Parallel Universe: Mealli-meal crisis in Zambia

By Elias Chipimo Junior
As promised, we set out the first in a series of 10 statements that we have entitled: “The Parallel Universe Series”. The term “parallel universe” is normally used in a non-complementary manner. It suggests that someone is out of touch with reality. When NAREP held a press conference on 10 January 2013 to deliver our New Year message, we challenged the Patriotic Front to stop focussing on political domination (for example, through triggering unnecessary by-elections) and to prioritise development actions. We then gave several examples of people’s expectations and pointed out that it was not our intention to see the PF fail because if they failed, it would be the people who would suffer.
We received a harsh response from State House suggesting that we are living in a “parallel universe” and requesting us to: “pinpoint where the PF Government has failed, and provide alternative grounded options rather than spend time in a day-dreaming or theoretical session about what [we] [wish] to happen”. The Parallel Universe Series will therefore address issues we were asked to point out. We do this in the spirit of offering solution-oriented thinking and to share with the general public our own policy priorities and governance plans as a Party that seeks to restore values-based leadership through constructive reasoning and issue-based politics. Our first discussion topic is the current mealie-meal crisis.
Rule number one in handling a maize crisis: accept that there is a problem
Few people would deny that we are facing a serious food crisis and one that could get a lot worse by the time the current rains are over and the new maize crop is harvested. The price of maize meal – the nation’s staple food – has increased in some cases by over 100 percent from the prices prevailing prior to the day the PF administration came to power. As we will try to demonstrate, although the problem is not entirely the PF’s fault, decisions that they have either taken or failed to take, have served to make a bad situation even worse.
With the price of mealie-meal reaching record levels, the PF appears to have finally woken up from its development slumber and realised they need to get their act together. The problem is that rather than acting, they are reacting. During one of the seemingly endless swearing-in ceremonies at State House, President Sata stated that he would consider re-introducing price controls to curb the high cost of mealie-meal. This would be an act of desperation and would only make the situation worse over the long-term. When you consider that prior to the election in 2011 the average cost of a 25 kilogramme bag of mealie-meal was K45,000 (rebased K45) and that this had risen to over K90,000 (rebased K90) at its highest point in some parts of the country last month, it is clear why there is some panic within the PF hierarchy.
The threat of price controls should not be taken lightly. Mealie-meal increases on a much smaller scale formed an important part of the revolutionary build up that saw the downfall of President Kaunda in 1991. Riots that took place in June 1990 due to Kaunda’s attempt to remove subsidies on maize were seized upon by a daring signals officer who mounted a short-lived coup less than 12 months before Zambia’s First President was finally voted out of power. Mealie-meal is clearly serious business in Zambia. What is sad about the situation we face today is that the present increases were predictable and could have been avoided.
The belated intervention by the Food Reserve Agency (FRA) and continued threats from the Head of State against the millers have meant that prices have started to come down. This has reduced the fear that price controls and other Second Republic tactics will be adopted to address a problem that was almost entirely due to the mishandling of the situation by an administration that appears to be focused more on playing politics than on development. Before we get too cosy with the idea that this risk has gone away, however, we need to remember that because the current price reductions are not a reflection of market forces, the reductions we are witnessing may only be temporary. Sooner or later, a more comprehensive approach to dealing with the mealie-meal crisis will have to be taken. What is needed now is a government that fully understands the politics of maize.
Understanding the politics of maize
When prices of commodities rise drastically, it is usually a market signal that something has gone wrong with the balance of supply and demand. If more people want to buy something that is in short supply, the price of that item will quite naturally go up. Any person who is in the business of trading in mealie-meal will be well aware when demand goes up and so will the consumers. Out of desperation and in order to secure an “essential” commodity whose availability is uncertain, people will – up to a certain level – be reluctantly prepared to pay more. This is exactly what has happened with the price of mealie-meal in Zambia.
The PF does not seem to have understood the politics of maize quickly enough. They have been too busy dealing with their political opponents to realise that they have created for themselves a new enemy: the ordinary Zambian who just wants to be able to enjoy his staple nshima without paying too much for it. Things might not even be so bad for the generally neglected Zambian if at least he or she had a job and could afford the price increase – or if he or she did not have to suffer endless load-shedding, lack of access to quality healthcare and safe clean water, or to face costly transport charges getting the family to school and to work. But before we give the PF too much grief over their poor handling of the maize crisis, let us first examine how we got here in the first place.
The roots of the crisis
The roots of the current mealie-meal crisis lie in the seemingly insatiable demand for the commodity from neighbouring countries, particularly the Democratic Republic of Congo (as well as in the broader Great Lakes Region and beyond), which demand has been made even worse by last season’s poor harvest in the United States and Mexico. Here is a summary of the challenge: South Africa has produced about 12 million metric tonnes of maize this year and is able to supply mealie-meal to the Congo more cheaply than Zambia because of its efficient system of planting, harvest, storage, finance and generally well-supported agricultural sector. This year, however, South Africa is not exporting to the Congo because its exports are covering the shortfalls in the North American markets (which were a result of last year’s drought in that region). The massive vacuum in the Congo supply chain has created even greater pressure on Zambian maize. Due to the basic rules of supply and demand, Zambian maize has simply become hot property in the DRC and beyond, pushing up the local sale price to unprecedented levels.
Had the Government intervened early enough when it became clear that prices in Zambia were rising, the crisis would have been far better managed. For example, when several politicians and commentators started speaking of banning exports last year, it was precisely to prevent Zambian maize from being sucked into the regional vacuum and creating a crisis here.
When you add to the regional demand factor, the various problems resulting from (i) the Food Reserve Agency’s confusing role in the maize market (exporting maize when our markets are facing erratic supplies); (ii) infrastructure challenges preventing maize from being collected from rural areas when roads are impassable during the rains and there is no effective storage in these locations; (iii) long-term structural problems in maize marketing; (iv) delays in providing inputs and payments to farmers; (v) poorly thought out government policy; and (vi) last minute procurement practices, you have the perfect storm of problems. You also have one predictable outcome: sky high maize prices in excess of K100,000 per 25 kilogramme bag. In some ways, we are lucky that the price is not higher!
When you have a critical continental shortage of a staple commodity creating strong regional demand, the short-term measure to take is to prevent exports (so that you can at least feed your own people) and flood the market with as much raw material (stored maize) as possible in a consistent manner. Belatedly, this is the action that PF administration has taken. The reason why prices are not coming down as fast as they should is that the demand is still so high and there are no effective means of preventing exports from our long and porous border with the DRC. Earlier this month newspapers reported the discovery by a Government official of a boat laden with mealie-meal as it was about to set sail for Burundi from Mpulungu harbour. Demand is high in the Great Lakes countries and into Sudan. How many boats go unnoticed? How much mealie-meal is being smuggled daily, weekly, monthly? No one knows!
As for the FRA? Well, that is a whole different story. FRA stocks of maize are not audited and it is pure guesswork as to how much maize they are holding at any one time and the quality of that stock. It did not help that the FRA was itself getting in on the export game during the current marketing season, presumably to try and recover the huge subsidy costs to the maize sector which amounts to nearly US$2 million per day. That amounts to 730 million dollars a year – almost the same amount of money as we borrowed under the Eurobond!
So what is the way forward?
(a) Infrastructure and extension services
Clearly, there is need for more innovative approach to the challenges (actual or perceived) affecting this critical sector. Even when it is not trying hard, Zambia is capable of producing enough food to feed itself. There has to be an expanded incentive to produce not only more but to do so efficiently. This calls for massive investment in extension services, research and development, road networks, irrigation infrastructure and in maize marketing. The colossal amounts being spent on maize purchases could have done wonders if applied to these areas. It is commendable that a good part of the Eurobond is to be spent on the energy and transportation sectors. These are critical areas for ensuring sustained agricultural production.
Zambia has in excess of 400,000 square kilometres of medium to high quality arable land that could serve as a massive breadbasket not only for the region but for Africa as a whole. Without investment in infrastructure, however, this potential will remain unrealised. The PF is certainly trying to do its part to improve the road infrastructure with its Link 8,000 project. The only problem is that Link 8,000 is not being supervised and run in a manner that will get us the best results within the shortest possible time and at the least cost (but this is a topic for another day).

(b) New marketing mechanisms
Once production costs are brought under control, we need to develop an efficient marketing mechanism. Innovative ideas include the support to the development of a vibrant commodity exchange linked to a series of storage centres around the country. Storage is critical and can be tied to a system of warehouse receipts. This is a great way to reintroducing the financial sector into agriculture even at a smallholder level. Storage that is certified based on best international practice will effectively commercialise the small farmer. If, for example, a rural small-scale farmer can deposit their produce in a warehouse near his or her field and collect a warehouse receipt for that commodity, he or she can take that receipt and obtain cash for part or all of the stock. This will prevent panic selling and will provide stability to his or her financial requirements. In order for such a system to work efficiently, however, Government must put in place – among other things – supporting legislation and a national storage construction and development programme.
It is important to recall that the private sector has been asking for the recognition of a Warehouse Receipt as a document of title from as far back as 2004. The MMD Government only moved on this in 2010 in an attempt to replace the Agricultural Credits Act. However, the 2012 Act remains unimplemented. This action should be delayed no further. Similarly, an Agricultural Marketing Bill went through stakeholders consultation in 2010 but it is not clear when it will be taken to Parliament despite a Parliamentary Committee report recommending the immediate presentation of the Bill to the National Assembly. It contains important provisions for the improving the sector and curtailing adverse political interference. A Commodity Exchange Bill also underwent stakeholder consultation in February 2010, although it is not clear what stage the Bill has reached.
All of these interventions will help to put maize supply on a much better footing. The price of mealie-meal should be determined as much as possible by market forces and if the Government wants to intervene then it should be done for every bag of roller meal which leaves the mill and not from the raw material stage. After all, Government is probably also subsidising the production of stock-feed (which uses huge amounts of maize) and is not able to monitor how much of the subsidised maize is being used in the stock-feed industry.
(c) Rethinking our diet and farming practices
It is also important for Government to begin the exercise of re-thinking our dependence on maize as a staple food as part of a broader crop diversification programme. Consuming huge quantities of maize meal, particularly the refined breakfast meal contributes to the high rates of preventable illnesses – particularly diabetes. It is almost as impacting as taking lots of sugar in your tea because it is simply refined carbohydrates (especially breakfast meal) that are then converted into sugar by the body. Traditionally, our communities were raised on finger millet – a commodity that can grow with far less fertilizer, has far greater nutritional value and would not become embroiled in the politics of maize as it can be grown more cheaply and efficiently in rural locations. Rural farmers need to be supported to move from subsistence to income-based farming through the emphasis on money crops like soya beans. Soya beans is a source of protein that is widely used for both human consumption and animal feedstock and has great national and regional demand. A soya farmer should have no problem paying back loans on the back of huge demand. In order for the maize sector to perform better, certain structural changes will have to be made.

(d) Rethinking the role of the FRA
Government needs to seriously rethink the role and performance of the FRA. Many traders and millers are not willing to take any local positions on maize preferring to do so purely for export and to a lesser extent to supply local breweries which consume a very small portion of annual production (approximately 80,000 metric tonnes against a full harvest of over 1 million tonnes). Local traders have traditionally had mandates from mills to buy and stock maize for them for release later on in the year but this business has been obliterated by FRA. The reason is simple. If a trader is not sure whether the FRA will also begin releasing maize at a cheap price to millers in the middle of the year, that trader will not want to hold stock that he might have purchased at a high price. This is because even a small reduction in the FRA price to the market could bankrupt a miller that has pre-purchased maize stock for releasing later into the market.
Most millers rely on bank finance but the lack of clarity and planning on the part of FRA makes both the millers and the lending institutions nervous and therefore cautious. They have no certainty as to when the FRA will intervene in the market. The only solution is to focus on the export market or buy limited amounts of stock that they can quickly sell if the FRA drops the price of maize. The financial sector generally prefers to lend to FRA because such lending comes with a Government guarantee. Millers would therefore rather fill their storage sheds with only a few months of stock when FRA is not participating in the market between May and October (a restriction set by the Food Reserve Act).
Further, because not every miller is able to accesses cheaper FRA maize, there is a distortion in the market. A close look at production figures shows that the more efficient producers of maize – essentially the large scale farmers – have tended to diversify into other commodities such as soya beans and tobacco. FRA has therefore only served to promote inefficiency. Current maize yields in Zambia average about 2 tons per hectare when they are supposed to be 5-10 tons per hectare. With its 1.3 million small-scale farmers, Zambia can easily match the average annual South Africa production of 10-12 million tons of maize and feed the continent!
A simple comparison between Zambia and South Africa demonstrates the challenge we face and how without more focussed national leadership, we will not solve the problem of high maize prices. In the end, unless economic activity picks up and people are able to earn more money, the price of maize will always be too high. Even in South Africa where production and marketing efforts are efficient, the price of a 25 kilogramme bag of maize fetches over K100,000 (rebased K100). If the PF administration was as determined to deliver development as it is to destroy Nevers Mumba’s MMD, Zambia would already be a very different country by now. As one expert in the sector (who shall remain nameless) points out, maize in the Americas and Asia is an economic commodity, whereas here we have reduced it to a political crop, haemorrhaged the Treasury and succeeded in sustaining poverty.
Elias C. Chipimo
NAREP President

17 January 2013


  • comment-avatar
    Vigil Citizen 5 years

    Brilliant reasoning Mr Chipimo.This is rocket science to the likes of Mr Sata but unfortunately it can never be simpler or can someone interpret it in Bemba for our president? We don’t need a prophet to tell us that maize meal prices won’t go down. The poor input distribution spells doom.Ba PF its time to get real. You can politic with something else bane not ku bwali.

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    Jakson 5 years


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    ps valley 5 years

    Walampisha Malaso ba Chipimo, mufwwimpye bo yawe inga twaubala kabotu taata. Nokuba boobo muzeezo nkouli we.

    In short its too long a passage and it needs to be summarised, hoever, its seems to caary vital ideas sir.

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    pf enemies is not opposition parties. The promisses they made has become enemy number one

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    kolwe ni kolwe 5 years

    Great article and well articulated. Please keep it up.

    I think it is up to the so called educated Zambians who are doing not any thing about the country.

    This man Chipimo has done what most of us are failing to do. So instead of condemning him as I have read from other bloggers lets understand what he has written and push the government to act.

    At the final end it is all up to us who suffer and remain poor, whether you are UNIP, UPND, PF MMD etc it does not matter. You will remain power if we do not do the right things for the betterment of our country.

    We have a real chance to become an economic supper power in the region through maize farming. At least I saw that opportunity from the article.

    All we need is to get our act together as a country.

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      kolwemuntusana 5 years

      dont leave out the COPS in the cost structure.we pay alot wen we r transporting our produce to town so that the towns pipo,including COPS, ba PF do something.maybe give a special permit so that trucks carrying agric. produce pass freeeeeeeeee!

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    Joseph 5 years

    Bravo chipimo,tel the P.F party the truth.People want food to go down.In livingstone,2 by-elections in less than a year.Now,10 bililon kwacha will be wasted,in expense in developing the city which is currently dirt and in bad state.Shame P.F for your failure to deliver your promises,you are just after manupulating people.

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    SATA 5 years

    Excellent article Elias Chipimo. Keep it up!!!

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    Elias, many thanks for the good exposé. The capping of how much maize a farmer could sell to FRA also did contribute to the scarcity of the product on the local market (in addition to the outflows to neighbouring countries). In places like Kaoma, farmers that produced more than what FRA could buy from a single farmer, still have the crop in their sheds. They had hoped FRA was reverse its decision. But, I guess now they have to settle for 30 to 35KR for a bag!

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    Excellent 5 years

    Zambia needs NAREP, if you are a true Zambian, take Elias Chipimo messege to those who cannot read here. We need a president with a contemporary mind set. ELIAS CHIPIMO is the next president of Zambia. A life changing revolution is on its way. The article is excellent, CONSTRUCTIVE CRITICISM, make no mistake, NAREP is a party of modern politics. Be part of the change and change Zambia for the better. Be part of the great idea,NAREP is the idea. VIVA NAREP!

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    Mubanga 5 years

    Continue handling them with kids’ gloves and see how popular you will become!!

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    shame 5 years

    Chipimo choose either to eat with the devil or struggle with us.

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    Najudah 5 years

    With the threat by Mr Kabimba to ensure the medium of instruction in primary years 1 to 4 is an unspecified local language the problem of illiteracy is only just beginning. I remember speaking to a lawyer from Tanzania in the 80’s who expressed the regret Tanzania had for insisting on Swahili as a medium of instruction and how this disadvantaged Tanzanians during that time. My point is this sudden, apparently politically motivated policy move to “dump” the English language for our most impressionable young people is to ensure a population that struggles even more to understand and articulate a language largely spoken in the global community and to ensure they do not hold their political leaders to account. I would have been more impressed with a move to encourage parents to teach their children their native language at home rather than impose the burden on our school system.

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      young FTJ 5 years

      FTJ and MCS (1995- MMD President and secretary general) moved a motion in parliament to make Bemba Official zambian language. We all know what happened to that motion.
      Now, still with the same idea, pupils will have to be taught in Bemba before they learnt English. You may argue and say children will be taught their languages. But I will ask you if primary school teachers will have to be transferred. Mr Chilufya in Kaoma does not want to learn nkoya, but Mr Nawa in Kashikishi speaks Bemba like one. This is just a way of getting rid of other languages from the literacy system. Watch my words in the next 40years!

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    Mwenya 5 years

    Democracy and iliteracy is a bad mix… Mr chipimo’s line of thought is the right type for the presidency, unfortunately he cannot get to plot 1 because the majority of our voters are ignorant and sometime stupid iliterates; pf thrives on that. Ba chipimo is not a threat because this short artice, as good as it is, ‘seems too long’ for your avarage zambian…

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    To me chipimo is a hypothetical opposition. Spend too much time on his computer other than taking the fight to the PF.

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      Howling Wofl 5 years

      I agree with you. I even doubt he is opposition. Some of these characters can be tricky.

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    you are tallking to illiterates

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      Its a thesis not an article. Chipimo spare us your thesis

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    Umumbulu 5 years

    Nice one!

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    chipimo nawakwi u are confusing pf and people of zambia now u are saying maize shortage is not pf problem but whose as part leader try to be frank u are for the people maybe u are fearing sata better stop presenting people

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    chipimo u are very useless. how do u become a bootlicker with all this wisdom. change for the better

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    KK 11 5 years

    Chipimo is a neither cold or warm political leader engaging in political mental orgasms.If people cannot tell what you stand for then know that you a fake leader. Politically, what does this Chipimo stand for? Nothing! For him politics is about writing these unscienfically researched statement or articles. Have you heard that Chipimo is visiting people in different communities? He should go out of his home and meet people not just sipping tea in his study room and writing sterile statements!

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      kolwemuntusana 5 years

      wat cow manure is this? are u going to pay for his trips to visit pipo?wake up man!thats not working.people must learn that good politics starts from the office.u think and then implement.officers r there to pick up complaints from the long can it take for chipimo to visit every every constituency in Z?wake up.

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      The Judge 5 years

      Yes indeed, take the fight out where it belongs, lengthy articles will only be between you and the PF who shall be very had to convince or cannot simply articulate them. Get to the streets….

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    brown bukala 5 years

    Zambian maize is truly hot cake in the region, RIGHT NOW IAM ENJOYING SCREWING A LADY FROM KENYA,SHE IS BUYING MAIZE IN ISOKA DISTRICT and iam the we are sleeping at a lodge in TUNDUMA waiting for the trucks
    i have realy enjoyed this lady pantu on top of that money chilempela over.after working hard in the field then coming to the service iam rendering to her in bed she can`t let me go.and she is well off in kenya
    bye bye zambia.we will be coming back to buy more maize

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    tute 5 years

    If I was a teacher, I would have given Chipimo 49%, which translates into a bear fail. The reason being that he has left out other pertinent issues which should have been considered in his analysis:1) maize is not only a political crop but also a social and economic and as such he should have examined the factors that influence maize production, marketing & consumption from these perspectives. 2)chipimo talks about demand vs supply factor that may have caused the increase in the maize meal price(economists refer to it as demand pull inflation). Yes, that is one of the factors. But he should have mentioned the cost push type of inflation recently imposed by Government (the minimum wage. The minimum wage heavily influenced the cost structures of the role players in the mealie meal value chain.3)Chipimo blinds himself to the fact that for free market system to operates efficient information flow is critical. All players (i.e farmers, distributors, millers, consumers etc)in the maize production-distribution-consumption system need information. To enable them make informed decissions. In Zambia,the efficacy of the public &private sector information system only for political pronouncements such arrests on oposition leaders, state house visits by chiefsof and swearing in ceremonies etc. Can one rely on Zamis as a price determing instrument?4) Narep president does not dig a little deeper in the challenges of maize marketing beyond infrastructural challenges. For example, I could have given him points if he had mentioned the huge negative effects of seasonal & uniform pricing of maize in Zambia. These hugely distort maize prices. 5)FRA can not achieve its mandate one main reason. It’s the politicians’ MILKING COW. ZCF is fighting hard to assume that role. 6) chipimo ignores the issues of national food security as promagated by the FAO. It is important that he balances critique in terms of the aims/objectives which are clearly spelled out in the mellinium goals of the UN. 7) chipimo should also examine the impact of maize subsidy on rural households. Yes transfer payments have an opportunity cost but should also be anlaysed against socio-wefare benefits (don’t throw the baby with bath water) 8)

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      Suggestor 5 years

      I really value your analysis, wish this reasoning could be carried forward into the political corridors of power

      • comment-avatar
        cynic 5 years

        Also the retail price of fertilizers in Zambia is more than twice that in SA, herein lies the South Africans ‘efficiency’!

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      kolwemuntusana 5 years

      if i were a teacher i wud have given u 30%.ur analysis is good for a research paper though it does not go much further also.Chipimo has given a general picture of wat is obtaining on the groung and for the average Zambians to understand.wen time comes for a detailed report,we will contact u.stop beeing a pragmatic,offer solutions

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      You guys don’t vote. The marketeer who’s a kaponya does.John 3v16. Kaunda cried, ‘where were the women voters?’

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    boss 5 years

    NAREP those are good good ideas but these issues UPND has already articulated them they were called bitter. Elias you are
    a coward our democracy is being raped and you are there pretending pf can listen to you sorry accompany them to police stations because you are part of opposition they are want to play smart by engaging wrong govt unite with your freinds because they seem more real with the status are an extention of arrogant pf because you appeal more to pf than the masses so you aren’t a threat to them currently.remember Rio that was a mistake.masebo mockingly described you a threat to them because you are already real our freedoms are under attack

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    Edward 5 years

    I now believe that statehouse is occupied by small-frightened creatures who are scared of the unknown….Now Mr. Chipimo,are you a genuine opp. figure or we should look for another one?

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    Centre Back of Democracy 5 years

    Well thought out article I must say. But will George Chella understand the intricate arguments you have put across? Put more aptly, will state house take heed of your arguments considering that they are always the first ones to hypocritically call for constructive criticisms. As I await the usual mis-calculated reactions from state house, it seems to me that things are catching up quickly with George and he probably has already resigned himself to the fact that he is no match for this intellectually rich debate.

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    iNkhosi Mzilikazi DiniZulu 5 years

    This is the logical kind of reasoning that ought to characterize the minds of every one who aspires for public office to serve. For others who are in there to either enrich themselves or are in it as a means and end to itself like Miyanda, disjointed and vexatious hallucinations is the order of the day. Zambia is doomed, whether we like it or not.

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    mutale saka 5 years

    i like ur article bt nw be serious Chipimo

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    mutale saka 5 years

    chipimo u r a genious.

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    Kays 5 years

    So why do you think Sata is more scared of MMD than you?

    • comment-avatar
      Ulemona 5 years

      You guys are tough!

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      mk 5 years

      Sata has scores to settle and has almost been brought up all his life playing divide and rule kind of politics. Largely the zambian population is uneducated and therefore doesn’t practice the politics that Chipimo practices. Satas politics is that of populist decisions,abusing Kaponyas as in the vigilante style of UNIP. Currently, Chipimo doesn’t have structures like those of MMD and sata knows that it will take time for Narep to reach the levels of MMD or PF. Narep has no MP in parliament therefore, politics being a game of numbers, Narep can’t bother Sata.

      • comment-avatar
        Howling Wofl 5 years

        In short, NAREP is not a political Party. Meaning Chipimo is not leading anyone.