Are banks willing to give loans to small and medium sized enterprises? Should the informal sector pay taxes? How can the country's economy grow? Listen, watch and read our dossiers on Acces to Finance, the Informal Sector and Business Empowerment.
Mar 6, 2010
Dossiers
Are banks willing to give loans to small and medium sized enterprises? Should the informal sector pay taxes? How can the country's economy grow? Listen, watch and read our dossiers on Acces to Finance, the Informal Sector and Business Empowerment.
Mar 4, 2010
Where is the access to finance?
The role of financial institution in lending money to small enterprises in Zambia is a sticky point. Banks promise to be helpful (…lets dare to care….) , but still the most people wont have a chance for a loan.Its a busy afternoon on Buseko market in Zambia's capital Lusaka. Patrick Zangi is standing in the sun and cuts aluminium bars. The 52 year old man constructs windows and door frames. He has been in the business for more than 35 years but he has never been able to expand it. Patrick blames it on the banks.”They don’t give us information about their procedures and offers.”
Many small and medium enterprise in Zambia are facing difficulties in obtaining loans from financial institutions due to high cost of interest rates. The range is up to 30 percent from the bank, and 15 percent from micro finance institution. That is why Zambian government established a citizen economic empowerment Commission (CEEC) to assist the smes in terms of lending,
Victoria Chirwa of Zambia Chamber of Small and Medium Business Associations critises the work of the CEEC. “We have problem with CEEC cause their condition is too daft the interest rate is reasonable, but the procedure is combasant.”Victoria Chirwa also don’t like that the CEEC demands a business plan,a bank account and collateral among other things. “Only few people can provide all the requirements for CEEC loans.”Mabel Mungoma, the CEEC director general, defends the strict policies of her commission. “The success is not about how many people we funded,it is in how many business are standing after a period .”The CEEC is very careful about giving out loans. In the beginning they made bad experiences with people not paying back. says Mabel Mungoma.
Patrick's business of making iron window frames has been stan
ding for the very long period of over 35 years, yet he has never applied for loan. Patrick is worried about the costs of a loan, he doesn’t want to take one even if he meets the requirements of the CEEC. Like Patrick many small business people are deeply frustrated about the banks, they don’t believe in a change, and for them CEEC does not provide the solutionAli Falaki
Street vending in Lusaka
Time and again the Zambian government has tried to chase vendors from the streets but they keep coming back. The central question is: what makes the vendors come back to the streets?Mulenga Katongo wears a simple traditional wrap and a stained top. She balances a tray of bananas and oranges on her head. Mulenga tries to sell her fruits at city market in Lusaka. On most days the woman in her early thirties walks on the streets to offer her merchandise. Today it is raining and she has chosen to come to the market because there is a shelter to protect her from the rain. But Mulenga is not at ease - her business is illegal. For her it’s not allowed to sell neither in the street nor walking around in the market offering her merchandise. Mulenga suffers from the situation. “We can’t have a situation where there are no vendors in town. What will we eat? We make our money in the streets.” Mulenga says that she couldn’t sell from the markets. It’s too expensive. “There’s a lot of corruption going on”, says Mulenga.
Mulenga has been selling fruits on the streets for three years now as a way of helping the husband sustain the family. They have to pay their children’s school fees and provide their five children with basic needs like many other vendors.
Working with fear
The battle lines between Lusaka city council and street vendors seem to be drawn. Chanda Makanta council public relations manager says, ”it’s very unfortunate that people believe that when they sell on the street they make more money than they would in the market.” But why do the council and the government want these people out of the street despite the hard economic situation the country is facing? Shouldn’t the Zambian authorities be glad that the unemployed find their way out of poverty?
On a normal day, Lusaka streets are crowded with vendors competently balancing trays with fruits and vegetables mainly on their heads. They carry on their work amidst fear of being arrested by police and the council.
Way forward
Is it that these people want to be on the streets and not designated market places simply because they want to reach out to their customers and avoid paying council levy of about 3200 kwacha per day? Mulenga argues, in her opinion the markets are not enough to accommodate all the people selling and she says it is very difficult to acquire stands in the market.
Mercy Phiri from the Lusaka district business association shares the concern of the vendors: “The markets’ space here is not enough and those in top most positions grab the stands first. People who want to get a stand have to rent from those few selfish individuals, who hike the prices and this pushes marketers back to the streets.”
Mercy seems to have a solution for the authorities: “If the government can legalise one street in the town center to allow these vendors to conduct their business especially in the evening when most people are knocking off from work, it would help the vendor. They could even collect levy from there.”
But until the situation on the market changes or the Lusaka city Council declares a street a legal vending place, Mulenga will continue carrying bananas and oranges on her head – always prepared to run away from the police.
Caroline Michelo
The frustrated bio fuel industry
As a landlocked country Zambia has to import 100% of its fuel stocks – a dangerous dependency for the country. Will the amendment of the energy policy influence growth in the bio fuel industry in the country?On his farm in Lusaka Tyson Chisambo bends down to inspect his small Jatropha stalks spread around his knees like a sea of green. He has a nursery with 2 million seedlings on a 2 acre land and also a 10 acre Jatropha plantation in Chilanga.
Jatropha is an energy crop, when crushed it produces fuel, which can be processed into bio ethanol-petrol and bio diesel. Chisambo says he has a processing plant that can crush Jatropha seeds but currently the plant is not working as there is no one trading in bio fuels.
Bio fuel mix
Chairman for the Society Forum for Bio Fuel in Zambia Marriot Nyangu says the government should prepare a value chain, which includes production and marketing instead of only advocating for the growing of Jatropha plants.The government of Zambia in 2007 drafted a law that forces oil companies to mix bio fuel with the regular petrol for sale at filling stations. This is called a blending ratio. Meanwhile the amendment of this law is still waiting for adoption by the Zambia Bureau of Standards (ZBS) in Lusaka.
This is a problem many Jatropha farmers are facing in Zambia. When the government amended the energy policy to support the bio industry as a sector in 2007, farmers like Chisambo jumped to the opportunity.
Charles Mulenga, Assistant Director at the Department of Energy says government is concerned about the supply of Jatropha in the country: "The study of the extent of cultivation of Jatropha in the country found out that only 10,000 hectares of land is plantation. That is not enough to enable us to come up with a mandatory statement of blending".
The government is currently in talks with the Bio Fuel Association of Zambia and stakeholders about the bio fuel industry. "The growing of Jatropha if encouraged within the outlining districts in the country, the oil produced will not only cater for their oil needs but also build processing plants that will brings jobs" claims Chisambo.
The energy minister Kenneth Konga however disclosed that government is floating shares of the only petroleum refinery Indeni on the stock exchange in-order to boost the energy sector.
Mulima Situmbeko
Links
Jatropha curcas in Zambia
China Asks Zambia To Plant 2 Million Hectares of Jatropha
Forests and the Biodiversity Convention
Access to finances for Zambia
Zambia has a large small and medium enterprise sector. But these businesses need loans from then banks to grow. The million-dollar question is: are banks willing to lend money to them?
It is a hot day at Buseko market in Zambia’s capital Lusaka. Most people gather in the shades of the mango trees. However, the heat of the afternoon does not discourage Moses Mwale, a 52-year-old carpenter at Buseko market. Moses works on a small piece of wood. He looks tired. He must be – the air in his small shop is sticky and he has been working all day.
When he is done working on this particular piece of wood, it will fit perfectly on the left arm of the partially made chair in the corner of the room. Moses loves his work. He would like to expand his business, but there is a problem. Moses says sometimes customers need the finished products in a short time but he ends up loosing business because of he depends on manual equipment. “I need a loan so that I am assisted in getting machinery to ease the work we do”, says Moses Mwale
Growing competition
Whether people are unable to get loans or fearful about getting loans, the banking sector has been dominated by four major banks. Private sector development chairperson Yousuf Dodia says the rules and the benchmarks in giving these loans have been set by the four major players. “This has been the scenario for many years, but in the last 24 months we have seen four new banks come in and these banks are mainly African banks. So the group of competitors in the banking sector has grown quit a lot,” Dodia says.
Businesses like Moses Mwales still depend on the government to take responsibility. Moses says the government should encourage small businesses by softening up loan restrictions from banks, but bank of Zambia head of public relations Kanguya Mayondi says Zambians do not have a healthy borrowing culture. “When people hear about borrowing it sends chills in peoples minds, but the only chills it should send is through our conscience - are we ready to pay back?,” asks Kanguya.
Dark cloud of competition
With 2010 bringing close the implementation of the COMESA customs union it will mean zero tariffs for goods moving among member countries. What this means is that goods coming into Zambia from Kenya or Zimbabwe will come in duty free and likewise goods manufactured here in Zambia will go into these countries duty free.
Banks can help in the financing of small manufacturering businesses like Moses Mwale, who does not feel like a potential bank client, probably because of high interest rates. This is true for most SMEs in Zambia unless the government steps in and takes advantage of the coming competition.Yousuf Dodia says the government should see the dark cloud of competition within the region and support the private sector in a more aggressive way.
Stephen Mdoma
It is a hot day at Buseko market in Zambia’s capital Lusaka. Most people gather in the shades of the mango trees. However, the heat of the afternoon does not discourage Moses Mwale, a 52-year-old carpenter at Buseko market. Moses works on a small piece of wood. He looks tired. He must be – the air in his small shop is sticky and he has been working all day.
When he is done working on this particular piece of wood, it will fit perfectly on the left arm of the partially made chair in the corner of the room. Moses loves his work. He would like to expand his business, but there is a problem. Moses says sometimes customers need the finished products in a short time but he ends up loosing business because of he depends on manual equipment. “I need a loan so that I am assisted in getting machinery to ease the work we do”, says Moses Mwale
Growing competition
Whether people are unable to get loans or fearful about getting loans, the banking sector has been dominated by four major banks. Private sector development chairperson Yousuf Dodia says the rules and the benchmarks in giving these loans have been set by the four major players. “This has been the scenario for many years, but in the last 24 months we have seen four new banks come in and these banks are mainly African banks. So the group of competitors in the banking sector has grown quit a lot,” Dodia says.
Businesses like Moses Mwales still depend on the government to take responsibility. Moses says the government should encourage small businesses by softening up loan restrictions from banks, but bank of Zambia head of public relations Kanguya Mayondi says Zambians do not have a healthy borrowing culture. “When people hear about borrowing it sends chills in peoples minds, but the only chills it should send is through our conscience - are we ready to pay back?,” asks Kanguya.
Dark cloud of competition
With 2010 bringing close the implementation of the COMESA customs union it will mean zero tariffs for goods moving among member countries. What this means is that goods coming into Zambia from Kenya or Zimbabwe will come in duty free and likewise goods manufactured here in Zambia will go into these countries duty free.
Banks can help in the financing of small manufacturering businesses like Moses Mwale, who does not feel like a potential bank client, probably because of high interest rates. This is true for most SMEs in Zambia unless the government steps in and takes advantage of the coming competition.Yousuf Dodia says the government should see the dark cloud of competition within the region and support the private sector in a more aggressive way.
Stephen Mdoma
SHOE MAKER BLAMES BANKS FOR HIS INABILITY TO EXPAND
Getting a loan from a commercial bank or micro finance institution is usually not a problem in Zambia - but what is, is the cost of borrowing. It costs up to 30 percent to borrow money from a commercial bank and 15 percent from a micro finance institution.
Kingsley Mwewa, 50, makes shoes in a market stall measuring just two square meters of floor space. An old sewing machine rattles everyda
y from his little stall as one pair of shoe after the other is produced. A pile leather material, shoes (old and new) and shoe soles are disorderly heaped on shelf on the opposite wall to a huge stall window where Mwewa displays the latest produced shoes. The leather, glue, rubber and sweat forms a cocktail of smells that is difficult pin point in description.
But Mwewa and his teenage assistant have been working in this little stall for the last eight years and the only problem their business has is not the smell or the floor space it is access to loans to expand the business. “It’s very difficult to get a loan from commercial banks,” Mwewa says. “They will ask you for collateral and even the interest rates are very high. The only people who can give you a loan are the microfinance institutions but they charge even higher interest rates.”
But its not only small business people that complain about the lack of access to finance. Zambian President Rupiah Banda recently cautioned banks that the high lending rates hinder the growth of small business and therefore limit employment opportunities for Zambians. He said this at the official launch of the First National Bank in November 2009. First National Bank was the fifth bank to open shop in Zambia in less than one year.
The reason why small businessmen like Mwewa as well as economists and politicians complain about lending rates in Zambia is that the inflation rate which is a major factor in determining the interest rates that the banks charge is at 9.8 percent. Why then is access to finance so expensive at 30 percent when inflation is barely 10 percent? But commercial banks claim the cost of doing business in Zambia is very high and that is reflected in the cost of borrowing.
From her glass demarcated office at the top of the most prestigious bank in Zambia, Mizinga Melu, the Managing Director of Standard Chartered Bank and also Vice chairperson of the Banks Association of Zambia, looks closely into her computer screen to analyze the latest financial data sent to her e-mail box.
“Yes, inflation has come down, but If you look at the statutory reserves banks are required to have with central bank and the cost of some of the fixed deposits … they cost quite a bit,” Melu says. “We also have to pay a high cost for the telecommunication and other expenses which all have to be reflected in the lending rates.” She adds that although the average lending rates in the country are between 25 and 30 percent, some people (companies and individuals) can access loans at rates as low as 15 percent.
Poor credit culture
The background to special treatment is the poor loan repayment culture in Zambia. Until two years ago, Zambian businessmen and farmers would borrow money from banks without the slight intention of paying back. Others would hoop from one bank to the other borrowing money and simply disappear.
To nab this culture, the Bank of Zambia created the Credit Reference Bureau, an institution that tracks activities of borrowers and shares that information with lenders with the intention of keeping bad characters out of the financial system. Although it has been in existence for the last two years, the Bureau has done very little to help synchronize the lending rates and the inflation rate.
Economic analyst, Yusuf Dodia says the problem is bigger than the credit reference bureau. “Although the country has 17 of banks there sector is largely dominated by four banks with a network of branches spread throughout the country. The problem is that there is no competition to push lending rates down.” Mr. Dodia says.
Mr. Dodia however predicts that in the next two years the competition among banks will impact on lending rates.
Central Bank dates Islamic Banks
The central Bank which regulates financial institutions is currently plotting several plans to compel commercial banks lend money cheaply. The Bank of Zambia wants bring to the market Islamic banking.
“Islamic banks do not charge interest on money borrowed,” Caleb Fundanga, the Bank of Zambia Governor says. “What they do is that the loan is converted into shares in the project the borrower wants to invest in.”
But until Islamic banking is introduced, Mr. Mwewa banks on customers support not financial institutions to make his shoe making business grow. He plans to employ five other people but this is a long term vision.
“I believe my shoes will be worn the world over …and I want my grandsons and daughters to take over this business and what I believe in is that it will grow!” Mwewa declares.
It’s a dream many small businessmen and women in Zambia have. But these dreams would have been easily realized were it not for the unaffordable lending rates that banks charge on loans.
Kingsley Mwewa, 50, makes shoes in a market stall measuring just two square meters of floor space. An old sewing machine rattles everyda
y from his little stall as one pair of shoe after the other is produced. A pile leather material, shoes (old and new) and shoe soles are disorderly heaped on shelf on the opposite wall to a huge stall window where Mwewa displays the latest produced shoes. The leather, glue, rubber and sweat forms a cocktail of smells that is difficult pin point in description.But Mwewa and his teenage assistant have been working in this little stall for the last eight years and the only problem their business has is not the smell or the floor space it is access to loans to expand the business. “It’s very difficult to get a loan from commercial banks,” Mwewa says. “They will ask you for collateral and even the interest rates are very high. The only people who can give you a loan are the microfinance institutions but they charge even higher interest rates.”
But its not only small business people that complain about the lack of access to finance. Zambian President Rupiah Banda recently cautioned banks that the high lending rates hinder the growth of small business and therefore limit employment opportunities for Zambians. He said this at the official launch of the First National Bank in November 2009. First National Bank was the fifth bank to open shop in Zambia in less than one year.
The reason why small businessmen like Mwewa as well as economists and politicians complain about lending rates in Zambia is that the inflation rate which is a major factor in determining the interest rates that the banks charge is at 9.8 percent. Why then is access to finance so expensive at 30 percent when inflation is barely 10 percent? But commercial banks claim the cost of doing business in Zambia is very high and that is reflected in the cost of borrowing.
From her glass demarcated office at the top of the most prestigious bank in Zambia, Mizinga Melu, the Managing Director of Standard Chartered Bank and also Vice chairperson of the Banks Association of Zambia, looks closely into her computer screen to analyze the latest financial data sent to her e-mail box.
“Yes, inflation has come down, but If you look at the statutory reserves banks are required to have with central bank and the cost of some of the fixed deposits … they cost quite a bit,” Melu says. “We also have to pay a high cost for the telecommunication and other expenses which all have to be reflected in the lending rates.” She adds that although the average lending rates in the country are between 25 and 30 percent, some people (companies and individuals) can access loans at rates as low as 15 percent.
Poor credit culture
The background to special treatment is the poor loan repayment culture in Zambia. Until two years ago, Zambian businessmen and farmers would borrow money from banks without the slight intention of paying back. Others would hoop from one bank to the other borrowing money and simply disappear.
To nab this culture, the Bank of Zambia created the Credit Reference Bureau, an institution that tracks activities of borrowers and shares that information with lenders with the intention of keeping bad characters out of the financial system. Although it has been in existence for the last two years, the Bureau has done very little to help synchronize the lending rates and the inflation rate.
Economic analyst, Yusuf Dodia says the problem is bigger than the credit reference bureau. “Although the country has 17 of banks there sector is largely dominated by four banks with a network of branches spread throughout the country. The problem is that there is no competition to push lending rates down.” Mr. Dodia says.
Mr. Dodia however predicts that in the next two years the competition among banks will impact on lending rates.
Central Bank dates Islamic Banks
The central Bank which regulates financial institutions is currently plotting several plans to compel commercial banks lend money cheaply. The Bank of Zambia wants bring to the market Islamic banking.
“Islamic banks do not charge interest on money borrowed,” Caleb Fundanga, the Bank of Zambia Governor says. “What they do is that the loan is converted into shares in the project the borrower wants to invest in.”
But until Islamic banking is introduced, Mr. Mwewa banks on customers support not financial institutions to make his shoe making business grow. He plans to employ five other people but this is a long term vision.
“I believe my shoes will be worn the world over …and I want my grandsons and daughters to take over this business and what I believe in is that it will grow!” Mwewa declares.
It’s a dream many small businessmen and women in Zambia have. But these dreams would have been easily realized were it not for the unaffordable lending rates that banks charge on loans.
FACTS
By Joshua Jere, Brian Mwale, Hadijah Nabbale
CONSTRUCTION BOOM CREATS EMPLOYMENT IN ZAMBIA.(fact box)
Zambia has about 4,700,000 people in the labour force.
According to the Ministry of labour, about 85.5 % are in employment.
The construction industry currently offers jobs for more than 40 thousand people.
Permanent secretary from ministry of labour adds that they expect more people to be employed in the field and starting training programme.
The construction industry happened to be one of the major sectors in Zambia.
Last year it contributed about 7.5% of the gross domestic products (GDP).
According to the Ministry of labour, about 85.5 % are in employment.
The construction industry currently offers jobs for more than 40 thousand people.
Permanent secretary from ministry of labour adds that they expect more people to be employed in the field and starting training programme.
The construction industry happened to be one of the major sectors in Zambia.
Last year it contributed about 7.5% of the gross domestic products (GDP).
Banks in Zambia loose millions to the informal saving culture.
Less than one third of the country’s population has a bank account. Research indicates that the biggest percentage without Bank accounts are the informal sector. But there alternatives to the official banking.
At the COMESA Market located right in the heart of Lusaka, South African jewelry and baby clothes, Vitengi from DR Congo and fruits from Zimbabwe are displayed on small stalls. Walking among the stands is Lovemore Ngwenya. He is not there to spend money but to collect it .He stops at a stall where a young man is rolling out chapatti. He stops and gives Ngwenya 3,000 kwacha in honor of his day’s contribution.
A group in COMESA Market aimed at assisting Marketers is comprised of 23 people. Each day, each member contributes 3,000 kwacha. At the end of day, the total sum of money collected is given to one member of the group. This is a saving plan on small scale. The system is called Chilimba. Every member of the group has a number. When their number comes up, they get all the money collected on that day. Marvis Chibwe a member of the group says saving in the Bank requires too much time which she lacks due to her busy schedule.
Ililonga Muyunda, the Executive Director of Zambia Consumer Association, says for many semi urban and rural consumers the banks are not in their physical location. “Banks are loosing business because once the informal sector is organized and sensitized there is a lot of business”. Muyunda expressed the need for Banks to cash in on the positive saving culture displayed in the chilimba system.
According to Simataa Simataa an independent analyst Banks are slowly changing to attract the informal sector “A couple of years ago, having an account was a privilege of the few. However Banks have realized this too and they’ve gone down .I know of banks that have gone as low as 20,000 kwacha for opening an account”.
Banks may be reaching out but it is still not enough, at the Market, stand owners still prefer to give the money to Lovemore Ngwenya in their Chilimba system. However, at the close of the day the member whose number was up didn’t get his share. Ngwenya says one member of the group was unable to make his contribution in time. He says he will make a follow up the following morning to come up with the total amount required for the member in waiting.
But if worse comes to worse Lovemore may have to accept an item like a Radio Set instead of the money - just like banks go for Collateral. So far Lovemore never had to take any Chilimba Collateral. His group members have a high discipline in honoring their share. A discipline many Banks would love to see in their clients.
Barbara Namisango
At the COMESA Market located right in the heart of Lusaka, South African jewelry and baby clothes, Vitengi from DR Congo and fruits from Zimbabwe are displayed on small stalls. Walking among the stands is Lovemore Ngwenya. He is not there to spend money but to collect it .He stops at a stall where a young man is rolling out chapatti. He stops and gives Ngwenya 3,000 kwacha in honor of his day’s contribution.
A group in COMESA Market aimed at assisting Marketers is comprised of 23 people. Each day, each member contributes 3,000 kwacha. At the end of day, the total sum of money collected is given to one member of the group. This is a saving plan on small scale. The system is called Chilimba. Every member of the group has a number. When their number comes up, they get all the money collected on that day. Marvis Chibwe a member of the group says saving in the Bank requires too much time which she lacks due to her busy schedule.
Ililonga Muyunda, the Executive Director of Zambia Consumer Association, says for many semi urban and rural consumers the banks are not in their physical location. “Banks are loosing business because once the informal sector is organized and sensitized there is a lot of business”. Muyunda expressed the need for Banks to cash in on the positive saving culture displayed in the chilimba system.
According to Simataa Simataa an independent analyst Banks are slowly changing to attract the informal sector “A couple of years ago, having an account was a privilege of the few. However Banks have realized this too and they’ve gone down .I know of banks that have gone as low as 20,000 kwacha for opening an account”.
Banks may be reaching out but it is still not enough, at the Market, stand owners still prefer to give the money to Lovemore Ngwenya in their Chilimba system. However, at the close of the day the member whose number was up didn’t get his share. Ngwenya says one member of the group was unable to make his contribution in time. He says he will make a follow up the following morning to come up with the total amount required for the member in waiting.
But if worse comes to worse Lovemore may have to accept an item like a Radio Set instead of the money - just like banks go for Collateral. So far Lovemore never had to take any Chilimba Collateral. His group members have a high discipline in honoring their share. A discipline many Banks would love to see in their clients.
Barbara Namisango
MONEY MAKING WHEELBARROWS
In the busy capital city of Zambia, Lusaka, 28 year old Sakala Lyson has begun an unusual business. And he is making a decent living with his wheelbarrow which is also known as a ZAMCAB. For the young man this was a way out of unemployment.
At the busy market place in central Lusaka, a row of wheelbarrows is lined up just outside the entrance of the market. This is where Sakala Lyson has been doing business for the past two years. He owns one of the wheelbarrows which are called ZAMCABS in Zambia. He pushes it for customers who want to transport their goods to various points within the market and town. Sometimes he even pushes his loaded wheelbarrow as far as 10 km within the city. “I tried to work in the companies but I could not find what I wanted, so I decided to come here and work as a Zamcab driver because I get money which I use to feed my family at home”, says Sakala.
MAKING ENDS MEET
He rents a house for his family – that is 2 children and a wife. In a couple of years he wants to send his children to school. This will be an additional cost. Before starting his Zamcab-business, Sakala was unemployed. It is a common problem in Zambia: Lusaka province has the highest unemployment rate at 29% according to the 2005 labour office survey report. Zambia is a very youthful nation. As such a lot of these youths just idle instead of working. “When you talk of the economic way of looking at it this is a resource - youths who are still energetic and vibrant”, says Steven Chamo, the Director of operations at the Organisation for Zambian Youth Entrepreneurs. “They are able to do anything you can think of but they are still at home doing nothing but abusing alcohol and drugs”
At least Sakala Lyson is not like those other youths who just gave up. With his Zamcab business he is able to make a decent living. On a good day he earns 20 USD. But when business is not good he goes home with 6 USD only. Even so this is enough to keep him going. He also has big plans for the future. “I have developed. My life has changed. I now have things which I didn´t have before. So now I want to do some other business. I want to go further”, says Sakala.
TOUGH LIFE
Sakala Lyson didn’t go far with his education. He lost both parents when he was a child and he only went up to grade 7. Nobody was there to pay for his school fees. It is difficult for young Zambians to find a decent job especially if they are a school dropout. “Jobs are very few and shrinking everyday. But youths have hidden potential in them. They should always mind what they have. What they have is greater than what they don’t have”, says Steven Chamo. He tries to encourage young unemployed Zambians to use their talents.BIG CHALLENGES
It’s been raining heavily in Lusaka for over 3 hours now. There is mud all over the market place. Big puddles of rain water and little brown streams are flowing everywhere. This is bad for Sakala’s zamcab business. Being a Zamcab operator is not easy. He has to carry very heavy loads and this puts a lot of strain on his back. Congestion and the danger of being hit by cars in the busy city of Lusaka are not the only challenges in for him. Sakala has to fight for a fair price for his services: “When you explain to someone that you are carrying something heavy and you ask for so much, then they say no I have the money and people can give you peanuts.”
Steven Chamo says, some people in Zambia consider zamcab operators to be failures. But looking at the high rate of unemployment at least people like Sakala Lyson are able to make ends meet. He is happy with what he is doing for now. He is even advising others to join the zamcab business. Apparently, he doesn’t mind competition: “I am appealing to school leavers even those who stopped working. They can come and join us because the bible tells us that God blesses a hard worker.”
Patricia Sundu
Government incurs huge losses through taxes
Mukwanda Danny operates a Zamcab business at the Soweto Market in Lusaka. With this business he feeds a family of five. Mukwanda is among thousands of people joining the lucrative informal sector.The informal sector is absorbing thousands of entrepreneurs. About 70 percent of the working people are operating different- not registered- businesses in Lusaka. Mukwanda Danny operates a Zamcab or wheelbarrow where he ferries goods for vendors to and from the market at a fee. “I get about 500 and 600 thousand kwacha (more than 100 USD) in a month. I pay my rent and I pay school fees for my children”, says Mukwanda. That is equivalent to the average Zambian income. Yet, Mukwanda hesitates to pay taxes. He feels that the government has not assisted him: “The majority of us do not benefit in any way from the government’
The informal sector within Lusaka falls under the City Council. But in 2009 the Council collected only 14,000 billion kwacha (about 64,400 billion USD). That is way below the target of 80 billion kwacha (368,000 billion USD). The Council Public Information Officer Chanda Makanta says the best they have collected was in 2005 with a collection of 16,000 billion kwacha (73,600 billion USD).
The council is unable to collect taxes effectively. “The council is understaffed and more so, there is no regulation in place demanding the inclusion of the informal sector”, says Chanda Makanta. She is calling for reforms in the sector.
Tax reforms
Love Mtesa, an economist expert, agrees that Zambia urgently needs some reforms: ‘’This should have been done yesterday, ” Mtesa says the economy will be improved with a better taxation policy. He says in 1962 every person above 18 years was paying taxes and by then the kwacha was strong against the dollar. “But now the exchange rate is unbelievably high and the government looses billions of money in uncollected taxes”, says Mtesa. This money could help improve the infrastructure in the country. Experts say, with reforms and proper policy to regulate the sector, every of the nine constituencies within Lusaka would end up having an additional school every year, and maybe two health facilities would come up in a year as a way of plowing back to the community.
Jane Kariuki
Mar 3, 2010
Zambia employement statistics
Figures from the Central Statistics Office, Zambia
Zambia employement statistics....
At least 60 percent of the Zambians work in the informal sector.
Break down of Zambia's employement statistics....
The proportion of the unemployed among persons aged 12 years and above for the nation was estimated at 14 percent in 2006. (child labor)• Looking at sex differences at national level, 13 percent of the males and 15 percent of the females were unemployed.• Urban areas recorded higher unemployment rates (32 percent) than rural areas (5 percent). • The highest unemployment rates for females were recorded in Lusaka Province at 41 percent followed by Copperbelt with 40 percent.
Poverty in Zambia -1991 - 2006
Results show that poverty levels declined from 70 percent in 1991 to 64 percent in 2006.
The average monthly income for a Zambian household is K 500.000 (~ 100 USD)
Access to health care
In Zambia the majority of households, about 95 out of every 100 Zambians, in urban areas have access to health facilities, while in the rural households 94 out of every 100 Zambians are reported to have used the facilities.
Income
20 percent of Zambians are living fabulously wealthy lives while the remaining 80 percent just manage to get by. At least 95 percent of workers in the informal sector still do not earn enough to lift themselves and their families out of poverty.
Sources
Article by Kabukabu Kawanambulu Ikwueme:
Zambia: Zambia’s Informal Sector Facing Major Challenges..
Zambia's Informal Sector Facing Major Challenges
Joseph Basoga
Zambia employement statistics....
At least 60 percent of the Zambians work in the informal sector.
Break down of Zambia's employement statistics....
The proportion of the unemployed among persons aged 12 years and above for the nation was estimated at 14 percent in 2006. (child labor)• Looking at sex differences at national level, 13 percent of the males and 15 percent of the females were unemployed.• Urban areas recorded higher unemployment rates (32 percent) than rural areas (5 percent). • The highest unemployment rates for females were recorded in Lusaka Province at 41 percent followed by Copperbelt with 40 percent.
Poverty in Zambia -1991 - 2006
Results show that poverty levels declined from 70 percent in 1991 to 64 percent in 2006.
The average monthly income for a Zambian household is K 500.000 (~ 100 USD)
Access to health care
In Zambia the majority of households, about 95 out of every 100 Zambians, in urban areas have access to health facilities, while in the rural households 94 out of every 100 Zambians are reported to have used the facilities.
Income
20 percent of Zambians are living fabulously wealthy lives while the remaining 80 percent just manage to get by. At least 95 percent of workers in the informal sector still do not earn enough to lift themselves and their families out of poverty.
Sources
Article by Kabukabu Kawanambulu Ikwueme:
Zambia: Zambia’s Informal Sector Facing Major Challenges..
Zambia's Informal Sector Facing Major Challenges
Joseph Basoga
Mar 2, 2010
Zambian informal sector saving under mattresses
The Central bank closed commercial banks that don’t measure up to the set standards. this fills the hearts of the micro small and Medium enterprises with fear of loosing the money.
According to Mungomba an economic Analyst many people in the sector now keep their money in the homes because they fear the long process of compensation in case such an incidence occurred.
Informal sector prone to Robbery…….
Mongomba said in so doing the people expose themselves to dangers of being robed. He added that the sector needs to develop a culture of saving if it is to attain economic growth.
The Governor Bank of Zambia urged commercial Banks to introduce new products aimed at encouraging people improve their saving culture. He said the development has enabled banks get money to lend out to the business sector.
Barbara Namisango
According to Mungomba an economic Analyst many people in the sector now keep their money in the homes because they fear the long process of compensation in case such an incidence occurred.
Informal sector prone to Robbery…….
Mongomba said in so doing the people expose themselves to dangers of being robed. He added that the sector needs to develop a culture of saving if it is to attain economic growth.
The Governor Bank of Zambia urged commercial Banks to introduce new products aimed at encouraging people improve their saving culture. He said the development has enabled banks get money to lend out to the business sector.
Barbara Namisango
Mar 1, 2010
LOOKING FOR ALTERNATIVE OILS
THE ZAMBIAN GOVERNMENT LAST MONTH INCREASED THE PRICES OF FUEL BY 15% WHILE THE FUEL PRICES ON THE WORLD MARKET HAVE BEEN STABLE FROM LAST YEAR 2009. ECONOMISTIS IN THE COUNTRY WONDER WHY GOVERNMENT IS NOT PUTTING FOCUS ON FINDING ALTERNATIVE OIL RESERVES FOR THE COUNTRY RATHER THAN CONSTANTLY INCREASING THE PRICES OF FUEL.
GOVERNMENT ABANDONED THE PROJECT OF HARVESTING BIO FUEL THROUGH THE JATROPHA PLANT WHEN THE COUNTRY IS IN DIRE NEED OF SUCH RESERVES. WITH A GROWING ECONOMY THE ZAMBIAN GOVERNMENT NEEDS TO INVEST IN ALTERNATIVE OIL RESERVES INORDER TO HAVE A FAVORABLE ECONOMY.
THE INCREASE IN FUEL PRICE HAS RESULTED TO THE PRICES OF COMMODITIES TO SKY ROCKET BY ALMOST 100%. THIS IS AS A RESULT OF THE PRODUCTION AND TRANSPORTATION COSTS THAT INCREASE IN RELATION TO THE FUEL COST.
Mulima Situmbeko
GOVERNMENT ABANDONED THE PROJECT OF HARVESTING BIO FUEL THROUGH THE JATROPHA PLANT WHEN THE COUNTRY IS IN DIRE NEED OF SUCH RESERVES. WITH A GROWING ECONOMY THE ZAMBIAN GOVERNMENT NEEDS TO INVEST IN ALTERNATIVE OIL RESERVES INORDER TO HAVE A FAVORABLE ECONOMY.
THE INCREASE IN FUEL PRICE HAS RESULTED TO THE PRICES OF COMMODITIES TO SKY ROCKET BY ALMOST 100%. THIS IS AS A RESULT OF THE PRODUCTION AND TRANSPORTATION COSTS THAT INCREASE IN RELATION TO THE FUEL COST.
Mulima Situmbeko
UNEMPLOYMENT LEVELS SOARING IN ZAMBIA
Zambia has a target of 7% economic growth. But this is being compromised by high levels of unemployment. As a result a lot of people have decided to join the informal sector in order to make ends meet.
The issue of unemployment has become a hot topic for debate. This is so because a high percentage of the population in the southern Africa nation of about 12 million people is unemployed. The Ministry of Labour is trying very hard to create employment. But the issue of policy framework formulation and implementation on creating more jobs for Zambians has faced a lot of hurdles.
One of the contributing factors to high unemployment levels is that some companies closed down after being privatized a few years ago. Most of the people who lost their jobs during this privatization process joined the informal sector by starting up small businesses.
CHALLENGES AND RISKS
Sakala Lyson, stays in Lusaka the capital of Zambia and every morning goes to the city market which is the main market in Lusaka. Here he has a business whereby he transports people’s goods from one point to another using a wheel barrow also known as a ZAMCAB. On a good day he makes approximately 20USD but when business is not good he takes home about 6USD only. This helps him to pay rent for his modest house, pay school fees for his two children and feed the family.
Though he is able to make a decent living, Sakala Lyson faces many challenges. For instance he does not have health insurance although his job is labour intensive and poses some health risks. Carrying heavy loads puts some strain on his back. He works in a very competitive and dangerous environment.
SENSE OF DESPERATION
According to Mr Steven Chamo, the Director of operations at Organisation for Zambian Youth Entrepreneurs, says the high unemployment levels have created a feeling of despair especially among the youth. His organization aims at bridging the gap existing between the youth who are doing small businesses and government through dialogue.They also conduct entrepreneurial trainings for the youth.
Although the government of Zambia is doing everything possible to create more jobs for people like John Sakala, Mr Chamo thinks that it should do more because a lot of people are suffering.
Patricia Sundu
The issue of unemployment has become a hot topic for debate. This is so because a high percentage of the population in the southern Africa nation of about 12 million people is unemployed. The Ministry of Labour is trying very hard to create employment. But the issue of policy framework formulation and implementation on creating more jobs for Zambians has faced a lot of hurdles.
One of the contributing factors to high unemployment levels is that some companies closed down after being privatized a few years ago. Most of the people who lost their jobs during this privatization process joined the informal sector by starting up small businesses.
CHALLENGES AND RISKS
Sakala Lyson, stays in Lusaka the capital of Zambia and every morning goes to the city market which is the main market in Lusaka. Here he has a business whereby he transports people’s goods from one point to another using a wheel barrow also known as a ZAMCAB. On a good day he makes approximately 20USD but when business is not good he takes home about 6USD only. This helps him to pay rent for his modest house, pay school fees for his two children and feed the family.
Though he is able to make a decent living, Sakala Lyson faces many challenges. For instance he does not have health insurance although his job is labour intensive and poses some health risks. Carrying heavy loads puts some strain on his back. He works in a very competitive and dangerous environment.
SENSE OF DESPERATION
According to Mr Steven Chamo, the Director of operations at Organisation for Zambian Youth Entrepreneurs, says the high unemployment levels have created a feeling of despair especially among the youth. His organization aims at bridging the gap existing between the youth who are doing small businesses and government through dialogue.They also conduct entrepreneurial trainings for the youth.
Although the government of Zambia is doing everything possible to create more jobs for people like John Sakala, Mr Chamo thinks that it should do more because a lot of people are suffering.
Patricia Sundu
HIGH LENDING RATES HINDER GROWTH OF SMALL BUSINESSES
A government official recently caused a stir when he accused commercial banks of deliberately keeping lending rates high despite the mushrooming of banks in the last one year. But his comments where greeted with applause by his audience largely composed of small and medium enterprises!
Lending rates in Zambia have remained stubbornly high ranging between 25 and 30 percent. Inflation which is one of the key factors in fixing interest rates, has reduced from a high of 19 percent two years ago to 9.8 percent today. This has sparked outrage from the private sector and some politicians suggest that commercial banks have formed a curtail. President Rupiah Banda recently said the high lending rates are harming economic growth.
The President said this when he officially launched First National Bank, the fifth commercial bank to open doors in less than 12 months. "I'm deeply concerned that while inflation has reduced to less 12 %, interest rates have remained very high." President Banda said." This has the effect of limiting the expansion of the economy because Small and medium enterprises can not borrow money to expand their business and employ more people."
Kingsley Mwewa,50, is a shoe maker in Zambia capital city Lusaka who says his business would have expanded were it not for the high lending rates. From his two meter squared stall in Chilenji Market, Mr Mwewa slams a small hammers on the edges of a piece of leather to smoothen it out. He has already made four pairs of leather shoes for school going children selling at only at 10 dollars. Mr. Mwewa says he once borrowed about 500 dollars from a microfinance institution but the loan left him poor than before. “The banks will ask your for collateral and so many other conditions before they can give you a long at a high rate. The only people who can give a loan are microfinance institutions but their interest rates are so high that after servicing the loan you become poorer than before.” Mr. Mwewa said.
Interest rates average 31 percent in Zambia
In an effort to lower interest rates through competition, the central bank attracted into the economy several banks to open shop. From only nine commercial banks operating by the end of 2008 the number has grown to 17 banks. But interest rates have only marginally reduced.
Economic analyst, Yusuf Dodia says there is not enough competition among commercial banks to push lending rates. “Zambia needs more investors in the financial sector because at the moment the newly opened banks are comfortable not to jump out of the band wagon of high interest rates. It is a fast way to recoup their investments if they keep interest rates high.” He says.
But commercial banks have recently justified the high lending rates as a reflection of the high cost of doing business in Zambia. Bankers Association of the Zambia Chairperson and Managing Director for Citi Bank, Savior Chibiya says banks like other business operate in the same economy where the cost of doing business is very high. “ We also have to pay a very high cost for Telecommunication and electricity among other cost which also add up to our cost of operation.” He says.
Central Bank dates Islamic Banks
The Central Bank is now dating Islamic banks with a view of attracting them to enter the Zambian financial sector. Islamic banks do not charge interest rates but will enter into an equity arrangement with the borrower. Until the loan is serviced, the two partners will share profits.
Central Bank Governor, Dr Caleb Fundanga says officials from his bank have had meetings with Islamic banks from Saudi Arabia. “Yes we have had meeting with some Islamic banks but we can not disclose yet the outcome of the meeting at this point.” He says.” But it must be understood that it the private sector not the central bank will introduce Islamic banking in Zambia.
Meanwhile, Kingsley Mwewa the shoemaker sustains his business by re-investing into the business but given the demands from his four children, one them a college student , the business is unlikely to expand.
Joshua Jere
Lending rates in Zambia have remained stubbornly high ranging between 25 and 30 percent. Inflation which is one of the key factors in fixing interest rates, has reduced from a high of 19 percent two years ago to 9.8 percent today. This has sparked outrage from the private sector and some politicians suggest that commercial banks have formed a curtail. President Rupiah Banda recently said the high lending rates are harming economic growth.
The President said this when he officially launched First National Bank, the fifth commercial bank to open doors in less than 12 months. "I'm deeply concerned that while inflation has reduced to less 12 %, interest rates have remained very high." President Banda said." This has the effect of limiting the expansion of the economy because Small and medium enterprises can not borrow money to expand their business and employ more people."
Kingsley Mwewa,50, is a shoe maker in Zambia capital city Lusaka who says his business would have expanded were it not for the high lending rates. From his two meter squared stall in Chilenji Market, Mr Mwewa slams a small hammers on the edges of a piece of leather to smoothen it out. He has already made four pairs of leather shoes for school going children selling at only at 10 dollars. Mr. Mwewa says he once borrowed about 500 dollars from a microfinance institution but the loan left him poor than before. “The banks will ask your for collateral and so many other conditions before they can give you a long at a high rate. The only people who can give a loan are microfinance institutions but their interest rates are so high that after servicing the loan you become poorer than before.” Mr. Mwewa said.
Interest rates average 31 percent in Zambia
In an effort to lower interest rates through competition, the central bank attracted into the economy several banks to open shop. From only nine commercial banks operating by the end of 2008 the number has grown to 17 banks. But interest rates have only marginally reduced.
Economic analyst, Yusuf Dodia says there is not enough competition among commercial banks to push lending rates. “Zambia needs more investors in the financial sector because at the moment the newly opened banks are comfortable not to jump out of the band wagon of high interest rates. It is a fast way to recoup their investments if they keep interest rates high.” He says.
But commercial banks have recently justified the high lending rates as a reflection of the high cost of doing business in Zambia. Bankers Association of the Zambia Chairperson and Managing Director for Citi Bank, Savior Chibiya says banks like other business operate in the same economy where the cost of doing business is very high. “ We also have to pay a very high cost for Telecommunication and electricity among other cost which also add up to our cost of operation.” He says.
Central Bank dates Islamic Banks
The Central Bank is now dating Islamic banks with a view of attracting them to enter the Zambian financial sector. Islamic banks do not charge interest rates but will enter into an equity arrangement with the borrower. Until the loan is serviced, the two partners will share profits.
Central Bank Governor, Dr Caleb Fundanga says officials from his bank have had meetings with Islamic banks from Saudi Arabia. “Yes we have had meeting with some Islamic banks but we can not disclose yet the outcome of the meeting at this point.” He says.” But it must be understood that it the private sector not the central bank will introduce Islamic banking in Zambia.
Meanwhile, Kingsley Mwewa the shoemaker sustains his business by re-investing into the business but given the demands from his four children, one them a college student , the business is unlikely to expand.
Joshua Jere
Feb 26, 2010
HIGH LENDING RATES AFFECT ZAMBIAN SHOEMAKER’S EXPANSION
A local shoe maker can not hire more employees to expand his business because banks have not made it easy for him to access funds. For many Zambian Small and Medium Enterprises –SMEs- interest rates ranging from 25% to 30% on loans by banks are scaring them to borrow money for expansion.
A Zambian Shoe maker has called on the Bank of Zambia –BOZ- to regulate banks so as to enhance access to funds by Small and Medium Enterprises –SMEs-. Kingsley Mwewa who operates his workshop in the Zambian Capital, Lusaka says many local banks do not have a provision for SMEs to borrow money. He says banks’ requirements for one to get a loan are too harsh for businessmen like him. “I have tried to get a loan from the bank but I can not afford the collateral which they are asking for,” says Mwewa.
Mr. Mwewa’s story is like that of many business people in the country. Their operations are going through stagnation because of what they term being sidelined by giants in the financial sector. Meanwhile Bankers Association of Zambia –BAZ- says its members have attached stringent measures toward loans because many SMEs have defaulted in the past. Association Vice Chairperson Mizinga Melu says the core of banks is to make a profit hence defaulters force institutions out of business. “ Statutory measures by government have greatly affected our rates hence many banks still find it difficult to reduce their rates compared to other countries in the region,” she says.
Could Islamic banking aid SMEs?
The Central Bank says the country lacks competition in the banking sector to force the rates downwards. BOZ Governor Caleb Fundanga further adds recovering of loans from borrowers who fail to pay back through the Credit Reference Bureau will help in lowering interest rates.
“The introduction of Islamic Banking which does not provide for borrowers to pay interest on loans would work well in Zambia. However the Bank of Zambia can only facilitate for this if an interested firm requests for its registration,” Dr. Fundanga says.
And Private Sector Development Association –PSDA- President Yosouf Dodia says high interest rates are retrogressive on economic development. He says the SMEs are the economic drivers of Zambia hence need to be considered in access to finance. “More than 80% of the employed population in Zambia is in the informal sector which is being run by SMEs.”
Brian Mwale
A Zambian Shoe maker has called on the Bank of Zambia –BOZ- to regulate banks so as to enhance access to funds by Small and Medium Enterprises –SMEs-. Kingsley Mwewa who operates his workshop in the Zambian Capital, Lusaka says many local banks do not have a provision for SMEs to borrow money. He says banks’ requirements for one to get a loan are too harsh for businessmen like him. “I have tried to get a loan from the bank but I can not afford the collateral which they are asking for,” says Mwewa.
Mr. Mwewa’s story is like that of many business people in the country. Their operations are going through stagnation because of what they term being sidelined by giants in the financial sector. Meanwhile Bankers Association of Zambia –BAZ- says its members have attached stringent measures toward loans because many SMEs have defaulted in the past. Association Vice Chairperson Mizinga Melu says the core of banks is to make a profit hence defaulters force institutions out of business. “ Statutory measures by government have greatly affected our rates hence many banks still find it difficult to reduce their rates compared to other countries in the region,” she says.
Could Islamic banking aid SMEs?
The Central Bank says the country lacks competition in the banking sector to force the rates downwards. BOZ Governor Caleb Fundanga further adds recovering of loans from borrowers who fail to pay back through the Credit Reference Bureau will help in lowering interest rates.
“The introduction of Islamic Banking which does not provide for borrowers to pay interest on loans would work well in Zambia. However the Bank of Zambia can only facilitate for this if an interested firm requests for its registration,” Dr. Fundanga says.
And Private Sector Development Association –PSDA- President Yosouf Dodia says high interest rates are retrogressive on economic development. He says the SMEs are the economic drivers of Zambia hence need to be considered in access to finance. “More than 80% of the employed population in Zambia is in the informal sector which is being run by SMEs.”
Brian Mwale
HIGH INTEREST RATES DENY EXPANSION OF SMEs
Kingsley Mwewa is a shoe maker who has been in this business for over twelve years. He operates his business in a small room down town of the capital of Zambia -Lusaka. Kingsley and his extended family of twelve have entirely depended on this business for over a decade. But due to the high interest rates, this shoe maker has only been able to just get enough and some times not enough Kwachas for his family.
When we asked Kingsley if he had ever tried to get a loan, he replied with a twisted facial expression “yes I have ever, but the percentage is too high”. This has not given his business and many other Small and Medium Enterprises in Zambia the opportunity to expand. Apparently the rate is at 21% in commercial banks and much higher in micro finance institutions.
The Zambia Association of Banks justify their high lending rates with a number of reasons. The Vice Chairperson Mizinga Melu said “the working conditions are not favorable for them to lower the rates. For example, electricity is not reliable we have to use generators which consume a lot of fuel which is expensive.”
Bad debts cause high Interest rates
The economy of Zambia is liberal meaning that Central Bank of Zambia can not regulate these banks. But it can not just sit and watch people being robbed, and this is why the governor Caleb Fundanga says, they introduce the credit reference bureau to curb loan defaulters. This will eventually cut down the number of bad debts and hence reducing the lending rates.
Economists observe that there is no high competition in the banking sector in Zambia and so this justifies the high lending rates. An economist Yusuf Dodia said that Zambia has only 17 financial institutions both commercial and Micro finance. So if only government licenses other banks, there will be high competition and defiantly banks would lower the interest rates.
This would do much for the SMEs like Kingsley Mwewa who will be able to expand his business and also realize his vision of a big shoe factory employing several Zambians and rewarding the nation a lot in terms of revenue.
Haddie Nabbale
When we asked Kingsley if he had ever tried to get a loan, he replied with a twisted facial expression “yes I have ever, but the percentage is too high”. This has not given his business and many other Small and Medium Enterprises in Zambia the opportunity to expand. Apparently the rate is at 21% in commercial banks and much higher in micro finance institutions.
The Zambia Association of Banks justify their high lending rates with a number of reasons. The Vice Chairperson Mizinga Melu said “the working conditions are not favorable for them to lower the rates. For example, electricity is not reliable we have to use generators which consume a lot of fuel which is expensive.”
Bad debts cause high Interest rates
The economy of Zambia is liberal meaning that Central Bank of Zambia can not regulate these banks. But it can not just sit and watch people being robbed, and this is why the governor Caleb Fundanga says, they introduce the credit reference bureau to curb loan defaulters. This will eventually cut down the number of bad debts and hence reducing the lending rates.
Economists observe that there is no high competition in the banking sector in Zambia and so this justifies the high lending rates. An economist Yusuf Dodia said that Zambia has only 17 financial institutions both commercial and Micro finance. So if only government licenses other banks, there will be high competition and defiantly banks would lower the interest rates.
This would do much for the SMEs like Kingsley Mwewa who will be able to expand his business and also realize his vision of a big shoe factory employing several Zambians and rewarding the nation a lot in terms of revenue.
Haddie Nabbale
ZAMBIA TO REVAMP TAX POLICY
Zambia loses sixty billion kwacha (12 million USD) per year in tax fraud and uncollected tax. Tax authorities say the policy will leave no stone unturned because it targets to affect all informal sector workers and will carry heavy punishment for evaders.
The Zambian tax law mandates all citizens with an income of 700.000 kwacha (140 USD) and above, to pay income tax. However most informal sector workers in the same threshold have been evading this tax, a scenario that has caused unfair competition among business community.
The sectors under review will include over 8000 wheel barrow pushers commonly referred to as ZAMCABS, casual laborers operating road side markets and mechanics and dealers in second hand cloths.
ZAMCAB operators in Soweto market say the move to force them pay tax is in the wrong direction adding that their income is far below the assumed value. The tax body is crafting new rules that will help punish offenders some of which will include up to 2 years in jail with heavy fines. The most difficult thing will be finding a means to gauge ones income and calculate how much one can pay.
who is likely to benefit.....
Lusaka city council authorities say despite the nation wide resistance to this policy, it will help achieve the target collection of close to 108 trillion kwacha (216 Billion USD) set by Zambia revenue authority (ZRA). The policy will also help to reduce to improve on foreign reserves that now stand at 2 billion dollars (10 trillion Kwacha) and maintain steady growth of the economy now estimated at 6.3 percent.
Independent economist Love Mtesa urges that this policy should be extended the estimated 5 million people active in Zambia’s working sector. Mtesa says it’s only fair that all those who earn contribute returns to the government however small the amount.
Zambia has an estimated 13 million people with a 200 USD per capita income. Their revenue collections are able to fund only up to 40 percent of it’s budget.
Joseph Basoga
The Zambian tax law mandates all citizens with an income of 700.000 kwacha (140 USD) and above, to pay income tax. However most informal sector workers in the same threshold have been evading this tax, a scenario that has caused unfair competition among business community.
The sectors under review will include over 8000 wheel barrow pushers commonly referred to as ZAMCABS, casual laborers operating road side markets and mechanics and dealers in second hand cloths.
ZAMCAB operators in Soweto market say the move to force them pay tax is in the wrong direction adding that their income is far below the assumed value. The tax body is crafting new rules that will help punish offenders some of which will include up to 2 years in jail with heavy fines. The most difficult thing will be finding a means to gauge ones income and calculate how much one can pay.
who is likely to benefit.....
Lusaka city council authorities say despite the nation wide resistance to this policy, it will help achieve the target collection of close to 108 trillion kwacha (216 Billion USD) set by Zambia revenue authority (ZRA). The policy will also help to reduce to improve on foreign reserves that now stand at 2 billion dollars (10 trillion Kwacha) and maintain steady growth of the economy now estimated at 6.3 percent.
Independent economist Love Mtesa urges that this policy should be extended the estimated 5 million people active in Zambia’s working sector. Mtesa says it’s only fair that all those who earn contribute returns to the government however small the amount.
Zambia has an estimated 13 million people with a 200 USD per capita income. Their revenue collections are able to fund only up to 40 percent of it’s budget.
Joseph Basoga
Feb 25, 2010
ZAMBIAN SMEs CALL FOR EASED ACESS TO FINANCE
A cross section of society in Zambia recentry complained that the Citizens Economic Empowerment Commission (CEEC) does not fulfill its mandate of disbursing funds to the Zambian people who seek loans to empower themselves. But what are the effects on the Small and Medium Scale entrepreneurs on the ground?
Small and Medium Scale entrepreneurs in Zambia have asked the government to make it easeir for them to access funds so that they can help in the development of the nation. Speaking in separate interviews in Lusaka’s Libala Township, the SMEs urged the government to ease the conditions so that many SMEs could have the opportunity to expand their businesses through the help of the CEEC.
Arthur Chembo who runs Arthur’s Blocks - a block making business along Chilumbulu road appealed to the government to reduce the requirements for one to qualify for a loan or financial assistance from CEEC. He said doing so will help many people who want to contribute to the nations economic growth come on board as compared to only people who have the money dominate and make themselves richer.
Chembo noted that once the government makes it easy for common people to access funds from CEEC, the crime rate in the country would reduce as many will have what to do as compared to the current situation on the ground. And a block maker Stephen Lungu from Chembo’s business entity said if the government could ease the cost of doing business in the country it would give him a chance to also start his business and become an employer.
Government should decentralize CEEC
Chembo has created employment to six people who make building blocks for sale to individuals or companies that are building. One block is going at K3, 500 (about $0.8 US) and he sales about 150 t0 200 building blocks to different clients with a daily earning of about K700, 000 ($ 155) if all goes well.
Another SME in the same area Kennedy Mambwe suggested that if the CEEC would be decentralized through out the country it would help more as compared to the centralization of the organization only in Lusaka.
What is CEEC all about?
Created under the current Zambian Constitution, the CEEC is a quasi government organization aimed at helping individuals and SMEs in the country acquire loans to start and expand businesses with the aim of empowering them. The CEEC is in Lusaka and all those who want assistance from the organization who are out of Lusaka have to travel to Lusaka to obtain the application forms and other necessary information. Recentry some people have complained of not having access to funds form the CEEC due to the conditions given to them to access the funds. Others say the centralization of the organization has denied many from having access to the funds. But CEEC Chairperson Mable Mungomba denied the allegations leveled against her organization as she said the organization was transparent.
Arthur Davies Sikopo
Small and Medium Scale entrepreneurs in Zambia have asked the government to make it easeir for them to access funds so that they can help in the development of the nation. Speaking in separate interviews in Lusaka’s Libala Township, the SMEs urged the government to ease the conditions so that many SMEs could have the opportunity to expand their businesses through the help of the CEEC.
Arthur Chembo who runs Arthur’s Blocks - a block making business along Chilumbulu road appealed to the government to reduce the requirements for one to qualify for a loan or financial assistance from CEEC. He said doing so will help many people who want to contribute to the nations economic growth come on board as compared to only people who have the money dominate and make themselves richer.
Chembo noted that once the government makes it easy for common people to access funds from CEEC, the crime rate in the country would reduce as many will have what to do as compared to the current situation on the ground. And a block maker Stephen Lungu from Chembo’s business entity said if the government could ease the cost of doing business in the country it would give him a chance to also start his business and become an employer.
Government should decentralize CEEC
Chembo has created employment to six people who make building blocks for sale to individuals or companies that are building. One block is going at K3, 500 (about $0.8 US) and he sales about 150 t0 200 building blocks to different clients with a daily earning of about K700, 000 ($ 155) if all goes well.
Another SME in the same area Kennedy Mambwe suggested that if the CEEC would be decentralized through out the country it would help more as compared to the centralization of the organization only in Lusaka.
What is CEEC all about?
Created under the current Zambian Constitution, the CEEC is a quasi government organization aimed at helping individuals and SMEs in the country acquire loans to start and expand businesses with the aim of empowering them. The CEEC is in Lusaka and all those who want assistance from the organization who are out of Lusaka have to travel to Lusaka to obtain the application forms and other necessary information. Recentry some people have complained of not having access to funds form the CEEC due to the conditions given to them to access the funds. Others say the centralization of the organization has denied many from having access to the funds. But CEEC Chairperson Mable Mungomba denied the allegations leveled against her organization as she said the organization was transparent.
Arthur Davies Sikopo
CONSTRUCTION BOOM IN LUSAKA IS FOR REAL
The city of Lusaka is glittering with newly constructed golden buildings that keeps one looking without even blinking the eyes. The city looks just like fairyland, indeed, to many people this is not just a dream but a reality.
There is a construction boom for real throughout Lusaka, Zambia. This has caused the number of construction companies to grow compared to the past years. The growth in the construction industry has created productive employment for many Zambians, both skilled and unskilled.
Mr. Bwalya Mukvka , a local resident of Lusaka city, makes and sells blocks. He is a thirty-year old man, married and with a family of five kids. He was jobless for the past the past five years, but the boom in the construction industry has generated productive employment and livelihood for him. He can now take care of his family affairs such as education, medicare and feeding. He earns Five Thousand Kwacha (K 5,000) per month; and this to him is sufficient to take care of him and his family's basic needs.
According to the Minister of Labour, Mr. Kelvin Chusule, the boom in the construction industry has provided a driving force in the eradication of poverty. There is now widespread employment and entrepreneurial opportunities for many Zambians engaged in construction.
TOO MUCH GOVERNMENT BUREAUCRACY
Mr. Nondo Kapuza, the company owner for Nondo Blockmaking Factory, said that the government policies related to the construction companies had made it easier for company owners to establish and operate in suitable environment. Now they can employ many workers, even though there are some challenges such as lack of funds, too much government bureaucracy to name but a few which they faced.
According to the Permanent Secretary in the Ministry of Labour,Mr. Levy Mwanza, government policies and plans have helped many construction companies to modernize and streamline their companies. Now they employ more skilled and unskilled workers. Currently, about 30% of the Zambian population are employed in the construction industry.
By Musa Conteh.
There is a construction boom for real throughout Lusaka, Zambia. This has caused the number of construction companies to grow compared to the past years. The growth in the construction industry has created productive employment for many Zambians, both skilled and unskilled.
Mr. Bwalya Mukvka , a local resident of Lusaka city, makes and sells blocks. He is a thirty-year old man, married and with a family of five kids. He was jobless for the past the past five years, but the boom in the construction industry has generated productive employment and livelihood for him. He can now take care of his family affairs such as education, medicare and feeding. He earns Five Thousand Kwacha (K 5,000) per month; and this to him is sufficient to take care of him and his family's basic needs.
According to the Minister of Labour, Mr. Kelvin Chusule, the boom in the construction industry has provided a driving force in the eradication of poverty. There is now widespread employment and entrepreneurial opportunities for many Zambians engaged in construction.
TOO MUCH GOVERNMENT BUREAUCRACY
Mr. Nondo Kapuza, the company owner for Nondo Blockmaking Factory, said that the government policies related to the construction companies had made it easier for company owners to establish and operate in suitable environment. Now they can employ many workers, even though there are some challenges such as lack of funds, too much government bureaucracy to name but a few which they faced.
According to the Permanent Secretary in the Ministry of Labour,Mr. Levy Mwanza, government policies and plans have helped many construction companies to modernize and streamline their companies. Now they employ more skilled and unskilled workers. Currently, about 30% of the Zambian population are employed in the construction industry.
By Musa Conteh.
UNEMPLYOMENT INCREASE IN ZAMBIA DUE TO LACK OF ENOUGH SKILLED.
ALTHOUGH THERE IS CONSTRUCTION GOING ON AT LUSAKA ZAMBIA WHICH MADE SOME OF THE ZAMBIANS TO GET JOBS, STILL PEOPLE CANNOT EARN ENOUGH MONEY TO COVER THE COST OF LIVING ESPECIALY WITH THE FAMILY DUE TO LACK OF ENOUGH SKILLS.
ABEL IS A THE BLOCK MAKER WHO IS LIVING AT LUSAKA ZAMBIA. HE HAS BEEN AFFECTED WITH THE SITUATION. HE MAKES THE BLOCKS FOR ABOUT A YEAR NOW, AND THEY ARE ABOUT TWELVE PEOPLE IN ONE PLACE WHO MAKE BLOCKS. THEY CAN MAKE MORE THAN ONE THOUSAND BLOCKS PER DAY AND SELL THREE THOUSAND PER BLOCK. ALL THE MONEY GOES TO THE OWNER OF THE PLACE AND THEY TAKE VERY LITTLE WITH THEM AT HOME.
HE SAID THAT HE MEETS A LOT OF CHALLENGES LIKE WORKING LONG HOURS,HIGH PRICE OF MATERIALS BUT HE RATHER IS WORKING THERE LONG HOURS THAN STAYING HOME, LIKE HOW HE USED TO DO BEFORE AND THAT SMALL MONEY WHICH HE GETS HE CAN TAKE CARE OF HIS FAMILY ALTHOUGH IS NOT ENOUGH. HE ADDED THAT HE WOULD LIKE TO GET MORE EXPERIENCE AND OPEN HIS OWN COMPANY BUT THE PROBLEM IS THAT THEY DONT GET ENOUGH SUPPORT FROM THE GOVERNMENT.
'PAID ACCORDING TO EDUCATION'
THE OWNER OF THE PLACE MR.MAXI NYIRENDA SAID HE TRIED TO GIVE THE JOB TO THE YOUTH WHO STAYED FOR A WHILE WITHOUT JOB,BUT HE MEETS A LOT OF CHALLENGE LIKE GETTING UNSKILLED PEOPLE AND ALSO SUPPORT FROM THE GOVERNMENT TOO.HE ADDED THAT HE PAID THEM ACCORDING TO THEIR EDUACTION EXPERIECENCES .
ACCORDING TO THE PERMANENTY SECRETARY FROM THE MINISTRY OF LABOUR ARTHUR CHOOBE,THE CONSTRUCTION INDUSTRY HAS EXPAND NOW COMPARE WITH BEFORE WHICH HELPS TO INCREASE THE NUMBER OF EMPLOYMENT AT FORMER SECTORS.
HE ADDED THAT GOVERNMENT HAS CREATE THE NEW STRATEGY OF HELPING YOUTH ESPECIALLY EDUCATING THEM THE ENTEPRENEWSHIP AND ALSO HELPING THEM GETTING BETTER JOBS TO HELP IT REDUCE THE POVERTY IN COUNTRY..
REHEMA SALIM AMRI
ABEL IS A THE BLOCK MAKER WHO IS LIVING AT LUSAKA ZAMBIA. HE HAS BEEN AFFECTED WITH THE SITUATION. HE MAKES THE BLOCKS FOR ABOUT A YEAR NOW, AND THEY ARE ABOUT TWELVE PEOPLE IN ONE PLACE WHO MAKE BLOCKS. THEY CAN MAKE MORE THAN ONE THOUSAND BLOCKS PER DAY AND SELL THREE THOUSAND PER BLOCK. ALL THE MONEY GOES TO THE OWNER OF THE PLACE AND THEY TAKE VERY LITTLE WITH THEM AT HOME.
HE SAID THAT HE MEETS A LOT OF CHALLENGES LIKE WORKING LONG HOURS,HIGH PRICE OF MATERIALS BUT HE RATHER IS WORKING THERE LONG HOURS THAN STAYING HOME, LIKE HOW HE USED TO DO BEFORE AND THAT SMALL MONEY WHICH HE GETS HE CAN TAKE CARE OF HIS FAMILY ALTHOUGH IS NOT ENOUGH. HE ADDED THAT HE WOULD LIKE TO GET MORE EXPERIENCE AND OPEN HIS OWN COMPANY BUT THE PROBLEM IS THAT THEY DONT GET ENOUGH SUPPORT FROM THE GOVERNMENT.
'PAID ACCORDING TO EDUCATION'
THE OWNER OF THE PLACE MR.MAXI NYIRENDA SAID HE TRIED TO GIVE THE JOB TO THE YOUTH WHO STAYED FOR A WHILE WITHOUT JOB,BUT HE MEETS A LOT OF CHALLENGE LIKE GETTING UNSKILLED PEOPLE AND ALSO SUPPORT FROM THE GOVERNMENT TOO.HE ADDED THAT HE PAID THEM ACCORDING TO THEIR EDUACTION EXPERIECENCES .
ACCORDING TO THE PERMANENTY SECRETARY FROM THE MINISTRY OF LABOUR ARTHUR CHOOBE,THE CONSTRUCTION INDUSTRY HAS EXPAND NOW COMPARE WITH BEFORE WHICH HELPS TO INCREASE THE NUMBER OF EMPLOYMENT AT FORMER SECTORS.
HE ADDED THAT GOVERNMENT HAS CREATE THE NEW STRATEGY OF HELPING YOUTH ESPECIALLY EDUCATING THEM THE ENTEPRENEWSHIP AND ALSO HELPING THEM GETTING BETTER JOBS TO HELP IT REDUCE THE POVERTY IN COUNTRY..
REHEMA SALIM AMRI
zambia government looses millions in uncollected tax revenue
The number of people in the informal employment in Zambia is growing day by day but the tax revenue base is not. John Masumbuko has been operating his business outside the city market for about 10 years but has never been asked to pay tax. He is not alone!
John Masumbuko leaves his home at the outskirts of the city to Soweto market where he has been earning a living for the last 10 years operating Zamcom wheelbarrow taxis. The taxis ferry goods for dealers to and from the market on a daily basis. On a good day Masumbuko makes about 40,000 kwachas and in a month about 750,000 kwachas.
He is among many joining the informal sector such as quarry miners, tax operators and open market vendors making tax free income.
Government policy faulted
According to the government policy that is currently in place anyone earning an income of above 700,000 is subjected to taxation. This is the money that is later used to develop government infrastructure such as carpeting of roads and establishing health facilities and schools. This however does not happen as there are no implementing systems in place to ensure taxes are paid. The city council Public relations manager Chanda Kakusa Makanta agrees that there are loopholes that need to be corrected.
An independent economist Mary Okudoi criticized the government policy system. She says the systems are not effective in tax collection. According to Okudoi the government looses about 60 billion Kwachas or about 900 000 dollars in uncollected tax which could be useful in development projects in the country. The government borrows heavily on donor funding and therefore increasing its external debt.
John Masumbuko, the Zamcom operator, says: ' We do not pay taxes... we do not benefit in anyway from the government '. He urged the government to assist them and create more job opportunities for them. He says he has no problem paying taxes if the government takes a bold step to improve the informal sector working conditions.
The World Bank in 2000 urged African governments to reduce the number of state employees where the governments was spending a big chunk of revenues on salaries. Those who were laid off mainly joined the informal sector where taxation policies are hardly implemented making it easy for them to evade government levies in the form of taxes.
Jane Kariuki
John Masumbuko leaves his home at the outskirts of the city to Soweto market where he has been earning a living for the last 10 years operating Zamcom wheelbarrow taxis. The taxis ferry goods for dealers to and from the market on a daily basis. On a good day Masumbuko makes about 40,000 kwachas and in a month about 750,000 kwachas.
He is among many joining the informal sector such as quarry miners, tax operators and open market vendors making tax free income.
Government policy faulted
According to the government policy that is currently in place anyone earning an income of above 700,000 is subjected to taxation. This is the money that is later used to develop government infrastructure such as carpeting of roads and establishing health facilities and schools. This however does not happen as there are no implementing systems in place to ensure taxes are paid. The city council Public relations manager Chanda Kakusa Makanta agrees that there are loopholes that need to be corrected.
An independent economist Mary Okudoi criticized the government policy system. She says the systems are not effective in tax collection. According to Okudoi the government looses about 60 billion Kwachas or about 900 000 dollars in uncollected tax which could be useful in development projects in the country. The government borrows heavily on donor funding and therefore increasing its external debt.
John Masumbuko, the Zamcom operator, says: ' We do not pay taxes... we do not benefit in anyway from the government '. He urged the government to assist them and create more job opportunities for them. He says he has no problem paying taxes if the government takes a bold step to improve the informal sector working conditions.
The World Bank in 2000 urged African governments to reduce the number of state employees where the governments was spending a big chunk of revenues on salaries. Those who were laid off mainly joined the informal sector where taxation policies are hardly implemented making it easy for them to evade government levies in the form of taxes.
Jane Kariuki
STREET VENDING IN LUSAKA
Time and again the zambian government has tried to remove street venders from the streets to the markets but they keep coming back.The general question is has the government done enough to help these venders formalise their businesses.
Lusaka city council (LCC) public relations manager Chanda Makanta says the biggest challenge is that these traders feel they make more profits when they sell from the streets because they dont pay any levy to the local authority,and they try to runaway from all these costs by coming on the streets.Ms Makanta says the council will not condone this and they will not allow anyone to continue selling on the streets and the council has also started dealing with the peolple who buy from these venders by fining them.she says the government has built enough markets for them to trade from.
VEWS OF THE VENDER
Contrary to what lcc is saying,the venders feel the procedure for aquiring stands at the market has not been made easy for the ordinary citizens to acqire.The venders feel there is a lot of corruption taking place in stand allocation.They say management at these markets has given out these stands to people with money ,who later rent out the stands at high prices which these venders can not afford .
WAY FORWARD
The lusaka district business association chairperson Ms Mercy Phiri feels the reason why these venders keep coming back on the streets is becous they want to reach out to the customers who find it very difficult to go to the markets ,which she says are located very far away from the city center.she also says the markets are not enough to accomodate all the people doing business hence the high charges beeing charged on the few stands available.she has called on the goverment to build more markets and legalise a part of the city center for the venders at peak times.
Caroline Michelo
Lusaka city council (LCC) public relations manager Chanda Makanta says the biggest challenge is that these traders feel they make more profits when they sell from the streets because they dont pay any levy to the local authority,and they try to runaway from all these costs by coming on the streets.Ms Makanta says the council will not condone this and they will not allow anyone to continue selling on the streets and the council has also started dealing with the peolple who buy from these venders by fining them.she says the government has built enough markets for them to trade from.
VEWS OF THE VENDER
Contrary to what lcc is saying,the venders feel the procedure for aquiring stands at the market has not been made easy for the ordinary citizens to acqire.The venders feel there is a lot of corruption taking place in stand allocation.They say management at these markets has given out these stands to people with money ,who later rent out the stands at high prices which these venders can not afford .
WAY FORWARD
The lusaka district business association chairperson Ms Mercy Phiri feels the reason why these venders keep coming back on the streets is becous they want to reach out to the customers who find it very difficult to go to the markets ,which she says are located very far away from the city center.she also says the markets are not enough to accomodate all the people doing business hence the high charges beeing charged on the few stands available.she has called on the goverment to build more markets and legalise a part of the city center for the venders at peak times.
Caroline Michelo
Feb 24, 2010
Zambia reviews costs and procedures of Doing Business
The World Bank ranked Zambia at the 90th position among 183 economies in the world where it is easy or difficult to do business. This has pushed the Zambian government to reform because it wants to improve its rankings.
It takes a company or individual who wants to construct a ware house or head office facility for their business in Zambia 17 procedures and 254 days almost an entire year to obtain a construction permit. The head of the country’s private contractors association said the process was too long for investors coming to the country and was making them go out of business. The Minister of Zambia’s Ministry of Works and Constructions said a new legislation has been drafted to reduce the procedures and time to get construction permit. The Works Minister said the current regulations are hurting to the economy and all would be done to have parliament approved the new draft regulations.
The annual World Doing Business Survey said it takes an entrepreneur an average of 18 days and six procedures to start a business in Zambia. It costs about 28.4per cent of gross national income to register business.
Government takes step
However, the brochure issued by the Patents and Companies registration office says an individual business must pay eighty thousand Kwacha (US20.00) and research fee of 10 thousand Kwacha. A corporate entity is to pay 105 thousand Kwacha initial registration fee. The brochure however did not state the number of days and the actual number of procedures one has to follow before registering a business.
However, Mrs. Bobo said government wants to reduce the procedures and cut down the cost of registering a business in Zambia. The reform effort involves both government and the private sector in all the nine steps associated with doing business in her country.
The Government of Zambia currently reviews the procedures and costs of doing business in the country. The head of the country’s registration company Mrs. Annesie Bobo said new measures to speed up registration are being put in place. Several brochures have been issued out for business people to follow the new procedures in registering. Mrs. Bobo believes it will make it easier for them to start a business.
Horatio Bobby Willie
It takes a company or individual who wants to construct a ware house or head office facility for their business in Zambia 17 procedures and 254 days almost an entire year to obtain a construction permit. The head of the country’s private contractors association said the process was too long for investors coming to the country and was making them go out of business. The Minister of Zambia’s Ministry of Works and Constructions said a new legislation has been drafted to reduce the procedures and time to get construction permit. The Works Minister said the current regulations are hurting to the economy and all would be done to have parliament approved the new draft regulations.
The annual World Doing Business Survey said it takes an entrepreneur an average of 18 days and six procedures to start a business in Zambia. It costs about 28.4per cent of gross national income to register business.
Government takes step
However, the brochure issued by the Patents and Companies registration office says an individual business must pay eighty thousand Kwacha (US20.00) and research fee of 10 thousand Kwacha. A corporate entity is to pay 105 thousand Kwacha initial registration fee. The brochure however did not state the number of days and the actual number of procedures one has to follow before registering a business.
However, Mrs. Bobo said government wants to reduce the procedures and cut down the cost of registering a business in Zambia. The reform effort involves both government and the private sector in all the nine steps associated with doing business in her country.
The Government of Zambia currently reviews the procedures and costs of doing business in the country. The head of the country’s registration company Mrs. Annesie Bobo said new measures to speed up registration are being put in place. Several brochures have been issued out for business people to follow the new procedures in registering. Mrs. Bobo believes it will make it easier for them to start a business.
Horatio Bobby Willie
Africa’s One-Stop Border Post brings hope to small businesses
Southern Africa's first One-Stop Border Post, the Chirundu Post, between Zambia and Zimbabwe has raised hope for small businesses . They have been fighting for survival due long delays at the border.
The One-Stop Border Post constructed barely three months ago should reduce the delays of clearing customs and immigration and further promote regional economic growth.
Reduced transport cost to boost economy…
Chairman General for the Cross Borders Traders Association for Southern Africa Development Community SADC and Common Market for Eastern and Southern Africa COMESA, Bernard Sikunyongana says the One-Stop Border Post is working well for small businesses in the region.
“Upon operation the One-Stop Border Post was expected to reduce delays of about 30% to 50%” said Sikunyongana.
Cynthia Mukwasa
The One-Stop Border Post constructed barely three months ago should reduce the delays of clearing customs and immigration and further promote regional economic growth.
Reduced transport cost to boost economy…
Chairman General for the Cross Borders Traders Association for Southern Africa Development Community SADC and Common Market for Eastern and Southern Africa COMESA, Bernard Sikunyongana says the One-Stop Border Post is working well for small businesses in the region.
“Upon operation the One-Stop Border Post was expected to reduce delays of about 30% to 50%” said Sikunyongana.
Cynthia Mukwasa
The Railways System of Zambia plans to retrench over 170 Employees.
The workers have called on government to take measures that will ensure that they do not become part of the huge number of unemployed in the country.
Meanwhile, RCZ has assured the workers everything has been taken care of to ensure they get what is due to them.
RSZ Chief Executive Officer, Benjamin Even said that the retrenchment will represent 10 per cent of the company’s direct and indirect workforce.
Mr. Even said being mindful of the difficulties in finding employment, his management had agreed with the Railway Workers Union of Zambia-RWUZ- to first give the affected workers an option of voluntary separation which he says was under generous conditions.
AGREEMENT after long bargain
He said the RSZ management and RWUZ officials bargained for the agreement for the past two weeks.
RSZ has emphasised that it remains committed in investing in infrastructure and improving the company’s performance within and beyond the contractual obligations.
RSZ said the exercise will save as a strategy to reduce costs and prepare for the future.
Allan Mtonga
Meanwhile, RCZ has assured the workers everything has been taken care of to ensure they get what is due to them.
RSZ Chief Executive Officer, Benjamin Even said that the retrenchment will represent 10 per cent of the company’s direct and indirect workforce.
Mr. Even said being mindful of the difficulties in finding employment, his management had agreed with the Railway Workers Union of Zambia-RWUZ- to first give the affected workers an option of voluntary separation which he says was under generous conditions.
AGREEMENT after long bargain
He said the RSZ management and RWUZ officials bargained for the agreement for the past two weeks.
RSZ has emphasised that it remains committed in investing in infrastructure and improving the company’s performance within and beyond the contractual obligations.
RSZ said the exercise will save as a strategy to reduce costs and prepare for the future.
Allan Mtonga
CEE Fund "a raw deal", Zambian small scale traders say
The Zambia Small Scale Traders Association (ZSSTA) criticizes government’s initiative to release funds to empower people with little businesses. The business people can not access the funds due to unfriendly conditions attached.
Association president Misheck Banda says the Zambian government should consider relaxing conditions attached to the fund to enable the intended people benefit from the initiative. “we as an association feel the empowerment fund initiative is a failure as many small scale traders in the country are unable to access it”, Banda told this web. He observed that many traders were still finding it difficult to progress in their business because of ‘tough’ conditions put in place by the Citizens Economic Empowerment Commission (CEEC) the body tasked to administer the fund.
Banda said the demand for collateral usually beyond applicants reach by the commission for them to access the funds has rendered the funds inaccessible by many. The other difficulty is that government asks the applicants to write business proposals when some of them can't write due to illiteracy.
Just a political gimmick?
CEEF, a revolving fund, is a scheme established under the Citizen Economic Empowerment Act No 9 of 2006 of the laws of Zambia. The funds are aimed at providing financial capital to small scale businesses as a way of empowering the local people to set up sustainable businesses. It is believed that through this initiative, many Zambians would be encouraged to open up businesses to improve livelihood especially for the large population of the unemployed citizens.
The funding initiative has a political pretense as many government officials argue that the funds which were released two years ago are so far benefiting the people of Zambia, but for Banda and many other citizens ;this is viewed as a political gimmick aimed at deceiving the electorate. “The government should not claim to be on the right path with these funds because the intended persons have not benefited from it”. This for me is pure politics”, added the ZSSTA leader.
Dennis Chanda Chisanga
Association president Misheck Banda says the Zambian government should consider relaxing conditions attached to the fund to enable the intended people benefit from the initiative. “we as an association feel the empowerment fund initiative is a failure as many small scale traders in the country are unable to access it”, Banda told this web. He observed that many traders were still finding it difficult to progress in their business because of ‘tough’ conditions put in place by the Citizens Economic Empowerment Commission (CEEC) the body tasked to administer the fund.
Banda said the demand for collateral usually beyond applicants reach by the commission for them to access the funds has rendered the funds inaccessible by many. The other difficulty is that government asks the applicants to write business proposals when some of them can't write due to illiteracy.
Just a political gimmick?
CEEF, a revolving fund, is a scheme established under the Citizen Economic Empowerment Act No 9 of 2006 of the laws of Zambia. The funds are aimed at providing financial capital to small scale businesses as a way of empowering the local people to set up sustainable businesses. It is believed that through this initiative, many Zambians would be encouraged to open up businesses to improve livelihood especially for the large population of the unemployed citizens.
The funding initiative has a political pretense as many government officials argue that the funds which were released two years ago are so far benefiting the people of Zambia, but for Banda and many other citizens ;this is viewed as a political gimmick aimed at deceiving the electorate. “The government should not claim to be on the right path with these funds because the intended persons have not benefited from it”. This for me is pure politics”, added the ZSSTA leader.
Dennis Chanda Chisanga
Feb 23, 2010
Banks open doors for loan access…
The bank of Zambia is encouraging competition in the banking sector.The bank has announced that it is negotiating with commercial banks to offer suitable loans to SME’s.
The bank of Zambia governor Caleb Fundanga said that Zambia has 18 licensed banks and with a few more applications waiting in line. He pointed out that it was important to encourage new banks to come into the market to bring about competition and subsequently good service delivery.
Loans and SME’s
The governor said, in a fast growing economy like Zambia’s it was important to support the SME’s which constitute about 70 % of the informal sector.He called on the banks to come up with products that will attract investment and which will support the growth of the informal sector.
Meanwhile, Zambia Chamber of Small and Medium Business Associations (ZCSMBA) Lusaka province publicity secretary Victoria Chirwa said that banks ask for too much collateral which hinders members of her organization to access loan for business growth. Ms.Chirwa called on banks to partner with the small scale business units and support the growth of the local manufacturing .
STEPHEN TAMBIRAI MDOMA
The bank of Zambia governor Caleb Fundanga said that Zambia has 18 licensed banks and with a few more applications waiting in line. He pointed out that it was important to encourage new banks to come into the market to bring about competition and subsequently good service delivery.
Loans and SME’s
The governor said, in a fast growing economy like Zambia’s it was important to support the SME’s which constitute about 70 % of the informal sector.He called on the banks to come up with products that will attract investment and which will support the growth of the informal sector.
Meanwhile, Zambia Chamber of Small and Medium Business Associations (ZCSMBA) Lusaka province publicity secretary Victoria Chirwa said that banks ask for too much collateral which hinders members of her organization to access loan for business growth. Ms.Chirwa called on banks to partner with the small scale business units and support the growth of the local manufacturing .
STEPHEN TAMBIRAI MDOMA
DEPRECIATION OF NIGERIAN CURRENCY THE NAIRA
TOO MUCH OF INFLATION IS AMONG THE CAUSES OF NAIRA
DEPRECIATION, WHICH AGAIN IS CAUSED BY DEBT FROM THE WORLD BANK. AND GOVER-
MENT HAS NOT PUT IN PLACE A PRICE REGULATING BOARD AND STILL
IMPORTS OIL FROM OVERSEAS.
BASICALLY,THERE ARE SO MANY MEASURES TO BE CONSID-
ERED,TO AVOID ALL THE ABOVE FACTORS. CERTAINLY IMPL-
THE SERVICES OF ECONOMIST ANALYST.
ALSO,GOVERNMENT HAS TO PUT MUCH RESOURCES INTO
PRIVATE SECTOR BECAUSE IS THE ENGINE GROWTH OF
ANY SOCIETY, AND AVOID CORRUPTION, EMPOWER AGRIC-
ULTURAL SECTOR,PROVIDE ENABLE ENVIRONMENT FOR
FOREIGN INVESTORS.
GOVERMENT NOT TACKLING POVERTY
HOWEVER, NIGERIA OIL SERVE AS THE MAJOR SOURCE OF
REVENUE BUT YET FOREIGN RESSEVE IS DEFICIT,AND ALSO
GOVERNMENT IS NOT REALLY TACKLING POVERTY BY PRO-
VIDING LOAN SMES AND SUPPORTING LOCAL INDUSTRIES
AND ENSURING PROMPT PAYMENT.
SIMILARLY,EDUCATION SECTOR HAS TO BE CONSIDERED TO HAVE LABOUR FORCE,AND LASTLY PROVIDE SECURITY FOR FOREIGN INVESTORS TO COME AND INVEST IN THE COUNTRY.
ALI AMINU FALAKI
DEPRECIATION, WHICH AGAIN IS CAUSED BY DEBT FROM THE WORLD BANK. AND GOVER-
MENT HAS NOT PUT IN PLACE A PRICE REGULATING BOARD AND STILL
IMPORTS OIL FROM OVERSEAS.
BASICALLY,THERE ARE SO MANY MEASURES TO BE CONSID-
ERED,TO AVOID ALL THE ABOVE FACTORS. CERTAINLY IMPL-
THE SERVICES OF ECONOMIST ANALYST.
ALSO,GOVERNMENT HAS TO PUT MUCH RESOURCES INTO
PRIVATE SECTOR BECAUSE IS THE ENGINE GROWTH OF
ANY SOCIETY, AND AVOID CORRUPTION, EMPOWER AGRIC-
ULTURAL SECTOR,PROVIDE ENABLE ENVIRONMENT FOR
FOREIGN INVESTORS.
GOVERMENT NOT TACKLING POVERTY
HOWEVER, NIGERIA OIL SERVE AS THE MAJOR SOURCE OF
REVENUE BUT YET FOREIGN RESSEVE IS DEFICIT,AND ALSO
GOVERNMENT IS NOT REALLY TACKLING POVERTY BY PRO-
VIDING LOAN SMES AND SUPPORTING LOCAL INDUSTRIES
AND ENSURING PROMPT PAYMENT.
SIMILARLY,EDUCATION SECTOR HAS TO BE CONSIDERED TO HAVE LABOUR FORCE,AND LASTLY PROVIDE SECURITY FOR FOREIGN INVESTORS TO COME AND INVEST IN THE COUNTRY.
ALI AMINU FALAKI
Jan 18, 2010
Soon to come
The workshop in Lusaka will take place in late February / early March. By then, we will have online articles, pictures, audio and video files up here. This is just a test run so far - and it will give you an idea what we might be doing in Lusaka.
This is a picture that has been taken by one of our participants at a previous training session in Accra when he was reporting on Susu collection.
And this is an audio file that goes along with it - a radio report about Susu collection:
Susu Scheme by mfw4ghana
The program that we used to implement the piece on this website is Soundcloud. Personally, I like it because it is easy to use and looks neat.
And this is a video that we have put up on Youtube - it's about funeral insurance in Ghana and was also produced during the training in Accra.
This is a picture that has been taken by one of our participants at a previous training session in Accra when he was reporting on Susu collection.
And this is an audio file that goes along with it - a radio report about Susu collection:
Susu Scheme by mfw4ghana
The program that we used to implement the piece on this website is Soundcloud. Personally, I like it because it is easy to use and looks neat.
And this is a video that we have put up on Youtube - it's about funeral insurance in Ghana and was also produced during the training in Accra.
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