Good morning ladies and gentlemen. Thank you for taking time to be here this morning. We begin our press conference today by asking a question: since the PF administration came to power, what has really changed in Zambian politics? We ask this because in spite of the hope that things would be different once the MMD was out of power, we are beginning to see that the hope has been misplaced. Indeed, one can see why the French journalist and author Jean Baptiste Alphonse Karr came up with the now famous expression: “plus ça change, plus c’est la même chose” – the more things change, the more they stay the same. Having had the same type of leaders in power since independence, it should surprise no one that the same tried, tested and failed political tactics and strategies are being applied to address long-standing development problems and to contain perceived political threats.
Earlier this week, the nation witnessed with alarm and concern, the arrest and charging of the leader of one of Zambia’s main opposition parties, Hakainde Hichilema – president of the United Party for National Development. No doubt some sections of our society will be happy about this turn of events, but if we are to be true to ourselves, we need to acknowledge that such a brazen display of power will only serve to undermine the hard won democracy we have all fought so hard to achieve – the democracy that the PF itself championed during its time in opposition; the democracy that many still caught up in the euphoria of the PF victory in 2011 may not yet realise, is now at stake. Dictatorship and the worst kind of authoritarianism do not suddenly spring up out of the blue. They start with small steps like deporting a foreign catholic priest expressing the concerns of his community during a homily; arresting a vocal political opponent whose only crime appears to be based on a statement that has long been forgotten; introducing a minimum wage without exhaustive broad consultation with key stakeholders; changing the laws on currency without assessing the implications of such action on historical contractual obligations and future investment decisions that could lead to employment of our local youth. Let us not be blind to the stark reality: in spite of all the impressive statistics about economic growth, there is something seriously rotten in the state of Zambia.
While the decision to arrest an opposition leader for uttering a statement about the training of PF cadres abroad shows a clear demonstration of the current administration’s ability to flex its muscle, it also betrays a lack of focus and priority on their part. If – as the government claims – the statement Mr. Hichilema made is not true, why should the authorities resort to such draconian action rather than take the necessary steps to show the statement to be false? If the same determination in charging and arresting Mr. Hichilema was applied to dealing with unemployment, gender-based violence, poor investment in schools and tertiary institutions, we might actually see signs of progress in our attempts to face these challenges. As it is, all the government has succeeded in doing is misguiding the nation and distracting attention from many very pressing developmental problems the majority are forced to face each day.
We call upon the Republican President Mr. Michael Sata, who having been a victim of unfair prosecution in the past himself, should be troubled that such action is now being taken against a political opponent at a time when he holds the reins of political power. And let no one pretend that this is a criminal matter that does not involve the President. No decision of this nature and for this offence would have been taken without the direct consent of the President or those closest to him. The decision to arrest a political personality on the grounds of “publishing false news with intent to cause fear and alarm” is far more political than criminal in nature and should only be taken after very careful consideration and a clear demonstration that unrest will actually occur. Based on the facts availed to date and the offence alleged to have been committed, NAREP does not believe that an arrest is warranted on this occasion. We believe that in future, laws of this nature should not be exercised without the consultation of an impartial committee of non-partisan senior members of our society.
Our advice to the PF administration is drop the charges against Mr. Hichilema immediately and engage in a process of constructive dialogue to address the pressing problems we face as a nation. Four ritual murders have occurred in the last few weeks in Lusaka alone and at the end of the day, when all is said and done, some or all of the perpetrators of these crimes remain at large, unemployment is still the greatest challenge facing our youth, gender-based violence continues to plague our women and in spite of the many promises to do so, we still do not have clarity on when we will have a new constitution in place. Clearly, we have enough problems already and do not need to manufacture new ones. And this is why we question the wisdom of some of the other decisions that have been made to date including the introduction of the statutory instrument making the kwacha the sole legal tender and the manner in which the new minimum wage statutory instrument was introduced.
We fully understand that the kwacha was being undermined as a currency by the ever continuing dollarization of our economy and that something needed to be done. But you do not solve one problem by creating a completely new one which makes the overall picture worse. Under the new law as set out in Statutory Instrument 33 of 2012, all transactions are to be priced in kwacha which is now the sole legal tender. While we have indeed since seen the appreciation of the Zambian kwacha, we are witnessing the greatest levels of uncertainty since the broad nationalisation and exchange control campaigns of the late 1960’s and early 1970’s. These approaches had their time and did not achieve the intended results in spite of the best intentions of those that championed them. Times have changed. Unfortunately, the thinking of our current leadership has not.
The PF administration should ask itself why this statutory instrument on currency regulation which was first considered in the early years of the MMD administration was never implemented. What ought to be considered is how to un-dollarize the economy without undermining the ability to attract much needed investment capital in our infrastructure and in locally-established businesses. If the PF administration is really serious about implementing the new regulation, let them tell us about ZRA – are they collecting royalties from the mining companies in kwacha now or are they breaching the new regulations and still receiving payments in dollars as they were when the new regulation was introduced? As the law currently stands, it is even illegal for a rural farmer to trade a goat for a bag of maize since the kwacha is now the sole legal tender! Like many of the other hasty PF initiatives, this regulation has fallen victim to the law of unintended consequences.
More seriously, the PF administration should be asking itself how money will be raised for important hydro-electricity projects that are desperately needed in Zambia if the tariffs to the main consumers of power – the mining and industrial sectors – are priced in kwacha? Let us not forget that only 23 per cent of the population (that is less than 3 million people out of population of over 13 million) have access to electricity in Zambia. If investment in the sector is to increase there may have to be an exemption granted to facilitate collection of tariffs from large consumers (like the mining companies) in dollars in order to repay massive dollar loans that cannot be borrowed competitively from local banks.
And as if this uncertainty were not enough, employment has been thrown into another tailspin by the rushed introduction of new regulations on the minimum wage. Let us make one thing clear: NAREP is not opposed to a minimum wage in Zambia. There is nothing inherently wrong with the idea of a minimum wage. Several countries in the developed and developing worlds offer some form of wage protection for lower income categories of workers. In fact, Zambia has had a minimum wage policy in place for several years which has in the past served as a rough guide for many union wage negotiations. The main issue regarding the new statutory instrument on the minimum wage is that it has been introduced in a uniform fashion across the whole country with little warning and without broad-based debate and consultation and a clear assessment of the short and long-term implications it is likely to have on employment.
Several things can happen when you increase the minimum wage in any sector of the economy: (1) because labour is usually the highest single cost in any industry, people are likely to be laid off to offset this sudden increase in monthly liabilities; (2) prices of goods and services are likely to increase – as we have seen with the attempt by bus owners to increase the cost of public transportation; (3) investment in labour intensive activities will be discouraged; (4) small businesses will suffer most and yet these are the real engines of employment creation in nearly every economy in the world, no matter how large.
And let us not blame the small businesses and bus owners. Let us not cast the blame on the private sector. The cost of doing business in Zambia is far too high and the policy inconsistencies and uncertainties are far too frequent for industries other than those based in the mining sector to make major investments.
Given the highly political nature of this matter, it may be too late to suspend the statutory instrument and to seek to reintroduce it after further consultations but it is not too late to modify its application so as to grant those that may be considering terminations or price increases or those that may be holding back on investing in Zambia time to consider its implications. The government should immediately set out an alternative process that would involve academic institutions, unions, labour organisations and employer groups including the Zambia Federation of Employers in debating the manner in which new minimum wage regulations can be implemented. Wage challenges will be different in different parts of the country. This is because the cost of living will not be the same in Lusaka as it will be in Serenje or Mongu. All of these issues need to be taken into account when determining a minimum wage.
If the government insists on going ahead in spite of the clear indications that it may do more harm than good in both the short and long term, they should prepare for even greater unemployment. The PF would do well to remember that the vast majority of the people that voted them into power are the unemployed and they are looking for solutions to their most pressing problems today.
Solving our national unemployment problem is not beyond our grasp. But it requires focussed and committed leadership, leadership that is prepared to overlook petty political squabbling; leadership that is prepared to consult with all stakeholders including those that rank amongst its fierce opponents; leadership that understands the importance of setting out a clear, consistent and well communicated policy agenda. Leadership that will not misguide the nation by creating problems that never should have existed in the first place.
When are we going to have a fresh start? When are we going to have a new type of politics that places concern on the people rather than on perpetuating a personal pipeline to power and all the attendant corruption that comes with it? It is time for the PF leadership to show the greater tolerance, wisdom and maturity that should come with the collective experience that is filling its senior ranks. They have it within them. Let that experience count for something for the people of Zambia who have suffered far too long under the false hopes and promises of administrations past.
Elias C. Chipimo, Jr
NAREP Secretariat
15 August 2012

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