Zambia becomes 7th competitive economy in Africa under the PF government September 5, 2013 | Filed under: Statements | Posted by: ZIN The World Economic Forum (WEF) has ranked Zambia as one of the top 10 most competitive economies in Africa for 2013. The WEF’s Global Competitiveness Report 2013-2014 which was released in Geneva, Switzerland yesterday ranked Zambia as the seventh most competitive economy in Africa ahead of Kenya, Gabon and Senegal. According to the report accessed in Lusaka yesterday, Zambia, Africa’s largest copper producer, trails Namibia, Seychelles, Botswana, Rwanda, South Africa and Mauritius which were ranked as the most competitive economies in Africa.
Out of the 148 countries surveyed globally, Zambia moves from last year’s 102nd position to 93 as one of the countries which recorded remarkable progress.The ranking was based on the Global Competitive Index which was introduced in 2004 and could be defined as the set of institutions, policies and factors that determined the level of productivity of a country. Its 12 pillars were institutions, infrastructure, macroeconomic environment, health and primary education, higher education and colleges, goods market efficiency, labour market efficiency, financial market development, technology, market size, business sophistication and innovation. “A number of African middle-income economies – Botswana (74th), Namibia (90th), Zambia (93rd), Senegal (113th), Lesotho (123rd) and Swaziland (124th) – improved, while oil-producing economies, Gabon (112th), Cameroon (115th) Nigeria (120th) and Chad (148th) – stagnated or declined in the ranking,” reads the report partly. Among the low-income countries, Kenya made the biggest improvement, rising by 10 places to 96th position in the world. Globally, Switzerland maintained its first position and so did Singapore and Finland on second and third positions, respectively.
Other countries in the world top 10 most competitive economies were Germany, United States of America (USA), Sweden, Hong Kong, Netherlands, Japan and the United Kingdom on 10th position.“Overall, wide regional divergences remain, and a number of African economies continue to trail behind significantly, with 14 of its economies populating the bottom 20 of the ranking. “Efforts across many areas are needed to place the region on a sustainable growth and development path, especially in infrastructure, health and basic education and adoption of the latest technologies,” the report says. It places Switzerland at the pinnacle of the ranking for the fifth consecutive year. Globally, excellent innovation and strong institutional environments were increasingly influencing the economies’ competitiveness. The US continued to be a world leader in bringing innovative products and services to the global market and its rise in the ranking was due to a perceived improvement in the country’s financial market and great confidence in public institutions.
There, however, had been continued concerns over that vast country’s macroeconomic stability which ranked 117 out of 148 economies. Two Years On for Sata: the Success Story and Its Dark SideAs the Patriotic Front celebrates two years in power, Sata’s story of economic growth is undermined by one of political repression. ARTICLE | 26 SEPTEMBER 2013 – 3:40PM | BY PAUL CARLUCCIMore Sharing ServicesShare|Share on printShare on emailSelect Language?The Patriotic Front promises investment and development in the education sector. Credit: Jeff Walker/CIFOR Lusaka, Zambia: Economic development or autocratic regression? After two years in government, Zambia’s Patriotic Front (PF) has inspired a double narrative. One side of the story features uncappedleadership ambitions, violent street politics, broken promises and a repressed opposition.
The other side shows a blooming economy, with an expanding GDP, increased foreign direct investment, thousands of new jobs and much-needed sector diversification. Both are true. Unsurprisingly, it was the platinum version which President Michael Sata underlined on September 20 during a speech to inaugurate the 11th National Assembly’s third session, rattling off a by now familiar set of economic indicators. Zambia registered GDP growth of 7.3% in 2012, though it is down to 6% for 2013 thanks to lowered agricultural production. Inflation shrunk to 7% over the summer of 2013. Lending rates have fallen to 16%, down from 20% last year. Furthermore, by the end of June, the government had surpassed its $3 billion foreign direct investment target for the year by over half a billion dollars.
The centrepiece of Sata’s economic record remains the $750 million Eurobond issued last September, a move straight out of Zambian author Dambisa Moyo’s 2009 book Dead Aid.With that first foray into international capital markets, Zambia joined a growing cohort of sub-Saharan African countries drifting away from the concessional loans and aid-based development doctrine promoted by the World Bank and International Monetary Fund. The Eurobond money is earmarked for energy generation and transmission, road and rail infrastructure, small and medium enterprise development, and health care. Of course, this comes with voices of caution that remember Zambia’s recent history as a Heavily Indebted Poor Country (HIPC).
The Treasury says that, in 2013, debt will reach 37% of GDP – not perfect, but much better compared to 200% at the peak of its debt crisis twenty years ago – and that figure is expected to come down when the government rebases GDP next month.Meanwhile, Zambia has received a frenzy of international attention for co-hosting the United Nations World Tourism Organisation’s General Assembly with Zimbabwe. It is generally agreed that the conference will contribute to a long-term branding success, although the private sector had mixed feelings about the event, with operators in the host city of Livingstone lamenting the absence of immediate economic benefits. Tourism is central in PF’s economic diversificationagenda, along with agricultural development, infrastructure construction and manufacturing, all of which factored in the party’s 2011 campaign. Paving the way to schoolTo that end, Sata boasted of a 316,000 multi-sector expansion in jobs in his speech. While light on specifics, the government has been open about setting targets, promising 510,000 jobs in agriculture and 500,000 in tourism alone.
A series of road work programmes also features in the government’s job-creation scheme, with Pave Zambia 2000 pledging 20,000 jobs, Link Zambia 8000 gearing up for its second phase paving 2,700 kilometres of inter-district highways, andLusaka 400 targeting roads in the nation’s capital. The party’s 2011 manifesto also vowed huge changes in the health and education sectors, which, thanks in large part to Zambia’s painful history of debt servicing obligations, have been long neglected. The document criticised the former Movement for Multiparty Democracy (MMD) government for funding only 18% of the education sector, forcing it to rely on non-governmental support.Sata’s anniversary speech highlighted an on-going review of education policy with the intention of aligning curricula to national development goals. He said the government would speed up the construction of secondary schools, with 32 of 84 completed to date. University construction is also on-going and the 2013 budget pledged 17.5% of total expenditure to education.
The administration has also increased health expenditure. Its manifesto disparaged MMD allocations of 6% (although the former government actually pegged its contributions at 8.6% in 2011). In 2013, budget allocations were just over 11%. Health achievements this year have been partly smothered by on-going news of anti-retroviral shortages – or “rationing”, in official parlance – but Sata boasted a battery of progress indicators, including 137 facility upgrades, two new district hospitals and hundreds of sector-related construction projects.
A sinister sideIn general, the numbers paint a reliable picture of a developing county. The fact of the Eurobond’s relatively low coupon rate and 15 times oversubscribed alone attest to market confidence in Zambia. But there is a sinister side to the Sata administration, which seems to be intensifying.
To start with, rumours of the president’s poor health sparked a leadership rivalry between Defence Minister Geoffrey Mwamba and the party’s Secretary General and Justice Minister Wynter Kabimba. While each minister has since publicly distanced himself from presidential ambitions, the dispute was intense enough to split the PF into factions, with six members arrested by police after allegedly storming a party function, destroying property and beating attendants. PF-perpetrated violence has been directed outwards as well. The most recent case was against Hakainde Hichilema, leader of the country’s third-place opposition United Party for National Development, who says his entourage was attacked last week during a visit to the town of Kasama. While the incident was reported in numerous media outlets, the police issued a statement on Friday refuting Hichilema’s version of events. Violence has also been a feature of Zambia’s numerous by-elections, the result of a PF strategy to increase their majority in Parliament.
Government baits the opposition parliamentarians with ministerial appointments and other incentives, triggering by-elections whenever members cross the legislature.The tactic has been largely successful, with PF winning eight of 13 ballots so far, with three more soon. But after the recent vote in Mkaika, which the MMD won by a landslide, newspaper reports alleged PF-orchestrated violence, complete with gruesome photographs depicting bloodied members of the opposition. Victims of political violence come from all parties, however, as shown by the 2012 Rufunsa local government by-election that ended in the murder of a PF cadre. The trend in the ruling party has been severe enough to merit censure from The Post, the country’s leading independent and pro-government newspaper. In an editorial earlier this month, the paper called on government to weed out and punish party thugs involved in street violence.
Sata has spoken out against electoral bloodshed, but his personal record on the issue is dubious. Nicknamed King Cobra, he was linked to machete attacks in a 2001 by-election while serving as minister without portfolio in the late Fredrick Chiluba’s MMD government. Cultivating a culture of silenceSata has also taken up Africa’s presidential tradition of wielding the same laws that frustrated him in opposition. He has been accused of silencing critics with criminal and civil defamationproceedings, with members of the opposition-aligned media a favourite target. PF cadres have also been accused of beating journalists and a series of institutional media reforms have run aground, due to the government’s powers to make key appointments to relevant committees. Critics also say the government’s use of the colonial Public Order Act has impinged on constitutionally guaranteed rights of assembly. While the law calls only for organisers to inform police of demonstrations, in practice it has been used to shut them down entirely.
This tendency to suppress alternative dialogue also plays out in disputes with Zambia’s NGOs, many of which are threatening to boycott what they say is an onerous registration process if government does not amend an MMD-era law setting out the terms of their operation. The government says groups that do not register will be delegitimised. Broken promisesDespite the appearance that Sata has delivered on many of the country’s economic indicators, he trails a long string of broken promises. One of the most significant of these is his government’s on-going failure to introduce a new constitution, which it promised to do within 90 days of taking power. Another of the government’s 90-day pledges vowed to peacefully settle long-standing separatist sentiments in Western Province, but clashes have continued, culminating in over 60 arrests and numerous treason charges last month. Likewise, the Freedom of Information Bill, paralysed since before his administration took office, has yet to come before the National Assembly, despite assurances to the contrary.
Not all stakeholders are internal. Dominated by foreign ownership, the extraction industry anxiously awaits the completion of government’s review of the Mining Act, and, according to a piece in this month’s The Bulletin and Record, it is unsure of what to expect. That makes for an uncertain investment environment in a country that relies on mining for 80% of its export receipts and, despite weaker Chinese demand, expects copper tonnage to reach 1.5 million tonnes by 2015.No matter what the review reveals, it is not likely to assuage the industry’s legion of critics, who say generations of mining development have failed to improve the economic prospects of ordinary Zambians. The story of the PF in power is convoluted and often ambiguous. The Sata administrationreinstated the Anti-Corruption Act abuse of office clause, but the president appointed his uncle as minister of finance. The government stabilised the kwacha, but it tore fuel and maize subsidies away from the poor.
Zambia has the respect of international markets, but it maintains close ties with North Korea. The first big vote of the new session will be the 2014 budget, a document that will inevitably steer the narrative toward the 2016 election. The 2011 poll was close. If the government doesn’t live up to its promises, the next one may be too. Think Africa Press welcomes inquiries regarding the republication of its articles. If you would like to republish this or any other article for re-print, syndication or educational purposes, please contact:[email protected]
com. For further reading around the subject see:Back in the Red: Can Zambia Manage More Borrowing?Just six years after debt relief, Zambia is approaching international capital markets, with government promising more such borrowing in the future. ARTICLE | 16 SEPTEMBER 2013 – 3:22PM | BY PAUL CARLUCCIMore Sharing ServicesShare|Share on printShare on emailSelect Language?Fifty Kwacha notes, the Zambian currency. Photograph by Luigi Chiesa. Lusaka, Zambia:When Geoffrey Chongo’s father died in 2001, he was just about to enter high school and Zambia was still struggling through its debt crisis. His school fees and personal development suddenly at risk, Chongo’s eyes were opened to a country that had spent a decade crashing through neoliberal reforms that required its leaders to privatise the economy, halt subsidies and drastically restructure the social sector. The debt to GDP ratio was 170% that year, with a huge social fallout: rampant unemployment, over 15% of the population suffering from HIV/AIDS and life expectancy at just 42 years old. Chongo is now Economic, Equity and Development Programme manager at the Jesuit Centre for Theological Reflection (JCTR), a Lusaka-based think tank.
Speaking to Think Africa Press, he says, “The macroeconomic statistics you’ve heard are real. We knew that when the rain season came, we would have cholera. It’s because of poor sanitation and poor health services. Every year we would have cholera and it would kill hundreds and hundreds of people.”His uncles and brothers were able to secure employment, however, and ultimately his school fees were paid. Five years later, after a barrage of reforms prescribed by the International Monetary Fund (IMF) and World Bank, much of Zambia’s $7 billion debt was cancelled.
Just six years on, Zambia started borrowing again, with the Patriotic Front (PF) government currently preparing to complete its first interest payment on last September’s 10-year $750 millionEurobond. Finance Minister Alexander Chikwanda says that these types of instruments are the future, yet debt-watchers like Chongo are concerned.They note a rising trend of taking on commercial loans, which stipulate fewer conditions than their concessional alternatives, but have higher interest rates. At the same time, many critics accuse the government of an antiquated debt policy with insufficient parliamentary oversight. Others lament wasted potential in the tax system that could see development dollars raised without onerous terms or interest.
While no one is warning of a new debt crisis yet, borrowing remains a loaded concept in a country so recently removed from HeavilyIndebted Poor Country (HIPC) status. An era of arrearsSince independence in 1964, Zambia has struggled to control its debt levels. Following the 1973 oil crisis and the 1975 plunge in copper prices the Kenneth Kaunda government fell into an ongoing balance-of-payments crisis. In response, international creditors pressured Kaunda into making unpopular structural reforms, until he lashed out in 1987, breaking off relations with the IMF and refusing to pay more than 10% of GDP to debt servicing. Creditors responded by penalising existing external debt and withholding aid. By the time Kaunda rebuilt his bridges with the IMF in 1989, debt to GDP ratio was 200% and the country was convulsed by hyperinflation and currency collapse. In 1991, after 27 years under Kaunda, the country held multi-party elections and Movement for Multiparty Democracy (MMD) leader Frederick Chiluba surged to victory.
Chiluba was a good student for the IMF, privatising much of the economy and enacting other market reforms. By the mid-1990s, prospects had improved: GDP grew by 6.5%, inflation stabilised and manufacturing and non-traditional exports recovered, although education and healthcare indicators continued to decline. But the end of the decade brought still more instability. The government-owned Zambian Consolidated Copper Mines haemorrhaged millions before it was partly privatised in 2000, whilst GDP growth shrank to 3.5%.
Debt was tallied at $7.3 billion. In 2001, the year Zambia entered the HIPC program, it owed $606 million to debt servicing alone. However, foreign governments began cancelling or restructuring some of the country’s debt. At the Gleneagles Summit in 2005, the G8 cancelled $40 billion of debt from the world’s poorest countries and, combined with completion of the HIPC program and a 100% write off of its IMF and World Bank loans accrued before 2005, Zambia’s debt to GDP ratio fell to 9%. Off to the bonds marketIn September 2012, the PF government issued the country’s first sovereign bond, joining a trend in sub-Saharan Africa initiated by Ghana in 2007. Mainly international investors have bought the government’s bonds, receiving an interest rate of 5.625%.
The bond was so popular it was oversubscribed by a factor of fifteen, revealing a trend of investor interest in emerging market debt. Echoing his boss, Deputy Finance Minister Miles Sampa has reportedly said that government will continue to approach the international capital market, with a 45% debt to GDP ratio the intended ceiling. Meanwhile, after the government’s successful foray, a number of public agencies, from city councils to Zambia’s Road Development Agency, announced their own intentions to enter the bonds market, bringing the issue of debt sustainability once again to the fore. Ministry of Finance Permanent Secretary Felix Nkulukusa, speaking to Think Africa Press, says, “Our policy has always been that we should have sustainable debt and our preferred loan contraction is concessional loans. In situations where the concessional loans are not enough and we can go for commercial loans, they should be commercial loans on projects that have economic results attached.” In addition to concessional loans, Zambia for years benefited from budget support, which was transferred straight into the country’s ledger books.But Zambia’s fiscal ranking has changed dramatically in less than a decade.
It is now considered a middle income country with a sovereign credit rating of B+. Its success makes it less and less eligible for budget support and concessional debt, with the former registering just 5% in the 2013 budget, down from roughly 40% in the HIPC years, according to Nkulukusa. The absence of these inputs forces the government into the international markets if it wants to finance development. The 2013 Budget Speech pledges Eurobond money to railways, roads, and healthcare infrastructure. Chongo approves of the allocations in theory, but worries about political interference when cash leaves the government coffers. Better roadways to Zambia’s remote waterfalls would benefit tourism, for example, whereas repaving a constituency undergoing one of the country’s frequent by-elections might not. Legal instruments to manage debt“Our concern is the framework that governs borrowing,” Chongo says.
“We feel it’s still weak. It doesn’t guarantee oversight of Parliament. The executive minister of finance still dominates the process of contracting debt.” Zambia’s Loans and Guarantees Authorization Act empowers the minister of finance to contract loans and negotiate terms and conditions.
JCTR would like to see a debt management policy that brings loans before a parliamentary committee on a case-by-case basis. They highlight a series of past loans that they say would have benefited from an oversight system, including a 2011 credit of $53 million from China for mobile hospital units that has been castigated for being ineffective and wasteful. According to Nkulukusa, there is sufficient parliamentary oversight when Parliament approves a budget stipulating borrowing ceilings. Case-by-case oversight, he continues, is impossible in part because of the parliamentary sitting schedule.
He cites the example of the Eurobond, when he says finance staff woke the minister up at 04:00am to report market rates. “We don’t have time to go to Parliament,” he says, “because we have to make a decision in half an hour”. Although the department is updating its debt management strategy, it will not, Nukulukusa says, include recommendations in line with JCTR’s thinking. Tax then spendThe NGO ActionAid occupies a separate corner of this debate, arguing that government should not be approaching international capital markets, whether it can sustain loans or not, until it maximises tax potential. Kryticous Patrick Nshindano, Economic Justice Program officer with the organisation, argues that “If we are going to look at financing for the economy, financing for a project, it has to be a more sustainable mode of financing, and the only sustainable mode we have is taxation. Why is that we are avoiding something that we already have in our hands which we could utilise in preference of going to borrow?” Nkulukusa says Zambia isn’t eager to tax therecent surge in mining investment until investors see returns.
And reaping taxes from the informal sector, he adds, costs more money than it nets. But ActionAid believes that alternative forms of taxation must be explored, considering debt servicing payments are money diverted from spending on health, education, and social security. Nshindano isn’t convinced by blooming economic indicators, noting that much of the productivity in the mining sector, which remains central to Zambia’s economy, stems from foreign-owned capital. He says that “We do not have full control over that. So in that sense it is not prudent to base that on our GDP growth.” The futureZambia’s current debt to GDP ratio is 27% of the country’s $20 billion GDP, according to Nkulukusa, 10% of which comes from external lenders.
He says 2014 projections of the debt burden are in development, and quashed fears of other public bodies issuing bonds, saying none of them have been rated and they do not have the technocratic capacity to engage the market. Current debt levels are widely considered sustainable, at least in the short term, all the more so if government successfully rebases its GDP this October, a move observers say could increase GDP by 20%. Still, there are those who are reticent. Speaking as a private economist and not a member of ActionAid, Nshindano stresses a prudent future based on a transparent borrowing regime with plenty of oversight. He argues that “If we are able to put in place mechanisms that will ensure first of all there’s accountability, there’s transparency, there’s the issue of monitoring the kind of money we are borrowing, and it’s utilised for intended purposes, and this has to be capital projects, it is a welcome move.
” Think Africa Press welcomes inquiries regarding the republication of its articles. If you would like to republish this or any other article for re-print, syndication or educational purposes, please contact:[email protected] British Government Hails PF Economic StridesBritish High Commissioner to Zambia, James Thornton has described as ‘impressive’ Zambia’s economic growth in the first two years of the Patriotic Front (PF) government.
Mr. Thornton has observed that Zambia’s economy has continued to grow faster under the PF regime because of the good polices that the PF is implementing. He says President Sata deserves a pat on the back because of the numerous developmental projects his administration has embarked on especially infrastructure development not only in Lusaka but the country as a whole. Mr. Thornton is hopeful that President Sata will steer Zambia’s development forward because he is a man of action. He has urged Zambians to rally behind President Sata and the PF government because the people stand to benefit more under the government of the day.
Inspired to Inform …Email: [email protected], 23 September 2013PF GOVT HAS NO INTENTION TO TURN ZAMBIA INTO A ONE PARTY STATE – SATAPresident Michael Sata has opened the Third Session of the Eleventh NationalAssembly with an assurance to the Zambians that the PF Government has no intentions of turning the country into a one party State. Below is the full speechIntroductionIn accordance with the decorum of this August house, I join you and the rest of the Honourable members of parliament to officially open the third session of the eleventh national assembly. It is one year since I last addressed this august house on the occasion of the official opening of the second session of the eleventh national assembly and a number of developments have since taken place in our country. ObituaryBefore I go any further, I note with sadness that during the second session of the eleventh national assembly, the house lost the Honourable member for Mansa central parliamentary constituency, the late Mr Kennedy Sakeni, MP and former minister of information and broadcasting services, who passed away on 5th September, 2013.
May his soul rest in peace. May I now ask the house to stand and observe a minute of silence in honour of our dear departed colleague. Mr. Speaker,This session is special in many respects. Firstly, it marks almost two years of hard work by the Patriotic Front in government. The Patriotic Front government came into power to address the many social and economic challenges facing the Zambian people so as to restore their dignity and past glory.
This is in line with the PF vision which is enshrined in our manifesto which states and I quote, “the citizens of this land, not only deserve better lives but are entitled to better lives”, end of quote. Secondly, the session also comes against the background of Zambia having successfully co-hosted with Zimbabwe, the highest ever attended United Nations world tourism organization general assembly last month. The event has helped to raise Zambia’s image as a tourist destination of choice. Thirdly, this session sets the stage for the commemoration of Zambia’s 50th independence anniversary, the golden jubilee, in October next year. The theme of the celebrations is and I quote, “commemorating God’s favour of Zambia’s 50 years of independence for continued peace, unity, democracy,patriotism and prosperity” end of quote. Mr. Speaker,This is an opportunity for us as a country to reflect on our achievements and challenges.
It is equally, an occasion to motivate and energise ourselves as a united people to face the future with resolve. During the commemoration, government will bestow deserving individuals who have made outstanding contributions to the development of this country with “a special single class independence day medal”. Parliamentary affairsMr.
Speaker,I am happy to note that, during the second session of the eleventh national assembly, the honourable members of parliament worked together across party-lines to deal with matters of great national importance in the interests of our people. This was demonstrated by the number of bills passed, parliamentary questions debated and ministerial statements presented. I, therefore, wish to thank you, Mr Speaker, the honourable deputy speaker, the deputy chairperson of committees of the whole house, and the chairpersons of all the parliamentary sessional and select committees for effectively discharging your functions. Your leadership enabled the house to carry out its constitutional mandate and ensure that our government was kept on track in its provision of services to the Zambian people. Furthermore, I would like to thank and congratulate his honour the vice president and leader of government business in the house, on the excellent manner in which he directed government business.
In thanking his honour the vice president, I also acknowledge the role that party whips played in ensuring that the business of the house was conducted smoothly. Similarly, I would like to commend the clerk of the national assembly and her staff for the excellent services and their dedication to duty. Let me take this opportunity to congratulate all the new members of parliament, who have since joined the house. I also thank the electorate who participated in the by-elections. I, however, regret to note that some by-elections were characterised by violence. I wish to emphasise the need for self-restraint and tolerance before, during and after elections so as to enable our democracy to flourish. Socio-economic affairsMr. Speaker,Under the Patriotic Front government, the performance of the economy has continued to be positive, recording growth in the gross domestic product of6.
8 per cent and 7.3 per cent in 2011 and 2012 respectively. This growth was driven by the transport, communications, construction, agriculture, trade and manufacturing sectors.
Inflation has remained at single digit, recorded at 7.1 per cent as at end of august 2013. Lending rates have fallen from an average of 20 per cent in 2012 to 16.
3 per cent as at June 2013. Mr. Speaker,The government’s initiative of borrowing through the euro bond, resulted in increasing the fiscal space for national development. This has enabled the country to undertake projects such as the re-capitalisation of the nitrogen chemicals of Zambia. The production of fertilizer locally is going to boost our farmers’ production and subsequently increase food security and generate employment. Mr. Speaker,Efforts to diversify the economy will be guided by the national vision 2030, the revised sixth national development plan covering the period 2013 to 2016 and the decentralisation policy.
The focus will be on the key areas of agriculture, infrastructure, manufacturing, tourism, science and technology. Our goal is to achieve higher and sustained economic growth in order to alleviate poverty through rural development and job creation. The planning framework re-affirms our government’s commitment to coordinated planning in line with the Patriotic Front manifesto which must be our reference document at all time. To this end, government will soon present to this house, the 2014 national budget to support implementation of priority programmes. I urge this august house to support the budget. Education and skills developmentMr. Speaker,I wish to restate that education and vocational skills development is critical to our national development.
It is, however, a fact that a good number of our young people have not had access to quality education due to limited school spaces particularly, at secondary and tertiary educationlevels. In our effort to address this challenge, I wish to inform this house that our government is reviewing the education policy and stakeholder consultations are about to be concluded. The policy will realign the educational system to ensure that the academic and vocational training are harmonised from early childhood to tertiary education levels. The aim is to make the curricula at all levels relevant to national development. In my address to this house last year, I directed the minister responsible for education to establish a regulatory body to monitor education standards in the country. I am pleased that the higher education act was enacted.
This act provides for the establishment of the higher education authority. Government has commenced the process of establishing the authority. Mr. Speaker,while steady progress has been made to expand primary school infrastructure, government recognises the need to accelerate construction of new secondary schools to meet the growing demand for post primary education. In this regard, government has completed construction of 32 new secondary schools out of the planned 84 in the country. In 2014, government will accelerate the completion of the remaining 52 schools currently under construction. It is our government’s policy to ensure that the construction of school infrastructure especially, in rural areas is accompanied by the construction of staff housing units so as to provide a conducive teaching and learning environment.
In addition to the construction of schools, government will also accelerate the rollout of information and communication technologies in learning institutions to enhance both access and quality of education. Mr. Speaker,in my last address to this house, I announced the construction of universities in various provinces. I am pleased to inform this house that construction of the Chalimbana and Palabana universities in Lusaka province, and Paul Mushindo at Lubwa mission in Muchinga province has commenced. Construction of the David Livingstone University in southern province, king Lewanika University in western province and Luapula University in Luapula province will commence soon.
Furthermore, the house may wish to note that the upgrading of infrastructure at Kwame Nkrumah and Mukuba universitycolleges has commenced. These measures will broaden opportunities of access to university education and help decongest the three public universities. Mr. Speaker,Government is aware that the infrastructure at the three public universities requires urgent attention. I, therefore, direct the minister responsible for education to address infrastructure rehabilitation at these universities so as to improve the academic environment. Our government expects that the quality of education that will be offered across all levels in the coming years, will match the parent’s expectations of good results.
The minister of education must take this directive seriously. Mr. Speaker,Our government places high priority on vocational skills development of our youths. This has guided our government to invest in the construction and expansion of trades training institutions throughout the country. I am, therefore, delighted to inform this house that construction works of these training institutions in Kalabo and Isoka are nearing completion while those for Mwense and Mporokoso trades training institutes will commence before the end of this year. In addition, expansion works are under way at northern technical college, Zambia air services training institute, Choma and Chipata trades training institutes, and Kabwe institute of technology. HealthMr. Speaker,Our government reaffirms its position that good health for our citizens is a pre-condition for national development.
Government has continued with its commitment to re-organise the health sector to ensure significant improvement in service delivery in a clean, caring and competent environment as close to the family as possible. I am pleased to inform this august house that government approved the national health policy in 2012. The policy is aimed at providing an optimum package of health care. I am therefore, directing the minister of health to ensure that health services are discharged with the necessary efficiency and effectiveness expected by the public. Mr. Speaker,in our quest to bring health care as close to the family as possible,government has continued to build and upgrade health infrastructure across the country at all levels. Government has made progress in this area and 137 health facilities have been rehabilitated countrywide.
In addition, the rehabilitation works for 110 health facilities have commenced. Construction of two new district hospitals has been completed in Shang’ombo and Chadiza districts. These hospitals are now operational. Furthermore, the construction of four new district level hospitals in Lumwana, Lufwanyama, Chiengi and Samfya is expected to be completed by the end of the year. Further, twenty one new district hospitals and 114 housing units are under construction countrywide. Mr. Speaker,in my address last year, I informed the house that government would commence the construction of 650 health posts across the country and expansion of the cancer diseases hospital. I am pleased to inform this august house that contracts have now been signed for the construction of the 650 health posts.
The construction will be done over a period of two years. In addition, the construction of a 220 bed facility at the cancer diseases hospital is expected to be completed by the end of this year. Government has already procured specialised medical equipment for this facility. The training of medical personnel in various clinical fields is also underway. Further, the government has commenced the modernization and upgrading of the university teaching hospital, Ndola and Kitwe central hospitals, and Livingstone general hospital by installing specialized equipment. These measures are aimed at affording more Zambians access to specialised quality health care services and hence, reducing the cost associated with treatment abroad.
Mr. Speaker,The government is committed to improving the procurement and distribution of essential medical supplies so that drugs are readily available in all health institutions. This will be achieved through allocation of adequate funds for the procurement and distribution of essential medical supplies including anti-retroviral drugs. In addition, the services of the medical stores limited will be decentralised by introducing regional distribution hubs. Mr. Speaker,to address the critical shortage of skilled health personnel, government will construct, rehabilitate and expand health training and research institutions to increase the number of graduates and promote research in health. Agriculture developmentMr.
Speaker,The agriculture sector is key to assuring national food and nutritional security, mitigating high poverty levels and creating job opportunities. To this effect, government will enhance use of science and technology in pursuit of its policy objective of achieving a competitive, diversified and sustainable agricultural sector. In 2012, the sector contributed 19.2 per cent to the gross domestic product. This was on account of good performance of the crops and livestock sub-sectors. A positive growth was registered in crops such as wheat, barley, soya beans and rice in the 2012/2013 agricultural season. However, maize production fluctuated regionally because of the unfavourable rain pattern experienced during the last farming season.
Mr. Speaker.Our focus for 2014 is to continue investing in the crop diversification programme so that we trigger the desired 6 per cent annual growth in the sub-sector. To achieve the projected growth, government will, among other things, continue the re-capitalisation of the nitrogen chemicals of Zambia.
In addition, government will continue restructuring the farmer input support programme aimed at providing access to inputs for 900,000 small scale farmers through better targeting. This will be complemented by up-scaling the electronic voucher system. Mr. Speaker,to increase productivity among small scale farmers, government will focus its efforts on modernising agriculture production through science, technology and mechanisation. In addition government will also promote good agricultural practices which will include conservation agriculture, use of improved seed varieties and diversify on-farm activities.
The measures will be supplemented by enhanced extension services. Mr. Speaker,during my address to this august house last year, I indicated that governmentwould continue to make land available for agricultural development under the farm block programme.
Works at Nansanga and Luena farm blocks are progressing well. In Nansanga, the government has constructed roads and dams and connected the farm block to the national electricity grid. In Luena, construction of infrastructure is underway. Furthermore, land has been identified for farm block development in north-western, copper belt, western, eastern, Muchinga and Northern provinces. Consultations to identify land for developing farm blocks with our traditional leaders in Lusaka and southern provinces are still underway. Mr. Speaker,to reduce over dependence on rain-fed agriculture, the government is committed to progressively bring 17,000 hectares of land under irrigation by 2016.
I am glad to report that over 4,500 hectares is now under irrigation as part of this programme. Mr. SpeakerThe government’s interventions in the livestock sub-sector were mainly in the restocking and disease control programmes. This was done through the creation of livestock centres and establishment of disease free zones. In 2014, the government will continue promoting increased livestock production and productivity by increasing the number and quality of various genetically superior breeds of livestock. To address livestock disease outbreaks, the government will continue with the construction of dip tanks and livestock centres. The government will also continue with countrywide vaccination of animals.
Mr. Speaker,The current supply levels of fish from our rivers and lakes cannot meet the national demand due to depleted fish stocks. Accordingly, the government will continue promoting aquaculture through the establishment of fish hatcheries and lake based nurseries across the country. In addition, the government shall promote fish conservation and surveillance to promote sustainable exploitation of capture fisheries resource. Mr. Speaker,Agricultural marketing has been facing some challenges for some time now. Our government will prioritise the promotion of agricultural marketing with a focus on increased private sector participation.
This will be achievedthrough the establishment of agribusiness centres; community crop bulking and marketing centres; and livestock marketing centres as well as agro dealer networks countrywide. To comprehensively address problems which we have encountered in agricultural marketing, the government will review the agriculture marketing act. To this effect, I am directing the minister responsible for agriculture to expeditiously review the act in consultation with all stakeholders. Mr. Speaker,The government will, in 2014, ensure that there is sufficient food reserves at all levels by enhancing storage capacity in order to reduce post-harvest losses.
This will be attained by increasing the storage capacity by a further 450,000 metric tonnes, bringing the total to 1.3 million metric tonnes. Construction and rehabilitation of storage facilities will continue to bring the required minimum national storage capacity to two million metric tonnes. These measures in the agricultural sector will lead to job creation and increased income generation which will ultimately contribute to poverty reduction.
Our target is to create 510,000 jobs by 2016 in this sector alone. Local government and housingMr. Speaker,Last year, I re-affirmed our government’s commitment to the decentralisation of functions in our local government system. To demonstrate this commitment, the government approved the revised national decentralisation policy, which I launched on 16th July, 2013. Mr. Speaker,in a country as large and sparsely populated as ours, citizen participation and effective delivery of services in many areas remain a daunting task. In order to address these challenges, our government has created 30 new districts out of which 18 are already functional. I therefore, urge, the responsible minister to expedite the operationalisation of the remaining newly created districts for enhanced local community governance and delivery of services.
Mr. Speaker,to strengthen the revenue base of the local authorities, the government is in the process of amending the rating act. With the decentralization policy inplace, I am now directing the responsible ministers for local government and finance to ensure that the local government and finance acts are brought in line with the spirit of the revised national decentralization policy. This policy must change our people’s living standards and contribute to employment creation in all the districts. Mr.
Speaker,The country has been experiencing a huge housing deficit, which has resulted in scarce and expensive accommodation for our people. I am therefore, directing the minister of local government and housing to explore various partnerships and investment to cushion the current national housing deficit. In addition, in 2014, government will recapitalize the Zambia national building society in order to provide affordable finance to our people for the construction of housing. Social protectionMr. Speaker,During my last address to this house, I committed government to developing a social protection policy to guide the implementation of social safety nets aimed at cushioning the poor and vulnerable groups from poverty. I wish to inform this august house that consultations on the development of the national social protection policy are nearing completion. The policy will streamline the implementation of the social safety net programmes and rationalize the use of resources to achieve maximum impact. The development of this policy must be expedited to compensate for the removal of subsidies on fuel and maize by the government this year.
Mr. Speaker,The government will continue to implement the national policy on disability to guide programmes for persons with disabilities so as to enable them to lead productive, fulfilled and dignified lives. The policy will ensure that disability issues are mainstreamed in all our sector plans and programmes. Rural developmentMr.
Speaker,Government will scale up interventions aimed at accelerating rural development in order to improve the people’s living standards. To ensure that the rural areas are connected to electricity supply, government isconstructing mini-hydro power stations. To this effect, construction of the mini-hydro power station in Shiwan’gandu has been completed. Construction of chanda falls mini-hydro power station in Chavuma is expected to commence soon. Our government will continue supporting the rural electrification programme which is aimed at connecting rural communities such as chiefs’ palaces, schools and health centres to the power grid. This is being complemented by solar projects. In 2014, the focus of the programme will be to electrify new districts in line with the government’s policy of decentralisation.
Further, the government has commenced an extension programme of mobile communication services to cover chiefdoms and other previously un-serviced rural areas. By the end of 2014, we expect that more than 60 per cent of the country will be covered by mobile communication services. Mr. Speaker,In order to boost access to financial services in the rural areas, government will in 2014 recapitalize the national savings and credit bank to provide affordable finance to our people. Furthermore, consultations with relevant stakeholders across the country, including the house of chiefs on the introduction of legislation to govern customary land have been undertaken. Accordingly, a bill will be tabled before this house in due course. Labour and social securityMr. Speaker,The government has commenced a comprehensive labour law review programme to update the laws in light of changes in work places.
This is aimed at addressing bad labour practices, such as casualisation and unfavourable conditions of service. Once reviewed, the labour laws will facilitate the improvement of conditions of service in all the sectors of the economy and protect the rights of both employers and employees. Mr. Speaker,to address concerns of occupational safety and health, our government is currently formulating a national policy.
The policy will promote the workers’ safety and address the occupational diseases, accidents and deaths at places of work. To this effect, I am directing the minister in charge of labour to expedite the review process. This must be done in consultationwith concerned stakeholders. Mr. Speaker,The Patriotic Front government is concerned with the plight of pensioners most of whom end up as destitutes, after having diligently served their country. The government has, therefore, embarked on pension reforms that seek to reduce destitution among pensioners in line with our government’s pro-poor policies.
The reforms will, among other interventions, enhance private sector participation in the pensions fund management. The government is also committed to restoring the dignity of the retirees by dismantling the outstanding terminal benefits arrears to alleviate their suffering. Mr. Speaker,Government continues to fulfil its promise of more money in people’s pockets.
In this regard, our government has recently honoured its pledge to increase salaries for public service workers, making their conditions of service competitive both locally and regionally. This has never happened in the history of this country. Employment creationMr. Speaker,Government attaches great importance to employment creation as the top most strategy for ensuring the stability of society and overall growth of the economy in all sectors. I wish to inform this august house that government is implementing the national industrialization and job creation strategy which entails the coordinated development of the primary, secondary and tertiary industries. The strategy outlines our focus in exploiting advantages in labour and natural resources, and actively developing labour-intensive industries and enterprises that have huge employment capacity. In this regard, government is continuing with the development of the multi-facility economic zones, technology and industrial parks which are expected to create over 110,000 jobs once fully operational.
Further, government has commenced the implementation of the pave Zambia 2,000 project. In this regard, the government has procured road construction equipment to be utilized in paving public roads and public places across the country. This road project is expected to create over 20,000 jobs for the youth as well as impart them with skills in road paving construction. Mr.Speaker,For the first time in the history of our country, government has commenced the auctioning of gemstones in Zambia to enable small scale mines generate sufficient revenue. In this regard, the government will continue to support the local auctioning of gemstones and also promote value addition through cutting, polishing and jewellery making in this sub sector thereby, contribute to employment creation and revenue generation. Furthermore, our government has, through the euro bond, mobilized 20 million United States dollars for onward financing by the development bank of Zambia to small and medium enterprises at low interest rates. I therefore call upon the small and medium entrepreneurs to develop bankable project proposals to access these funds.
Other initiatives by the government to address employment creation include construction of eight youth vocational training centers across the country. The government’s intention is to establish at least one youth vocational training centre in each district in line with the PF manifesto. In addition, the government provided k19.14 million in the 2013 budget to support youth enterprises development. The funds have since been accessed by over 700 youth-led enterprises countrywide, creating 2,300 employment opportunities for the youths. Mr. Speaker,The implementation of these measures among others, has created over 316,000 jobs in the various sectors of our economy. Investment and state owned enterprisesMr.
Speaker,Our government will continue to implement programmes and activities aimed at attracting and promoting investment into the country. In addition, government will also streamline business registration, licencing and granting of incentives in order to create a competitive business environment and maximise economic growth activities. In 2013, the government targeted to attract foreign direct investment amounting to 3 billion United States dollars.
I am pleased to inform the house that, as at 30th June 2013, approved projects were above the target and amounted to 3.56 billion United States dollars. This performance was against the prevailing slow growth in the global economy.
This is a re-affirmation of the country’s investmentattractiveness and position as a top investment destination by foreign investors. Mr. Speaker,The state has not been able to maximise the revenue potential of numerous state owned enterprises and assets. In addition, there still remain many parastatals and partnerships in Zambian companies that are not adding sufficient value due to lack of efficient and effective management. In this regard, government shall reorganise and reform the system for overseeing and managing state owned enterprises, assets and parastatals to ensure the state maximises their contribution to job creation and economic development.
Tourism and artsMr. Speaker,I am pleased that the tourism and arts sector continues to play a key role in the attraction of investment and creation of employment. The government will continue to pay special attention to enhancing tourism product diversification and infrastructure development in the northern circuit, lower Zambezi and the greater Kafue national park, in order for them to contribute to economic development. Mr. Speaker,The house may wish to recall that on 30th may 2012, Zambia and Zimbabwe signed the co-hosting agreement of the 20th session of the United Nations world tourism organisation general assembly (UNWTO). We must congratulate ourselves on the successful co-hosting of the event which attracted over 4,000delegates from across the globe. This will result in improved tourist visits and thereby raising the revenues for economic development.
The co-hosting of the event improved the infrastructure and general outlook of Livingstone as our tourist capital. I wish to thank everyone for their contribution and support to the successful co-hosting of this event. The experience gained will go a long way in assisting the country to host events of a similar magnitude in future. It has also provided a model which can be replicated for accelerated development of our infrastructure across the country. MiningMr. Speaker,Mining has continued to be a major contributor to foreign exchange earnings and employment. Government will continue creating an enabling environment for mines development activities so as to attract investment for both large and small scale mines in 2014. To ensure continued investment and maximum economic benefits from the mining sector, government has completed the revision of the mining policy.
The policy is aimed at facilitating mineral diversification from copper and cobalt to other minerals like nickel, gold, manganese, iron, emerald and uranium. To this effect, government will recapitalize the ZCCM-IH to promote value addition in the mining industry. Mr. Speaker,Let me state here that government is committed to making the mining industry more transparent and accountable in mineral production, extraction and export declarations. In this regard, government is reviewing various pieces of legislation to facilitate increased exploration activities and strengthen the declaration monitoring mechanism. This will contribute to increased revenue collection by the government. Infrastructure developmentMr.
Speaker,Our government has prioritised infrastructure development, such as, roads, airports and rail as key to national development. Accordingly, government is heavily investing in the construction, rehabilitation and upgrading of the transport infrastructure. Our commitment is demonstrated by the implementation of the link Zambia 8000 project under which over 1,500 kilometres of road works are being constructed in phase one, while over 2,700 kilometres of roads will be upgraded to bituminous standard under phase two. Further, government has launched the Lusaka 400 road project which involves rehabilitation and construction of selected urban roads. With respect to airport infrastructure, the government has completed the up-grading and modernisation of the Harry Mwaanga Nkumbula international airport in Livingstone to international standards. This contributed to the successful hosting of the United Nations world tourism organisation general assembly last month.
Further, the government is in the process of upgrading and modernising the Kenneth Kaunda, Mfuwe and Simon Mwansa Kapwepwe international airports and provincial aerodromes. Mr. Speaker,I wish to re-affirm our government’s commitment to reactivate the railway infrastructure in the country. This is evidenced by the government’s allocation of 120 million United States dollars of the euro bond to Zambia railways limited. Our vision is to create a competitive and efficient railway system which will ensure that all bulky and heavy cargo is offloaded from the roads. This will guarantee our road network a longer lifespan and also reduce the national budget on road rehabilitation and maintenance. Mr.
Speaker,in my address to this house last year, I committed government to ensuring security in supply of petroleum products through the construction of provincial fuel depots. I am happy to inform this house that the government has made progress in this area. The Lusaka fuel depot has been completed and commissioned, while construction of the Mpika and Solwezi fuel depots are scheduled to be completed soon. In addition, construction works for the Mongu fuel depot are expected to commence next year.
Looking into the future, government is committed to the development of renewable energy. In this regard, I am directing the minister responsible, to proceed with the revision of legislation in order to attract investment in the renewable energy sector. Mr. Speaker,The government will continue implementing projects aimed at increasing electricity generation capacity through construction, refurbishment and upgrading of hydro-power stations across the country. To this effect, the government is extending the Kariba North Bank power station. Once the extension is completed in 2014, the power station is expected to generate an additional 360 megawatts. With regard to water supply and sanitation, the government will continue with the construction and rehabilitation of the water supply and sanitation infrastructure across the country. To demonstrate this commitment, the government has increased investments in infrastructure development from 90 million kwacha in 2011 to 250 million in 2013.
Environmental protectionMr. Speaker,Environmental protection is key to sustainable socio-economic development. In this regard, government has put in place a policy and legal framework to safeguard the environment.
With regard to the ecological balance, I am glad to inform this august house that the government has established 11 large scale forest nurseries across the country. These nurseries will raise 1.5 million seedlings each of different tree species for plantation establishment and replenishing of degraded areas.
Governance and the administration of the stateMr. Speaker,The government is fully committed to upholding the rule of law including separation of powers among the three arms of government. In this regard, I want to assure the Zambian people that our government has no intentions whatsoever to turn this country into a one party state. With regard to the constitutional making process, the government remains committed to delivering a people-driven constitution. The consultative process has been completed and the final draft constitution is expected by the end of this year. Thereafter, the government in collaboration with other stakeholders will guide the process accordingly. Mr. Speaker,The fight against corruption remains one of the top priorities on our good governance agenda.
Government will, therefore, strengthen and decentralise the operations of the anti-corruption commission to enable it to effectively execute its mandate. To this end, the government has established a special investigations unit in the commission to deal with complex financial crimes. Media reformsMr. Speaker,in the last address to this house, I committed the government to establishing the independent broadcasting authority to ensure accountability and level the playing field in the broadcasting industry.
I am pleased to inform this house that our government has fulfilled its promise and the authority is now operational. Foreign relationsMr. Speaker,The government will continue to uphold the fundamental principles of sovereign equality and mutual respect. The government will, therefore, strive to ensure that Zambia continues to play an active role in international organisations for the benefit of the country. Our foreign policy is aimed at repositioning our country so that it derives maximum benefits from international relations. To this effect, the government will continue to maintain friendly diplomatic and trade relations with other countries. Priority will be given to economic diplomacy as a means to promoting the revitalisation of the Zambian economy. ConclusionMr.
Speaker,as I conclude my address to this august house, I wish to reaffirm our government’s determination to create a better Zambia for all in line with the PF manifesto. This is the basis upon which, the PF government was overwhelmingly elected into office on 20th September, 2011. It is now my singular honour and privilege to declare the third session of the eleventh national assembly officially open. May God bless us all and our great nation Zambia.
Mr. Speaker, I thank you.