September 28th, 2015 - Presidential Address to Parliament (19th Sep)

The views expressed by the author are his alone and do not reflect the views of Concern Worldwide. 

Notes from ZNFU Agro-Watch, volume #37 (Sep 22nd) ... author's comments in red. 

Cost of Agricultural Inputs Making Zambia Uncompetitive:

H.E Edgar Lungu The Republican President, His Excellency Edgar C. Lungu, opened the 5th session of the 11th National Assembly on Friday 18th September 2015. In his maiden speech, the President stated that Zambia needed to capitalize on its resources in order to become a regional agricultural hub and a global exporter of processed agricultural products. Some of the salient point made, with respect to agriculture, in the 74 paged speech include:

• Zambia’s high cost of production needed to be addressed. The dependence on imported inputs is making the country’s agricultural produce uncompetitive. There is thus need for more investment in local manufacturing of agricultural inputs. My guess is that they are referring to fertilizers which are inherently costly due to the fact that Zambia has a) no oil [it comes off tankers from Dar-es-Salaam], and b) a limited capacity to produce nitrogenous fertilizers, which in lieu of better farming practices, are to the average farmer the equivalent of a powerful drug to an addict. Without fertilizers and hybrid maize (also largely pegged in dollars, which is currently killing my project), there is essentially little hope of a marketable surplus barring expenditure in land and labour resources.

• The piloting of the Electronic Voucher System in 13 districts under the Farmer Input Support Programme; Only about five years or so after they FIRST promised to use it ... wonder how it will go this time around? The idea is good, but disliked by local party politicians, as it deprives them of a major opportunity for "gift-giving" at the rural level. 

• Directive to the the ministers responsible for Finance and agriculture to come up with a mechanisation Programme for small-scale farmers working in Collaboration with the private sector and civil society. This is with the aim of making small-scale farmers more self-sufficient; Admirable, but always curious ... those who can afford mechanization typically use it; those who can't, don't. How will the private sector work around that? Also, how does that lend itself to self-sufficiency? 
• Government will bring about 5,000 ha of land under irrigation each year to mitigate against the effects of climate change. 
• The movement of the Department of Cooperatives to the Ministry of Commerce, Trade and Industry from the Ministry of Agriculture and Livestock;
• Government plans to establish 13 milling plants nationwide to be managed by ZNS and Zambia Cooperative Federation (wait ... how will this help the private sector? A return to government-subsidized, artificially low-cost (and likely poorly run) milling companies will effectively subsidize consumption, pulling production along with it. Mono-cropping 25, crop diversity -10.
• Government plans on doubling the number of livestock breeding centers from the current 10 to 20 by 2023. The Breeding centers will be for mostly goats and sheep, targeting the huge goat and sheep market in the Middle East. Hope no one informs Rwanda, Burundi, Uganda, South Sudan, Kenya, Ethiopia, Tanzania, or Kenya of this plan, as they are a bit closer and have in some cases, ocean access. Are we going to truck or fly these goats? 
• The Sanitary and Phyto-sanitary Standards should be strengthened and strictly enforced to ensure that agricultural produce being sold on the market are safe and of good quality. I would ask, what's in it for the farmer to achieve phyto-sanitary acceptable foods? 
• Government is in the process of establishing two fish hatcheries in each province in order to support growth of fish farming. Further, government will establish one community fish fingerling nursery in each District and also train 1,400 fish farmers in fish Feed production. This is with the target of the nation reaching fish self- sufficiency in the next three years through an annual production of 80,000 tons of fish from fish farming and 90,000tons from natural fisheries. Okay, I hope they find some new rivers or lakes out there, because Luapula is fished out and the Barotse Floodplains are not that far behind. I also wonder if they are going to revamp Dept. of Fisheries into a going concern.

The republican President further stated that the country would soon ratify the Tripartite Free Trade Area which would make Zambia part of the largest Free Trade Area in Africa and that the nation was part of the negotiations for the Continental Free Trade Area which would offer a bigger market access to Zambian Entrepreneurs and innovators.

On Energy, H.E Chagwa Lungu indicated that despite the low water levels in Lake Kariba and the Kafue River the power shortage has been occasioned by Zambia's inability over the years to attract new investment in Electricity generation on account of the low electricity Tariffs. Government hopes that the revision of retail tariffs upwards from an average of 5.64 to 10.35 cents per kilowatt hour will attract more investments in the energy sector, particularly for those interested in renewable energy sources such as solar, wind and waste-energy projects. Hmmm ... those low tariffs purchased a lot of nice cars over at ZESCO. Also wonder if it's the slipping exchange rate which puts import costs (of which much of ZESCO infrastructure is reliant upon) way to high for them to afford conductors, transformers, etc.

In addressing the concerns over Zambia slipping back into a debt trap, the Republican President stated that the Zambian economy has grown from a US$ 3 Billon GDP in 2005 to a US$28 billion today and that the country was well within the acceptable international threshold of 40% of the Gross domestic product. He further stated that the nation had borrowed for long term investments that would spur national growth. In other words, China needs to get back on-track and purchase copper at $6,000/ton or we're in for it.

The theme of the President’s address was “Embracing a Transformational culture for a smart Zambia Now.” No time like the present.

September 7th, 2015 - Into the furnace

The views of the author are his alone and do not necessarily represent the views of Concern Worldwide.

The Zambian Kwacha has been on something of a climb lately; we’re used to it creeping upwards, but over the past two weeks it went from 7ish to almost 10. It is a bit breath-taking to watch a currency drop 40% of its value in less than a month. The timing is crummy for us, as farm input prices are figured in dollars; this means the kwacha equivalent of a $10,000 tender on Aug. 15^th, for example, is now worth $6,000. We are likely to have a big underspend at the end of the year simply from inflation. We also run the risk of suppliers breaking off contracts, a worrying prospect given the time it takes to do everything by the book. A brief aside, but larger NGOs are notoriously obligated to document the living daylights out of everything, and procedures typically are quite convoluted and usually paper-based. They are ostensibly designed to keep things accountable and transparent; what I know of them is that they keep things from happening quickly or simply.

The government, or rather, the President, has responded appropriately by declaring two new districts in Northwestern Province. The government also took a big chunk of its latest Eurobond to pay against obligations (much against civil servant emoluments that have been delayed) with the hope that pumping hard currency into the economy will slow the fall. It has a bit of wishful thinking involved; forces much larger than Zambia, e.g., the slowdown in the Chinese economy and hence, the lower demand for copper, means less revenues from the resource that erstwhile scholars such as moi consider much more of a curse than a blessing.

In the meantime on the maize front, the Food Reserve Agency raised its price for a 50kg of maize from K70.00 to K75.00 on what appeared to be a spur-of-the-moment announcement by the President at the Lusaka airport. This was something worth pondering a few weeks ago when K7.00 ZMW was equal to $1USD, hence a bag of maize equalled $10.00; now, K10.00 = $1USD, so that same bag is worth $7.50; wonder how much will end up in the market, which adjusts its prices a bit more vigorously.

ZESCO continues to be the punch-bunny for the public’s angst against the government, as ZESCO is a parastatal. If you scroll back through my older posts, I likely explain what a parastatal is multiple times, but just in case: parastatals are government-run companies. A Zambian technocrat would likely get upset over my semantics, as in the one-party state days, parastatals were government-owned and -run. Anyway, there are few of them left after the orgy of liberalization in the late 90’s that along with the AIDS pandemic left the Zambian landscape a wasteland. Unfortunately, they hung on to ZESCO; Zambia (used?) to get loads of foreign currency by selling power, and it’s a patronage thing … working in ZESCO appears to be a golden ticket given the number of nice cars in there parking lots, and the fact that they have parking lots.

Travelled to Mongu today on the Shalom bus; as usual, it was a numbing, nine hour assault on my senses with endless loop of either gospel or rhumba playing at full volume in order to be heard over the engine and the noise of the dry wind coming through cracked windows to keep the bus from becoming unbearable. Was unnaturally hot in Mongu at 16:30 when we arrived; I later checked our station and found out it peaked around 37° C (99° F) just before that. We are in for it in a big way if it’s already that hot … can’t imagine what October will be like.