Executive Issues July issue - Recd on 11Jul08

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2/16Executive Issues

Volume 1 - July 2008

Executive Issues

FOR the last one month, controversy has raged over the reconciliation be-

tween President Levy Patrick Mwanawasa and his once arch-rival Michael

Chilufya Sata or King Cobra. Details of the so-called reconciliation have re-

mained sketchy , plunging their respective political parties into serious internalgossip. Sata has remained cagey over the deal to the extent that he is avoiding

discussing the matter even with his close party lieutenants. Inside the ruling

Movement for Multiparty Democracy (MMD), the situation is no better. Senior

party ofcials, most of whom have previously worked with Sata, strongly be-

lieve Mwanawasa is not being strategic in his dealings with Sata. You cant

trust Sata, said Mundia Sikatana, former Minister of Foreign Affairs, who re-

members the day Sata joined the MMD in 1991promising not to occupy any

position. But within a short time, Sata gladly took up successive senior posts

in the party. So, many MMD members, especially cadres, are unsettled by this

latest development.

Sata is politically astute and playing his game can be dangerous. We gather heplans to use his reconciliation to destabilize the MMD as it picks the succes-

sor to Mwanawasa. That way, he is said to believe, he could re-launch himself

politically . Mwanawasa is no longer an issue now since he is going, Sata

reportedly told one of his lieutenants when asked about the reconciliation. One

of the key agenda items he wants to test Mwanawasa on is the constitution-

making process. Satas strategy is to push for the reorganization of the ongo-

ing National Constitutional Conference (NCC) to include on their own terms

the Church mother bodies and the Oasis Forum, which are boycotting. If he

succeeds , he will claim victory, justify his new partnership and woo the politi-

cal support of the churches. Also key to the reconciliation is his deteriorating

health. He may need to make a further call on the public purse for future medi-

cal treatment in South Africa, which is fully guaranteed if he remains in good

books with government. His wife, Dr. Christine Kaseba, is believed to be play-

ing a vital role in inuencing his new course. PF Vice President Dr. Guy Scott

understands very well the suicidal political game Sata is playing. That is why

he had offered that the party refunds government expenses incurred by Sata

in South Africa. He was ruled out of order. Outspoken PF spokesperson Given

Lubinda is even more confused over the deal. He was never consulted despite

being a member of the Central Committee, which is yet to meet to discuss the

matter. But PF insiders do not expect anything tangible from such a central

committee meeting since the body is packed with Satas place men. Only Scott,

Lubinda and PF chairman of legal affairs Wynter Kabimba could dissent.

Some close family members are worried about Sata. They say he has been

devastated upon nding on his return that his closest and favourite son, Chi -

lufya, had died. He avoids talking about it, which they say is unusual for Sata.

Equally, worrying to them, is the fact that he has been issuing media statements

instead of quietly mourning his son until after a certain period.

Some nanciers of the PF have also been demanding a change of manage -

ment in the party. They want the strangle hold on the party of Sata and Scott

relaxed and replaced by a more democratic leadership with more party func-

tionaries taking on a role. They also want party funds to be channeled directly

to provinces and districts as opposed to the secretariat in Lusaka. They want

Sata to reconcile with the rebel Members of Parliament who deed his orderto stay away from the NCC. Sata has remained adamant and refused to drop

charges against the Dr. Peter Machungwa-led lawmakers, insisting that they

are indisciplined. Efforts are on going for the two camps to meet

and resolve their differences. A national conference is planned for

later this year but few PF members believe it will take off.

M w a n a w a s a

firting with a snake

BEHIND the scenes lobbying, talks and negotiations are underway to

get the key civil society and religious bodies join the ongoing National

Constitution Conference (NCC), which they are boycotting. Stanely

Mhango, President of the Forum for Democratic Process (Fodep) is

spearheading the initiative, which has so far, proved unsuccessful.

The Oasis Forum, comprising the Council of Churches in Zambia

(CCZ), the Zambia Episcopal Conference (ZEC) and the Non-Gov-

ernmental Coordinating Council (NGOCC) has refused to change

their mind and join. The Oasis Forum, together with some labour

organizations led by the Federation of Free Trade Unions (FFTUZ) in

Zambia are demanding a thorough review of the NCC Act, mainly to

reduce government representatives, if they are to join the process.

The boycott by these crucial groups may seem to be a failure for now,

but the impact may be felt once the document is submitted to the Ref-

erendum for adoption. The Oasis Forum plans to campaign againstthe NCC-produced document for lack of credibility. NCC chairperson

Chifumu Banda has pleaded with the boycotting groups to rescind

their decision, knowing too well that the credibility of his draft con-

stitution will be unacceptable among Zambians. Some donor aid

agencies have also tried to convince the Oasis Forum and its allies

to try and ght from inside the conference, arguing that constitution

making is a long battle. NCC Deputy Secretary Newton Nguni met

some of the civil society groups to try and get them on board but to

no avail. The resistance has been strengthened by the government

move to pack the NCC with mainly unknown pastors and NGO lead-

ers who sympathize with the ruling Movement for Multiparty Democ-racy (MMD). By and large, the composition of the NCC is considered

too large for any constructive debate.

Mutilating the Mungomba Constitution

The role of the NCC seems misplaced. Recent sittings of the commit-

tees of the conference clearly demonstrated a lack of understanding

of the role of the NCC. It appears the committees were duplicating

the work already done by the Wila Mungomba led Constitution Re-

view Commission (CRC), whose Report and Draft Constitution are

the working documents for the conference. Instead of validating the

two documents, NCC has resorted to receiving submissions from the

NCC - Mutilating

the Constitution

To pg 3

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Executive Issues

same people who presented their views to the CRC. This approach

has been criticized by many experts who think the process will now

be lengthened. They are mutilating a good document without any

reason, said Joyce Nonde, FFTUZ President, whose organization

decided to stay away from the NCC. The absence of former com-

missioners who served on the CRC makes it difcult for the NCC tohave institutional memory on the recommendations made in the draft

constitution. This has led to the duplication of the work by inviting

same petitioners to appear and give the same views they provided

to the CRC.

Interesting, some of the consultants who worked with the CRC have

been re-engaged by the NCC to perform the same tasks. The NCC

needed the services of the draftspersons as opposed to the general

consultants as if they are rewriting the entire documents. For sure,

the nal document that will come out of the NCC will be totally differ-

ent from the Mungombas widely accepted draft constitution and it is

likely the Referendum will throw it out depending on how organized

the Oasis Forum and allies will be. So far, the role of civil society

groups appears confusing and unfocussed. Maybe, it is a wake up

call to them to embrace new strategies and leadership.

NCC - Mutilating the Constitution

THE race for President of the ruling Movement for Multiparty Democ-

racy (MMD) is quietly heating up. The MMD is divided into different

camps, with members shufing around self-anointed presidential hope-

fuls. Names keep propping up as possible successors to President

Levy Patrick Mwanawasa. The President himself seems to be losing

grip on the party and may not contain the rancorous atmosphere which

is slowly building up within. The Christine Moonga, affair was only the

tip of the iceberg. The now expelled member of the National Executive

Committee (NEC) was always a political nonentity but she managed

to hit the party where it hurt when she openly accused Mwanawasa

of practicing tribalism. Moonga is well connected to the party heavy-

weights, who include her husband Paul Moonga, an ex-MMD LusakaDistrict chairperson as well as Mbita Chitala, the recently sacked Am-

bassador to Libya. Many more disgruntled MMD cadres are patiently

waiting for their turn to join the Moonga bandwagon, which is slowly

beginning to roll.

As insiders ght, most United National Independence Party (UNIP)

members are quietly jumping ship to join the MMD. Their main attrac-

tion is the possibility of seeing current Vice President Rupiah Bwezani

Banda or RB become President. Banda, a veteran politician and diplo-

mat, has never renounced his UNIP membership. So many UNIP mem-bers see him as their own man. Strategically, he has stayed away from

the ongoing campaign by his lieutenants who are pushing his name as

the suitable successor to Mwanawasa. Chief among the campaigners

is Lusaka Province minister Lameck Mangani and Deputy Information

MMD PRESIDENTIAL WOES

minister David Phiri. The Chewa boys is their new tag, referring to

their tribe, which is also Bandas lineage. They seem to have played

their cards well in organizing the party in the Eastern province but

their uncompromising maneuvers angers fellow Easterners. For

sure, Banda is now a key leading candidate for the MMD presidency

even though he has consistently refused to be drafted saying he is

too old for the job. Opposition Members of Parliament like working

with Banda, who avoids controversy even in parliament. However, his

chances will depend on whether Mwanawasa will openly give him the

support and his ability to spread his messages to other areas.

Another old mans name has recently surfaced within the MMD -Wila

Disraeli Mungomba (69 years) or WDM as he is fondly known among

his peers. He has not publicly stated his position though some senior

party ofcials have already started canvassing for his possible entry

into the race. Mungomba is not much of a peoples person though

he has impeccable credentials. His main weakness will be in dealing

with grassroots members. He is a Muzungu (whiteman), one insider

said. But his resume speaks volumes of a man widely unknown by

the young generation in Zambia. Former Member of Parliament for

Mporokoso during the Kenneth Kaunda era, Mungomba is a qualied

lawyer and banker who once served as President of the Africa Devel-

opment Bank (AfDB) (1980-85). He is a shareholder and chairman

of New Capital Bank Plc and sits on several boards of companies in

Zambia and abroad. He chaired the Constitution Review Commis-

sion (CRC) from 2003 to 2006 which drafted the constitution widely

seen as representing the peoples will. But it is unlikely that Mwa-

nawasa can back him after he produced a Constitution that literally

went against the Presidents wish. Another threat he has is his distant

involvement in internal MMD politics. He is a northerner and elder

brother to the late maverick politician, Dean Namulya Mungomba.

The young Turks have not been left out of the race. Stan Bwalya

Chiti, a lawyer, is among the busybodies. He has been meeting with

key potential backers within the party in readiness for the launch of

his campaign. Chairman of Goldman Insurance, Chiti is not politically

known, though he briey served as Member of Parliament for Mpika

and consecutively on the African Parliament. He tried to contest for

the MMD Vice-President at the last convention but the elections were

called off. He needs to grow, said one of the senior party ofcials.

He is a northerner and looks to be nancially ready for the battle. But

he is also too smart for grassroots politics though he wears a very

friendly demeanor.

Sebastian Kopulande, an ex-aide to President Mwanawasa is equally

in the race but very few people take him seriously. He has been ap-

proaching strategically placed people to back his bid but it appears a

lot of them do not think he will go far. Mbita Chitala is another politi-

cian who should be watched closely. Not that he can turn tables, but

he has the capacity of causing consistent troubles in the

MMD, which can eventually weaken the party. He is more ofTo pg 4

News




Executive Issues

veillance. However, he quietly sneaked out of the country in what the

nation was told an escapee. But the ongoing deals and counter deals

in the ght against corruption raises a lot of questions on his escape.

Over and above, Chungu has been seen ying around European capi-

tals, with a base in Portugal. How did he get the European visa? Many

ask. More complicated is the fact that his passport was conscated and

deposited in the magistrates court in Zambia as part of his bail

condition. So, how did he get the new passport? Chungu has

Fugitive spymaster in Mozambiquebeen seen openly checking-in at airports in the Democratic Republic

of Congo, Kenya, Rwanda, South Africa and Mozambique as well as

Portugal, Belgium and France without any difculties.

The absence of Chungu in court has, no doubt, made the corruption

cases more complicated. He was at the apex of the corruption allega-

tions. However, it also puts his co-accused, mainly Faustin Mwenya

Kabwe, Aaron Chungu and Chiluba is a precarious situation.

From front pg

Emily Sikazwe

Faces fresh

deportationFromf

rontpg

HIGHTLIGHTSNews

VJ, FTJ reconcile

Former President Frederick Titus Jacob Chiluba has

joined the reconciliation club and has made peace with

his one time close friend and condante, Vernon John-

son Mwaanga or ?VJ?. The two fell out after President

Levy Patrick Mwanawasa appointed Mwaanga tothe

position of Information minister, prompting mistrust be-

tween the two. At that

time Chiluba was having a big ght with Mwanawasa

following allegations that he stole millions of dollars

when he ruled Zambia from 1991 to 2001. However,

after a spell in government, Mwaanga equally fell out

of favour with Mwanawasa and he was unceremoni-

ously sacked from cabinet. Thereafter, Mwaanga re-

tired from active politics.The reconciliation of Chiluba

and Mwaanga coincided with that of President

Mwanawasa who made peace with his long-time

archrival, Michael Chilufya Sata of the Patriotic Front.

We hear, United Party for National Development

(UPND) President

Hakainde Hichilema or ?HH? is making overtures to

Sakwiba Sikota, or ?Saki? to re-join the UPND which

he left on the ground of tribalism. Sikota runs the small

United Liberal

Party (ULP).There are indeed ?no permanent enemies

in politics but permanent

interests.?

Diplomacy - More pack bags

Zambia High Commissioner to Namibia Grifn Nyiron-

go is on his way back after his stint in Windhoek.Nyirongo, who also once served as Zambia?s

Ambassador to Belgium, has been recalled and re-

placed by former presidential aide, Mavis Muyun-

da. Muyunda worked as poitical advisor to Presi-

dent Levy Patrick Mwanawasa from 2001 until she

was retired from her post early this year.Zambia?s

deputy Ambassador to China, Chilufya Kapwepwe

has also been brought back home after serving for

several years in missions abroad. Chilufya, daugh-

ter of Zambia?s liberation struggle hero, Simon

Mwansa Kapwepwe, served as deputy High

Commissioner in Namibia before her Beijing ap-

pointment. She is being replaced by

Zambia?s rst secretary in Washington.

Kapwepwe?s ?purge? came at a time when her

sister, Chileshe Kapwepwe was also unceremo-

niously removed as Managing Director of the Na-

tional Airports Corporation (NAC), in a move the

authorities said was to stop her from ?going for a

third term?. Few knew that the principle also ap-

plied to parastatal chiefs.Zambian Ambassador

to Japan, Godfrey Simasiku, we hear, is probably

next on the ight home. Former Central Province

deputy minister, Kennedy Shepande will replace

him, so we are told. Shepande, former a member of

parliament and chief whip of the opposition United

Party for National Development (UPND) joined the

ruling party in 2003.




Executive Issues

The Zambian delegation, headed by Labour and Social Security Minister

Ronald Mukuma, was quizzed by the International Labour Organisation (ILO)

in Geneva for introducing an obnoxious amendment Bill to the Industrial and

Labour Relations Act. Workers should be thankful to Joyce Nonde, President of

the Federation of Free Trade Unions in Zambia (FFTUZ), who put up a spiritedlobby in Geneva during the ILO annual meetings. Despite having been left out

of the government delegations, in preference to the rival Zambia Congress of

Trade Unions (ZCTU), Nonde managed to nd her way to Switzerland to put

the Zambian case in perspective. An ILO committee on freedom of associa-

tion summoned Mukuma with his delegation to explain the rationale of the new

amendment Bill, due to be presented in Parliament in July. The UN agency is

reported to have prevailed on Mukuma and his Permanent Secretary, Ngosa

Chisupa, to immediately withdraw the Bill and not to table it until the discrimi-

natory clauses were removed. In particular, ILO wants Zambia to convene a

meeting with trade unions to agree on the content before proceeding.

ILO contends that the proposed law, which President Levy Patrick Mwanawasa

said will be passed without changes, is a total violation of international con-

ventions on labour. In particular, the proposed amendment that requires trade

union leaders to be employees was ruled to be a violation of Article 3 of the

ILO convention number 87, which promotes freedom of association. No doubt,

the proposal was targeted at Nonde, an outspoken union leader, who is cur-

rently serving as General Secretary of the Zambia Union of Financial and Allied

Workers (ZUFIAW) despite having retired. Nonde previously worked for the

Labour minister quizzed over new Billstate-run Zambia National Building Society (ZNBS). In other words, the ILO

supervisory bodies consider that provisions which require all trade unions of-

cers to be actually employed in the respective occupation or undertaking are

contrary to the guarantees set forth in the Convention, ILO told the Zambian

delegation. Interestingly, ZCTU President Leonard Hikaumba, who was partof the Zambian delegation, did not raise objections to the Bill in Geneva even

though his Secretary General, Ian Mkandawire, had written to ILO to express

objections to the Bill. But on May Day, Mwanawasa said the Bill was being re-

jected by trade union leaders because they had personal interests to serve and

some wanted to overstay in ofce. However, former Secretary to the Cabinet

and Labour Commissioner Sketchley Sacika disagreed with the President,

arguing that trade union members should decide on their own as to who should

rule them. The election or appointment of ofcers of a trade union is a matter

for the members of a trade union, and the labour commissioner should have

nothing to do with such elections, Sacika argued.

But government insists that the Bill is aimed at protecting workers from leaders

who misuse their contributions, strengthen the collective bargaining process

by introducing one-union, one-industry principle to avoid formation of splinter

unions and prevent the public from being affected by strike actions in the so-

called essential sectors. Under the proposed bill the minister will have wide

powers to declare any sector essential. [ok]

PRESIDENT LEVY MWANAWASA has quietly appointed Supreme Court

Judge, Florence Ndepele Mwachande Mumba the new chairperson of

the Electoral Commission of Zambia (ECZ), subject to ratication by the

National Assembly. Mumba, one of the most experienced legal minds in

Zambia, was tipped to takeover as Deputy Chief Justice when Justice

David Mberere Lewanika passed on. However, her name was suddenly

dropped in preference for the younger , Justice Ireen Mambilima, who

has since been appointed, ratied and sworn in as Deputy Chief Jus-

tice. We hear there was a lot of talk over her proposed appointment, with

some questioning her parents nationality. However, despite missing the

key judicial appointment, Justice Mumba is believed to have the best cre-

dentials to handle the ECZ. She is a tough woman, so politicians should

watch out, one lawyer remarked.

Mumba appeared before the Select Committee of the National Assembly

on April 21st, appointed to scrutinize Presidential nominees. Her name,

backed with impeccable credentials, is expected to pull through the Na-

tional Assembly without difculty. But who is she?

Florence Who?

Justice Mumba to head ECZ Judge Mumba was born on 17 December 1948 in the copperbelt town ofMufulira in Zambia. She began her legal career in 1973 when she wascalled to the Zambian bar. She practiced law for many years before she

was appointed Director of the Department of Legal Aid in 1978. In 1980,

Mumba was appointed Judge of the High Court. She headed various

national commissions. In 1989, she was appointed Investigator-General,

which is Zambias Ombudsman, a post which she held until her appoint-

ment as Supreme Court Judge in I997.

On the international scene, Judge Mumba represented Zambia at the

Conference on Women in Nairobi in 1985 and at the African Regional

Conference on Women in Senegal in 1994. Within the International Com-

mission of Jurists, of which she has been a member since 1993, she

participated in the work of the Committee of Legal Experts for the Protocol

to the African Charter on the Establishment of an African Court on Human

Rights organised in South Africa in 1995. Finally, Judge Mumba took part

in the Sixth World Conference of Ombudsmen as African Regional Direc-

tor and Vice-President of the International Institute of Ombudsmen held

in Argentina in 1996.

She has also been a member of various national and international com-

missions such as the Commission of the Law Development of Zambia

from 1976 to 1979, the Council of Law Reporting Editorial Board of Zam-

bia from 1981 to 1983, the Council of Legal Education from

To pg 6

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Executive Issues

1985 to 1990, the Electoral Commission from 1992 to 1994 and the Unit-

ed Nations Commission on the Status of Women from 1992 to 1995.

In 1997, Judge Mumba was appointed Judge of the International Criminal

Tribunal for the former Yugoslavia on 20 May 1997. Among the famous

cases she handled includes: The Prosecutor Vs Drazen Erdemovic, The

Prosecutor Vs Anto Furundzija, The Prosecutor Vs Dragojulb

Kunarac et al., The Prosecutor Vs Milan Simic and the Prosecu-

tor Vs Blagoje Simic et al. As Appeals Chamber Judge, she sat on various

cases: The Prosecutor Vs Dusko Tadic, the contempts proceedings insti-

tuted against Milan Vujin and The Prosecutor Vs Zlatko Aleksovski.

Her major achievement was when she was elected Vice-President of the

ICTY between November 1999 and November 2001. After her term end-

ed, she returned to Zambia where he sat on the Supreme Court bench

until her recent appointment as chairperson of the ECZ.

She married Fleming Mumba , a renowned Lusaka motor rally driver who

died this year in a trafc accident.

Justice Mumba to head ECZ

To pg 7

News

THE race for President of the ruling Movement for Multiparty Democracy

(MMD) is quietly heating up. The MMD is divided into different camps, with

members shufing around self-anointed presidential hopefuls. Names keep

propping up as possible successors to President Levy Patrick Mwanawasa.

The President himself seems to be losing grip on the party and may not

contain the rancorous atmosphere which is slowly building up within. The

Christine Moonga, affair was only the tip of the iceberg. The now expelled

member of the National Executive Committee (NEC) was always a political

nonentity but she managed to hi t the party where it hurt when she openly ac-

cused Mwanawasa of practicing tribalism. Moonga is well connected to the

party heavy-weights, who include her husband Paul Moonga, an ex-MMD

Lusaka District chairperson as well as Mbita Chitala, the recently sacked

Ambassador to Libya. Many more disgruntled MMD cadres are patiently

waiting for their turn to join the Moonga bandwagon, which is slowly begin-

ning to roll.

As insiders ght, most United National Independence Party (UNIP) mem-

bers are quietly jumping ship to join the MMD. Their main attraction is the

possibility of seeing current Vice President Rupiah Bwezani Banda or RB

become President. Banda, a veteran politician and diplomat, has never re-

nounced his UNIP membership. So many UNIP members see him as their

own man. Strategically, he has stayed away from the ongoing campaign by

his lieutenants who are pushing his name as the suitable successor to Mwa-

nawasa. Chief among the campaigners is Lusaka Province minister Lameck

Mangani and Deputy Information minister David Phiri. The Chewa boys is

their new tag, referring to their tribe, which is also Bandas lineage. Theyseem to have played their cards well in organizing the party in the Eastern

province but their uncompromising maneuvers angers fellow Easterners. For

sure, Banda is now a key leading candidate for the MMD presidency even

though he has consistently refused to be drafted saying he is too old for

the job. Opposition Members of Parliament like working with Banda, who

avoids controversy even in parliament. However, his chances will depend

on whether Mwanawasa will openly give him the support and his ability to

spread his messages to other areas.

Another old mans name has recently surfaced within the MMD -Wila Disraeli

Mungomba (69 years) or WDM as he is fondly known among his peers. He

has not publicly stated his position though some senior party ofcials have

already started canvassing for his possible entry into the race. Mungomba

MMD PRESIDENTIAL WOESis not much of a peoples person though he has impeccable credentials.

His main weakness will be in dealing with grassroots members. He is a Mu-

zungu (whiteman), one insider said. But his resume speaks volumes of a

man widely unknown by the young generation in Zambia. Former Member

of Parliament for Mporokoso during the Kenneth Kaunda era, Mungomba

is a qualied lawyer and banker who once served as President of the Africa

Development Bank (AfDB) (1980-85). He is a shareholder and chairman of

New Capital Bank Plc and sits on several boards of companies in Zambia and

abroad. He chaired the Constitution Review Commission (CRC) from 2003 to

2006 which drafted the constitution widely seen as representing the peoples

will. But it is unlikely that Mwanawasa can back him after he produced a Con-

stitution that literally went against the Presidents wish. Another threat he has

is his distant involvement in internal MMD politics. He is a northerner and

elder brother to the late maverick politician, Dean Namulya Mungomba.

The young Turks have not been left out of the race. Stan Bwalya Chiti, a

lawyer, is among the busybodies. He has been meeting with key potential

backers within the party in readiness for the launch of his campaign. Chair-

man of Goldman Insurance, Chiti is not politically known, though he briey

served as Member of Parliament for Mpika and consecutively on the African

Parliament. He tried to contest for the MMD Vice-President at the last con-

vention but the elections were called off. He needs to grow, said one of the

senior party ofcials. He is a northerner and looks to be nancially ready for

the battle. But he is also too smart for grassroots politics though he wears a

very friendly demeanor.

Sebastian Kopulande, an ex-aide to President Mwanawasa is equally in the

race but very few people take him seriously. He has been approaching stra-

tegically placed people to back his bid but it appears a lot of them do not

think he will go far. Mbita Chitala is another politician who should be watched

closely. Not that he can turn tables, but he has the capacity of causing consis-

tent troubles in the MMD, which can eventually weaken the party. He is more

of an anarchist and strives where there is trouble. Depending on which camp

he will support, Chitala can, at times, be a good mobiliser of grassroots sup-

port. Former Member of Parliament for Mbala, Chitala is one of the founder

members of the MMD.




7

Executive Issues

Wila Mungomba The old man and the medals

Wila Disraeli Mungombas (WDM) name is now constantly mentioned in

political circles as the potential successor of President Levy Patrick Mwana-

wasa. [See our main story]. Even though he has never openly indicated his

position on the matter, he has become the subject of discussions among some

Zambians. The bow-tied man and former President of the Africa Development

Bank (ADB), is the recipient of six Ordre Nationale du Merit or Order of Merit

medals bestowed on him by the Governments of Ivory Coast, Cameroun, Togo,

Tunisia, Senegal and then Zaire (now Democratic Republic of Congo). He has

also been decorated with the Honour of Distinguished Diplomatic Services by

the Government of South Korea as well as the Honour for Distinguished Ser-

vices to Development in Africa by Mercury International.

But who is WDM?

Born on October 18, 1939, Mungomba is a Lawyer, Banker and Development

Consultant with over 30 years of experience working in Africa, United Kingdom

and the United States. Below are the key positions he has held;

Member of Parliament Mporokoso Constituency (1973-74)

Chairman - Public Accounts Committee in Parliament

President Africa Development Bank (1980-85)

Legal Advisor Zambian Mission to the United Nations

Counselor Zambian Embassy in Washington DC (1968-70)

Partner Jacques and Partners law rm (1971-74)

Executive Director International Monetary Fund (IMF) (1976-78)

Senior Executive Ofcer Standard Chartered Bank London (1979-80)

Legal and Financial Advisor Zambia Privatisation Team -retained

by the World Bank (1995-98)

Member - University of Zambia Council (1988-91)

Chairman - New Capital Bank Plc (2003 to date)

Chairman Constitution Review Commission (2003-06)

Mungomba holds a BA (Economics) degree from Makerere University in Ugan-

da. He is a lawyer and graduate of the Honourable Society of the Inner Temple

in London, holds a Postgraduate Certicate in International and Comparative

Law from the International and Cooperative Law Centre in Dallas Texas, United

States.

He is a widower with two daughters.

Whos who?

News

Dr. Katele Kalumba or Ka Ka is one of the most watched politicians in

the battle for succession. He has been in the race for the presidency for a

longtime now though his close associates say he has given up because of

the protracted cases of corruption against him. He has conspicuously gone

quiet, leaving most key decisions to his deputy Jeff Kande. Kalumba is very

popular in the MMD and cadres see him as their messiah. Two key issues

work against his presidential bid. One, he is from Luapula Province, which

produced Zambias second President Frederick Jacob Titus Chiluba. MostZambians would love the presidency to rotate to other provinces. Second, his

involvement in the corruption cases has terribly dented his image for public

ofce. Member of Parliament for Chiengi, Kalumba is one of the longest serv-

ing lawmakers in Zambia. He remains a man to watch.

Inside cabinet, the battle is even hotter. Of late, Finance Minister Ngandu

Peter Magande appears to be taking a strong lead ahead of his peers. Mwa-

nawasa has a soft spot for him because of his articulation on the countrys

economic policy. But too, he lacks party grassroots connections. Formerly

with the opposition United Party for National Development (UPND), Magande

plays his cards well. He is a media man and journalists love him because he

does not carry any airs around him. Former Secretary General of the ACP

Countries, Magandes resume is equally impressive. He hails from Southern

province.

Next in the race is foreign minister Kabinga Pande, a North-westerner.

A journalist by profession, Pande worked as Public Relations Manager at the

Bank of Zambia before he joined politics. He is very friendly and likes associ-

ating with the grassroots supporters of the MMD. He gives us attention when

you are talking to him, said one cadre. However, his political experience is

very minimal though he strategically won the position of deputy chairman of

the MMD at the last convention. Mwanawasa may just back him if he runs

out of options.

Felix Mutati, commerce minister, personally sells his candidature through his

impressive articulation of national issues. But odds are against him. He is a

Bemba from Northern Province and it is unlikely that Mwanawasa can give

him support. Crucially, he seems to be a show off and cadres detest him for

that. Though he usually helps them once in a while when they are in trouble.

Home Affairs minister Lieutenant General Ronnie Shikapwasha and Health

minister Brigadier General Brian Chituwos candidatures will be the most dif-cult to sell. Firstly, they are widely seen as part of the family tree of Mwana -

wasa. Therefore, any perceived family ties to Mwanawasa will disadvantage

such a candidate. Clearly, they will not go far. As for Shikapwasha, who calls

himself reverend, some have raised concerns over his leadership when he

was in Zambia Air Force (ZAF). He will have an uphill battle should he decide

to throw his hat in the ring.




Executive Issues

THE English clich of washing dirty linen in public could best describe the performance

of Barclays Bank Zambia new boss Zafar Masud and his Standard Chartered Bank

counterpart Mizinga Shansonga Melu at the recent Euromoney conference. At the cen-

tre of the rampus were the current commercial bank lending rates, which have remained

high despite the reduction in Ination and Treasury bills rates. Masud is with the people,

and agreed that the current interest rates in Zambia were unjustied. But Melu could

not take that. Central Bank Governor Caleb Mailoni Fundanga opened the debate, ear-

lier, by questioning the current lending rates. In his keynote address to the conference,

Fundanga observed that the bank interest rates had not scaled down as fast as the

reduction in ination. On average, the lending rates fell from 54.6 percent in December

2001 to 24.4 percent in December 2007, which is slower than expected. Masud, who

is also President of the Bankers Association of Zambia (BAZ), said lower lending rates

were indeed expected with the current low ination. With ination projected at 7.0 per-

cent by December this year, the interest rates should naturally fall, analysts say. But

Melu thinks customers have over amplied the issue of lending rates, and argued that

in most cases the rates were not as high as they were portrayed to be. Her comments

drew a sharp reaction of disapproval from the packed hall at The Pamodzi Hotel. And

Masud openly disagreed with her, attracting a round of applause, for coming out more

sympathetically to the business community. A study has now been commissioned by

BAZ to thoroughly investigate the reasons behind the persistent high interest rates. We

hear Bank of Zambia ofcials are also part of the team. The idea is to reduce the cost of

doing business in Zambia, which is said to be higher at present than in other emerging

markets.

More banks enter the market

With more players entering the Zambian banking sector, competition is expected to help

push down lending rates. The bigger players, Barclays Bank and Standard Chartered

Bank, who have been dominant in the market, will face stiff competition from new en-

trants. Zambia has 13 operating commercial banks. The 14th one, Access Bank of

Banks- Washing dirty linenNigeria, is scheduled to begin operating soon. We hear also that FNB of South Africa

has shown strong interest in launching a branch in Zambia. Analysts say more big

players are needed to enter the Zambian market which is small but with potential to

grow especially with the growth in the mining sector. Citibank Zambia managing direc-

tor Saviour Chibiya says more players are needed on the market because no single

bank in Zambia can provide a credit line of over US$100 million without syndication.

Justice Chinyanta, Zambias foremost banker and chief executive ofcer of the South

African-based LOITA Group of Companies agrees that competition is likely to change

the market. He observed that only 20 percent of the Zambian population is bankable

and so the market is larger and new players to tap in.

For instance, the Small and Medium Enterprises (SMEs) should be the market to

target, Chinyanta argued. He blamed the bigger banks for lacking innovation and only

offering Zambians copycat products and services. Standard Chartered bank has al-

ready planned a major product targeting the SMEs, which is to be launched soon.

It is also building on its mortgage scheme, which has attracted a large number of

Zambians from the formal sector.

Loans for the unbankable

One area that has steadily developed in recent years is the micro-nancing sector.

A number of institutions have been established to provide credit lines to less well to

do Zambians who, until recently, were considered unbankable. Teachers, soldiers

and civil servants now queue up at a number of micro-nancing institutions in order

to acquire salary-backed loans. But government wants to tighten the noose on these

institutions, arguing that a stronger regulatory regime is needed to deal with the mush-

rooming of micro-nance lending institutions. For instance, the BOZ survey on micro-nance institutions conducted in 1999 showed that most of them were operating with

inadequate capital while their corporate structures were too weak. There were about

98 micronance institutions operating in Zambia in an unregulated environment and

To pg 9

THE Zambian Kwacha was a key beneciary of the initial wave of new portfolio investor

interest in Sub-Saharan African markets last year. It now looks likely to strengthen again.

This time, economic fundamentals will play a greater role in the currencys apprecia-

tion. 2005 was an important year for Zambia. The country received sizeable debt relief

under the World Banks Heavily Indebted Poor Countries (HIPC) programme and the

G8-sponsored Multilateral Debt Relief Initiative. Zambias external debt fell from over

USD 7bn to just USD 500mn by the end of the year. The good news coincided with a rally

in copper prices, and a revival of activity on the copperbelt. Ination was still high, but

nominal T-bill yields were attractive. Investors bought into the Zambian story, seemingly

unaware of, or perhaps unconcerned that revenue earned from copper was negligible.

High yields, currency appreciation and the benet of leverage delivered more than 50%

returns within a few short weeks. The Zambian experience was pivotal, stimulating

more interest in African markets, and a new scramble for African assets. Risk appetite

may have changed since the heady liquidity-fuelled days of late 2005, but the ZMK nowlooks set to appreciate again, this time for reasons related to the imposition of a windfall

tax on copper earnings. The amount of tax revenue earned from copper, and the incen-

tives granted to investors in Zambias copper sector have long been a source

of controversy.

Business News

Analysis- Beware of the strong KwachaAccording to one civil society report (For whom the windfall?), the Zambian state re-

ceived USD 71mn in tax from mining companies over the 2002-06 period, against re-

ported mining sector prots of USD 652mn. Further copper price strength more recently

is likely to be even more favourable for the protability of the sector, although a substan-

tial sector-wide investment program is underway. With companies able to carry forward

costs associated with this investment, tax revenue was - until now - slow to rise, despite

the copper boom. A World Bank study conducted in 2005 suggested that the impact of

the development agreements (put in place to secure investment from new operators at

a time of weak international prices) was to create an effective marginal tax rate of 0%

for the mining sector against much higher marginal tax rates for other sectors of the

economy. Mining has however always been of strategic importance, as a formal sector

employer and as a contributor to export earnings. Despite extensive foreign ownership

in the copper sector post-privatisation, fortunes on the copperbelt have always been

synonymous with Zambias own economic performance. Between 2005 and 2006, thevalue of Zambias copper exports more than doubled, reaching USD 2.78bn, and has

risen further since. Pressure from the political opposition, as well as encouragement

from donors, helped to bring about a change in the tax regime, announced in this years

budget.

To pg 9




9

Executive Issues

this led to the BOZ introducing the Micronance Regulations of 2006, on the basis of

the Banking and Financial Services Act. These regulations managed to bring down the

number of micronance institutions to thirteen, Fundanga revealed, though he hinted

that the number may rise again going by the number applications under consideration.

The high interest rates charged on the poor is also alarming government. Finance and

National Planning minister Ngandu Peter Magande wants stronger protection against

what he calls exploitative interest rates by micro nance institutions. But the micro-

nance institutions argue that tightening their operations is not the answer but rathercloser monitoring to remove the logs in the sector. For instance, Micron Africa Zambia

Limited Managing Director, Ruskin Jere, says micro-nancing has managed to capture

the majority of Zambians who were considered unbankable by the bigger banks. No

bank looked at these people as customerswe managed to bring them on board as

micronance institutions, said Jere.

However, the risk factor of such lending is also high because most of the creditors have

no xed abode and can even forge documentation. And this explains the high interest

rates these institutions charge, another analyst explained. However, business is our-

ishing in this sector. Bigger players such as Barclays Bank have joined the bandwagon

and recently opened the micro-nance wing. But should the big guys be allowed to

join the lower league? This is a question which micro nance institutions have been

asking Central Bank. And many agree that big banks should be barred from getting into

micronance business.

Banks- Washing dirty linen

Business News

Now the mining sector faces a higher royalty rate (from 0.6% to 3%), higher corporate

taxes (from 25% to 30%, although losses may still be carried forward according to a pre-

determined 75:50:25 formula), and most signicantly - will see a windfall tax imposed

on copper earnings of up to 75%. Moreover, it is

probable that these payments will be made in ZMK, signicantly increasing the demand

for ZMK relative to the FX inows to which the market is accustomed. There is some

possibility that payments might be made in USD to the Zambia Revenue Authority, which

will then convert the proceeds at an average interbank USD-ZMK rate in an off-market

transaction with the Bank of Zambia, thus preventing the inows from impacting the

market severely. A sizeable currency appreciation appears imminent.

Gauging the impact of the sudden windfall

What will the impact of all of this be? Ofcial attitudes to currency appreciation are still

ambiguous. While Zambia, as a net oil importer, will benet in the near term from a

stronger currency, other factors are likely to

dominate government thinking. Although Zambia plans to reduce its traditional reliance

on donor nancing, for the moment, the contribution of donors to Zambias budget is

large enough for the authorities to be wary of seeing dramatic and sustained currency

strength. (The proceeds of the windfall tax have not been included in the 2008 budget).

With domestic revenue collection set to surge, Zambia will be able to make rapid prog-

ress in reducing its traditional donor reliance, should it wish to do so. But questionsabout revenue sustainability and the optimal means of development nancing must still

be considered).

In recent years, Zambia has also tried to boost its non-traditional sectors, especially

agriculture and tourism. While we believe that demand for high-end tourism may be rela-

tively inelastic with respect to the exchange rate, and that a stronger ZMK may actually

help with the cost of imported inputs for agriculture, such as fertiliser, (to say nothing of

the cost of much-needed infrastructure development), the authorities - under the inu-

ence of various lobby groups - may not be receptive to this view. There is therefore a risk

that sharp ZMK appreciation might be met with an ofcial effort to reverse or slow the

currencys gains. We have incorporated this into our currency forecasts, with a mid-09

USD-ZMK rate of 3500, compared with a rate of 3120 by the end of this year. But it is

not just the currency impact of kwacha strength on the economy that should be con-

sidered. The impact on future mining sector developments is equally important. Mining

companies have too much invested in Zambia to walk away now. The authorities appear

condent that the structure of the windfall tax will not act as a constraint on Zambian cop-

per output. Although a maximum windfall tax of 75% applies, the government estimates

that this (together with mining

sector royalties and the higher rate of corporate tax) will increase the total mining tax

rate from 31% to 49%. Clearly, opinions differ, but for now it is assumed that the extent of

investment spending already undertaken by existing mine operators will mean that they

are unlikely to exit Zambia as a result of the imposition of the windfall tax. (One of the

largest operators has already invested around USD 900mn in growth projects and the

rehabilitation of the mines since 2004, and still awaits signicantly higher production).

Simultaneous investment in rening capacity means that Zambia will have to remain ontrack to achieve its aspirational production target of 1mn tonnes of nished copper, for

it all to pay off (although copper from the Democratic Republic of Congo may also be

rened in Zambia). There is some truth to this argument. The importance of economies

of scale has driven the revival of the copperbelt in recent years. Signicant investment

has already been undertaken, and only more production will now help to drive costs

down. This is especially true in some of the wetter copper mines, where water pumping

can account for as much as 30% of the total running cost of the mine. If the pumps stop

operating, the mines would ood within hours. For at least one of Zambias largest mines,

a tripling of mine production is planned, and much of the investment spend has already

been committed. The huge increase in production will however require only a small in-

crease in the pumping requirement. Economies of scale will help lower production costs

and also help the mine to absorb more overhead costs. Having doubled output, Zambias

Copperbelt looks to do it again soon. Having invested considerably in Zambia, it may not

make too much sense for mining companies to withdraw at this stage.

However, there are still important factors that should be noted. The investment cycle

in mining is notoriously pro-cyclical, but the imposition of the windfall tax on mines will

reduce the upturns in the cycle. Given the structure of the windfall tax, for some of

Zambias mine operators, further upside when LME copper prices rise will be negligible.

This will impact investment on the copperbelt in the long term. For new operators even in

the midst of a copper boom, it may well be a choice between additional investment spend

in Zambia, or elsewhere, and the upside elsewhere may be higher.

Another potential problem with the windfall tax is that it is based solely on the sales

price for copper - it does not take into account the fact that different producers face dif-

ferent costs of production, depending on how the copper is extracted. In some cases,

ore grades in open pit mines have declined and production has been depleted, creating

a need for mining at greater depths. Costs in the Zambian mining sector are in general

already higher because of the existence of underground operations (in particular the

Konkola Deep Project which was necessary to prolong the life of one of Zambias largest

mines beyond 2011). This means that development overheads are also higher. But even

within Zambia, there is wide variation in the depth of the mines. The difculty with the

windfall tax is that it discriminates against the higher cost producers, and may discour-

age the development of more marginal producers. In the context of a copper-related

boom, this is unlikely to matter. Should copper prices correct down in the future, in line

with weaker international growth, it might exacerbate Zambias vulnerability to global

cycles. Clearly, there are various issues that may need to be revisited.

But in the near term, it looks likely that Zambia will go ahead with its plans for the windfalltax. Although royalties are paid monthly, the windfall tax is due at the end of each quarter

(based on daily LME prices - averaged out for a month). The ZMK has already been ap-

preciating, helped by ows related to a recent telecoms sector IPO. But the continuation

of signicant FX inows looks likely to drive USD-ZMK to even lower levels. The new tax

regime became effective from the start of this scal year -April 1st. With a 3 month grace

period on the windfall tax, ZMK appreciation pressures are likely to be most pronounced

between June and September (unless of course the government puts in place corrective

measures). Given the history of ZMK appreciation in leading portfolio investor interest in

African markets, global slowdown or not, we could be in for another wave of FX euphoria.

In the short term, at least. [Courtesy of Razia Khan of Standard Chartered Bank.


10/16




Executive Issues

Business News

He is a Zambian resident

in South Africa who will

be taking a sabbatical in

August this year as a fel-

low of the Weatherhead

Center for International

Affairs at Harvard Uni-

versity, though he will

continue as non-execu-

tive chairman of LOITA. I

will be there for one year

and intend to consolidate

the Groups potential

base in the US market,

Chinyanta said. A lawyer

by profession, Chinyanta

has over 25 years of ex-

perience in investment

banking, having worked

as Vice-President of Ci-

tibank Africa region as

well as HSBC Africa be-

fore venturing into LOITA.

He is an executive Vice-

President of the Southern

Africa Chapter of the Af-

rica Business Roundtable

(ABR).

LOITA Holdings Corpora-

tion, founded by Chinyan-

ta who is Group chair-

man and chief executive

ofcer, is the holding

company for LOITA Capi-

tal Partners International

an investment banking

rm and Fintech, an IT

company. The Group also

has interests in LOITA

Transaction Services,

which has a stake in Afri-

can Financial Switches.

LOITA

Smiling to

the bank

ONE question that unsettles the maverick Finance Minister

Ngandu Peter Magande is the imminent possibility of missing

the projected year-end ination target of 7.0 percent. Asked

whether he was on track with his ination target especially that

the gure is showing an upward trend in midyear, Magandes

tone changed: Why do you want to know? Do you use ination

in your planning at home? the minister queried the reporter at

a recent news conference.

He has every reason to be riled because recent developments

show that he may miss his much acclaimed target. Reasons?

The ongoing electricity outages, the rising in global oil prices

and the food shortages facing the world. These factors are put-

ting a strain on governments intention to tightly hold ination at

single-digit level. Dr. Denny Kalyalya, Deputy Governor of the

Bank of Zambia (BOZ) in-charge of operations, admitted the

problem, but was quick to point out that the 7.0 percent is stillrealistic, at least for now.

There are challenges in reaching that (ination) target but we

cant give up yet, Kalyalya told members of the Economic As-

sociation of Zambia (EAZ). Many economic pundits agree that

it may be difcult to achieve the 7.0 percent target if the current

trends of power outages and rising global oil prices continue.

After all, high ination is not always a bad thing, Barclays

Bank Managing Director Zafar Masud, chipped in, defending

Magande at the Euromoney Conference.

Infation Missing the targetStrong Kwacha is back

Away from ination, Zambians are also grappling with the

re-emergence of the strong Kwacha, which has been trig-

gered, we are told, by good economic performance mainly

in the mining sector. For instance, copper output shot-up

by 101.6 percent between 2000 and 2007, bringing in more

foreign exchange on the market. This was further beefed up

by the upsurge in copper prices on the international market.

The earnings from the Non-Traditional Exports (NTEs) tripled,

BOZ claims [see graph], though analysts argue that this sec-

tor has been badly affected by the strong Kwacha. Only few

NTEs performed well, the majority did badly, said Trevor

Simumba, an economist who has been following the trends.

He argued that cotton and tobacco industries are performing

badly due to the strong currency leading to job loses in rural

areas where the sectors employ a lot of labour and Indeed,

the gures from BOZ show a decline in some of the NTEs inrecent years.

The country is also enjoying huge savings from lower for-

eign debt servicing after the country qualied for the Highly

Indebted Poor Countries (HIPC) initiative after which the debt

stock decreased to US$2.1 billion as at December 2007 from

US$7.3 billion in 2001. Foreign Direct Investment (FDI) has

also picked up in the aftermath of the HIPC debt relief. And

so? Its a strong Kwacha! But is it good or bad? - That is a

question that still begs an answer.

Source: Bank of Zambia


12/16




Executive Issues

ZAMBIAN President Levy Patrick Mwanawasas credentials as a regional leader

have been bolstered, following his strong stance as SADC chairman on neigh-

bouring Zimbabwe. Western countries have used superlatives to describe his

leadership of the regional body. But the majority of his peers in SADC view him

as something of a sell-out who is conniving with the West to press for regime

change in Zimbabwe. By and large, the allegations against Mwanawasa are

unfounded but they persist. Out of the 14-member countries of SADC, only Bo-

tswanas new President Ian Khama and to some extent Tanzanias Jakaya Mrisho

Kikwete, seem to be in concert with Mwanawasa over Zimbabwe. President Rob-

ert Gabriel Mugabe and his government consistently portray

Mwanawasa as a Western puppet especially after he quite undiplomatically char-

acterized the political and economic meltdown in Zimbabwe as a case of the

Sinking Titanic. The remark did not go down well in Harare, which immediately

dispatched the veteran political bruiser, Didysmus Mutasa (Minister of State for

National Security) to Lusaka to lodge a complaint. Thereafter, a long political anddiplomatic ght between the two governments ensued.

A last minute cancellation of a planned ofcial visit to Zimbabwe by Zambias Se -

curity and Intelligence Service Director-General Regis Phiri signaled the continu-

ation of problems between the two countries. We hear Phiri had been

invited by Zimbabwe to workout an amicable dtente. Mwanawasa responded by

dispatching Vice President Rupiah Bwezani Banda as a Special Envoy to assure

Mugabe that he was not trying to destabilize his presidency as alleged by his of-

cials. Banda managed to calm the situation down but Zimbabwean government

suspicions of Mwanawasas hand in their problems continued. They were re-kin-

dled anew when Mwanawasa invited Zimbabwes main opposition leader Morgan

Tsvangirai to the April extra-ordinary summit in Lusaka to discuss the Zimbabwe

elections. The summit was heated and Mwanawasa seemed isolated with the

other leaders taking the view that the invitation of Tsvangirai was irregular. The

Zambian leader defended his position, insisting that the invitation was made after

consulting South African President Thabo Mbeki and Khama. Thereafter it was

open season. Zimbabwes state-run Herald newspaper published a chain of edi-

torials and feature articles critical of Mwanawasa.

The Zambian government was forced to lodge a formal diplomatic complaint by

way of a note verbale , a form of diplomatic communication, as relations betweenthe two neighboring countries worsened, as accusations by Zimbabwe that Zam-

bia received US$71 million in aid from the United States for regime change

in that country ew. Zambia denied the accusations. Foreign minister Kabinga

Pande announced on June 5 that the Zambian government was shocked by the

persistent attacks on Mwanawasa who was genuinely trying to help resolve the

crisis on Zimbabwe.

Zimbabwes outspoken Justice and Constitutional Affairs Minister Patrick China-

masa insists that Mwanawasa has failed to implement a Southern Africa SADC

resolution that mandated him to engage Western countries in order for them

to end their sanctions on Harare. Mwanawasa is SADC chairman until August

when Mbeki takes over. Zambia and Zimbabwe have almost suspended routine

diplomatic briengs, through their legations. But Mwanawasa is insistent that he

will not keep quiet when the political and economic meltdown in Zimbabwe is

affecting Zambia. Zambian authorities have now tightened border controls with

Zimbabwe in an attempt to block hundreds of Zimbabweans from crossing into

Diplomats

Diplomacy Levy, Mugabe fghts on

Zambia. Mwanawasa has already said he is not ready to accept an estimated 25,

000 Zimbabweans eeing xenophobic attacks in South Africa who had indicated

willingness to re-locate Zambia. Only genuine asylum seekers, whose lives were

in danger, would be granted entry. On June 10, Zambia granted political asylum to

12 supporters of Zimbabwes main opposition Movement for Democratic Change

(MDC) who ed the escalating violence ahead of the presidential run-off election.

The United Nations High Commissioner for Refugees (UNHCR) in Lusaka is cur-

rently screening more MDC supporters before recommending them to Zambia for

asylum. The Maheba Refugee Camp in North-Western Province, which sheltered

Angolans during the civil war, will be the new home for the Zimbabweans. But

Zambia has asked UNHCR to provide funds for the refugees because the country

has no budget line.

Divisions within SADC over Zimbabwe have increased with the majority of the

member countries accusing Mwanawasa of failing to follow procedure in handlingthe crisis. The Zambian leader conrmed at a news conference that President

Mbeki has not been consulting with him as chairman and he had the cheeky of

ignoring his telephones calls a worrying development for SADC. While attending

the Tokyo International Conference on African Development (TICAD) in Japan,

Mwanawasa called for a sideline meeting with SADC leaders to discuss Zim-

babwe. Mwanawasa wanted a quick resolution of the deployment of the SADC

Observer Mission to Zimbabwe for the presidential run-off election. In attendance

were South African President Mbeki, Nambias Pohamba, Malawis Bingu wa

Mutharika, Tanzanias Kikwete, Swaziland King Mswati and the Prime Minister of

Lesotho Pakalitha Mosisili. The rest of the countries were represented by their for-

eign ministers. Zimbabwean foreign minister Simbarashe Mumbengegwi raised

a point of order, asking whether Mwanawasa was right to raise the issue of the

SADC Observer Mission without consulting Mbeki, who is the SADC mediator

on Zimbabwe. Mbeki supported Zimbabwe on the point and the other countries

joined in support. They wondered why Mwanawasa called the meeting when

Angolan President Eduardo dos Santo who chairs the SADC Organ on Politics,

Defence and Security was supposed to do that.

Mwanawasa was unanimously ruled out of order and we hear he threatened to

resign from his position though his Foreign Minister Pande denied the report. On

June 5, Zambian Information minister Mike Mulongoti, castigated SADC leadersfor failing to send the mission to Harare when it was agreed to do so at an extraor-

dinary heads of state summit held in Lusaka on April 13.

President Mwanawasa found it difcult to reconcile his conscience when some

heads of state and government spoke at length, deliberating on the procedural

debate and consequently ended the meeting inconclusively, Mulongoti said.

The trouble with Mwanawasa and indeed other leaders in the region is that they

do not trust Tsvangirai whom they consider to lack presidential qualities. In fact,

Mwanawasas government once deported Tsvangirai from Livingstone where he

had sneaked in with his Movement for Democratic Change (MDC) leadership to

hold their strategic meeting. The MDC promised to take on Mwanawasa but aban-

doned that mission on the way. Mwanawasa is now hitting hard on Zimbabwe

as he prepares to handover the chair to Mbeki in August. Last kicks of a dying

horse, a Zimbabwean ofcial remarked, counting days of Mwana-

wasas time at the helm of SADC. No doubt, he will be remembered for

taking such an unprecedented position as chairman. To pg 14




Executive Issues

Meanwhile, Zambias rst President Kenneth Kaunda is pushing for a new initia-

tive on Zimbabwe, asking SADC to push for a Mugabe-led unity government. He

argues that whatever the outcome of the June presidential run-off, the problems

of Zimbabwe will not be solved more so that the security and defence forces have

joined in the political bandwagon. He suggested that opposition leader Tsvangirai

should accept the position of Prime Minister to be created with equal powers with

the President. Losing independent candidate in the rst round, Simba Makoni, is

said to be pushing for a unity government as well.

Side Bar

The last minute pull-out from the run-off by opposition leader Morgan

Tsvangirai was ill-timed strategy. This will denitely works in the game-

Diplomacy Levy, Mugabe ghts on

plan of President Robert Gabriel Mugabe who will, undoubtedly, be declared

winner unopposed. This is what the ruling ZANU-PF wanted to get victory at

all cost. The opposition Movement for Democratic Change (MDC leadership is

divided on the matter. One camp feels that boycott of the polls will denitely help

Mugabe consolidate his position and anoint a successor within his ranks and le.

This will surely change the political landscape of Zimbabwe. But the other groups

argues that violence participating in the sham elections will only give credence to

Mugabe to claim fake victory based on intimidation. And in any case, they argue,

the outcome of the presidential run-off was already predetermined following the

announcement by the defence and security chiefs that they will not accept an

opposition victory. Both sides have valid arguments. However, the boycott has

made Mugabe to consolidate his hold on Zimbabwe. We hear he is now pushing

a smooth succession plan involving his trusted minister and friend, EmmersonMnangangwa, to takeover the reign. However, within ZANU-PF, strong opposition

against Mnangangwa, is also strong mainly spearheaded by the powerful retired

Army General Solomon Mujuru. Mujuru is pushing for the wife, Joyce Mujuru, to

takeover. She is current Mugabes number two but without any inuence.

The Zambian government has nally managed to secure a deal on behalf

of the over 200 supporters of the late former Ugandan President Milton

Apollo Obote for them to return home after years in exile. Obote who had

been a guest of the Zambian government died in October 2005 in a South

African hospital where he was evacuated after an illness. The Ugandan team

has been living in Zambia since 1985 after they ed their country following

the overthrow of Obotes government by President Yoweri Kaguta Museveni.

Home Affairs Permanent Secretary Susan Sikaneta bid farewell to the rst

batch of the returnees on May 21, 2008 at Lusaka International Airport where

they boarded a Kenyan Airways ight to Kampala. Most of the Ugandans,

who were given political asylum by then President, Kenneth David Kaunda,

have been living in fear of returning home after they were accused of com-

mitting atrocities during the Obote rule. Now Museveni has agreed to allow

them back without facing repercussions even though others are still scared

and do not trust Museveni.

The United Nations High Commissioner for Refugees (UNHCR) has provided

US$ 210,000 for the voluntary repatriation of the Ugandans. For the purpose

of their return, the returnees have been given Voluntary Repatriation Forms

(VRFs) issued by the UNHCR since most of them have no valid passports.Besides providing transportation to the Ugandans, UNHCR will also assist

them with small grants to help them during the journey as well as use part of

the funds for re-integration in Uganda.

UNHCR said the political, economic and social conditions in Uganda are now

ripe for such an organized repatriation.

Diplomacy:

Bon Voyage to Obote

team

Diplomats

Russian money to ow into Zambia?

Russias outgoing Ambassador to Zambia Dr. Anvar Azimov raised dust

on the international scene after he disclosed that three Russian compa-

nies are planning to invest a staggering US$2 billion dollars in Zambia.

Initially, Azimov said the three Russian companies will pump in US$ 3 bil-

lion dollars in Zambias mining sector. But international investment advi-

sors doubts the gures especially that Russian investors rarely cuts such

kind of deals in Africa. The Mineweb quoted a South African mining ad-

visor as saying it sounds like unlikely story to me. Russians never ac-

tually invest their money into Africa, and especially into Zambia. When

pressed for details, the Russian Embassy in Lusaka opted to remain mute.

The three Russian companies are said to be exploring the possibilities

of launching Greeneld mining investments, including setting up a multi-

million smelter, a power station, railway line and a mining town with hun-

dreds of houses for mineworkers. The representatives of these companies

are due to arrive in Zambia this month to conclude on the negotiations.

RusInvest partner (Renova Groupe), ECN Groupe and Aurora Capital are the

three companies said to be interested in Zambia and their key ofcials have

already opened talks with government. Joint ventures with Zambians are the

possibility but the Russian should take not less than 70 percent sharehold-ing, Azimov was quoted as saying. They are interested in huge projects, not

small ones, Azimov said. We understand they have already put in a propos-

al to develop a smelter at Lumwana Copper Mines (LCM) in northwestern

Province at a cost of US$ 400 million dollars. LCM, due to be commissioned

this month, has no smelter and it plans to process its copper ore at the Chi-

nese-owned Chambishi Copper Smelter (CCS) currently under construction.

However, we understand the Russian investors have faced difculties in

nding mine areas where to exploit because most mineral areas with huge

untapped deposits have already been granted to investors. The Ministry of

Mines and Mineral development is working out a process of repossessing

the exploration licences issued to investors who have never used them.

Luapula province may also be the only available land for the Russians, whohave also pledged to support sport. Another option which the Russians are

considering is outright purchase of the exiting mines from the current own-

ers. This story is too good to believe, said one mining investor in Zambia.

But he was quick to point out that it will make a lot of sense if the Russians

were eyeing Uranium, which has been discovered in most parts of Zambia.

About 30 other Russian investors have visited Zambia in recent months to explore

the business opportunities in Zambia. Meanwhile, the Russian government

has disclosed that it intend to strengthen its military cooperation with Zambia.




15

Executive Issues

Profles

Chikolwa A moving boss

Joseph Chikolwa, Chief Executive Ofcer of Zambia Consolidated Copper

Mines- Investment Holding (ZCCM-IH) has been appointed new managing

director of Stanbic Bank Zambia Limited, taking over from Larry Kalala whohas become the banks chairman. Chikolwa has held key positions within

the nancial sector, including that of general manager/ chief executive of-

cer of the Lusaka Stock Exchange. He also held senior positions in Zambia

National Commercial Bank Plc, Standard Chartered Bank Zambia Plc and

Investrust Bank Plc.

Holder of a degree in Economics from the University of Zambia, a masters

degree in Finance from University of Wales, a diploma in nance from the

Institute of Financial Services, Chikolwa is a fellow of the Zambia Institute

of Bankers.

Chipwende Homecoming

Andrew Chipwende had been appointed chief executive ofcer of the re-

cently created Zambia Development Agency (ZDA). Chipwende held senior

positions with the disbanded Zambia Privatisation Agency (ZPA), which he

later headed before its dissolution. He specializes in policy formulation, pro-

gramme design and strategy development. After his stint at ZPA, Chipwende

was appointed advisor to the government of Sierra Leone in-charge of priva-

tization, which focused mainly on sector reforms and improving business

conditions ahead of the countrys privatization programme. We hear he faced

a big competition at ZDA during the interviews but he emerged the favouritewithin government circles.

Chewe Eating with Nigerians

David Chewe has been appointed rst chief executive ofcer of Access Bank

Zambia Limited, which is a subsidiary of Access Bank of Nigeria. Chewe is

the current President of the Zambia Institute of Banking and Financial Ser-

vices. He is a renowned banker who has served at senior and executive lev-

els at Standard Chartered Bank Zambia Plc, Stanbic Bank Zambia Limited,

Barclays Bank Zambia and Zambia National Commercial Bank Plc.

Mungomba The perseverance

Mable Mungomba has been appointed rst director general of the Citizens

Economic Empowerment (CEE) Commission. Immediate past president of

the Zambia Institute of Marketing, Mungomba has over 18 years of experi-

ence in the private sector where she held senior executive positions, includ-

ing that of general manager at former International Chemicals (Z) Limited.

Mungomba holds an undergraduate degree in Business Administration from

the Copperbelt University and three postgraduate qualications.

She has among other qualications a Masters in Business Administration

with a major in Multinational Finance and International Business, diploma

from the Chartered Institute of Marketing, United Kingdom (CIM) and a Cross

Sector Partnership qualication from Cambridge University.

She also worked as chief executive for the Africa Health Services, an Anglo

American Corporation subsidiary, before joining the start-up team that led to

the vision and development of Celtel.

Financial Briefs Key Appointments ACC - Nix to Nixon BandaSometimes it does not pay to act professional, at least the Anti-

Corruption Commission (ACC) Director-General, Nixon Banda,

must have learnt by now. Banda has been a thorn in the fresh of

most senior government ofcials serving in the current govern-

ment. And it was not a surprise that his contract has not beenrenewed. The reasons given for the non-renewal is that Banda

had reached the legal retirement age of 65, ACC said. Com-

missioner Akashambatwa Mbikusita-Lewanika tried to justify

the decision saying it what the ACC Act provided. But the list of

retired senior government ofcials serving in key positions, in-

cluding in the defence and security, is good testimony to expose

governments double-standard. For instance, Police Inspector-

General Ephraim Mateyo and Zambia Air Force Commander

General Samuel Mapala are all on contracts. We understand

that Banda was due to get a fresh contract but suddenly things

changed, prompting speculation on the real reasons behind hisexit. Ever since he was appointed to steer the ACC, Banda had

been upright in his dealing. His boldness to ght corruption often

landed him in problems with inuential people in the current gov-

ernment. One prominent case is that of the Drug Enforcement

Commission (DEC) where he steadily intervened and arrested

key persons, including former Commissioner Ryan Chitoba for

corruption. Chitoba and his ex-deputy Jacob Koyi are current-

ly in court facing criminal prosecution. Chitoba promised t x

Banda. Attempts to discredit him in the media as a corrupt-man

were orchestrated but to no avail. At some point, the Law As-

sociation of Zambia (LAZ) intervened in the matter after Banda,

a lawyer and member of the LAZ, was accused of corruption.

LAZ cleared him after he appealed before one of its commit-

tees. Banda was never short of controversy. He angered the

magistrates after he accused them of lacking capacity to handle

high prole cases. Subordinate courts boycotted handling ACC

cases until he apologized for his remark. And government has

now said nix to Nixon.

Key Events in July

Zambia International Trade Fair [2-8th July 2008]

Commonwealth Parliamentary Association

Africa Region Conference [11-19 July, 2008]

Smart Partnership Conference [28 31 July, 2008]

Commissioning of rst phase of Lumwana Copper Mines

(LCM) Dates to be announced


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Documents

Executive Issues July issue - Recd on 11Jul08