ZACA, PSDA welcomes 2013 national budget

By KELLY NJOMBO and TRYNESS MBALE

ZAMBIA Consumer Association (ZACA) and Private Sector Development Association have welcomed the 2013 national budget saying it will benefit consumers on the low cost of bread and promote local production.

The associations say removing value added tax (VAT) on wheat and bread is a positive move while suspending duty on various equipment and motor vehicles used in the tourism sector will boost the sector.

Speaking in separate interviews in Lusaka yesterday, ZACA executive director Muyunda Ililonga said the VAT measure on wheat products will increase production of wheat as more farmers will be encouraged to grow the commodity thus bring the cost of bread downwards.

“The policy measure to zero-rate bread and wheat for VAT will benefit both farmers and the consumers because this move will lower the cost of bread and other wheat products on the domestic market. And farmers will have to produce more wheat at a much lower cost than before.” he said.
Mr ililonga said there is need for farmers to take advantage of the development by increasing production.
He said the measure will give farmers extra incentives to produce more wheat and expand the sector which has in recent years been growing steadily with this year’s production estimated to be at 266,000 tonnes.

With the Zero-rating of wheat, local farmers will now compete favourably with foreign wheat farmers as previously imported wheat was cheaper due to incentives in the respective countries resulting in Government banning the importation of wheat to protect local farmers.

“We hope manufacturers, producers, millers and bakers will reduce the cost of wheat products because as far as we are concerned this move by Government will reduce the cost of wheat production,” he said.
The Private Sector Development Agency (PSDA) has also welcomed the 2013 national budget because it addresses issues of capacity building and promotes local production.

PSDA chairperson Yusuf Dodia said the 2013 budget has responded to the people’s needs saying Government’s plan to create more jobs is a good move towards reducing the unemployment rate in the country.

Mr Dodia said he is happy that Government considered the budget submissions made by the association with 11 of the 20 submissions being included in the just presented budget.

Government has adopted among other submissions made by PSDA, suspension of duty on various equipment and motor vehicles used in the tourism industry, zero rating import of manufacturing equipment to promote the local manufacturing industry and increasing funding to the education sector.
“The 2013 budget is very good because it is looking at building capacity for Zambians and will encourage local production,” he said.

He also commended the government for suspending duty on various equipment and motor vehicles used in the tourism sector saying it will boost the sector.

Mr Dodia however expressed concern on Government move to placing more emphasis on the promotion of local production by increasing levy on imports saying the development will affect competition.
“Government’s plan to promote local products by increasing levy on imports is not good because it will prevent local manufacturers from growing due to lack of competition,” he said.

The Daily Mail  Newspaper

Consumer bodies hail Zanaco for K2 trillion loan book

By NANCY MWAPE

THE Consumer Unity and Trust Society (CUTS) and the Zambia Consumers Association (ZACA) have commended Zanaco Bank Plc for responding to the financial needs of the Zambians by availing K2 trillion to spur economic activities.

Speaking in separate interviews, ZACA executive secretary Muyunda Ililonga said as an association, they are happy that Zanaco is responding to market demands.

Zanaco Bank Plc’s book loan this year stands at K2 trillion with individual loan and the agricultural sector accounting for a larger funding to be released into the national economy to spur economic activities.
The individual loan potfolio will account for the lion’s share of the loan book at 43 percent and the agricultural sector 27 percent while the remaining sum is to be shared between corporate entities and Government.

“We are happy that the privatisation of Zanaco is benefiting the country, this is one bank before privatisation that never used to give loans to the public,” he said.
Mr Ililonga said with this huge loan portfolio on its books, it was clear that the sale of the bank worked well.

He said the loans especially those targeted at individuals, the private sector and agriculture industry will stimulate economic activities in the country.

“People want to invest in capital projects but lack funding. The loan will boost individuals to engage in economic ventures and create additional jobs in the market labour,” he said.

He said with increased competition in the financial sector, the banking industry is robust and innovative, adding that if this momentum continues, it will boost the Zambian economy.

CUTS chairman Lovemore Mtesa said lending to individuals and small scale entrepreneurs by commercial banks is a direct form of empowering them.

“This is something that should be lauded, we welcome the development and hope that the interest rates offered are affordable. If the cost of money is too high it defeats the whole purpose,” he said.

In August this year, Zanaco launched a new campaign dubbed “Empowering you. Building Zambia” aimed at boosting economic development and generating employment through targeting key segments of the country.

The bank is providing loans at reduced rates to cater for corporate, small-scale entrepreneurs, farmers and individuals.

Meanwhile, Zanaco has invested US$1 million to be spent on adaption of its infrastructure in readiness for the rebased Kwacha to be implemented on January 1, 2013.

The bank says that it is on track in its preparatory works to ensure smooth adoption of the new Kwacha.

ZAMBIA CSOs DEMAND ENACTMENT OF TOBACCO LAW

Press Release

A group of civil society organizations that campaign on public health are demanding action from the Minister of Health. They want him to “move” on the stagnated process of enacting a comprehensive tobacco control law in line with the country’s international commitments. Zambia ratified the WHO Framework Convention on Tobacco Control (FCTC) in May 2008 but has not domesticated the treaty since. Early this year, the PF government through the Ministry of Foreign Affairs undertook to domesticate all treaties to which Zambia is a party.

“As civil society groups we welcomed this announcement by government. We were excited that government was keen to fulfill it’s commitments to the international world but now we are dismayed because not much is happening in terms of actualization of those lofty pronouncements” said Brian Moonga, Secretary General for the Zambia Media Network Against Tobacco (ZAMNAT).

The group that recently held a mentorship meeting in Lusaka expressed regret that the Ministry of Health has been dragging its feet on a matter that has been outstanding since 2010. “We are not happy, repeated correspondence with the office of the Minster on this subject has gone unattended to.  This is not healthy, government needs to respond to the concerns of citizens and we want progress on this issue” added Raphael Makowane of Zambia Anti- Smoking society. The group says there is no justification whatsoever to continue delay on the legislation because the health,  economic and social consequence of tobacco use are well known and documented. Disease and death caused by tobacco use, once a problem manly in high- income countries, have become a large and increasing part of the burden of disease in developing countries. According to the WHO, the huge death toll associated with tobacco use is rapidly engulfing low and middle income countries, where most of the world’s 1.2 billion smokers live.

“But the course and pattern of this epidemic can be changed” said Muyunda Ililonga, Executive Director of Zambia Consumer Association, “The FCTC to which Zambia is party provides a road map to a common framework to move ahead. It promotes evidence-based measures that are effective yet cost- effective in combating tobacco use. Politicians committed to public health can place tobacco-a risk factor to several non-communicable diseases (NCDS)-on top of the health agenda and save lives and future of our children. Nations are taking bold steps to protect the lives of their people from premature death caused by tobacco use. We cannot continue with our slow match while other nations are moving forward. We must act now to protect the health of our people. The world is watching us,” added Ililonga.

Zambia domestic the FCTC

By Brenda Zulu

Zambia needs to domesticate the Framework Convention on Tobacco Control (FCTC) as it is a signatory to the treaty. However from that time we do not have a bill and as civil society organisations we need to ensure that the bill is passed as law in Zambia.

In Zambia the key players are the British American Tobacco, famers and leaf buyers.

“They may influence a law that may favour their interests other than the public health act,” said Muyunda Ililonga Zambia Consumer Association (ZACA) at a Tobacco industry interference workshop on August 31, 2012 at Pungwe Lodge.

“If we increase the price of tobacco, the demand for it will go down and also there is need to enforce the ban on smoking in public places,” said Ililonga.

He explained that the reason why the cigarette contents need to be regulated was because that in Zambia they want to want to regulate labeling.

"In Zambia we have trained nurses and doctors through nicotine replacement. Our boarders are porous and Zambia is experiencing some smuggling of tobacco and there is need to control the illicit trade. Zambia needs to find a cash crop that is economically viable as tobacco and it is a process," said Ililonga.

The tobacco industry is very strong and can influence politicians as they have the money. We need to corporate with others. In terms of health at least 50 chemicals of the 4000 that cause cancer.

ZAMBIA: Minimum wage leads to steep food price rises

LUSAKA, 27 September 2012 (IRIN) - The euphoria that greeted the government’s imposition of minimum wage increases has quickly soured, with prices of food and other essential commodities escalating as higher wage costs are passed onto consumers. 

In July 2012, President Michael Sata’s government upped the minimum monthly salary in line with the 2011 election promise of “more money in the pocket” for poorly paid workers. Wages for domestic workers increased from US$30 to about $105, while general workers such as office orderlies, shop assistants, sweepers and farm workers saw their monthly earnings more than quadruple from $50 to $220.
 
In the past month, the cost of 25kg bag of the staple ground maize meal has increased by $1 to $8.50, while other farm produce prices have also risen.
 
“Everything at the market is now very expensive, and it is like they are being increased every day. Last month, we were buying a bunch of rape vegetables at 2,000 Kwacha [$0.40], now it is 3,000 Kwacha [$0.60]. And a kilo of beef, which was 21,000 kwacha [$4.20] - now it is 27,000 kwacha [$5.40]. This is too much for us the poor people,” Mwamba Kasonde, a housewife in the capital Lusaka, told IRIN.
 
“I think the only solution for us is to forget about eating nice, fresh food. We will be buying dry foods; dry fish, dry kapenta [sardines] and soya chunks [processed dry soya]. Chicken and meat should be for special occasions or only for the rich people,” she said.
 
Stress on the poor 
Daniel Mutale, social conditions programme manager for the Jesuit Centre for Theological Reflections (JCTR), a local faith-based think tank, said the sudden cost increase in basic food items was putting additional stress on the poor. About 64 percent of Zambia’s 13 million people live on $1 or less per day, according to Zambia’s Central Statistical Office.
 
The JCTR publishes the Basic Needs Basket, a monthly survey of food prices and basic commodities required for a family of six in Zambia. “The substantial rise in the cost of basic food items counters the purpose of policies like the recently adjusted minimum wage to foster decent living conditions among the disadvantaged workers,” Mutale said.
 
“We call on the government to put in place immediate measures to curb the increase in mealie-meal prices [maize-meal] and other essential commodities.” 

The instability of food prices acts as a disincentive to having a productive economy

Hanford Chaaba, spokesperson for the Zambia Consumer Protection and Competition Commission, told IRIN the sharp increases will make Zambian companies vulnerable to external competition, “which will, in the long run, put them out of the market.”
 
“The instability of food prices acts as a disincentive to having a productive economy. Therefore, any increment in prices on food items results in reduced disposable income for the consumers, and this works to the disadvantage of successful economic growth,” he said.
 
Apart from food prices skyrocketing, the cost of other essential commodities and services, such as electrical goods and building materials as well as transport fares, are also on the up. 

Increase in transport costs 
Ishmael Kankhara, a local businessman who owns 200 passenger minibuses, the largest fleet in Lusaka, recently announced he would raise the fare charges for his buses by $0.15 to ensure he pays all drivers a minimum wage of $220. He currently pays his drivers about $100 a month.
 

If I pay the [new] minimum wage to all my drivers at the moment, I would run bankrupt within one month

“If I pay the [new] minimum wage to all my drivers at the moment, I would run bankrupt within one month, and there would be no more Flash Buses on the roads anymore. So, while a 600 kwacha [$0.15] increment may not be enough, at least it would go some way in cushioning the impact of this law,” Kankhara told IRIN. 

Executive director of the Zambia Consumer Association Muyunda Ililonga told IRIN the minimum wage increases have backfired on the poor. “You can’t have more money in the pocket when the cost of living is skyrocketing. This rise in the cost of consumer goods and services is detrimental to consumer welfare.
 
“The PF [Patriotic Front] government can only successfully show they are different from previous governments if they can lower the cost of living through workable policies. It shouldn’t be coming up with conditions to benefit only a few people, such as the minimum wage revision. They should go for policies to benefit all citizens, such as reducing VAT [value-added tax],” he said.
 
“If our VAT was reduced to, say, 14 percent [instead of the current 16 percent], it would reduce the cost of food items in the country and, ultimately, the cost of living. Many people, even the unemployed would benefit from reduced VAT,” Ililonga said.
 
Kennedy Sakeni, the information minister and chief government spokesperson, has condemned employers for passing on the costs of the new minimum wages and vowed that the government would soon “crack the whip”. 

“We want to see to it that prices stabilize soon and are reachable by a majority of our population. We want to ensure these prices do not go beyond the reach of average Zambians because the majority of our people are unemployed. They don’t even get any salaries to survive on,” he said.
 
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