Zambia Analysis 2011-12 Dec-Jan Web

December 2011 & January 2012 | ZMK 10,000.00

Budget analysis

How to make farmer inputs more effective

Mine conditions – are the Chinese really the worst?

Foreign policy missteps

The thinking person’s placeZambia Analysis

Zambia’spipe dream

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Why succeeding in copper fabrication isn’t so easy

Zambia Analysis, December 2011 & January 2012 | 3

Zambia’s 90-day workout

The PF’s famous 90 days are just about up. Predictably enough, the early rhetorical promises of development in 90 days have been replaced by sober reflections on how little can be achieved ‘overnight’, but what can we make of the PF’s first three months in power?

The government smartly went for some quick wins to convince people it was serious about its promises—reducing fuel prices, scrapping healthcare user fees, and restruc-turing income taxes a little in favour of low earners. The mining companies are going to foot a bigger tax bill to compensate—as they should—but nevertheless the evolving mining tax regime feels somewhat flimsy. The windfall tax issue refuses to go away. Royalties may be up but Mines Minister Wilbur Simuusa has said they could come down again if prices crash. This kind of wavering, as Zambia’s top economic blogger has pointed out, suggests an ill-conceived regime, fails to appreciate the importance of stability, and could even encourage non-compliance. Zambia needs a regime that will be stable and effective in the longer term, and the mines will be willing to cooperate if this can be achieved.

This sums up the main problem with the government’s start: a certain kind of ad hoc-ness of how things are done. As refreshing as his administration has been after the dog days of MMD rule, President Sata’s populist roots are clearly present in the way some policy is being patched together. We’ve seen out-of-the blue policy announce-ments and deals for more foreign financing, while some ill-considered appointments or near-appointments have tarnished a promising anti-corruption drive. The jury is out on whether this government will be able to create effective policies. Many things go into creating good policy: research and evidence, ideological vision, consultation and build-ing coalitions between interest groups to mention a few. But reflex decision-making on the hoof is not one of them.

If it’s sound policy Zambia needs, then we have some challenging and thought-provok-ing analyses this month.

First, on p. 8 an article stemming from World Bank and DFID research takes the se-ductive idea that Zambia should be adding value to its copper by making and exporting more copper semi-manufactures (wires, tubes, etc) and ducks it under a cold shower. ‘Where is your market?’ the article essentially asks, pointing out the challenges Zambia faces in being internationally competitive in this field. Zambia needs a well-worked out industrial policy to encourage its entrepreneurs to start making some of goods that it currently imports, slowly creating a local market for copper semi-manufactures.

Second, on p. 18, the Indaba Agricultural Policy Research Institute questions wheth-er fertiliser subsidies are really the best way to support Zambia’s farmers. Research has shown that Zambia’s acidic soils can render the fertiliser ineffective and many farmers are unaware of how to counter this. A more integrated approach to supporting farmers is needed, include more research and extension services. (continued overleaf)

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Editorial

4 | Zambia Analysis, December 2011 & January 2012

Contents

This issue December 2011 & January 2012

5 Notes

Cover Story

8 Pipe dream?Scrutinising Zambia’s prospects of developing its copper fabrication industry

Features

14 The PF plan for our pockets Isaac Ngoma reviews the 2012 budget

18 Getting more out of farmer input supportWhy subsidised fertiliser is not enough

22 New relations, old issuesSishuwa Sishuwa on the pitfalls of Sata’s foreign policy

25 Simply the worst? Barry Sautman and Yan Hairong challenge findings on labour practices in Chinese-owned mines

Arts | Books | Culture

28 Book Review: Beijing rulesChola Mukanga on Stefan Halper’s Beijing Consensus

30 Book Review: Emerging AfricaShankar Acharya on Steven Radelets’ new book

32 Rat tails and fairy talesCeire Sadlier at the Lusaka Playhouse

Write for Zambia Analysis

If you have something to say, why not say it in these pages?

We invite ideas and contributions of all kinds. Please contact the Editor: [email protected]

And third, on p. 25 we publish an article responding to the recent Human Rights Watch report that condemned conditions in Chinese-owned mines and plants in Zambia. The Hong Kong-based scholars Barry Sautman and Yan Hairong see this report as another sign of Western anti-Chinese bias. While acknowledging that conditions must be improved, they use mining casualty figures to show that the CNMC mines are no worse than oth-ers regarding safety, and they point to practical differences between mines to explain differences in labour conditions.

Whatever the truth about exactly who is worse than whom, the perception of Chinese indifference to workers’ travails is widely held in this country, and prob-ably not without reason—there is, after all, no smoke without fire. But the re-sponse must be to put out the flames of exploitation wherever they are found, not just where we think we will find them. As Sautman and Hairong suggest, fixating on the issue as a ‘Chinese problem’ could be counterproductive in terms of solving it. To be fair, the HRW report’s author Matt Wells is equally ready to acknowledge that the focus should not all be on China: ‘The issue...is not so much with Chinese companies, who will stretch the laws as far as they will go, but with countries that let their laws be stretched.’ So, at least we should all agree on this: that Zambian workers’ suffering is ultimately a Zam-bian problem, which the elected Zambian government must ensure is addressed properly, without bowing to either fear or prejudice.


Diary: December 2011

02.12–16.12

Anti Retroviral Man feature at the National Museum, Lusaka

10.12

Human Rights Day

10.12–19.12

2011 African Youth Chess Championships, Baobab College, Lusaka

15.12–17.12

Eighth Session of the WTO Ministerial Conference, Geneva, Switzerland

January 2012

08.01

South Africa’s ANC celebrates 100th anniversary

21.01–12.02

African Cup of Nations in Gabon and Equatorial Guinea

25.01–29.01

World Economic Forum Annual Meeting 2012, Davos-Klosters, Switzerland

Transparency International’s recently published 2011 Corruption Perceptions Index shows a slight improvement in Zambia’s scores this year. Zambia ranks 91st out of 182 countries around the world, compared to 101st out of 178 last year. Does this mean things have got better? Not really. The difference in score is explained by a methodologi-cal difference: the use of an additional indicator (from Political Risk Services International’s Country Risk Guide) that boosts Zambia’s score, when in many of the other indicators Zambia’s score actually went down. Of course, none of this takes any account of the recent change of government—next year’s score may be far more interesting in this regard.

Stray statistics

• The most common password used on the internet is ‘password’. The second most common is ‘123456’. (SplashData, reported in the Daily Finance)

• The cost of transporting a t-shirt made in China to Europe by container ship is 2.5 cents. (The Economist)

•Congo DR’s 2011 election required 4,000 tonnes of ballot papers. The Kinshasa ballot was a 56-page booklet of more than 1,500 candidates. (BBC)

•Over 100 million Chinese people became poor last month. Fortunately this is simply because the government increased the income level defining rural poverty from 1,196 to 2,330 yuan a year. (The Economist)

•One African woman made the Financial Times’ list of the Top 50 Women in World Business 2011: she was Olunfunke Iyabo Osibodu, head of the Union Bank of Nigeria. (FT)

Corruption Perceptions Index 2011

0 2 4 6 8

Botswana

Namibia

South Africa

Zambia

Malawi

Tanzania

Zimbabwe

Angola

Congo DR

2011 CPI score

Notes


The Millennium Challenge Corporation (MCC) is a US Government corporation which gives large grants to selected devel-oping countries to finance development projects. To be eligible for MCC ‘Com-pact funding’, countries must score above the median or absolute threshold in more than half of the MCC indicators covering three areas; ‘ruling justly’, ‘investing in people’ and ‘economic freedom’. In ad-dition, eligible countries must pass the ‘control of corruption’ and ‘democratic rights’ indicators. The indicators used are not assessed by MCC, but are drawn from third-party sources, such as the World Bank, IMF, Heritage Foundation, Freedom House, WHO, UNESCO and UNICEF. Eligibility is assessed annually in December.

Zambia’s results for the US fiscal year 2012 are shown here. As in 2011, Zambia scores well, passing in 17 out of 20 indica-tors The only failures are freedom of in-formation, child health and primary edu-cation expenditures. For MCC purposes, Zambia is being compared with other low-income countries, (defined by MCC as countries with per capita income of less than US$ 1,915, a higher cut-off point than is used by the World Bank). Zambia will therefore undoubtedly remain eligi-ble for MCC funding.

There are, however, some areas of concern. First, some scores have been de-teriorating over the last two years, even though they remain in the upper half of the scores for low-income countries, no-tably the control of corruption, political rights, civil liberties, government effec-tiveness and fiscal policy. Since the indi-cators were measured in most cases more than one year ago, these are the results of the previous MMD government’s policies, not the present PF government. Never-theless, they broadly indicate areas where

the PF government needs to take action.More seriously, Zambia fails on the

freedom of information and child health indicators. These indicators are new this year, so no comparison can be made with previous years. It also fails on primary education expenditures, but this seems to reflect non-availability of data.

For more information on MCC and its eligibility criteria, visit www.mcc.gov. For methodological details, see the Report on the Criteria and Methodology for Deter-mining the Eligibility of Candidate Coun-tries for Millennium Challenge Account Assistance in Fiscal Year 2012.

Note: Alongside the name of each indicator is the country’s score and percentile ranking in its income peer group (0% is worst; 50% is the median; 100% is best). The peer group median is represented by the blue dashed line in each graph.

Zambia remains eligible for MCC funding

Economic freedom

Regulatory quality: World Bank, Brookings WGI

-2

-1

0

1

2

2006 2007 2008 2009 2010 2011

Regulatory quality = 0.24 (69%)

-10

-5

0

5

10

2006 2007 2008 2009 2010 2011

Fiscal policy = -2.4 (54%)

Fiscal policy: IMF, WEO

Land rights and access: IFAD/IFC

0

0.5

1

2006 2007 2008 2009 2010 2011

Land rights and access = 0.641 (52%)

Access to credit: IFC

0

20

40

60

2006 2007 2008 2009 2010 2011

Access to credit = 52 (96%)

0

5

10

15

20

2006 2007 2008 2009 2010 2011

Inflation = 8.5 (33%)

Inflation: IMF, WEO

0

50

100

2006 2007 2008 2009 2010 2011

Trade policy = 82.3 (95%)

Trade policy: Heritage Foundation

0

0.5

1

2006 2007 2008 2009 2010 2011

Business start-up = 0.963 (79%)

Business start-up: IFC

Notes


0

10

20

30

2006 2007 2008 2009 2010 2011

Political rights = 25 (73%)

Political rights: Freedom House

Rule of law: World Bank/Brookings WGI

-0.5

0

0.5

1

2006 2007 2008 2009 2010 2011

Rule of law = 0.43 (80%)

Voice and accountabil.: World Bank/Brookings WGI

-0.5

0

0.5

1

2006 2007 2008 2009 2010 2011

Voice and accountability = 0.54 (68%)

0

10

20

30

40

2006 2007 2008 2009 2010 2011

Civil liberties = 33 (61%)

Civil liberties: Freedom House

-0.5

0

0.5

1

2006 2007 2008 2009 2010 2011

Control of corruption = 0.21 (73%)

Control of corruption: World Bank/Brookings WGI

-0.5

0

0.5

1

2006 2007 2008 2009 2010 2011

Government effectiveness = 0.06 (56%)

Governm. effectiveness: World Bank/Brookings WGI

0 20 40 60 80

100

2006 2007 2008 2009 2010 2011

Freedom of information= 61 (46%)

Freedom of Inform.: Freedom House/ONI/FRINGE

Ruling justly

Investing in people

Immunisation rates: WHO

50

70

90

2006 2007 2008 2009 2010 2011

Immunisation rates = 86.5 (59%)

Health expenditure: WHO

0

1

2

3

4

2006 2007 2008 2009 2010 2011

Health expenditure = 3.66 (73%)

Primary educ. expend.: UNESCO/National sources

0.00

2.00

4.00

2006 2007 2008 2009 2010 2011

Primary education expenditure = 0.21 (3%)

Girls’ primary education completion: UNESCO

0

50

100

2006 2007 2008 2009 2010 2011

Girls' primary educ. completion = 85.2 (73%)

Natural resource management: CIESIN/YCELP

0

50

100

2006 2007 2008 2009 2010 2011

Natural resources managment = 63.34 (63%)

Child health: CIESIN/YCELP

0

50

100

2006 2007 2008 2009 2010 2011

Child health = 5.1 (33%)

Notes


For years Zambia’s leaders have articulated a desire to add more value to the country’s copper. Unfortunately, precious little headway has been made in copper fabrication or in manufac-turing products that contain copper. Only a few companies are engaged in processing copper in Zambia today and together they employ less than 1,000 workers. Why has Zambia done so little to capture the additional economic returns that can be earned from fabricating copper, and what are its prospects for doing so in the future?

This article, based on a study conducted by the World Bank and DFID, uncovers the real difficulties Zambia would face in establishing a thriving copper fabrication industry. The most important constraints relate to the size of the local market for fabricated copper, and the disadvantages faced in competing in bigger markets further afield. Understanding these constraints is vital—otherwise, there is a real risk that policy-makers start pushing products that they think can work, instead of enabling markets and reducing costs so that markets can work.

Pipe dream?A recent study scrutinises Zambia’s prospects of developing its copper fabrication industry

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Economic Analysis


Constraints on Zambian copper fabrication

(1) Limited local or regional demand. The major source of demand for fabricated copper products is manufacturing, but Zambia’s manufacturing base is small—as is sub-Saharan Af-rica’s more generally—which translates into limited local and regional demand for copper semi-manufactures. Sub-Saharan Africa accounts for less than 1 percent of global consumption of the principal semi-manufactures. The total open market for all copper and copper alloy semis in sub-Saharan Africa (ex-cluding South Africa, whose market is largely self-sufficient) is around 10,000 tonnes a year.

In Zambia itself, the market is even smaller: Zambia’s usage of refined copper is less than 0.2 percent of the global total. The market for semi-manufactures in Zambia largely consists of the various items needed by ZESCO, telephone cable for Zamtel, signalling cable for the railways, various wire and cable items for the construction industry, copper strip and connectors for transformer manufacture and repair, and various castings and

engineering materials for the mining industry. In sum, local and regional demand is not sufficient to support a substantial Zambian copper fabrication industry any time soon. (2) Zambia cannot compete in markets further afield. Zam-bia’s location, a long way from potential significant market outlets, is a disadvantage. This is exacerbated by freight costs, logistical difficulties (particularly border delays and long lead times) and inadequate transport infrastructure. The Asian market is well served locally, and taking into account freight costs, Zambian exporters have no room for any profit margin to establish a foothold against local suppliers. The only way to get around this is to be capable of meeting a particular need better than local suppliers.

With improved logistics, perhaps the Zambian industry could engage in the South African market, but South Africa already has a well-established industry producing the full range of semi-manufactures and it is very competitive in terms of ef-ficiency, service and delivery. This, along with geographical re-alities, also puts it in a better position to service customers in export markets outside Africa (Figure 1 shows the cost advan-tage enjoyed by South Africa’s Palabora).

In the copper industry value chain, copper fabrication lies between copper production (e.g. the mining of ore and its refining into copper cathodes) and the downstream industrial users who use copper and copper alloys in manufactured products such as cables, electrical fittings and much else besides. In between, copper is fabricated into ‘semi-manufactures’ such as tubes, sheets, strips, rods, castings and, above all, wire.

110

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80

100

120

140

160

180

Copperbelt to Johnannesburg

Copperbelt to Durban Copperbelt to Dar Palabora to Durban Durbant to Asia

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Figure 1: Typical freight costs Sources: project research reports, interviews with companies

Economic Analysis


(3) The ability to source copper locally is not a major competi-tive advantage for the copper fabrication industry. This may seem counter-intuitive, but the price of copper is set by inter-national commodity exchanges and varies little throughout the world. Zambian fabricators buying metal at the refinery gate and selling their products regionally may be in a competitive position against non-regional suppliers, but as soon as Zambian semi-manufactures are exported to, say, Asia, that saving is offset by the transport costs that will have effectively been transferred from the cathode to the semi.

The world over, copper is usually fabricated closer to the mar-kets for copper products than to where copper is actually mined from the ground. The world’s large copper fabrication industries are concentrated in the industrialised areas of the world where there is local or regional demand for their output. So an ability to produce copper does not go hand in hand with an ability to fabricate it (see Figure 2).

Zambia is clearly not alone in lacking a major copper fabrica-tion industry despite the local availability of copper. The world‘s largest copper producer, Chile, has also not developed into a major fabricator on a global scale. It accounts for 34 percent of world mined copper and 17 percent of world refined copper, yet

its use of refined copper is less than 1 percent of the world total. Like Zambia, both its population (16.8 million) and its manufac-turing industry are small, and its economy is centred on natural resources. But Chile has successfully leveraged its resource base by establishing a competitive mining industry, ensuring the ben-efits of copper are channelled to the population, and encouraging diversification in industries with growth potential (horticulture, fisheries and tourism). Chile’s fabrication meets the needs of lo-cal industry and infrastructure, and little more. This example suggests that pinning hope for economic diversification on the copper fabrication industry, or even manufacturing as a whole, is not necessarily the most appropriate course of action for a major copper producer.

(4) Copper fabrication requires types of raw material not available in Zambia. Firstly, as a general rule, the fabrication industry prefers to use scrap, provided that there is a supply of

acceptable quality, and 37 percent of the copper used in fabrica-tion is derived from scrap metal. Scrap metal is derived from two sources: new process scrap from downstream processors of metal products—off-cuts, turnings, quality rejects and so on—and end-of-life scrap from obsolete copper-containing products.

Figure 2: Locations of copper production and use, 2008 Source: International Copper Study Group

0

2,000

4,000

6,000

8,000

10,000

Chile Peru Zambia Australia Canada Russia India Japan USA Brazil South Africa

China South Korea

Germany

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Refined copper use Refined production Mined production

Economic Analysis


Zambia, unfortunately, lacks sufficient quantities of scrap to sustain a major copper fabrication industry. Zambian scrap, which is probably about 1,000 tonnes a year, is mostly exported to South Africa.

Secondly, many copper products are made from copper al-loys and Zambia produces only a few of the other metals re-quired. For brass, bronze and copper nickel products, alloying materials such as tin, lead and zinc would have to be imported, which puts a land-locked country such as Zambia at a compara-tive disadvantage.

(5) Access to capital and skilled labour. Word class fabrication of copper and copper alloy semi-manufactures is capital inten-sive, not labour-intensive. Sophisticated machines need only a small number of workers. A continuous-cast wire rod mill with a throughput of up to 300,000 tonnes a year may require a team of less than 100 to undertake operations, maintenance, sales and administration. The know-how needed to set up and operate equipment requires highly skilled labour.

These characteristics pose problems for Zambia. Interest rates are high and without access to capital small indigenous firms would struggle to buy equipment, achieve critical mass, and manufacture to an acceptable standard. Labour productivity in Zambia is a concern, at least compared to higher-performing countries such as Kenya and South Africa.

(6) Wider business troubles. Deficiencies in the broader envi-ronment for manufacturing not only make it more difficult for copper fabrication businesses to start up and expand but also make it difficult for other types of manufacturer—the users of fabricated copper products—to thrive. There are three main issues.

First, infrastructure: the problems need not be rehearsed here, but there are shortcomings in Zambia’s transportation, en-ergy and telecoms infrastructure. Improving these could increase competitiveness. It should also be remembered that not only do infrastructure improvement projects enhance the economic life of the country, but many are also copper-intensive.

Second, entrepreneurship. Zambia is overly reliant on im-ports, especially from South Africa. Until more Zambian entre-preneurs start asking ‘Can’t we make this product here?’ a decent manufacturing base cannot emerge. The entrepreneurship which does exist in Zambia is directed more at trading opportunities than at manufacturing. Changing this will take time, educa-tion and leadership, but the development of entrepreneurial ap-proaches has happened elsewhere in a relatively short period of time, especially in South Asia, and there is no inherent reason why they cannot develop here in the same way.

Third, industrial policy. A major feature of recent industrial policy is the Multi-Facility Economic Zones (MFEZs) introduced by the last government to promote the manufacturing industry. Unfortunately there has been a lot of confusion surrounding their exact purpose and execution. Ideas for an improved indus-trial policy are summarised at the end of this article.

Fabricated benefits? Given these constraints, the potential for copper fabrication in Zambia appears modest. What is more, even if Zambia’s copper fabrication were to develop it may not be able to provide the ben-efits of jobs and prosperity that the country is looking for.

First, because internationally-competitive fabricating opera-tions are not labour-intensive, they would not make significant inroads in Zambia’s employment targets. Second, Zambia is al-ready dependent on copper for the bulk of its export earnings, and more copper fabrication—which is linked to the same de-mand-cycle as refined copper—will only increase Zambia’s expo-sure to copper price volatility and defeat the purpose of diversi-fication. Moreover, producers of refined copper have a market of last resort (a London Metal Exchange warehouse in Singapore or Dubai), so they can always receive some value for their product, while fabricators have no such luxury: in a downturn they must quickly adjust their production to match declining demand. Fi-nally copper fabrication merely increases the focus of the econo-my on copper, rather than diversifying it into other areas which offer development opportunities.

Third, margins in copper fabrication are lower than in copper mining and refining, and even world-leading fabricators do not earn high margins. The scale of profit margins in copper fabrica-tion is altogether different from mining, as are the risks. Com-pared with mining, copper fabrication requires modest capital investment, but the margins are slim (see Table 1).

Mainstream fabricated metal products require a high level of capacity utilisation and throughput to generate sufficient in-come. More sophisticated products, which require more work-ing, quality control and consistency, offer a bit more scope for enhancing margins.

Large capacity wire rod mill

Oxygen-free high conductivity rod

Cathode from ore

Costs $106 $137 $3593

Profit $13 $68 $3070

Table 1: Relative costs and profit margins per tonne

Economic Analysis


Ways forward

It is unlikely that significant new demand for fabricated copper products will emerge domestically or regionally in the short- or medium-term. Domestic demand will remain limited because of Zambia’s lack of competitiveness in manufacturing generally. Regional markets are growing, but from a small base, and South Africa is a formidable competitor. In short, the current market prospects do not justify a significant expansion of Zambia‘s cop-per fabrication capacity.

There may be scope for marginal expansions to existing ca-pacity. The limited number of users of copper semi-manufactures in Zambia may wish to source products locally in order to reduce their dependence on imports (which are subject to slow border clearance). Local entrepreneurs might also cater to small, local needs on an artisanal scale, but these are largely scrap-based rather than cathode-based. Greater use of copper products in Zambia and the region in the construction industry—for exam-ple using copper pipes for plumbing rather than the more com-mon galvanised iron or plastic—could also help build domestic demand for copper products. But together these will not amount to a substantial market. Even these opportunities could be lim-ited if the need is for products which require inputs of scrap and other metals rather than pure copper. In addition, highly com-petitive industries in South Africa in particular, and perhaps in India, China and elsewhere, will be prepared to seize any market

opportunities that arise. New market opportunities in non-elec-trical applications are likely to lead to increased imports before any import substitution by local manufacturers.So what is the most effective way to encourage copper fabrication over the longer term? Aiming high straightaway—for interna-tional large scale fabricating industry—would pose major chal-lenges in how to access a customer base and achieve a competi-tive edge and profitability. Instead, the industry must be helped to crawl before it can run. The immediate strategy should be to encourage investment in manufacturing components and spares, especially in Copperbelt clusters, which could create a market for fabricators. The next step would be to encourage some further low-level activity that caters for local needs, gradually expanding into small-scale competitive niche production based on identi-fied market opportunities. These steps should be helped along by measures to improve access to finance, create awareness of market opportunities, and improve infrastructure in light indus-try areas.

The government should also focus on attracting manufactur-ing investment both from inside and outside the country. For this, five main changes are required:

1. A cultural shift away from import dependence2. More availability of affordable, long-term capital

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Economic Analysis


3. Investment in industrial and transport infrastructure4. Currency stability5. Clear and realistic industrial and economic policies delivered

by an efficient administration.

Above all, Zambian policy-makers should understand the importance of the market in industrial development in a lib-eral economy. Changing the place of industrial manufacturing means addressing the market end of the value chain.

In addition, there should also be greater cooperation be-tween industry and government, more support for start-up businesses, and an industrial policy comprising ten key elements:

1. Recognise the inherent limitations: a land-locked coun-try with a small population—but at the heart of a sizeable region

2. Identify realistic targets3. Identify which manufacturing sectors to prioritise4. Create an attractive inward investment climate but en-

courage local participation and look for partnership opportunities

5. Assure reliable power6. Reduce road and rail transport costs and times7. Improve telecommunications8. Address technical skills gaps by vocational education and

technical training—retain skills rather than export them9. Incentivise improved labour productivity10. Understand what is happening—more and better data is

needed, and the International Copper Study Group could help in this regard.

None of these changes will be achieved in the short-term and none will immediately change the nature of Zambia’s in-dustry and economy, but they will lay the groundwork for a new approach that could one day unlock potential that Zambia has to offer.

This article was adapted especially for Zambia Analysis from DFID and the World Bank’s June 2011 report, What is the potential for more copper fabrication in Zambia? The project was led by Marie Sheppard and original research was conducted by Sunil Sinha and Simon Payton.

For a full version of the report, contact the Sipiwe Chihame at the World Bank, Zambia ([email protected]). For a summary version, see http://tinyurl.com/copper-fabrication (pdf, 1Mb).

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tEconomic Analysis


The electoral victory of the Patriotic Front (PF) was accompa-nied by high expectations of economic change, so the PF’s first budget tells us about how it plans to meet the many promises it made in opposition. Putting more money in our pockets sounds like a good idea, but in reality there are always balancing acts and trade-offs to make in economic policy. As Finance Minister Alexander Chikwanda said in his speech, the government has to focus on both ‘social justice and equity’ and ‘sustaining mac-roeconomic stability’. They also need to ‘carefully balance the demands of our citizens for lower taxes against the demands for higher spending, especially on poverty reducing programmes’. The challenges of poverty (especially in rural areas) and unem-ployment are undeniably huge, so the PF needs to show it can maintain stability and bring some feel-good factor in the short term, while bringing development and poverty reduction in the longer-term.

The proffered means for achieving all this are familiar enough: ‘diversifying the economy, enhancing productivity, pro-moting employment opportunities and pursuing sound financial management while investing in supportive infrastructure’. Ef-fecting these changes is a slow and difficult task which the budget can only begin to help encourage. Many of the targets for the financial year ahead bear close relation to the MMD projections from 2011. On the macroeconomic front, these are to:

1. Achieve real Gross Domestic Product (GDP) growth of above 7 percent (up from 6 percent in 2011)

2. Attain end-year inflation of no more than 7 percent3. Limit overall fiscal deficit to 4.3 percent of GDP and domes-

tic borrowing to 1.3 percent of GDP4. Maintain gross international reserves of at least four months

of import cover.

The fiscal policy objectives are also more of the same:

1. Increase domestic revenues to 19 percent of GDP (up from 18 percent in 2011)

2. Limit domestic borrowing to 1.3 percent of GDP (down from 1.4) and net external borrowing to 3 percent of GDP (up from 2 percent)

3. Commit at least 50 percent of the budget to social sectors and infrastructure development

Some of the most telling changes are to be found in the tax regime. Chikwanda set out his desire to ‘rebalance the burden of taxation, providing tax relief for those who have borne a dis-proportionate burden in the past while at the same time gener-ating more resources from those areas of the economy that have benefited most from our strong macroeconomic performance.’

So who are the winners and losers in this rebalancing act? For formal sector workers on low wages there is welcome relief. The Pay-As-You-Earn tax-free income threshold increases from ZMK 1m to ZMK 2m, while the income brackets taxed at 25 percent and 30 percent a month each increase. This is a bold move that should increase these people’s disposable income and so stimulate consumption or saving.

In the business world, bankers got a tax reduction from 40 to 35 percent; the aim is to encourage them to lower the high lend-ing tax rates which contribute to the high cost of doing business. Farmers’ corporate tax has also reduced from 15 to 10 percent in the hope that it will encourage higher productivity and acceler-ated investment in the sector. We only hope this will mean not more maize growing but rather crop diversification.

The sector that loses most is mining, with mineral royalty tax from increasing from 3 and 5 percent to 6 percent across the

The PF plan for our pocketsIsaac Ngoma reviews the 2012 budget

Budget Analysis


board for base metals, energy minerals, and gemstones. This rev-enue-based tax can means more tax is paid, whether profits are made or not, but the mining companies will at least be pleased to have avoided the windfall tax.

On the spending side, education and health both get more money but a similar share of the budget as before. A notable ad-vance is the removal of user fees for primary healthcare serv-ices, which should widen access. Big investments are being made in the energy and road sectors, which will have great economic spinoffs if properly managed.

While comparisons will be made between the PF’s first budget and the MMD’s last, any meaningful judgement on what this all means lies far ahead. Implementation is always the bottom line. From what we know now, the PF has made a competent start. The fundamental budgetary objectives are acceptable and reassuring as long as there is prudent economic management and commitment to fiscal discipline. The hand of

the MMD government is still very much visible, but this is no bad thing for continuity’s sake. We may learn a lot more about the PF’s direction from the 2013 budget—and in how 2012’s is implemented. For now, let us wait in anticipation. Our pockets are open in readiness.

Isaac Ngoma is President of the Economics Association of Zambia.

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Budget Analysis


Allocation (ZMK billions)

% of budgetAllocation (ZMK billions)

% of budgetAllocation (ZMK billions)

% of budget

2012 2011 Change

General Public Services Executive 8,304.8 30.0% 5,855.5 28.5% 2449.3 1.5%

Executive 856.1 708.9 147.2

o/w Grants to local authorities 257.1 146.2 110.9

Constituency Development Fund 120.1 108.0 12.1

Legislation 594.7 423.3 171.4

General government services 7,400.5 4,478.5 2922.0

o/w Domestic debt interest 1,650.1 1,170.7 479.4

External debt 1,416.8 494.6 922.2

Compensation and awards 200.0 - 200.0

Elections - 244.6 -244.6

Centralised administrative services 362.5 362.5 0.0

Defence 1,648.5 6.0% 1,485.8 7.2% 162.7 -1.2%

Public order and safety 1,017.4 3.7% 919.0 4.5% 98.4 -0.8%

Economic affairs 8,120.0 29.3% 5,252.0 25.6% 2868.0 3.7%

General economic, commercial and labour 266.1 248.9 17.2

o/w Empowerment Fund 40.0 76.0 -36.0

Agriculture forestry and fishing 1,698.0 1,231.6 466.4

o/w Farmer Input Support Programme 500.0 485.0 15.0

Strategic Food Reserve 300.0 150.0 150.0

Food Security Pack 25.0 15.0 10.0

Fuel and energy 1,369.7 355.8 1013.9

o/w Kafue Gorge Lower power project 864.0 - 864.0

Rural electrification programme 437.1 314.3 122.8

Transport 4,658.8 3,312.0 1346.8

o/w roads 4,481.0 3,098.0 1383.0

Communications 39.0 15.9 23.1

Tourism 52.6 63.3 -10.7

Environment protection 31.8 0.1% 121.3 0.1% -89.5 0.0%

Housing and community amenities 352.9 1.3% 646.6 3.2% -293.7 -1.9%

o/w water supply and sanitation 150.3 555.0 -404.7

Health 2,579.9 9.3% 1,772.9 8.6% 807.0 0.7%

o/w infrastructure development 389.3 152.4 236.9

Recreation, culture and religion 136.9 0.5% 108.0 0.5% 28.9 0.0%

Education 4,850.5 17.5% 3,828.8 18.6% 1021.7 -1.1%

o/w infrastructure development 796.4 444.2 352.2

Social protection 655.6 2.4% 547.5 2.7% 108.1 -0.3%

o/w public service pension fund 474.2 358.6 115.6

Social cash transfer 55.0 42.7 12.3

GRAND TOTAL 27,698.3 100% 20,537.4 100% 7,160.9 0.6%

Table 1. Expenditure, 2011 and 2012 budgets

Budget Analysis


Table 2. Resource envelope, 2011 and 2012 budgets (ZMK billions)

2012 2011 Change

Total tax revenues 19,267.7 15,230.1 4,037.6

Income tax 10,271.5 7,800.8 2,470.7

Company income tax 3,264.4 1,337.1 1,927.3

PAYE 4,216.2 3,710.6 505.6

Withholding & other 909.5 894.7 14.8

Mineral royalty 1,881.4 1,858.4 23.0

Value added tax 4,723.6 3,998.8 724.8

Domestic VAT 392.0 828.5 -436.5

Import VAT 4,331.6 3,170.3 1,161.3

Customs and excise 4,272.6 3,430.5 842.1

Customs duty 2,108.6 1,674.5 434.1

Excise duty 2,164.0 1,756.0 408.0

o/w Fuel Levy 460.6 313.8 146.8

Non-tax revenues 708.3 539.0 169.3

Fees & Fines 465.0

Exceptional 216.2

Medical levy 19.2

Dividends & on-lending 7.9

Domestic borrowing 1,324.3 1,219.8 104.5

Total domestic revenue and financing 21,300.3 16,988.9 4,311.4

Total foreign grants and financing 6,398.0 3,548.5 2,849.5

Grants 1,894.4 1,587.7 306.7

General budget support 541.4 586.6 -45.2

Sector budget support 219.2 1,001.1 -781.9

Project grants 1,133.7 - 1,133.7

Foreign financing 4,503.6 1,960.8 2,542.8

Programme loans 2,652.0 1,762.0 890.0

Project loans 1,851.6 198.8 1,652.8

TOTAL REVENUE AND FINANCING 27,698.3 20,537.4 7,160.9

Budget Analysis


Zambia has enjoyed two consecutive record-setting years of maize production that coincided with massive increases in distribution of subsidised fertiliser through the Farmer In-put Support Programme (FISP). Research has demonstrated, however, that the primary cause of the growth in production has been unusually favourable weather, not increased fertiliser use. Using the 2006, 2007 and 2008 harvests as the baseline, 15 percent of the additional maize production in 2011 is the re-sult of increased fertiliser use, while 42 percent is attributed to differences in weather.1 Much of the remainder is attributable to the activities of the Food Reserve Agency (FRA) through incentives for the expansion of maize farmland. However, the government’s expenditures on FRA have primarily gone to 30 percent of the farmers in Zambia who sell maize (see

‘Mountains of Maize, Persistent Poverty’ in last month’s issue of this magazine).

Moreover, consecutive surplus harvests have masked the fact that Zambian land productivity falls far short of the stand-ard for other surplus producing countries such as South Af-rica, Argentina and the US (see figure). Despite the dramatic increase in the use of FISP fertiliser in recent years, the maize yield in Zambia has been stagnant for decades. The fact remains that most small farmers still do not produce enough to feed their own families, and very few sell any substantial surplus.

As the newly elected government forms agricultural poli-cies that will guide investments over the next 5 years, it might be useful to ask why input subsidies have not increased pro-ductivity more effectively.

Getting more out of farmer input supportAnalysis by the Indaba Agricultural Policy Research Institute shows there is more to supporting farmers than subsidising fertiliser

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Ineffective inputs on acidic soils

Criticisms of Zambia’s input programme often revolve around issues related to corruption and untimely input deliveries. Much less attention is given to fact that inputs other than fer-tiliser could also be considered as a means to increasing pro-ductivity. Perhaps surprisingly, if subsidies were to focus on a single input alone, fertiliser may not be the most appropriate technology for many Zambian maize fields.

At the most sophisticated level of commercial farming, minute variations in soil characteristics and other agronomic conditions dictate that the appropriate input technology can vary from one corner of a field to the other. As this article is being written, there are commercial farmers (most likely even some in Zambia) using on-the-ground photo sensing and infrared technologies to adjust input mixes and optimise input use on their maize fields with great precision. It is obvi-ously unrealistic to expect the government to do this for all the farmers receiving input subsidies, but this is the level of efficiency with which small surplus producing farmers will increasingly need to compete, and policy-makers could ad-dress at least one glaring disadvantage they face. Specifically, a forthcoming study by the Indaba Agricultural Policy Re-search Institute demonstrates that soil acidity is a substantial limiting factor in Zambian maize production. This is not a new revelation, but the fact that nothing is being done about

it continues to impede most Zambian farmers’ yields and livelihoods.

Zambian soil is, for the most part, acidic by nature due to the parent material from which it was derived several thousand years ago and the pattern of rainfall prevalent in this part of the world. Over the past few decades, however, concentrated crop portfolios and extensive fertiliser use have worsened the problem. Acidity on maize fields affects yield both directly, through the impact it has on the plants them-selves, and indirectly, through the impact it has on fertiliser’s effectiveness. Basal fertiliser in particular, which contains pri-marily phosphorus, is vulnerable to nutrient ‘lockup’ in the acidic soils that prevail throughout Zambia, rendering it of little use to plants.

When phosphorus is exposed to certain other elements it chemically bonds with them, forming what is known as a phosphate. Not all phosphates are alike, however, and in terms of phosphoric fertiliser application, the type that is formed is highly correlated with soil acidity. On acidic soils, phosphorus in basal fertiliser converts to aluminium and iron phosphates, which are unavailable for plant consumption. On neutral and semi-neutral soils, phosphorus will convert to mono- and di-calcium phosphates that are readily consumed by the plant. This is important because phosphorus is a neces-sary element in the processes of storing the sun’s energy and plant growth.

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Figure 1: Maize yields in Zambia versus global exporting countries (1961–2009) Source: FAOSTAT, accessed July 2011

Policy Analysis


Table 1 shows the estimated average marginal yield response to basal fertiliser application in Zambia over a range of potential Hy-drogen (pH) levels (pH is the standard unit of acidity measurement where lower values indicate more acidity) and the distribution of fields in the nationally representative sample of the more than 7,000 fields used to measure them. In the pH range below 4.4 (i.e. in very acidic soils) yield response to basal application is just 2.18 incremental kilograms of maize per kilogram of fertiliser. Response is slightly higher over the pH range from 4.4 to 5.5, where the aver-age effect is 3.81 kg/kg. Above the 5.5 pH level (i.e. in semi-neutral soils) yield response increases considerably, more than doubling to 7.88 kg/kg, on average.

There is a vast body of agronomic literature on the limited ef-fectiveness of phosphoric fertilisers on maize in acidic soils that cor-roborates these findings. The unfortunate fact for Zambia is that the overwhelming majority of all maize fields (98 percent of those used in the study generating these estimates) are in areas where most soils are acidic and where basal fertiliser is relatively ineffective.

In his first speech to the new Parliament on 14 October, Presi-dent Sata stated that his government would continue input subsidies ‘with a view of enabling farmers to be weaned-off the programme’ while continuing to use fertilisers they will then purchase commer-cially. At these response rates, however, this vision is unattainable because using fertiliser without mitigating soil acidity is only profit-able when the fertiliser can be purchased at subsidised prices.

Changing the strategyThis calls for a shift in the design of agricultural productivity poli-cies, away from fertiliser subsidies and towards developing a more integrated programme. This may include fertiliser subsidies along with other inputs and agronomic practices, but must allow for sus-tainable and profitable crop intensification, even after the subsidies are withdrawn. That a policy shift is necessary is clear, but how new investments should be prioritised is less so. Among other things, designing and implementing new programmes will require signifi-cant research and extension.

The Zambian Agricultural Research Institute (ZARI) is the most logical place for this research to take place. The results of the study mentioned above were shared with several researchers and officials at ZARI. All agronomists and officials interviewed were fully aware of the fact that acidity affects the productivity of both maize plants and the fertiliser applied near them, and the fact that most Zambian soil is acidic. Indeed, Zambian agronomists even have working theories on how to solve the problem.

In the opinion of senior ZARI researchers, one approach is to develop acid-resistant seed varieties that are specifically de-signed to prosper on Zambian soils. There are, however, very limited resources dedicated to such endeavours. According to one official, the budget allocated to improved plant development for all of Zambia is less than ZMK 0.5 billion annually and the laboratories tend to receive less than half of that. The remainder is frequently re-allocated to either FISP or FRA.

That said, additional research might not be necessary to improve yields in the short term because ZARI has generated Zambia-spe-cific knowledge that has never been fully exploited. It is known to agronomists (and commercial farmers), for example, that lime ap-plication is the most direct management practice to solve the prob-lem of soil acidity. Certain types of lime even have the added benefit of adding calcium and magnesium (useful elements) to the soil, while neutralising manganese and aluminium (harmful elements).

If Zambian officials are aware of both the acidity problem and at least one potential solution to it, why do smallholders not at-tempt to manage their soil’s pH? (Less than 2 percent of the study’s sample applied lime, and those who did applied at just 5-10 percent of the recommended rate, on average). According to officials, there are two primary constraints. First, the cost of getting the appropri-ate amount of lime on to the field is high. The unit price of lime itself is relatively low (the retail price is approximately 10 percent of that of basal fertiliser), but ZARI application recommendations are 1–2 tonnes per hectare (5–10 times greater than the recommended basal fertilisation rate). The cost of moving that quantity of lime has

Soil pH 3.1–4.3 4.4–5.4 5.5–7.1

Kgs maize per kg basal applied 2.175 3.813 7.876

% of maize fields nationwide in this category

51% 47% 2%

Source: FSRP/CSO Supplemental Survey data, 2004 & 2008 and authors’ calculations.

Table 1: Average yield response to basal fertiliser in Zambia over soil

acidity ranges

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Policy Analysis


been prohibitive. For example, while a 50 kg bag of lime may cost ZMK 17,000 at the retailer, officials estimate the cost at the farm gate can be as high as ZMK 80,000 in more remote areas. If this is true, distributing sufficient lime would indeed be twice as costly as distributing the current amount of basal fertiliser. That said, ZARI has experimental results demonstrating that lime alone can more than double yields on acidic soils, while phosphoric fertilisation alone has almost no impact. In short, the added benefit of distrib-uting lime would almost certainly outweigh the added cost. Unfor-tunately, these results have never been widely published.

The second constraint is the lack of farmer awareness regard-ing the negative impacts of soil acidity and the mitigating effects of lime application. There was a brief period during which the Pro-gramme Against Malnutrition (PAM) included lime in the package of goods distributed to its beneficiaries. Not realising the potential benefits, or in some cases believing lime would damage their soil, many recipients either disposed of their lime or mixed it with water to use as paint for their houses.

Low awareness is a surmountable hurdle but, at current budg-et allocations, extension officials claim they are not adequately equipped to convince farmers to shift input strategies. For exam-ple, ZARI has produced ‘production guides’ for several crops, in-cluding one for maize which discusses the importance of liming. Funding, however, has limited production of these guides to about 2,000 copies per crop. In a nation of nearly 1,500,000 small farm-ing households, this is staggeringly inadequate. That said, extension officials claim that guides alone are not sufficient to change behav-iour. On-the-ground evidence will be necessary, they say, through example plots that demonstrate the benefits of soil pH manage-ment over several years. Resources for maintaining such plots have not been allocated.

Officials estimate that one plot per District Camp would suffi-ciently sensitise farmers about the benefits of managing pH. There are roughly 1,700 such Camps in Zambia, each with an extension officer already in place. Roughly half of them are in areas where highly acidic soil is prevalent. By official reckoning, the additional cost of installing and managing each demonstration plot would be ZMK 2.5–5 million a year. A pilot programme of 100 Camps over three years would thus cost less than one percent of the govern-ment’s allocation to FISP in 2011 alone. Managing one demonstra-tion plot in every one of the 800 Camps where soil acidity is the worst would cost, at most, ZMK 4 billion a year. This is less than the ZMK 5.2 billion allocated to the annual agricultural show in 2011, a three-day event held in the capital which, incidentally, is partly a farmer outreach programme.

Liming, of course, is not the only solution to the productivity limitations of acidic soil. For example, it has been shown that apply-ing small bands of fertiliser very near, around or under the seed at

the time of planting makes phosphoric fertilisation more effective in acidic soil. This is known as ‘banding’ application, as opposed to spreading fertiliser evenly over the entire field (‘broadcasting’) as is commonly practiced.

Private firms in developed countries produce phosphorus-en-hancing fertiliser supplements that alter the soil chemistry near the fertiliser to protect it from becoming unavailable to plants. These fertiliser supplements have been tested extensively on US soils where they have been found to increase yields by 15–20 percent. The benefits may be even greater on Zambia’s more acidic soils.

Increasing the land productivity of small holders is an ob-tainable goal for Zambian policy-makers. Results from the study discussed here show that it will be important for new policies to acknowledge that there are potentially much more effective input alternatives to fertiliser alone. Acidity-mitigating measures could be taken to improve yields meaningfully for the first time in dec-ades. This may be through tailored application methods, the use of supplementary inputs such as lime and phosphorus enhancers, or some combination of pH mitigation and management practices. The optimal prescriptions are unknown and finding them will re-quire investments in agronomic research specific to Zambia’s agri-cultural systems.

On the other hand, it is clear that uninformed subsidy policies will not succeed in producing long-term economic growth. On 3 August 2011, shortly before becoming Vice-President of Zambia, Guy Scott wrote openly in his column in The Post newspaper about the need to improve and diversify the input subsidy programme. We wholeheartedly agree. In fact, there is a need to revise the set of productivity enhancing policies as a whole. Addressing the issues related to soil acidity and allocating more resources to agricultural research and development would be a good start.

The Indaba Agricultural Policy Research Institute is a local institute dedicated to enhancing the public’s understanding of agricultural policy issues in Zambia. Indaba Institute members William Burke, Thomas Jayne and Chance Kabaghe contributed to the preparation of this report.

This article draws on results presented in: W. J. Burke. 2011. Determinants of maize yield response to fertiliser application in Zambia: Implications for strategies to promote smallholder productivity. PhD dissertation. Department of Agricultural, Food, and Resource Economics, Michigan State University. East Lansing, Michigan.

1 Figures according to N. M. Mason, W. J. Burke, A. Shipekesa, and T. S. Jayne, “The 2011 Surplus in Smallholder Maize Production in Zambia: Drivers, Beneficiaries, & Implications for Agricultural & Poverty Reduction Policies,” Lusaka: Food Security Research Project Working Paper No. 58, 2011. Downloadable at: http://aec.msu.edu/fs2/zambia/wp58.pdf

Policy Analysis


New relations, old issuesSishuwa Sishuwa on the pitfalls of the Sata government’s approach to foreign policy

It is nearly 100 days since Michael Sata assumed Zambia’s high-est office. While the first months of his rule have been eventful on the domestic front, foreign policy is another matter alto-gether. For example, the government’s response to NATO’s ac-tivities in Libya, the death of Muammar Gaddafi, and the mat-ter of recognition of the National Transitional Council was a deafening silence. At home, Sata’s first public appointment with a foreign representative was with the Chinese Ambassador to Zambia. One could have interpreted this decision as a signal that a New Look policy towards Beijing was in the offing. But Sata has since moved to quell such thoughts by meeting and assuring top American and British officials that they too have an important position in his government.

It is difficult to know what really drives the new govern-ment or what it stands for when it comes to foreign policy. The appointment of outspoken and labour-oriented Chishimba Kambwili as Minister of Foreign Affairs has not helped the situation. The choice surprised many analysts; the position is ordinarily reserved for an experienced and mature figure with a deep understanding of foreign policy issues. In spite of his ora-tory gifts and other strengths, no one can accuse Kambwili of possessing such qualities. The appointment suggests that Sata does not rate foreign policy matters very highly among his pri-orities, at least for now. Of course, the President may advance the excuse that his choice was constrained by the scarcity of suitable candidates within the PF pool. But he could have easily found qualified and experienced Zambians for the position if he was serious enough about it to rise above partisan politics. But the PF’s campaign message prior to the elections focused largely on domestic issues, so it is hardly surprising that foreign policy issues seem to be secondary in terms of the new govern-ment’s priorities.

Without attempting to comprehensively unravel the enigma

of the Sata’s foreign policy, this article looks at two episodes in order to make some sense of his approach as well as to high-light some of its pitfalls. The first was his refusal to travel to Malawi on account of having been deported from that country in March 2007. The second was the decision to apologise to Angola over the MMD’s dealings with Jonas Savimbi’s rebel Na-tional Union for the Total Independence of Angola (UNITA).

Taking it personallyOn 15 March 2007, while still in opposition, Sata landed at Malawi’s Chileka International Airport and was immediately arrested. The PF leader was detained at Blantyre Police Sta-tion for over eight hours before he was unceremoniously and embarrassingly driven to Mwami border post by immigration officers. His passport was confiscated and only given back to him upon arriving at the border near Chipata. This was in spite of the fact that Sata had travelled to Malawi by air and had a return air ticket. To crown it all, the future Zambian President was deported, declared a prohibited immigrant forthwith and warned that he would be arrested if he entered Malawi while the deportation order was still in effect. Eager to know why he had been arrested and deported, Sata engaged a local law-yer and took the Malawian government of President Mbingu wa Mutharika to court. The matter is still in court today and the Malawian government has yet to furnish the now Zambian President with reasons for what happened.

Following his election as President of Zambia in September, Sata demanded a public apology from the Malawian govern-ment over his unexplained deportation. He refused to attend the Common Market for Eastern and Southern Africa (COME-SA) Heads of State summit that was held in Malawi from 14 October, arguing that he could not travel because, legally, the

Foreign Policy Analysis


deportation order was still in effect. To show that his govern-ment is not against Malawi per se, however, President Sata sent Vice-President Guy Scott in his stead.

In the aftermath of the meeting, the Malawian government revoked the deportation order and stated that Sata was free to enter the country and would be accorded the status due to any head of state. But Sata has stood firm, insisting that Mutharika, renowned for his arrogance and lack of humility, should apolo-gise or at least furnish him with the reasons for his infamous deportation.

What do we make out of this episode in relation to Sata’s foreign policy? Ever since the deportation, people had feared for Zambia’s relationship with Malawi in the event of Sata be-coming president, and their fears have now been vindicated. Sata was right to demand for an explanation of why he was de-ported and—in the absence of convincing justifications—for

an appropriate apology. What the Malawian government did was simply wrong. Any democratic government that respects individual rights and freedoms would not have reacted to Sata’s visit to Malawi the way Mutharika’s regime did. It was wrong to expel an opposition leader who posed no danger to public safety, had committed no crime nor violated any laws. Opposi-tion party leaders, like those in government, are also demo-cratic representatives of the people. Whenever they travel, they represent their constituencies, political parties and indeed countries and should therefore be accorded the respect that they deserve. Although the reasons for Sata’s deportation re-main undisclosed, it is not unreasonable to suggest that Sata’s deportation had much to do with the fact that he was likely to meet Mutharika’s sworn adversary, former Malawian president Bakili Muluzi. This was a serious violation of both Sata’s and Muluzi’s human rights.

President Kaunda greets Angolan President Eduardo dos Santos on an early visit to Zambia.

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However, to suggest that Sata has a legitimate case against Malawi is not to say that even his approach was spot-on. Sata was wrong to drag the whole nation into what is otherwise a personal issue. Although he was representing the PF, he was not representing the whole country because at the time he was deported he was not yet an elected public official. Neither was he on a mission that concerned the whole nation or the aspira-tions of all Zambians. So we can ask of this apology that Sata is demanding on behalf of Zambia: what is in it for the nation? In discussing his own personal relationship with Mutharika, Sata should have brought out broader issues that are beneficial to Zambia and Zambians and even to the region as a whole. For instance, he should have used that opportunity to con-demn Mutharika’s record on human rights in Malawi and urge him to address human rights violations in his country. There is growing consensus in Malawi that Mutharika is becoming ever more autocratic and intolerant of criticism. Intimidation of civil society officials, lack of democratic space for opposition parties, media restrictions and alleged corruption have become widespread.

Drawing attention to these crucial broader issues would have made more sense than simply downgrading the episode to a personal quarrel. But the Zambian government’s decision to invite Malawi’s vice-president Joyce Banda, who has fallen out with Mutharika, to Zambia’s independence celebrations, as well as the reported decision to award a broadcasting licence to a Malawian opposition-allied radio station to transmit from Eastern province, not only issues from the Sata–Mutharika stand-off but is also likely to unnecessarily worsen the relations between the two countries. One hopes that lessons have been learnt from this issue and that the nation will see a more diplo-matically mature response to the matter than it has seen so far.

An unexplained apologyAnother issue that threw up much dust was the apology that Kenneth Kaunda was dispatched to convey to Angola over the MMD’s dealings with UNITA. The pitfall of that move lies in the fact that neither the purpose of that apology nor the response from the Angolan government has been disclosed to the Zam-bian public. As opposed to keeping the reasoning a mystery, a nuanced explanation of what inspired the government’s apol-ogy to Angola over the MMD government’s dealings with Jonas Savimbi’s UNITA would do for both historical and contemporary reasons. First, Sata was a senior official in the MMD government.

Where did he stand on the issue at the time? Why did he not resign if he was opposed to the collective decision that was taken then? Second, is the apology an official admission of guilt?

Furthermore, given the fact that both the Kenneth Kaunda and Frederick Chiluba governments recognised UNITA in-stead of the People’s Movement for the Liberation of Angola (MPLA), the nation deserves to know why the apology was not extended to the Kaunda era and whether or not Kaunda was the best person to deliver the apology given that he was part of the problem. In his book Into Exile and Back, Simon Zukas recalled how President Kaunda once sought arms assistance from the US in the 1970s to sponsor Savimbi and his UNITA political machine and also how Vernon Mwaanga and Rupiah Banda frequently boasted that they had managed to convince Kaunda and his government to isolate the MPLA in favour of UNITA. These are serious revelations over which Kaunda, Mwaanga and Banda should be interrogated. University of Zambia students once publicly protested against the recogni-tion of UNITA by the Kaunda regime while Chiluba’s govern-ment, in which Sata was a senior figure, vehemently denied any association with UNITA. What has changed? Has Angola complained or threatened not to trade with Zambia if we did not apologise? While the apology may have been made in good faith, there is need for the government to learn to communicate to the nation some of its actions to avoid misinterpretation be-tween the governed and their government.

Given the fact that the new government has only been in power for a few months, most of the pitfalls of the Sata presi-dency so far—especially in relation to foreign policy matters—are not untypical for a new government with limited adminis-trative experience. It is also understandable that in the first 100 days priority was given to pressing domestic issues such as the setting up of government, the establishment of commission of enquiries to look into various issues including the Mongu kill-ings, the sales of Finance Bank and ZAMTEL, the operations of the Zambia Revenue Authority and the launch of investigations into suspected plunder of national resources by the previous administrations. But now that they have settled in, the nation will want to see how the government moves from here on for-eign matters, and whether they have drawn any lessons from the previous three months.

Sishuwa Sishuwa is reading for a doctorate in Modern History at Oxford University as a Rhodes Scholar.

Foreign Policy Analysis


countries for miners according to the International Federation of Chemical, Energy, Mine and General Workers’ Unions.

Unsafe conditions of service remain an industry-wide prob-lem. There have also been firm-specific studies of Chibuluma mine under South Africa’s Metorex firm (2005), Konkola Copper Mine (KCM) (2007) and Mopani Copper Mine (MCM) (2010) that have shown substantial safety problems. If the claim is that CNMC is worse than other mining firms in Zambia with regard to certain practices, the reasons for this claim must be convinc-ingly set out. The HRW report asserts that it ‘stems largely from the attitude of Chinese owned and run companies in Zambia, which have tended to treat safety and health measures as trivial’. Explaining CNMC’s safety outcomes only in terms of attitudes is simplistic. The relative number of fatalities is not determined solely by the relative safety consciousness of mining firms, but also by the operational configurations of their mines. Under-ground mines typically have more casualties than open cast (open pit) mines. The deeper underground mining goes, the greater the likelihood of rock falls and casualties. At over a thou-sand meters, the CNMC mine Non-Ferrous Company-Africa (NFCA) Chambishi is deep underground. The CNMC China Luanshya Mine (CLM), which is at least 580 metres deep, is also an underground operation. Open cast mining, especially to ex-tract surface deposits, is not only safer, but also cheaper than deep mining, so mine configurations affect wages as well as safe-ty (more on this below).

Other, larger Zambian copper mining firms do not have only underground mines; some have open cast mines and some are mixed underground/open cast operations. KCM is owned by Vedanta, the UK–Indian major. KCM Nchanga open pit mine plus KCM Nchanga underground mine had 32 fatalities from 2001–11, while KCM Konkola, an underground mine, had 31 fatalities. MCM is owned by the Swiss-based mining and met-als trading giant Glencore. MCM Nkana has underground and open cast mines and had 55 fatalities from 2001–11, while MCM Mufilira, an underground mine, had 27 fatalities.

Simply the worst?

A recent report on labour abuses by Chinese-owned mining firms in Zambia has been a predictable media sensation. Count-less news outlets and blogs have reported the conclusions of Hu-man Rights Watch (HRW) report that the four firms parented by the China Non-ferrous Metal Mining Company (CNMC) are ‘generally the worst on issues involving health and safety, hours of work, and the right to organise’. In this article we challenge both the methodology and empirical conclusions of the report, arguing that there is little evidence to believe Chinese-owned op-erations are worse than any others. Moreover, we suggest that the report accords with the larger, highly-skewed Western discourse of ‘China in Africa’.

Worst for safety?The HRW report is based largely on interviews with miners. Their concrete observations about the working conditions and deficiencies they have experienced or witnessed cannot be dis-missed. But the interviewees cannot, however, reliably infer from their own experiences that CNMC operations are less safe than others elsewhere. Any such inferences are highly suspect given the climate of intense anti-Chinese prejudice present where they work and live. The surest way to know whether a mining compa-ny’s safety practices are greatly deficient compared to other firms is to determine, ceteris paribus, whether it accounts for a large disproportion of mining fatalities. Firms in Zambia cannot avoid reporting fatalities. Injuries may be under-reported, but serious ones should strongly correlate with fatalities, as most fatalities and serious injuries result from rock falls.

Statistics provided by the Mineworkers Union of Zambia (MUZ) on fatalities in all foreign-owned copper mines and for CNMC-owned operations indicate that CNMC is unexceptional. CNMC-firm fatalities in Zambia—25 of the country’s total of 217 from 2001 to mid-2011, or 11.5 percent—are not disproportion-ate. Moreover, mining fatalities in Zambia are not especially high by world standards; Zambia is not among the 60 most dangerous

Findings from Human Rights Watch about labour practices in Chinese-owned copper mines are flawed, say Barry Sautman and Yan Hairong

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For 22 months, from October 2006 to August 2008, NFCA had no fatalities, a rarity in the industry When asked about its record, CEO Wang Chunlai stated that accidents increase when operations and employment levels expand and explained to us:

Before, we only had one ore body to work on; now we have two [but] as you go deeper there is more stress on structures. Now we go down to more than 1,000 meters. The ceiling there gets unstable and that can create injury. We do try to look for weaknesses in our safety work. As the scale of work enlarges, we’ve recruited more new workers, so our training may be lagging and we have to invest more in training.

In a 2011 interview, the Mine Safety Department (MSD) Chief Inspector of Mines spoke negatively of NFCA, but only of its first five years in operation (2003–08), when he said it was the worst mine in terms of safety. Now, however, he views it as ‘OK’ in terms of safety, no longer standing out from the others. As for CLM, the MSD Director told us that it had the industry’s best dust abatement system. From June 2009 to December 2010, CLM had only one fatality.

No one, including the company itself, denies health and safety problems in CNMC’s Zambia facilities—or that such problems require urgent attention. Taking into account fatality figures and differences in the configuration of mines, however,

there is no basis to claim that Chinese-owned copper operations are the worst in terms of safety.

Why are wages lower?CNMC mines still have to catch up with other mines on in terms of pay, but the gap has been narrowing. There are a number of reasons why some mines pay more than others. One is the size and productivity of the operation. The total workforce (including permanent and contract workers) for each of KCM and MCM, is more than three times the CNMC mines’ total workforce (20,000 each versus 6,000); in 2010 they produced five to thirteen times the amount of copper concentrate (138,000 tons for KCM and 98,000 tons for MCM versus 22,000 tons for NFCA and 10,000 tons for CLM). In a 2011 interview, John Lungu compared min-ers’ basic salaries at the two CNMC Zambia mines with the country’s largest foreign mining firms:

MCM and KCM are the best payers among the mine owners. But the Chinese have responded to criticisms. The lowest wage in Chambishi went up from 400,000 Kwacha to K1.5 million and there’ve been later increments.

There are a number of mining-specific reasons why there is still a wage gap between CNMC-owned mines and those of the larger firms. These reasons in part have to do with the costs of

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rehabilitating Chambishi (which had been closed for 13 years and was flooded before CNMC acquired it) and of refurbishing of the antiquated Luanshya mine, which had been neglected by previous owners and closed after its abandonment by the Swiss/Israeli partnership J&W in 2008. Furthermore, there are differ-ences in the copper content of mining concessions that affect wage levels. A section engineer at Chambishi Mine remarked to us in 2008:

With 1.8 percent copper content, the former [owner] didn’t think it was worth their while to mine it. 1.8 percent in Zambia is considered a tail [leftovers] mine. They don’t think it was worth their effort if it’s lower than 3 percent.

Deep underground operations and lower copper content make CNMC production more labour-intensive, with lower productivity. NFCA and CLM Luanshya together accounted for 4.5 percent of copper concentrate production in Zambia in 2010 while having about 10.5 percent of its workforce. NFCA and CLM Luanshya’s productivity (7.1 tons per person) is sig-nificantly lower than the industry average in both Zambia (12.3 tons/person) and China (13 tons/person).

When we asked NFCA CEO Wang Chunlai about his com-pany’s reputation as a low-wage operation, he pointed out that NFCA is young and labour-intensive. He also noted that salary increases are a cumulative annual percentage: part of the reason why CLM pays higher wages than NFCA is that it is an older en-terprise and CLM acquired longer-serving workers, even though the starting pay is about the same as for NFCA.

While CNMC companies are still behind the industry stand-ard in pay, they do better in terms of job security. During the financial crisis, when other companies were retrenching their workforces and closing operations, CNMC companies made a promise of ‘three nots’: not to reduce investment, not to cut down on production, and not to lay off workers. Starting in 2012, all NFCA and CLM workers will be permanent employees (contract workers are still heavily used in KCM and MCM). The nickel mine Albidon Ltd., of which the Chinese state-owned en-terprise Jinchuan has a 51 percent share, indefinitely suspended operations in November 2011 due to a 23 percent decline in the price of nickel over the preceding four months, but it continues to pay the full salaries of its 2,000 or so employees.

Union membershipBoth the MUZ and National Union of Miners and Allied Work-ers (NUMAW) are active in NFCA and CLM. NUMAW is better represented in NFCA and MUZ better represented in CLM. The

MUZ is not recognised by the two CNMC processing enterpris-es, Sino-Metals and Chambishi Copper Smelter, and the reason for this needs further investigation. But the facts so far do not support the claim that CNMC companies are hostile to MUZ for political reasons. In fact, we were told by the MUZ branch chair-man at CLM that ‘When Chinese came [to take over Luanshya], it was at a time of anti-Chinese sentiment. The union supported it [CNMC]’. What has been most devastating to union activism in Zambia’s mining sector was the drastic decline in the mem-bership due to retrenchment during the financial crisis. MUZ’s membership, for example, dropped from 26,000 before the crisis to 12,000 in August 2011.

A skewed focusCNMC’s practices are worse than others in some respects and better in others—and they are slowly improving. There should be improvements across the board for mineworkers in Zambia who still receive a subsistence wage and live in under-serviced com-munities, a possibility made less rather than more likely when attention is focused exclusively on ‘the Chinese’.

But why does HRW focus on labour abuses at CNMC firms in Zambia? Labour abuse in Zambia’s copper industry, while de-plorable, is not an outstanding issue in the context of the African continent, which like many other parts of the world, experiences massive human rights violations, including grave labour rights violations. Despite focusing on just one industry in one country, HRW dubiously asserts its report ‘begin[s] to paint a picture of China’s broader role in Africa’. HRW’s focus plays into the racial hierarchy already present in Zambia and risks reinforcing rac-ist stereotypes—that the Chinese are cruel and have a disregard for human life—which have endured for more than a century in the West and which have now spread to Africa. Is it a coin-cidence that HRW studies of abuses in the mining industry in Africa have been confined to one about a Chinese state-owned enterprise and two others that implicate the Zimbabwean gov-ernment, a target of Western sanctions? The HRW study tells us more about the political agenda of HRW—and the mainstream discourse of China-in-Africa that it reinforces—than about Chi-nese-owned operations in Zambia.

Barry Sautman and Yan Hairong are affiliated with the Hong Kong University of Science & Technology and the Hong Kong Polytechnic University respectively. A fully-footnoted version of this article is available from the authors ([email protected] or [email protected]), who are also producing a much longer academic study on the subject.

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Image: © Marc and Nick Francis (whenchinametafrica.com)


Beijing rules

Chola Mukanga weighs up what we have to fear from China’s growing influence

The Beijing Consensus: How China’s authoritarian model will dominate the 21st century

By Stefan Halper (Basic Books, 2011)

A week never passes without hearing something about China’s growing domi-nance of international economic and po-litical relations. Such international expo-sure comes with increased global scrutiny of Chinese society and policies. Everyone has an opinion about China’s place in the world. Is China colonising Africa? Will it initiate global disorder? Or will it eventu-ally implode? These questions reflect the fact that the rest of the world does not re-ally understand China. The public narra-tive about China has largely been scripted by an ignorant and impatient media. This has produced a rather unhelpful black and white juxtaposition. You are either for China’s global emergence or against it.

Stefan Halper’s The Beijing Consensus marks a refreshing departure by seeking

to provide a more nuanced assessment of Beijing’s challenge to the global order. Written largely from an American per-spective, the central thesis of the book is that although China’s emergence on the international stage does pose a serious danger to global order, this is not prima-rily military. Rather it is a ‘threat of ideas about how prosperity is attained and the society we want to live in’. China is cham-pioning a market authoritarianism which it is now exporting across the globe. The Chinese model promises rapid growth but excludes things that many in the West believe underpin a good society: free speech, freedom of worship, open gov-ernment and political opposition. Such a model, Halper argues, is proving attrac-tive to dictators and partial democracies as they flock to Beijing to learn how they can combine staying in power with eco-nomic growth.

All this poses a strategic challenge to the West, particularly the USA and its global leadership. In Halper’s words ‘Chi-na is shrinking the West and its values’. The global financial crisis has accelerated

matters: China emerged from the first phase of the crisis in both substance and tone as the new leader of the global or-der and that role will become more pro-nounced in decades to come. The ques-tion for genuine democracies is whether Beijing can be considered a responsible stakeholder while its policies continue to enable ‘systematic repression among its impoverished partners’.

If the West is able to confront this chal-lenge, it must first appreciate the nature of the threat and recognise that China’s de-mocratisation is not inevitable. To under-stand China we need to focus on the in-terests and incentives that are driving its leaders. A key observation is that China is not deliberately setting out to dimin-ish the power of the West, but is assum-ing global economic and political domi-nance in response to its leaders’ need to pacify the masses. Domestic pressure has forced China’s leadership to focus square-ly on growth and sacrifice all else on its altar. The globalisation of information has also made Beijing vulnerable to inter-national pressure, and this combination

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much of Africa on a destructive path of decline. There are many African countries that welcome competition among the ‘great powers’ to allow the best ideas and international governance frameworks to emerge.

Equally surprisingly is Halper’s some-what narrow assessment of Beijing’s mili-tary threat. There may be no risk of a direct military confrontation, but Beijing does appear to be challenging Western military influence in Africa. When the USA sought to establish Africom a number of nations roundly rejected those advances after pressure from Beijing. A recent academic study noted that China’s military-to-mili-tary activities in Africa, including defence attaché presence, naval ship visits, arms sales and other missions to support mili-tary cooperation are expanding to keep pace with China’s growing national inter-ests throughout the region. The economic and military spheres are not unconnected: why would nations that invest billions in other nations not back this up with some guarantee of security? China’s growing global integration is bound to be accom-panied by greater military intervention as it seeks to secure global supply. This is the most worrying aspect of China’s reach in developing nations and one slightly un-derplayed by Halper. But it is a lesson that Zambia and other African nations must not lose sight of.

Despite these weaknesses, The Beijing Consensus presents a fine assessment of the Chinese question. It provides a clear analytical approach that focuses on the structural incentives driving Beijing and in doing so allows readers to begin to see more clearly what a Beijing-dominated world may look like.

Chola Mukanga is an economic adviser to the UK Government on issues of economics, international justice, rights and law. He is the founder of the Zambian Economist website, www.zambian-economist.com.

of domestic and international pressures has led to the emergence of ‘two Chinas’ co-existing in the international system: a ‘good neighbour’ and ‘the rogue state’. This duality in China’s global presence limits the extent to which the democratic West can steer Beijing to a more positive course. China will continue to simultane-ously support and subvert global govern-ance structures for its own benefit. And Beijing will continue to export its market authoritarian model as long this keeps the leaders in power.

Taken together, Halper’s central argu-ments are difficult to challenge. The evi-dence in sub-Saharan Africa says that Be-ijing’s influence is growing. It appears that the fear of antagonising China looms large among African leaders, past and present. Earlier this year Zambia found itself at a centre of a storm when workers were fired upon by Chinese employers: a day later then Vice-President George Kunda was in Beijing praising the Chinese govern-ment and saying absolutely nothing about the incident, while then President Rupiah Banda moved to tell Zambians to keep quiet about such things.

But the central issue remains whether Beijing really has begun to export its au-thoritarian model or whether that is sim-ply a fear that is yet to be realised. It is not clear from the evidence in the book whether Beijing’s influence is replacing genuine democracy with illiberal democ-racy in developing nations or whether it is merely holding back the emergence of more democratic states. This distinction is vital and goes to the heart of what the West is purported to have already achieved glo-bally and what Beijing is threatening to supplant. The lack of clear evidence on this matter is a major weakness of Halp-er’s narrative. The question of whether China has made things worse for the Afri-ca is undoubtedly a complex question, but one which is very important. It requires a deeper country-by-country assessment of

how China has affected outcomes and a proper grasp of the counterfactual—that is, a world without Beijing.

Taking Zambia as an example, it is not obvious that we would necessarily be bet-ter off in terms of democratic outcomes without Chinese influence. Beyond the perverse economic plunder of mineral resources (which is primarily Western led), it is difficult to argue that in terms of governance, the 1991–2001 period under IMF/World Bank leadership was necessarily better than the 2002–10 pe-riod when China expanded its Zambian interests. So what, then, is the value of Western values? Are we really just refer-ring to American dominance, for better or for worse? In that case, for many poor nations there’s little difference between a Beijing dominated world and an Ameri-can one. Similarly, if we look at the last MMD government’s policy, it is unclear what it was learning from Beijing. The Beijing model is direct state-led involve-ment in key strategic sectors and stricter requirements on foreign investments (e.g. in the car industry). That was hardly Zambia’s approach under the MMD gov-ernment. Indeed when one extrapolates across other developing nations (e.g. Ma-lawi, DR Congo and Angola) a similar picture emerges. Many of these countries are more liberal than Beijing, and where they are intolerant of democracy, it is be-cause they have always been intolerant, not because Beijing has introduced such a stance.

Globally, one would imagine that the counterfactual would see increasing dominance of America ideas. That raises the question of whether such a model is necessarily better than a duopolistic ar-rangement at the top, or indeed outright Beijing dominance. American geopoliti-cal activities have helped keep millions of people poor—just look at the chaos dur-ing Zaire’s genesis—while the economic policies of the IMF and World Bank set

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Emerging Africa

Zambia is one of 17 African countries responsible for lifting the gloom over Africa’s development prospects, writes Shankar Acharya

Emerging Africa: How 17 Countries Are Leading the Way

By Steven Radelet (Brookings Institution Press)

As an employee of the World Bank in the mid-1970s I spent a few years working on sub-Saharan African (SSA) countries and concluded that their prospects for robust economic development were problematic. All these years later, is there any reason to change that judgment now? Many people would say no. After all, median real in-come in SSA has changed little since the mid-1970s. The image of sub-Saharan Africa that many of us outside the con-tinent recognise is one of corrupt rulers, undiversified economies, and civil strife.

Earlier this year I had an opportunity to revisit the issue at a conference in Bel-lagio, Italy convened by the Ghana-based African Centre for Economic Transfor-mation. While many different points of view were represented there, I came away with the impression that things were re-ally changing for the better in many SSA countries. The single most persuasive presentation was made by USAID chief economist, Steve Radelet, based on his book, Emerging Africa, which he wrote during his years with the Centre for Glo-bal Development. Let me convey the gist of his analysis.

Radelet divides the 48 SSA nations into four groups: 17 emerging countries which have averaged over 2 percent per capita GDP growth since 1995; another 6 on the threshold of sustained growth; 9 oil exporters (dominated by Nigeria and Sudan) whose fortunes fluctuate with oil prices; and the remaining 16 others where

Emerging countries (344 million)

Botswana 4.1

Burkina Faso 2.8

Cape Verde 4.0

Ethiopia 4.1

Ghana 2.6

Lesotho 2.3

Mali 2.5

Mauritius 3.7

Mozambique 5.4

Namibia 2.4

Rwanda 3.7

Sao Tome and Principe 5.0

Seychelles 2.6

South Africa 2.0

Tanzania 3.0

Uganda 3.8

Zambia 1.8

Other countries (180 million)

Burundi -0.8

CAR -0.5

Comoros -0.3

DRC. -1.1

Cote d’Ivoire -0.9

Djibouti -0.4

Eritrea -1.7

Gambia 1.5

Guinea 1.7

Guinea-Bissau -2.3

Niger 0.6

Madagascar 0.9

Somalia n.a.

Swaziland 1.9

Togo 0.2

Zimbabwe -2.9

Oil exporters (261 million)

Angola 7.6

Cameroon 1.7

Chad 3.4

Congo, Rep. 1.3

Eq. Guinea 23.6

Gabon -0.7

Mauritania 1.1

Nigeria 2.3

Sudan 4.7

Threshold countries (89 million)

Benin 1.3

Kenya 2003-08 2.4

Liberia 2005-08 3.1

Malawi 1.2

Senegal 1.4

Sierra Leone 2003-08 3.7

Note: Figures in parentheses refer to population in 2010.

The table shows the details of the country groupings and

average per capita growth rates 1996–2008.

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average income has actually declined since 1995.

What is particularly encouraging is that the emerging countries (ECs) ac-count for 344 million of SSA’s total 2010 population of 875 million. Adding the threshold countries’ 89 million would mean that about half of SSA’s population resides in countries doing reasonably well without the benefit of oil riches.

In a series of inter-temporal compari-sons between emerging countries and those in the other sub-Saharan African (OSSA) country category, Radelet pro-ceeds to flesh out the markedly superior performance of the former group. By 2007, the level of gross investment in ECs had nearly tripled since the mid-1990s, as compared to rising only about 70 percent in the OSSAs. There had been a similar tripling of the ECs’ total trade during this period, compared to hardly 50 percent more trade in the OSSAs. Estimates indi-cate that total factor productivity growth in the ECs averaged close to 2 percent a year, as compared to minus 1 percent for OSSAs. Agricultural production in the ECs was 50 percent higher over the period compared to a 30 percent increase among the OSSAs. Between 1999 and 2007, net primary school enrolment increased from 65 to 80 percent in the ECs, while in the OSSAs the rise was more gradual, from 57 to 67 percent.

So what explains the substantially su-perior performance of the 17 emerging countries of sub-Saharan Africa? Radelet attributes this to five fundamental factors: the rise of democracy and improved gov-ernance; better economic policies; the end of the African debt crisis and improved donor relations; the rise of new tech-nologies (especially mobile telephony); and the emergence of a new generation

of leaders and voters. The first two merit elaboration here.

In the late 1980s there were only three democracies in sub-Saharan Africa: Bot-swana, Gambia and Mauritius. By 1994 the number had risen to 20 and by 2005 to 26. Interestingly, by the end of the millen-nium nearly all the 17 emerging countries could be characterised as democracies. Using Freedom House indices, political

and civil liberties improved markedly in the EC group from 1990 onwards, while they remained at a low level in the OSSA group. Similarly, the incidence of domes-tic conflict fell sharply (comparing 1996–2008 to the previous 15 years) in the EC group, while remaining high in the OSSA group. On each of the World Bank gov-ernance indicators (rule of law, corrup-tion control, political stability, regulatory quality, government effectiveness and voice/accountability) the ECs recorded improvement between 1996 and 2008, while in OSSA all indicators worsened.

Turning to economic policy, Radelet draws on a seminal study (Benno Ndulu et.al. The Political Economy of Economic Growth in Africa, 1960-2000, Cambridge University Press, 2007) that identified four identified ‘anti-growth syndromes’, three of which are economic ones:

heavy-handed control regimes; redistri-bution systems that rewarded political allies and ethnic groups at the expense of efficiency and growth; and heavy bor-rowing and asset stripping. Radelet shows that these syndromes declined sharply in the EC group from the mid-1980s. In contrast, the syndromes retained their stifling hold in the OSSA right through to 2004 (the end point of the underlying data series).

The emerging countries of Africa clearly refute the gloom about African economic development that pervaded until quite recently. Yet Africa’s develop-ment is by no means on autopilot. For one thing, the 16 OSSA countries (with 180 million people) are still going the wrong way. They include nearly 70 million citi-zens in strife-torn Democratic Republic of Congo and substantial numbers in Ivory Coast, Madagascar, Niger, Zimba-bwe, Guinea and Somalia. For another, the fate of 261 million people living in the oil exporters (nearly 160 million of them in Nigeria), depends not just on the price of oil but also on necessary improvements in economic policy and governance of the kind seen in emerging Africa. Fi-nally, even in the 17 emerging countries (and the 6 threshold ones) a great deal remains to be done to ensure sustained, broad-based and diversified growth and development. At the very least, however, the last 15 years or so has seen a strong, positive and hopeful development story coming out of Africa.

Shankar Acharya is Honorary Professor at ICRIER and former Chief Economic Adviser to the Government of India. The views expressed are personal. A version of this review was originally published in India’s Business Standard.

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Rat tails and fairy tales

Beware the Ice Queen’s Wand, 8–10 December 2011, Lusaka Playhouse.

Reviewed by Ceire Sadlier

To take a corner of Lusaka in this hot and humid time of year and turn it into a strange, frozen ice-world where children huddle together with chattering teeth requires more than a little magic. Such a chilling feat might only be achieved by the sorcery of an evil ice queen or the creative brilliance and resourcefulness of the Barefeet Theatre company, and fortu-nately both were to be found in this De-cember’s Christmas play at the Lusaka Playhouse.

Touching on clas-sics including The Pied Piper of Hamelin and A Christmas Carol, it was the overarching borrowings from The Snow Queen that added a real seasonal feel to the story. The energetic fairy tale premise guar-anteed family fun, while a spattering of cunning political jibes aimed squarely at the bureauc-racies of donor funding kept the adults accommodated.

Though the finer references to chil-dren’s rights may have been lost on the youngsters in the audience, the exciting and frantic production was a clever mix of Zambian flavoured fairy tales and real life human rights issues that are core to Barefeet’s every day work.

With the same frenetic energy as 90 minutes of Spongebob Squarepants, the young audience was catered to and par-ticipation was a must. Publicity post-ers had told us to ‘lose the shoes and join the fun’, and sure enough one of

the highlights of the show was half a dozen audience members of all shapes, sizes and ages being pulled up onto the stage to groove to the sounds of Vanilla Ice’s cringe worthy but irresistible ‘Ice, Ice Baby’. Their enthusiastic if involun-tary contributions had the audience in stitches.

In the role of the Ice Queen, Ndala Bukolo ensured that the evil character injected humour rather than fright to the play. His droll personification of a tem-pestuous, greedy oppressor was matched perfectly by Michael Chanda’s skillful physical comedy as the Ice King. Chan-da’s back bending, cartoonesque move-ments depicted a goofy King drawing

constant laughs for his performance.The group of enslaved children con-

vinced the audience of the chill they were feeling in icy lair of the Queen’s palace, moving in a chattering huddle and intro-ducing the show stopping dancing and acrobatics that Barefeet are famous for.

Just as the audience began to wilt and wonder if there was going to be an inter-val, the booming voice of the Rat King, enthrallingly played by Adam McGui-gan, roared from the back of the audito-rium. McGuigan’s fleeting appearance as a tongue thrusting rodent mob boss lifted the play with perfect timing.

The sparsity of the uncharacteristi-cally simple, white scenery was spared by the wild movements on stage and the colourful and humorous costumes. The limitations of the Playhouse’s technical resources were circumvented by restrict-ing the lighting to a convincingly cold mix of white and blue. Though each ac-tor bellowed their lines and songs with unflinching effort, their voices could not contend at all times with the annoying in-terruption of the venue’s clacking ceiling fans, at least for those at the back of the auditorium.

Beware the Ice Queen’s Wand was packed with dance and song, laughs and roars. It lacked some of the spine tingling,

romantic elements and fi-nessed, formal drama of previous Barefeet Christmas performances, especially 2008’s Edward Scissorhands. But it delivered genuinely uplifting festive pantomime fun. The production was buoyantly animated from start to finish, gripping chil-dren throughout. A young girl in front of me leapt to her feet several times with excitement. As the final scene was being played out, a mother trying to beat the

exit rush tried to pull her daughter by the hand up the stairs. The five-year-old’s eyes were glued to the stage and she kept turn-ing, tripping on the steps to catch the last glimpses of the spectacle.

Ceire Sadlier lives in Lusaka and writes a weekly blog at www.theirishexzaminer.com.

Barefeet are proud to use the power of entertainment (and initiatives like the Christmas show) to assist in funding their programmes with the children. For more information or to donate please visit www.barefeettheatre.org.

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