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.