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

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

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

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

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

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