excerpts from the book "Its Now Time For Zambia to Prosper"
The argument for lower taxes Taxes play a very crucial role in modern societies. As it were, there are certain services that are best mobilized and managed by a central government for the benefit of all citizens. If services such as health, education, sanitation, security and social services were completely left in the hands of pure capitalists, the majority of our people will not afford these services and will be left out. Because of this, many governments continue to find excuses for increasing taxes because many of them have not been prudent and innovative enough to come up with other means of raising revenue for public expenditure. Tax happens to be an easy but lazy alternative for a lot of politicians all over the world. However, the stark truth is the majority of citizens world over want no taxes or at least the lowest tax rates possible. This is because currently many workers are not making ends meet. No wonder workers often find taxes to be punitive. In Zambia where the PAYE tax rate can go as high as 35% it means if your salary is K10,000, the government will take K3,500 from you and leave you with K6,500. If you are a family person and live in a rented house, you will definitely feel the pinch of the K3,500 tax deduction. Whichever way you look at it, you are not going to be a proud tax payer. No matter how responsible a citizen you are, you will forever wish this tax amount was reduced substantially to give you room to afford a better life. High taxes contribute to poor quality of life Because tax eats into the already meager incomes of the majority of poor households, tax negatively affects the quality of life of the bulk of our citizens. It would have been a different story if most of our citizens were wealthy but unfortunately they are not. Every bit that you deduct from an already struggling family hurts. Lower taxes encourage business Lower taxes would mean more finances available for citizens to spend. More expenditure supports more business and jobs. Lower taxes will increase tax revenue If you have heard of the infamous tax havens, these are essentially countries or regions with very low tax rates. Simply due to common sense, many wealthy companies and individuals prefer to take their money to these low tax places. The result is tax havens attract substantial cashflows. Now when we do a bit of mathematics 5% of $100 billion is $5 billion whilst 35% of $10 billion is $3.5 billion. The point is with lower tax rates, a country will attract more investments resulting in more tax revenue than when they peg their tax rates high. Though the media have unconsciously began to portray low tax regions as rogue and illicit regions, low tax regions are actually doing the smartest thing around. By the way it is not illegal to have zero or low taxes. There is no national or international law against that on earth! It is a matter of choice and citizens all over the world prefer it. In fact many politicians all over the world continue to play lip service about wanting to reduce taxes for their citizens but they simply lack the brains and morals to do it. More people will voluntarily pay tax at lower tax rates Currently, there are a lot of tax evaders in Zambia as a result of high tax rates. You are talking about individuals and even some of the biggest corporations. Lowering tax rates will make it more affordable and encourage more tax payers to pay tax eventually resulting in increased tax revenue. The proposed deal with the Zambian government But is it possible for Zambia to achieve a situation where citizens and companies pay the least amounts of taxes but yet resulting in higher tax collections than currently collected by the Zambian government? The answer is it is possible and this is how Zambia will achieve this. In 2015, our government spent just under $6 billion on various things including public service salaries. The money came from tax revenues, investment earnings and a significant portion from loans. My proposed situation for Zambia as regards taxation is where we push our GDP beyond $100 billion and start charging 5% flat rate on income and not profit, for both companies and employees and pretty much everything else including export duty. This means, instead of charging companies on their profits, we will simply charge them 5% on their income as the only and final tax. No VAT, no nothing else. A tax of 5% is pretty much affordable for everyone because even a person earning K100 only can surely afford to pay K5 tax. At a GDP of $100 billion, we will be able to recover $5billion in corporate taxes. At a national wage bill of $20 billion, we will be able to recover another $1 billion from employees. From exports of $40 billion, we will be able to recover another $2 billion. The only thing that will be taxed a bit higher will be imported products that are also produced in Zambia. For example, because Zambia is very much capable of producing bananas, when anyone decides to import bananas into the country, the bananas will attract a higher tax than the usual 5%. In this case, the import tax will not be less than 10%. Another necessary strategic move will be for our government to invest in such a way that government ends up with 30% ownership of our emerging investment vehicles. That is government is to own 30% stake in all the Agri-city corporations, Ranch towns and so on. Then as part of dividends for its investment, the government will be getting 5% of all revenues every month from the businesses it would have invested in. That is in addition to the 5% mandatory income tax. When at the end of the year, a corporation generates profits that will result in 30% of profits being higher than the 5% of income government received during the year, the difference will be remitted to the government. Meaning if businesses government invests in generate $60 billion in revenues, 5% of this will be $3 billion payable to government. In addition, government will also receive the mandatory 5% income tax of $3 billion bringing the total government revenues to $6 billion from government investments. Overall, this approach will result in government revenues as tabulated in the next table. # Tax base Description Tax base (usd billion) Tax % Tax income (usd billion) 1 GDP 100 5% 5 2 Wage bill 20 5% 1 3 Export volumes 40 5% 2 4 Other revenues 2 5 Govt investments 60 5% 3 Total Tax Income 13 This will be more revenue than the government of Zambia has ever generated and it will be achieved at the most progressive tax regime ever operated in Zambia and Africa. Mind you, I have not even factored in the tsunami of investments that will rush into Zambia at this tax rate. This tax regime is guaranteed to bring further investments into the country which will further grow the tax base and revenues. Off my head, at 5% tax, government revenues will easily hit $20 billion. With this picture, it is proposed that the government of Zambia participates in the unfolding Zambia by acquiring 30% stake in all the investment vehicles proposed. That is the government of Zambia should acquire 30% stake in agri-cities, ranch towns, mining towns and so on. The proposed investment is a $30 million in each of the 33 cities and towns bringing total government investment to $990 million. This can be invested at a comfortable period of 10 years. This investment, apart from raising revenues for government, will automatically result in the achievement of almost all objectives of the government. That is the investment will result in:
Aid will no longer be sustainable in the near future Africa has benefited immensely from international aid and many governments literally survive on aid. The truth however, is that aid is not sustainable and African governments need to make it a priority to gain financial independence and wean themselves off aid. There will come a time when the majority of countries who have been offering us aid will no longer be able to. The “Zambia Shall Prosper Project” is designed to play a major role in making our government financially independent.
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If there is anything that Zambia’s 11th August elections have clearly exposed is that we are generally a mediocre nation. One would expect that a nation ravaged by poverty, unemployment and lack of quality housing would elicit solid visions from those aspiring to political office. Unfortunately, In the case of Zambia, coming up and selling tangible solutions to our nation’s major challenges did not seem to be as important. In Zambia, attaining political office seems to be much more important than what someone would actually do with that office. Some of our politicians even seem ready to shed the blood of poor Zambians to achieve political power even when they have nothing convincing on the table in terms of a vision for the nation. This is something I find very tragic.
Since coming back to Zambia about 3 years ago, I have tried to listen to every politician worth listening to and ferociously sought to read and dissect their manifestos. Honestly speaking, I think we can do better as a nation. As it stands, 6 out of every 10 Zambians are ravaged by poverty, do not have sufficient food, and live in sub-standard housing in shanty compounds or villages. I could hardly believe it when Mr. Davies Chama (Secretary General for the PF) told me that a significant number of people in Lusaka still use pit latrines. I decided to take a look and I got a shock of my life! Barely 10 minutes’ drive from Lusaka City Center, one will come across the many shanty compounds housing the majority of Lusaka’s population. It did not help that I visited these areas during the rainy season! You are talking about substandard housing, filthy environments, shared water taps, pit latrines, heaps of uncollected garbage and all. With this prevailing scenario, it would be a miracle if Lusaka were to records no cases of Cholera in a particular year. When you read that 60% of Zambians are poor it doesn’t quite sink until you get to look at the standard of life in these shanties and rural Zambia. Ladies and gentlemen, our nation is actually in a state of emergency because of poverty and we don’t seem to realize it! Given this background, it is shocking that there is literally no political party in Zambia with a clear plan and commitment to create employment, wealth and make quality housing affordable and available to millions of ordinary Zambians. Listen, it is one thing to claim you can fix the economy or that you plan to create 1 million jobs in a particular year but it is quite another thing to have an actual workable plan to achieve your goals. When I say, there is no political party with a plan- this what I mean; Zambia needs about 4 million new and well-paying jobs and about 2 million new quality housing units. Having a plan to address these challenges would mean the following basics:
I have looked at manifestos in the past election and I can confidently state that there I no political party with a solid and practical plan to generate wealth, millions of jobs and millions of quality housing units. No political party has a plan to make quality housing affordable to the majority of Zambians. To start with, even a simple thing as availing residential plots to the tens of thousands of Zambians who want residential plots, has been a challenge to us. Our level of mediocrity as a nation becomes clear when you consider the fact that we have so much land available! It may sound idealistic, but the truth is it is very possible, practical and realistic for Zambia to generate 4 million well-paying jobs within the next 10 years. It is also within the confines of possibility that Zambia can build 100,000 housing units every year giving us 2million new housing units within 20 years. It has not happened simply because we have been a mediocre nation that did not aspire to nor demand better results. Can I also put it on record that the failure of Zambia to make significant strides economically has had nothing to do with lack of finances. It has had everything to do with a nation suffering from mediocre thinking, planning and actions. As the voting masses, we have also given so much room to our politicians to offer nothing, be on holiday and continue delivering mediocrity. They say a nation usually gets the kind of leadership it deserves. Well, I think Zambia now deserves better and it is time we citizens stopped accepting mediocrity. It’s now time for Zambia to prosper.
Excerpts From The Book "Its Now Time for Zambia to prosper" By Mauden Shula I took time to go through what was the latest National Development Plan at the time of my writing. Quite admirably, the document competently addresses the major economic challenges facing our country and goes on to detail what we need to achieve as a nation for the situation to improve. The following is an actual excerpt from the Revised 6th National Development Plan (R-SNDP) 2013-2016: 2.3 OBJECTIVES AND STRATEGIES OF THE R-SNDP The thrust of this revised Plan is to accelerate growth further and promote viable livelihoods of the Zambian people, especially in the rural areas. The Plan will therefore focus on investing in a few selected sectors that will have the greatest impact on job creation, rural development and inclusive growth. It should be noted, however, that funds will continue to be availed to other sectors over the Plan period. In line with the above focus, the revised Plan has the following over-arching objectives: a)to promote employment and job creation through targeted and strategic investments in selected sectors; b)to promote rural development by promoting agricultural development, rural enterprises and providing support infrastructure in rural areas; C)to enhance human development by investing in the social sectors; and d)to accelerate infrastructure development to enhance the growth potential of the economy. In order to achieve these objectives, emphasis will be placed on the following sectors; Science and Technology, Agriculture, Energy, Infrastructure Development, Health, Education and Water and Sanitation. Agriculture is the major employer in the country, while reliable and efficient infrastructure is vital to economic and social development that promotes inclusive growth. By raising labor productivity and lowering production and transaction costs, economic infrastructure will enhance economic activity which is essential for poverty reduction. While investing in economic infrastructure achieving inclusive growth, investment in health, education and water and sanitation is also critical for sustaining the attained growth. The strategic focus of the R-SNDP is, therefore, to address the low levels of employment in the economy, invest in rural development and reduce widening inequalities in the economy. The strategies will include: A)Infrastructure Development; b)Employment and Job Creation; C)Rural Development; and D)Human Development. The strategies are discussed in detail in subsequent chapters. I went on to ferociously peruse the mentioned subsequent chapters in the document to get to grips with what our economists and politicians have determined to be the best ways to move Zambia forward. After hours of study, and looking at where we currently are as a nation and considering that this development plan’s tenure ends in 2016, my conclusion was that it would take us another 100 years to end poverty in Zambia if we are to stick with our current economic solutions. Though the Revised 6th National Development Plan is on point when it comes to identifying Zambia’s major economic problems, what I noticed however, was that the suggested solutions are very casual, vague and clearly inadequate. Take for example the following excerpt found on page 19 of the Revised 6th National Development Plan: 4.1 INTRODUCTION The positive economic trends at the macro level have not translated into improvement of the standard of living for the majority of Zambian people; in particular, job creation has not been commensurate with the gains registered from economic growth. Economic growth is a prerequisite for job creation, however, sectors that have contributed to this growth have not significantly contributed to job creation. For example, mining has made a key contribution to Gross Domestic Product (GDP)growth, Government revenue and export earnings, however, employs less than 2 percent of the working population. This failure to translate growth into improved peoples’ welfare and creation of job opportunities means that there are a number of constraints that must be addressed. Increasing employment will therefore, require strategies that will stimulate growth in sectors with the greatest job creation potential. Job and employment creation under this Plan will be achieved in three broad ways. Firstly, the envisioned growth itself will spur job creation. Secondly, labour-based public infrastructural development will create further jobs. Thirdly, reforms in the labour market will create the appropriate environment for employment generation by addressing bottlenecks that constrain absorption of the labour force such as mismatch between supply of skills and demand. Of cardinal importance is the issue of youth empowerment through prioritisation and mainstreaming of youth programmes in all sectors. From the excerpt, you notice very clear identification of the problem but the solutions advanced are feeble, unspecific and leave a lot to chance and hope, which is something we should not be doing when we are spending huge sums of money. I don’t have to be a prophet to predict that the solutions so far advanced will result in very few jobs compared to our current deficits. The other fundamental flaw I will point out is the erroneous thinking that a good performing economy will result in increased employment. On the contrary, the principle truth is that it is the quality and quantity of jobs that results in economic growth. That is first, you need to have as many Zambians productively engaged in activities that create wealth for the economy to grow. It is jobs that grow the economy and not a growing economy that gives you increased employment! Any economic model at variance with this truth is not sustainable and will be short-term. Which means our foremost preoccupation should be with organizing and investing into our economy in a way that quickly brings as many available Zambians aboard highly productive wealth creating activities. With this perspective, what you realize is the economic destiny of our nation is actually in our hands! The following are major ways wealth is created:
In this respect I can posit that one of our key failures as a nation has been the failure to frame and execute a vision that can practically deliver prosperity to the majority of Zambians in the quickest, most sustainable and most cost effective way possible. To a large extent, our prosperity models and measures of economic performance dismally fail to deliver for the ordinary Zambian. In recent years, our country has been receiving raving reviews for being amongst the fastest growing economies in the world and we have every right to give ourselves a pat on the back for that. The problem, however, is that our laudable economic growth has hardly brought any benefits to our masses resulting in very insignificant movements in our poverty statistics. Demographics in the rural areas have remained practically unchanged. But how can an economy grow as fast as ours has been doing and yet the majority of our citizens remain poor, one may ask? Well, in the case of Zambia, the explanation is quite simple. The major drivers of economic growth have been mining, construction and services. Unfortunately, the majority of these sectors are foreign controlled. With the boom in copper prices, we saw the rejuvenation of the copper mining industry driven by foreign investment. A lot of money was being made from copper mining but being made by foreigners in our country. As we speak, I personally don’t know of any mine worth talking about that is owned by indigenous black Zambians. We have seen quite significant infrastructural development in our country, but again, the major players happen to be Chinese and South African contractors. The common script now is; our local contractors tend to irresponsibly abandon their projects or do shoddy work. We have also seen the growth of shopping malls in our cities and towns but unfortunately, the majority of businesses operating at these fancy shopping outfits are foreign owned. The reality is that the sterling economic growth our country has been posting in recent years has been nothing but the rate at which foreigners have been minting money in our country with us Zambians as mere suppliers of cheap labor. Far from it, the foreign investor is not the bad guy here. We practically beg them to come here and give some of them deals they will never get in their countries in a thousand years! In most cases they find it hard to believe their fortunes when they come to our country. For sure they find plenty of natural resources and very favorable investment conditions just like we proudly advertise to them. They hardly believe their luck that we can allow them to take so much from our communities and all they have to do is to once in a while, play some cheap and choreographed PR stunts commonly going by the name of Corporate Social Responsibility (CSR). At the back of their heads they know exactly what they think of us but they simply play the, ‘zip your mouth and enjoy it whilst it lasts ‘ approach. A few of them, in their private conversations, are honest enough to marvel at our naiveté. We have cases were some of their, not so rosy opinions of us, have found themselves in the public domain. A case in point is the bragging of the Chairman of Vendetta Resources about how he took us for a ride by getting one of our biggest mines (KCM) in Africa for a song. Zambia’s Economic Strategy Going Forward When I talk about Zambia attaining prosperity, I am talking about prosperity that will filter through to the majority of Zambians very quickly and sustainably. Don’t get me wrong, I am not talking about socialist style hand-outs here. What I am saying is, for us to be proud of our prosperity, it has to be the kind of prosperity that will enable a grandmother in a remote place such as Shangombo enjoy such things as 3 healthy meals a day, decent accommodation with electricity, running water, a toilet inside, decent health services within a 1km radius and access to most of the commodities and services we urbanites routinely enjoy. I am talking about prosperity that will enable a child in the remote village of Nabwalya be able to go to a clean, electrified and well-resourced school within walking distance. I am talking about the kind of prosperity that enables a teacher that works at this school to live in an ultra-modern house and neighborhood with access to modern facilities right in Nabwalya village. I am talking about the kind of prosperity that will make it possible for an ordinary man skilled in basic agriculture, to earn K5,000 monthly employed as a farm worker. I am talking about prosperity that will bring dignity to our people. Foreign investors will never give us this kind of development because this is not their country and it is not their responsibility and neither is it in their interest. They are here to make money and everything else is incidental. This kind of prosperity will only happen when our capacity to generate wealth as Zambians rapidly broadens. Prosperity will only be sustainably available when wealth is being increasingly generated. The biggest short-coming with our current and past economic agenda is that it does not have the capacity to create major wealth. The agenda is more consumption oriented with the hope or assumption that economic growth and jobs will somehow result. To attain prosperity that will make a difference for the entire Zambia, it will take Zambians and nobody else, to embark on a path that seeks wealth creation first and foremost. It has to be a path that engages as many Zambians as possible in activities that generate wealth in the most efficient manner. Fortunately there are approaches that can be implemented immediately with almost immediate impact such that within 20 years, our nation will be greatly prosperous. The following table high-lights proposed investment vehicles that when embarked on and realized, will assimilate four million Zambians into a wealth creating machinery that will result in a minimum of 12 million Zambians living comfortable and high quality lives. # Proposed Investment Vehicle Quantity Average jobs/unit Total jobs 1 Agri Cities 10 101,000 1,010,000 2 Ranch Towns 10 67,500 675,000 3 Mining Towns 10 60,500 605,000 4 Border Towns 10 45,500 455,000 5 New Commercial Capital 1 270,000 270,000 6 Resort Towns 10 21,800 218,000 7 Steel City 1 104,500 104,500 8 Glass City 1 52,000 52,000 9 Business branches in other countries 1,000 30 30,000 10 Indirect Jobs 1 600,000 600,000 TOTAL JOBS 4,019,500 Population to be supported per job: 3 Projected population to be supported : 12 million Putting our money into investment vehicles summarized in table 1 will deliver packaged economic advancements and give us a new Zambia that will eventually be characterized by the following:
Sounds extremely ambitious right? Well forget about prosperity for the majority of Zambians without putting in place a national-wide wealth generating platform like the one proposed in table1. Without beating about the bush, there is just no way majority of our people will attain prosperity if we don’t have a plan for a national wide platform for Zambians to work and generate wealth. Zambians need to generate wealth for Zambians to ultimately enjoy prosperity. The only way forward is to establish investment vehicles that have the capacity to engage significant numbers of Zambians to produce wealth at high levels of productivity. Nothing else will do the magic. The cocktail of investment vehicles listed in table 1 gives us just that platform. The major part of this book is to detail the practicality of these investment vehicles. In perfect Capitalist theory, the expectation is that when a government creates an enabling environment and puts in place key infrastructure, investments and jobs will result. In an emergency scenario like ours where we have the majority of our people in poverty and without dignity, we cannot leave our destiny at the complete mercy of imperfect economic theories. By now, the entire world knows that though capitalism is a good principle, it is not perfect and left to its own vices; it always produces few very wealthy people and a poor majority. You think of the best capitalist nation you know and you will learn that only a small percentage of people in those nations enjoy the majority of the wealth. I subscribe to capitalism but to a kind of capitalism that considers a nation’s unique challenges and introduces specific interventions that accelerates wealth creation and better quality of life for a wider majority. I subscribe to the kind of capitalism that has made China, Singapore, South Korea, Taiwan, and Brazil wealthy nations. It is a fact and has been said over and over that Zambia, like many African countries, is blessed with vast natural wealth. It is therefore a moral scandal that the majority of Zambian citizens (60%) are perpetually poverty stricken in the face of this wealth. For decades, prominent and ordinary Zambians continue outshining each other as they try to sound knowledgeable by parroting the fact that our natural heritage such as fertile land and fresh water can result in a prosperous Zambia if well managed. For me, there is nothing more nauseating than seeing a headline in our private and public media such as “ AGRICULTURE CAN CONTRIBUTE TO MASSIVE EMPLOYMENT CREATION.” The thing is almost every Zambian now knows this and is therefore no longer impressed by such headlines. What Zambians are concerned with now is- what is stopping us from benefitting from our natural wealth and how can we effectively turn around the tables. Why do foreigners with access to capital seem to be benefitting more from our natural wealth than we the owners of the land?
There is nothing as frustrating as having millions of poor citizens and consistently hearing that your country is actually wealthy enough to avoid such a situation. So why is Zambia’s 10 million citizens ravaged by poverty when our nation is wealthy? Are our economic managers clueless morons or what? Or is it because we have corrupt and selfish political leaders who have no qualms about selling off our natural wealth to the highest foreign bidder? What if I told you that actually, our current economic system is designed to produce the masses of poor citizens as currently the case? What if i told you that the millions of poor Zambians is not an accident but intentional? Well, I don’t know who is effectively behind our present economic design and I won’t point fingers at anybody but what I can emphatically point out is, our current economic set-up and structure guarantees you the growing masses of poor citizens characteristic of our country. The low average household income that in turn, guarantees you poor diets, poor housing, health and generally poor quality of life is a function of our dysfunctional but intentional economic design. Imagine a typical poor five-member Zambian household residing in a rented ramshackle in Chibolya compound of Lusaka. The father is a grade 12 who did not have sufficient funds to pursue college education and he currently ekes out a living as a ‘highly paid’ mini-bus conductor earning about K1,500 every month. His wife is equally a grade 12 and to supplement the family’s income, sells food staffs as a hawker at a local market. Her monthly profits averages K1,500 bringing the total household income to K3,000 or $300. Now serious research indicates that a family in Lusaka needs about K4,500 for sufficient nutrition. The K4,500 ($450) does not include transport, medical, clothes, rent and school expenses. This means, from the word go, our Chibolya family is in trouble and needs an additional K1,500 just to bring their nutritional supplies to acceptable levels. Otherwise the family needs an extra K3,000 just to break even. A family needing K6,000 but only affording K3,000 monthly results in the many poverty stricken households representing over 60% of Zambia. Now what are the options open for this Chibolya family to increase their income by an additional K3,000? I won’t go into serious details but the obvious options include a better paying job for the father and more capital for the mother to generate more income. One would throw in to say, the father could eventually advance his education and get a better paying job. Well the problem is we have over 3 million Zambians looking for jobs as we speak and so finding a better paying job is just a nice fantasy. Though every year we hear hundreds of millions of dollars being secured to finance small scale businesses for Zambia and Africa, getting access to this capital is a toll order for an average Zambian plying their trade at our many markets. I usually wonder where these millions of dollars from donors are going whilst hard working Zambians are still stuck with lack of capital to grow their small businesses. Borrowing from our high interest charging commercial banks is conclusively a non-starter for 95% of Zambians. The thing is this; an average Zambia father and mother is more than willing to work and/or do business to provide for his/her family. The problem is he or she is operating in an environment that offers in-built obstacles to him/her accessing ideal opportunities for advancement. The result is and has always been that growth and advancement is cut off for the majority of our citizens. They continue-just surviving under harsh conditions. The Zambian economic system ensures they stay just where they are and that their offspring will equally continue on this path ensuring generational poverty. At a national level, our country secures and utilizes funds every year but does not spend funds in a way as to increase the wealth, employment and access to capital for small businesses. The interesting thing is it’s not because they can’t but they simply don’t. It is intended that way!! With annual GDP of about $27.7 billion and a workforce of 6.3 million people in 2015, our productivity stood at about $4,400 per worker per year. In Kwacha terms we are looking at K44,000 per annum or K3,666 per month. That is at the rate of K10 per US Dollar. If we took away 60% to cover expenses and return on capital, we remain with K1,222 as payable to each of the 6 million workforce every month. Now imagine a salary of K1,222 per month and you have to pay rent, pay for school fees, fuel, clothes and food for your 5 member family that reside in Kabulonga Suburbs of Lusaka. This explains why the majority of our citizens are so poor. As a country, we have not been generating enough value or wealth therefore we don’t have enough to go around. Our productivity levels are pathetically low compared to affluent nations. The following table gives you an idea of how Zambia compares with top 10 nations in terms of productivity.
1. Luxembourg $103,187 2. Switzerland $82,178 3. Qatar $78,829 4. Norway $76,266 5. United States $55,904 6. Singapore $53,224 7.Australia $51,642 8.Denmark $51,424 9.Iceland $51,068 10.San Marino $49,130 11. Zambia $4,400 At our current productivity levels, it does not matter which political party is in power, our citizens would continue in poverty. In simple terms, when you have 10 apples to share amongst 100 people, it doesn’t matter who is doing the sharing, there is not going to be enough for everybody. That’s the case Zambia finds itself in. At our current GDP, the government of Zambia will never be able to raise enough revenues from taxes for its operations. There is just not enough base to work with. That’s precisely one of the major reasons our government continues borrowing to sustain itself. For Zambia to begin experiencing significant positive shifts in the levels of wealth, our GDP levels have to grow beyond $100 billion per annum. In other words, as long as our GDP levels remain below $100 billion, poverty will remain rife in our country. If there is any Zambian out there claiming they can end poverty or make the lives of the majority of Zambians better without addressing our productivity and GDP levels significantly, that person must be jailed for perjury. As a nation, we need to produce enough wealth for there to be enough wealth for our citizens to enjoy. The low productivity level in Zambia are an interesting scenario because the truth is, man is actually naturally designed to out-produce his needs. What I mean is, given the very basic tools and inputs, a man working from the first day of the month to the last day of the month will eventually produce value that is far beyond what he needs as an individual for a comfortable life. For example, if you gave a healthy man land, a hoe, sufficient seed, fertilizer, pesticides and means of irrigation and he engaged in agricultural activities 6 hours a day for 1 year, the value of the resultant agricultural production will be way beyond what he requires as an individual for a comfortable life. He will therefore be able to support other people. If you went on and availed him a tractor, ploughs, harvester, automated irrigation system and other necessary mechanization, his production will literally make him an affluent man together with his family. This goes to prove the point that conscious planning and organization is at the heart of high productivity. In the average Zambian agricultural operation, we do things without regard to efficiency and level of productivity resulting in very low productivity thereby entrenching poverty in our nation. For Zambia to make significant strides we need to find a way to engage as many Zambians as possible to be part of economic activities but in addition, these people must be engaged in a way that results in significant productivity levels. When I closely look at the employment statistics in our country, I have come to a firm realization that our main problem is not unemployment. Ours is a problem of low productivity or what is commonly known as ; under-employment. According to official government statistics, our unemployment levels are only about 7.3 % or 600,000 unemployed Zambians out of a possible 6,3 million. It means we still have about 5.8 million Zambians engaged in some economic activity of one form or the other. If you follow ILO’s standard of employment that’s not that bad. According to ILO standards, employed people include all persons who performed some work (including work for at least one hour) for pay, profit, or family gain. From the available statistics as summarized in table 3, the majority of our workforce is in the agriculture sector. The problem is these people are generating insufficient wealth. It doesn’t help to have close to 3million Zambians engaged in agriculture but only contributing $4.4 billion dollars at a productivity rate of $1,477 per year per agro worker. But that’s exactly what has been Zambia’s situation. The majority of our people are engaged in agriculture but at scandalously low productivity levels. If these 3 million Zambians were working at productivity levels of $25,000 per person per annum, they would be contributing $75 billion towards our national GDP every year. So whatever we are going to do to create more wealth in our nation has to be something that will move productivity levels in our agriculture sector from the current $1,477 to $25,000 per worker. The good news is there are ways to achieve this and that’s what this book is about. It is very important to come to terms with the fact that there is no nation that has been able to achieve prosperity with low productivity. Unless you choose to be perpetual beggars always looking for alms on the international financial market, you need to generate the wealth for you to enjoy it. This is what we are going to do in Zambia and the next 20 years are going to be significant in this regard. It is also important to know that high productivity levels is something you plan for and is no accident. In economies where people are serious, they literally carry-out work studies to ensure each work is as productive as possible. For our case, we will commence by making sure that each of our key jobs in our investment vehicles is designed to give us adequate productivity. |
Mauden ShulaMauden Shula is Co-founder and the CEO for Jobs4Zambia (Jofozam Ltd). He is author of several books including : "Why I want to Employ one million People" and "Its Now Time For Zambia To Prosper". The two books contain the strategic agenda for Jobs4Zambia. ArchivesAdvocacy
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