, one of them being Atmon Muchenga Chiluba from Kaputa, who expressed happiness at the introduction of the new notes. ‘It is easier to carry a lot of money, particularly in reference to one hundred kwacha (KR100) notes. I do not have problems dealing with the new currency because the value is the same as the old currency,’ he said. Chiluba, who is a businessman, however feels that the one kwacha (KR1) denomination should have been in note form and not coin, as is the case. He says he has been facing challenges with coin use, as most customers are not keen on using or receiving coins. He also says it is cumbersome to carry coins around.

Luckson Chawe, also of Kaputa, says he has no challenges with the rebased currency and is able to smoothly transact in the new currency. In Chawe’s opinion, the new rebased currency will make the kwacha appear stronger against the United States dollar and other major convertible currencies. When asked whether the rebasing of the kwacha will add value to the local currency, Chawe responds: ‘Yes! Because one dollar is now equivalent to five kwacha rebased (KR5). ‘The rebased currency is a panacea to businessmen’s needs of carrying huge sums of money,’ he said.

Atmon Chiluba Muchenga in his shop in Kaputa district.

In Chilubi, customers are generally impressed with the use of the new currency, and have no difficulties telling apart the new from the old currency. A few people, though, have challenges with coins. Luckson ChaweFeels the rebasing has added value to the kwacha

Jacqueline Kasuba Lutanda: ‘There is need for sensitization and Jacqueline Kasuba Lutanda: massive education ‘There need for if rural is people are sensitization to and massive education if rural appreciate people are to appreciate the advantages of the the advantages of the rebased rebased currency’ currency’.

22 Commerce Gazette | Jan-Feb Edition 2013

Avito Bantungwe laments that it is difficult to keep coins safely, as they are going missing.

Avito Bantungwa

Christopher Chikwembe and Albina Nsange were also interviewed, and they equally appreciate the new currency. However, Chikwembe still has challenges issuing change when a customer produces the old currency and he has to give back change in the new currency, and vice versa.

Albina Nsange serving a customer Albina Nsange serving a customer

African Business News

Western tax avoidance

hinders African development

Associated British Foods has spirited millions away from its sugar operations in Zambia, where two-thirds live in poverty

Caroline Muchanga showing her receipt for the market stall tax she has to pay. Photograph: Jason Larkin/Panos Pictures/ActionAid

Anglo American Platinum counts cost of violence and strikes in South Africa

Chris Griffith, Anglo American Platinum CEO

he litany of major multinational companies accused of tax avoidance has grown, with Associated British Foods – owners of brands ranging from Silver Spoon and Ryvita to Primark – added to the list including Vodafone, Starbucks, Barclays and Boots.

government, enabling it to exploit a tax break originally designed to support domestic farmers. This saw its tax rate tumble from 35% to just 10%, costing a further $9.3m of revenue. We estimate Zambia has lost $27m in total – a huge sum for one of the poorest countries in the world.

The one big difference is that this time ActionAid is not accusing the company of finding ‘clever’ ways to shrink their British tax bills but those owed in Zambia, where two in three people live below the poverty line and 45% of children are malnourished.

The sad thing is that African nations (just like the UK) desperately need the jobs and investment that big business, such as Associated British Foods, can provide. Yet the positive impact companies bring is massively undermined by systematic tax avoidance, which ultimately means fewer teachers and doctors can be employed, stunting development overall.

The miner, which is 80%-owned by London-listed Anglo American, announced plans to lay off up to 14,000 people last month, prompting another strike and fuelling fears of a fresh crisis across South Africa’s mining sector.

The financial engineering performed by Associated British Food’s Zambian sugar operations follow an all-too familiar pattern of tax liability reduction. Pre-tax profits of $123m generated since 2007 have been whisked away through the tax havens of Ireland, Mauritius, the Netherlands and Jersey, depriving Zambia of some $17.7m. That’s enough to put 48,000 additional Zambian children in school a year. Associated British Foods has responded with John Bason, ABF’s chief financial officer, arguing:

‘

I’ve looked really closely at this, and the payments made by the sugar business [to Ireland and Mauritius] are all for services provided and it is at cost.’ But it’s odd then that the Irish accounts show profits of 26% on these huge ‘management fees.

Like the independent British coffee shops and booksellers outraged by the lack of a level playing field when faced with the likes of Starbucks and Amazon, domestic Zambian businesses also suffer. ActionAid met market traders like Caroline Muchanga, who in some years has paid more business tax in Zambia – in absolute terms – than the giant multinational she lives next to, despite the fact that her children go to bed hungry at night. While we believe that companies have a responsibility to shun aggressive and artificial tax practices, ultimately it’s the rules of the game that have to change. Permissive international corporate tax rules were built for a bygone era and are simply not fit for purpose in today’s globalised economy. Leaders from India, South Africa, Argentina, Senegal and indeed Zambia have been calling for systemic change to fix a broken system and there’s certainly been no shortage of handwringing rhetoric from UK politicians; from George Osborne telling us that tax avoidance was ‘morally repugnant’, to David Cameron imploring big business to ‘wake up and smell the coffee’ on the issue. Now it’s time for the politicians to put their money where their mouths are. Securing the visionary international agreements we need won’t be easy, but there are signs that big breakthroughs are on the horizon. The US and EU have recently tabled legislation making extractive industries much more transparent about their financial contributions, though of course this will have no impact on a company like Associated British Foods. The US is twisting the arm of tax havens to eliminate the secrecy that enables tax avoidance and evasion to flourish unchecked.

mplats sales down 16% and output 8% in 2012 as industrial action and worsening market conditions take their toll

Anglo American Platinum, the world’s biggest producer of the precious metal, has swung into the red at the end of a year scarred by violent unrest and strikes at its South African operations.

More than 50 people were killed in strikes in the platinum belt, near Rustenburg, west of Pretoria, in August and September. The worst violence happened at Lonmin’s Marikana mine where 34 demonstrators were killed and 78 injured when police opened fire on 16 August. The unrest spread to other companies, including Amplats, where workers staged a two-month illegal strike. That too descended into violence and at least one miner was killed in clashes between police and striking workers. Amplats said industrial action had cut full-year on year output by 8% last year, while sales dropped by 16%. The company posted a hefty operating loss of 6.3bn rand (£450m), down 180% from a year earlier – hit by falling sales, lower platinum prices and soaring costs. Headline losses per share rose to 562 cents, way off the profit of 1,365 cents reported in the previous year. Last month Amplats set out plans to cut output by almost a fifth in an attempt to save 3.8bn rand annually. The company aims to close four mine shafts in Rustenburg in the north of the country and sell a smaller operation further east. But the proposal was condemned by South Africa’s mining minster and caused the latest walkout at three Amplats mines. Management has agreed to delay the required 60-day consultation process by two weeks to allow the parties to seek alternative solutions. Its chief executive, Chris Griffith, said: ‘The proposed portfolio review recommendations continue to require extensive consultation with government, organised labour and other stakeholders prior to implementation.’ The Guardian

The G20 finance ministers will discuss new proposals on how to make transient multinationals pay their fair share, with Britain, France and Germany raising expectations of a breakthrough. Cameron has already (and admirably) stuck his neck out by making tax and transparency priority issues as chair of the G8 this year. There are even rumours that he’ll lead the way by forcing the 50% of tax havens with close constitutional links to the UK to break their culture of secrecy.

It’s also not accidental that these fees are going to Ireland, which allows the company to exploit an abusive tax treaty preventing Zambia applying the normal 20% withholding tax levy on these transactions. On top of these fairly standard tax avoidance schemes, the company also won a court case against the Zambian

24 Commerce Gazette | Jan-Feb Edition 2013

While these highwire political processes might seem a world away from Muchanga’s market stall in Zambia, this year we have a golden opportunity to give her children a better future. It won’t happen without a fight, so we need to keep the pressure up on our political leaders to deliver a fairer tax system for us all. The Guardian

Amplats miners in South Africa staged a two-month illegal strike that ended in clashes between protesters and police. Photograph:Alexander Joe/AFP/Getty Images

International Business News Govt says

Tax fizzy drinks and ban junk food ads, say doctors

French firm

sold horsemeat as beef

Obesity is the ‘single greatest’ threat to health, say the doctors

izzy drinks should be heavily taxed and junk food adverts banished until after the watershed, doctors have said, in a call for action over obesity. The Academy of Medical Royal Colleges, which represents nearly every doctor in the UK, said ballooning waistlines already constituted a ‘huge crisis’. Its report said current measures were failing and called for unhealthy foods to be treated more like cigarettes. Industry leaders said the report added little to the debate on obesity. The UK is one of the most obese nations in the world with about a quarter of adults classed as obese. That figure is predicted to double by 2050 - a third of primary school leavers are already overweight. Doctors fear that a rising tide of obesity will pose dire health consequences for the nation. The Academy of Medical Royal Colleges is a ‘united front’ of the medical profession from surgeons to GPs and psychiatrists to paediatricians. It says its doctors are seeing the consequences of unhealthy diets every day and that it has never come together on such an issue before. Its recommendations include: • A ban on advertising foods high in saturated fat, sugar and salt before 9pm • Further taxes on sugary drinks to increase prices by at least 20% • A reduction in fast food outlets near schools and leisure centres • A £100m budget for interventions such as weight-loss surgery • No junk food or vending machines in hospitals, where all food must meet the same nutritional standards as in schools • Food labels to include calorie information for children Prof Terence Stephenson, the chair of the Academy, evoked parallels with the campaign against smoking. He told the BBC: ‘That required things like a ban on advertising and a reduction in marketing and the association of smoking with sporting activities - that helped people move away from smoking.’

and lambasted a culture where it was deemed acceptable to drink a litre of fizzy drink at the cinema. A tax was needed to help ‘encourage people to drink more healthy drinks,’ he said. ‘Doctors are often accused of playing the nanny state, we didn’t hear from a single person who said they liked being overweight, everybody we met wanted help from the state and society. ‘If we didn’t have things like this we wouldn’t have speed limits that save lives, we wouldn’t have drink-driving limits that save lives, there’s a host of things that society and state does to help us live long, healthy fulfilling lives and we’re just suggesting something similar.’ But Terry Jones, of industry body the Food and Drink Federation, said the report ‘seems to be a damp squib and to add little to an important debate’. ‘The Academy of Medical Royal Colleges has presented as its recommendations, a collection of unbalanced ideas apparently heavily influenced by single issue pressure groups,’ he said. ‘FDF had hoped that today’s report would have looked seriously at how the food industry and the medical profession would have worked together to tackle obesity, and genuinely brought new insights to bear on how to empower healthier choices and change behaviour to deliver better long-term public health outcomes. This report fails to do that.’ The British Soft Drinks Association rejected the idea that a tax on soft drinks, which it said contributed ‘just 2%’ of the total calories in the average diet, would address a problem ‘which is about overall diet and levels of activity’.

Temptation

Dr Aseem Malhotra, a cardiologist who helped draw up the report, has noticed more and more of his patients are overweight and suffering from obesity related illnesses. He told the BBC: ‘The root cause is the food environment, it’s like telling children going into a sweet shop not to eat sweets. ‘There’s nothing wrong with the occasional treat, but those treats have insinuated themselves into the daily diets of most people. ‘There’s an oversupply of cheap sugary foods, clearly regulation is needed.’ The Department of Health in England has a set up voluntary agreements with the food industry as part of its responsibility deal. Health minister Lord Howe welcomed the report and said he wanted to see ‘businesses intensifying their efforts as well’.

He said there was no ‘silver-bullet’ for tackling obesity, instead the entire culture around eating needed to change to make it easier to make healthy decisions. ‘I choose what I eat or whether I smoke, what people have told us is they want help to swim with the tide rather than against the current to make the healthy choice the easy one,’ he said. While the report makes a raft of recommendations, Prof Stephenson attacked sugary drinks for being ‘just water and sugar’

He said: ‘To tackle the rising tide of obesity the industry, healthcare professionals, government and individuals all need to continue working together to get results, which is why our Call to Action sets out how important this is. ‘Government is already helping people make healthier choices by working with industry to reduce fat, salt and sugar in foods and by giving children and families advice on how to eat well, get active, and live longer through Change4Life.’

Horsemeat products at horse butchery in Dortmund. Photograph: Ina Fassbender/ Reuters

French investigation into how horsemeat found its way into ready meals in Europe found that a French processing company called Spanghero knowingly sold Romanian horsemeat labelled as beef, Consumer Affairs minister Benoit Hamon said. Hamon said the firm engaged in ‘fraud’, and Agriculture minister Stephane Le Foll said Spanghero’s licence was being suspended while experts carried out tests on products at its processing plant. ‘The investigation shows that Spanghero knew that the meat labelled as beef could be horse. There was a strong suspicion,’ Hamon told a news conference, adding that a Romanian supplier named in the affair seemed to have been acting in good faith. He said Spanghero had received a shipment of horsemeat from a Dutch middleman and passed it off as beef upon reselling it to frozen food processor Comigel. ‘Did the meat arrive at Spanghero with the same label of ‘Beef, origin EU’ which is the label that it left with?’ he asked. ‘No. It arrived with a label that said ‘product of Romania, meat on the bone’, but on the bill and the carrier information there was a customs code for horsemeat.

‘Much cheaper than beef’

‘It would seem that the first agent in this chain to label the meat ‘beef’ was indeed Spanghero,’ Hamon said, adding that the southwest based company could not have failed to notice that the meat in question was much cheaper than beef. He said a total of 750 tonnes of horsemeat was involved. Hamon also said the processor, Comigel, should have realised the problem as soon as the meat was thawed if they had not already noticed the questionable paperwork. In an emailed statement, Spanghero denied the accusations. ‘Spanghero confirms having placed an order for beef, having been led to believe it received beef, and having sold back what it thought was beef, properly labelled as such, in line with European and French regulations,’ the firm said. The scandal has spread to involve 13 countries and 28 companies.

UK arrests

British police said that three men were arrested by officers investigating the scandal. Police said the arrests were linked to suspected fraud offenses occurring at two plants which were inspected earlier this week by the UK’s Food Standards Agency. Police said two men – aged 64 and 42 – were arrested at Farmbox Meats near Aberystwyth, in Wales while a 63-year-old man was arrested at the Peter Boddy Slaughterhouse in Todmorden, West Yorkshire. The Food Standards Agency had ‘detained’ all meat on the premises and seized paperwork and customer lists from the two plants. Pan-European police agency Europol is coordinating a continentwide fraud investigation amid allegations of an international criminal conspiracy to substitute horse for more expensive beef. France 24

BBC News

Commerce Gazette | Jan-Feb Edition 2013 25

The Barber A man was getting a haircut prior to a trip to Rome. He mentioned the trip to the barber who responded, Rome? Why would anyone want to go there? It’s crowded, dirty and full of Italians. You’re crazy to go to Rome. So, how are you getting there?’ ‘We’re taking Kenya Airways, was the reply. ‘We got a great rate!’ ‘Kenya Airways?’ exclaimed the barber. ‘That’s a terrible airline. Their planes are old, their flight attendants are rude, and they’re always late. So, where are you staying in Rome?’ ‘We’ll be at the downtown International Marriott.’ ‘That dump! That’s the worst hotel in the city. The rooms are small, the service is surly and they’re overpriced. So, whatcha doing when you get there?’ ‘We’re going to go to see the Vatican and we hope to see the Pope.’ ‘That’s rich,’ laughed the barber. ‘You and a million other people trying to see him. He’ll look the size of an ant. Boy, good luck on this lousy trip of yours. You’re going to need it.’ A month later, the man again came in for his regular haircut. The barber asked him about his trip to Rome. ‘It was wonderful,’ explained the man, ‘not only were we on time in one of Kenya Airways’s brand new planes, but it was overbooked and they bumped us up to first class. The food and wine were wonderful, and I had a beautiful 28 year old stewardess who waited on me hand and foot. And the hotel - it was great! They’d just finished a $25 million remodeling job and now it’s the finest hotel in the city. They, too, were overbooked, so they apologized and gave us the presidential suite at no extra charge!’ ‘Well,’ muttered the barber, ‘I know you didn’t get to see the Pope.’ ‘Actually, we were quite lucky, for as we toured the Vatican, a Swiss guard tapped me on the shoulder and explained that the Pope likes to personally meet some of the visitors, and if I’d be so kind as to step into his private room and wait, the Pope would personally greet me. Sure enough, five minutes later the Pope walked through the door and shook my hand! I knelt down and he spoke to me.’ ‘Really?’ asked the Barber. ‘What did he say?’ ‘He said, ‘Where did you get the lousy haircut?’

The CEO A fellow had just been hired as the new CEO of a large tech corporation. The CEO who was stepping down met with him privately and presented him with three numbered envelopes. ‘Open one of these if you run up against a problem you don’t think you can solve,’ he said. Things went along pretty smoothly, but six months later, sales took a downturn and the CEO was really catching a lot of heat. About at his wit’s end, he remembered the envelopes. He went to his drawer and took out the first envelope. The message read, ‘Blame your predecessor.’ The new CEO called a press conference and tactfully laid the blame at the feet of the previous CEO. Satisfied with his comments, the press - and Wall Street - responded positively, sales began to pick up and the problem was soon behind him. About a year later, the company was again experiencing a slight dip in sales, combined with serious product problems. Having learned from his previous experience, the CEO quickly opened the second envelope. The message read, ‘Reorganize.’ This he did, and the company quickly rebounded. After several consecutive profitable quarters, the company once again fell on difficult times. The CEO went to his office, closed the door and opened the third envelope. The message said, ‘Prepare three envelopes.’

Last Wishes An elderly gentleman, quite well to do, realized that his life was turning down the final stretch, so he summoned the three friends that he trusted the most for some advice. One was a doctor, one a priest, and the other an attorney. ‘I’ve been thinking lately,’ he said to them, ‘that perhaps there is something to the ancient Egyptian belief that when we die, we take some things with us to the next world. So, I’m giving each of you an envelope with K1 million cash in it. At my funeral, I ask each of you to slip it into my casket so that I can use it on my journey to the next world.’ The three agreed. A few weeks later, he was dead. At the funeral, each of the three went up to the casket, and each placed an envelope into the casket. Afterwards, the three were talking, and the doctor couldn’t keep it in any longer. ‘I have a confession,’ he said. ‘This year has been quite bad for the clinic. My CAT scanner broke, and I had to scrape to replace it. I took K80,000 out of the envelope to pay for it.’

Lawyer Fishing A lawyer and an engineer were fishing in the Caribbean.

As the other two cringed, the priest then added, ‘I must confess, too. The poor have been especially unfortunate this year, and to provide them with food, I took K120,000 out and used it to feed and clothe them.’

The lawyer said, ‘I’m here because my house burned down, and everything I owned was destroyed by the fire. The insurance company paid for everything.’

The attorney was beside himself. ‘I am disgusted. Our friend asked but one thing of each of us, and trusted us with his last request. How could you two break that trust and go against his wishes?’

‘That’s quite a coincidence,’ said the engineer. ‘I’m here because my house and all my belongings were destroyed by a flood, and my insurance company also paid for everything.’

The doctor replies, ‘You expect us to believe that you, an attorney, didn’t take anything out of your envelope?’

The lawyer looked somewhat confused. ‘How do you start a flood?’ he asked.

‘I would never!’ replied the attorney. ‘In that envelope was a personal check for the full amount!’

The Artist An artist asked the gallery owner if there had been any interest in his paintings on display at that time. ‘I have good news and bad news,’ the owner replied. ‘The good news is that a gentleman enquired about your work and wondered if it would appreciate in value after your death. When I told him it would, he bought all 15 of your paintings.’ ‘Thats wonderful,’ the artist exclaimed. ‘What’s the bad news?’

New Office A young businessman rented a beautiful office and furnished it with antiques. However, no business was coming in. Sitting there, worrying, he saw a man come into the outer office. Wanting to look busy, he picked up the phone and pretended he was negotiating a big deal. He spoke loudly about big figures and huge commitments. Finally, he put down the phone and asked the visitor ‘Can I help you?’ The man said, ‘I’ve come to install the phone.’

‘The guy was your doctor.’

‘The sheer size of the contract and the audacity of Zesco to sign an agreement with a company whose record is well known by the Ant-Corrption Commision (ACC) is shocking to the nation. We are deeply disappointed and appalled that a company that was debarred by the Word Bank for impropriety is back and Zesco is having fanfare signing contracts without seeing anything wrong in entering into a contract with the company. it will be interesting to know the position of government and the ACC over this Zesco fiasco. We challenge the government to investigate how a company that was blacklisted can now be doing business without new information about their new conduct. It is absolutely necessary that a procurement audit of this particular contract is conducted by government, with the involvement of all necessary law enforcement agencies, especially the Anti-Corruption Commission.’

‘We support government’s move to reject Zesco’s application to increase electricity tariffs. The current arrangement allows consumers to pay for the inefficient services by the power utility company. This is what we have been advocating as a union; to see Zesco improving on its service delivery. Those clients that are not connected despite having paid connectionfees should be supplied with electricity.’

Lee Habasonda Transparency International Zambia - president

Leonard Hikaumba Zambia Congress of Trade Union - president

Habasonda said the behavior of Zesco does not help the image of the country in terms of making Zambia’s stand on corruption to outsiders clear.

Hikaumba commenting on government’s rejection of proposed Zesco’s tarriff hike.

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