Government has said growing the economy through increased trade is one way that can help the country to address issues of poverty.

Minister of Commerce, Trade and Industry Emmanuel Chenda said in Lusaka yesterday that one of the biggest challenges Zambia was faced with was dealing with issues of poverty.

Mr Chenda was speaking during the Zambia-Finland business forum held at Radisson Blue Hotel.

He said trade could help grow the economy which would eventually tackle poverty in the country.

“If we grow the economy through opening up trade, then we will be tackling poverty in the country. We cannot address poverty if we fail to grow trade,” Mr Chenda said.

He said the Government had also put in place programmes aimed at addressing issues of the green economy and poverty through trade.

The minister also hailed the Finnish Government for its support aimed at improving the business environment in Zambia such as the private sector reform programme and the business development services voucher programme.

He reaffirmed Government’s commitment to deepening the bilateral and business cooperation between the two countries.

Mr Chenda said the partnerships among the private sector, Government, civil society and academia for the development of the green economy in Zambia.

He said the collaboration between Zambia and Finland was positive in that Zambia had in the recent past registered commendable progress in fostering economic growth and improving general living conditions of the people largely due to the realisation that the private sector was a partner in development.

Speaking at the same function, Finnish Minister for European Affairs and Foreign Trade Alexander Stubb said the future of business in any economy lay in the green economy.

Dr Stubb said Finland had developed from top 30 to the top three through opening up to trade.

He said 40 per cent of that country’s Gross Domestic Product (GDP) came from trade.

“We believe that the future of business lies in the green economy,” Dr Stubb said.

He advised Zambia against looking up to other countries to do business, but that it should instead encourage companies to develop the green economy by providing regulatory incentives which would encourage them to invest in the green economy.

And Vice-President Guy Scott said the Government was committed to the development of the private sector in the country.

Dr Scott urged Finnish businesses to invest in Zambia as the country had opportunities in agriculture and energy sectors.

There is a strong need for business owners to know how to respond to any condition of a business at any given stage.

Today I look at the challenges of cash flows in a business set up.

Before I look at the problems cash flows pose, I want first to describe what a cash flow is for the sake of all entrepreneurs across the board.

Cash flow means the amount of money which a business is able to receive and the amount of the same money which it is able to spend over a specific period.

It can be in a day, in a week, in a month or in a year depending on the explanation of the cash flow period being looked at.

It is important to understand that there are businesses that deal with cash procedures only for receiving revenues such as those selling food, groceries etc, which require cash in exchange of commodities given to customers, while other businesses sell their merchandise on credit to register sales from their customers.

In both cases the businesses will require to maintain places where they buy supplies which form the bulk of purchases for resale in case of already finished products.

Some businesses apply immediate cash to buy supplies while others obtain these supplies on credit from their suppliers.

Businesses which sale goods on credit maintain lists of customers who are called debtors because they owe the business money for goods obtained on credit while on the other hand, the business also maintains the list of suppliers to which it owes money for goods it obtained on credit and these are called creditors.

The SMEs need to maintain these records to ensure that it keeps track of the debtors and the creditors in mitigating the cash flow.

Apart from maintaining the debtors and the creditors, the business by its nature of operating also has in its own circles a number of obligations to pay such as salaries and accumulates unpaid expenses such as legal fees, consultancy fees, water bills, to mention but a few.

Now the important fact to understand about the business cash flow is that, cash flowing into the business cannot be confused with the profit for a business as other business owners tend to think.

It is important for entrepreneurs to keep accurate records of business expenses to ensure that that it deals justly with the cash going out.

I am saying this because my interaction with SMEs have revealed that the problem is emanating from this misunderstanding.

Immediately the business owners record positive cash inflow in their business accounts their hearts jump and they start withdrawing money anyhow for unrelated business ventures, forgetting they perhaps issued post-dated cheques to suppliers.

When the supplier puts in a cheque at the required time it bounces for insufficient funds and this is a crime.

Sometimes the errand of heavy withdrawal affects the payment of salaries making the workers to get paid late.

A business needs to focus on a proper cashflow in a period to escape these problems and embarks on a plan also known as a budget.

There is need to know where the cash will come from into a business account and estimate the figures to the nearest truth.

From these figures the business should plan and prioritise the expenses in the order of importance.

This can help the business solve some of the pressing cash flow problems.

For example, if an SME knows that it is not going to raise enough money for salaries or purchases at the month end and knows that it has a strong list of debtors who will pay the following month, he or she can get an overdraft from the bank.

The bank offers overdraft after the client satisfies set conditions.

The bank manager will be willing to help as long as he or she is convinced that the debtors are genuine and they will pay at the focused time.

Entrepreneurs need strong management skills to understand the importance of cash flows in their businesses and stop every morning requesting for a bank balance which causes a lot of problems.

For instance, one entrepreneur requested for a bank balance from the bank and was told there was enough money.

Forgetting that he had issued cheques to his vendors who had held on to that cheque for sometime without depositing it, he went on to withdraw the money thereby affecting the cheques.

The banking law allows for the cheque issued to be in circulation for at least three months before it becomes stale.

It is, therefore, important for entrepreneurs to learn management skills of how to reconcile bank statements.

Entrepreneurs who don’t have any accounting background need to subject themselves to constant seminars and workshops to gain managerial skills to help them run their businesses properly.

If I tried to turn myself into a bit of a statistician, this would mean about two pedestrians dying every day, let alone the thousands of injuries that occur annually.

Most of those injured or killed are innocent citizens having their normal life by walking the streets or boarding a vehicle from one place to the other only to get involved in an accident.

For example, from media reports, the Post bus tragedy of Chisamba that claimed fifty three lives was as a result of human error.

A few months down the line, it was gratifying to read in the tabloids that RTSA has an ambitious goal of reducing road accidents by fifty per cent by the year 2020. This move is indeed commendable.

It is generally agreed that life is so precious and no matter how correct or ‘nice’ an explanation for causing death or injury is concerned, there is no second chance to live again. As the old adage goes, ‘there is no sorry after death…’.

From this concern arises an important question: Is there a law that seeks to protect pedestrians or passengers or in short third parties?

The answer is found in part VII of the Road Traffic Act number 11 of 2002, which makes third party insurance compulsory.

Section 86 (1) of the Act states that ‘no person shall use or cause or permit any person to use a motor vehicle or trailer on a road unless there is in force in relation to the use of such vehicle or trailer by that person or that other person, as the case may be, such a policy of insurance or such a security in respect of third party risks as complies with the requirements of this part’.

The act further states in section 86 (2) that ‘any person who contravenes the provisions of this section commits an offence and is liable, upon conviction, in the case of a first offence to a fine not exceeding three thousand penalty units or to imprisonment for a period not exceeding twelve months, and in case of a second or subsequent offence, to a fine not exceeding seven thousand five hundred penalty units or to imprisonment for a period not exceeding twelve months, or to both’.

This piece of legislation does not seek to punish but rather protect third parties.

Why use insurance to protect or compensate third parties? Well, if you consider how many people would have money to pay a third party after causing an injury/death? You will agree that very few would manage.

This is because accidents are unplanned as they may occur whether one has money or not.

There is also a complicated issue of deciding how much to pay the person involved which this column will endeavour to unleash.

Having given this lengthy background, we now turn to insurance companies who are mandated by law to compensate third parties.

What happens when an accident occurs and the third party involved dies or gets injured?

This is a question that will be tackled at length next week, please join me as such.

Let’s chat here.

In this part of the column, I will reproduce a question asked by one reader which I think there could be many other people out there with similar questions. I have withheld the name to avoid victimisation.

Dear webster

I was encouraged to write to you because of your well-explained articles on insurance matters. I seek your advice.

I have a younger brother who was hit by a speeding vehicle on Kabwe-Kapiri Mposhi Road around 19:00 hours two years ago. The driver picked him and dropped him at kabwe General Hospital unconscious.

He woke up in hospital and had four fractures on both legs and on one hand. To our surprise the police report that was issued did not bear his signature and it stated that he was the one in the wrong and consequently he could not be compensated by insurance.

The owner of the vehicle just repaired his vehicle and has since disappeared. Following up the case at police, the bicycle, which was the evidence, went missing at Kabwe Police Station and the officers were very uncooperative.

The brother is permanently deformed and no insurance compensation.

I seek your advice as police is a no-go area for now.

Thanks zl.

Check next week for the response on this question.

Comments

: webster_tj@hotmail.com or webster@picz.co.zm or on facebook search for insurance talk Zambia page or call/text 0977857055

(The author is a chartered insurer with over eight years industry experience)

Were Zambians made to survive on only nshima made from maize meal as staple food?

What of other crops like rice, sweet potatoes, cassava, Irish potatoes, macaroni, finger millet and sorghum?

Recently, while in Cape Town, South Africa for the World Economic Forum on Africa meeting I found myself informally discussing the issue with a local senior colleague who was attending the same conference.

We noted the need to move away from the culture of depending on only nshima from maize for our livelihood because it is not helping us.

The overdependence on maize and its products has augmented the position of the cereal crop that is grown widely throughout the world in a range of agro-ecological environments, to a political produce.

Like this media executive and I noted, the continued dependence on nshima made from is not helping us at household and national level.

Without going into merits and demerits of the removal of subsidy on maize, I would say the development provides all of us with an opportunity to rethink on our feeding choices and come up with alternatives to maize.

I feel even at the peak of the subsidy on its cultivation, maize has been grown by the local small-scale farmers at higher cost given the low productivity.

One reason for that is the fact that the crop is grown even in areas where it is not supposed to exist while the poor farming practices by the small-scale farmers could be another explanation.

Reducing or eradicating the overdependence syndrome on maize would require the total change of the mindset by the citizenry, including the farming community.

For that to occur, the Government should play an active role in marketing and popularising the consumption of other foodstuffs, including nshima made from other crops.

In my October 10, 2012 column, while welcoming Government’s extension of the Farmers Input Support Programme to include sorghum, groundnuts and cotton, I made an observation which is still valid.

I noted then that: “Comparatively, maize and rice could be the two most important crops interms of the national food security contribution as they have the widest consumer base in most parts of the country.

“Apart from being raw material for products like beer, Sorghum is not so much significant because its full potential to majorly contributeto the national food security has not been realised.

“For it to attain high level of acceptance among the potentialconsumers there is need for its promotion. Like finger millet, asorghum meal is not so popular.

“Get me right, I am not saying that it is not a good meal! Myobservation is that as a nation we have not spent efforts stimulatingconsumption of sorghum, despite its   potential to help end hunger.”              

The senior colleague of mine suggested that to help popularise crops alternative to maize, Government leaders including the President should be seen partaking, for instance, nshima made of sorghum.

Slowly but surely the mindset of people would then start changing because the leaders would be leading by example.

Experts should also look at the nutritional value obtained from consuming products from other crops like sweet potatoes as opposed to feeding on maize nshima and inform Zambians.

There is also need to ascertain the cost implication of diversification at production and consumption levels.

For a long time there has been a perception that a maize meal is the cheapest dish one could make or buy but I do not think so.

A meal made from maize or indeed any other crops could just be more expensive than a rice meal if we consider all the ingredients and other expenditures like the amount of electricity used, the time it takes to prepare nshima and other factors.

Therefore, financial experts or economists should help us by explaining the costs of consuming any of the alternative meals and growing the alternative crops.

What is relieving is that in some homes, members are already consuming meals made from rice and bread.

Usually the problem only sets in if there are some visitors.

Traditionally, it is believed that when you visit a home and spend a night without being served nshima it is either you are not welcome or the visited family is “starving” – even if you are offered other foods.

All these myths and misconceptions have to be erased before we can see a shift from the reliance on nshima to dependence on other foods.

Short of that, the moaning against the removal of subsidy will continue in homes and in public places.

Comments: 0955431442,

0977246099, 0964742506 or e-mail:jmuyanwa@gmail.com

THE Zambian Kwacha traded flat against the dollar on Monday in a quiet trading session which opened the week’s trading at KR5.350/5.370 at par with Friday’s close.

According to the Zanaco newsletter released yesterday, the local unit traded flat in the early session with few flows seen from the corporate amidst subdued inter-bank activity.

It touched an intra-day high of KR5.340/5.360 but quickly pared its gains to close the day at its opening levels.

The Kwacha is expected to continue trading on a weak footing and is likely to remain range bound to trade within the 5.300 and 5.400 ranges.

On Monday, the money market experienced a significant increase in liquidity levels, rising to KR844.7 million from the previous day’s levels of KR662.6 million.

The volume of inter-bank funds traded increased to KR356.5 million from KR120.5 million despite the improved liquidity.

The weighted average overnight inter-bank lending rate reduced slightly to 11.43 per cent from 11.63 per cent.

Bank of Zambia was in the market for its open market operations both in the morning and afternoon with a view to inject a total of KR500.0 million into the money market.

A total of KR26.2 million was bid by market players, at a weighted average rate of 10.37 per cent.

Further, the entry of new commercial banks and the expansion of products and services by market players have not helped in changing the situation as some parts of Zambia have no banking and financial services.

A recent study by Finmark Trust indicates that 62.7 per cent of the Zambian adult population remains without access to formal and informal financial services and products.

Indo Zambia Bank (IZB) responded to the challenge and rolled out the Micro-Credit Lending scheme which allows women groups to borrow under the Self Help Group (SHG) concept.

The formation of SHG by women has assisted many households to get out of poverty by forming small income generating enterprises.

The synergies emanating from the group will help expand the scope and scale of outreach to as many community members as possible taking advantage of the aggregations.

Most importantly, SHG are seen as an essential and integral part not only to the financial service delivery, but also as a channel for the delivery of non-financial services within larger objectives of livelihood promotion, community development and women’s empowerment.

Barring a few exceptions, savings and credit have been used as a practical entry-point activity around which to organise poor women into SHGs.

For example, in India these SHGs are potential “micro-banks”, either on their own, or through higher levels of association, capable of using their own resources, grants and borrowed funds for financial intermediation.

Apart from accessing funds from the formal financial sector, SHGs can become a forum for dissemination of development ideas and information, an association for community mobilisation or an organisational unit for linking up with other economic, social and political interventions.

Within this role for SHGs, a range of models and approaches have emerged, with IZB supporting women entrepreneurs.

IZB believes linking SHGs directly to the bank is the basic model in which an SHG, promoted by a non government organisation (NGO) or other institution, can access a multiple of its savings in the form of loan funds.

The SHG after accessing the resources from the bank can then lends the funds to its members.

So far IZB has disbursed KR2.2 million to 85 women groups comprising of more than 1,000 women beneficiaries.

Last year, the bank financed 47 groups which translated to 940 families amounting to KR1.400 million.

IZB managing director Shankardas Gupta said the total amount approved was KR2.2 million to be disbursed to 85 women group of which 38 groups are borrowing for the first time to whom a total of KR874,000 had been extended.

The first group to receive the loan include Everest, Chikondi Chazimai and Muliphamvu of Chipata Township, Tiyanjane and Unity of George Township, Tulichite Choolwe,Carrot of Chingwere, Moto Moto and Nkusu of 10 Miles and Favour of Mandevu Township.

Others are Zambezi of Nine Miles, Tiyeseko of Matero and Milimo of Chazanga Township, Pasogolo of George Township and among others.

“We have received application from 87 groups out of which only two have been unsuccessful.

The total amount of loans approved is KR2.2 million and repayment period for the loan is between 12 and 24 months.

The groups have been assessed individually and have group savings of between KR1, 000 to KR3, 000,” he said.

The first batch of the loans under the SHG Scheme was disbursed in January, 2011 amounting to KR840, 000 to 20 women group and since then the funds have grown to KR2.2 million this year.

During the period under review, the bank was able to reach out to 400 families and to-date the number had increased to 1,000 families.

Mr Gupta said it was important for the women beneficiaries who had received the credit facilities to ensure that the loans given to them were utilised for the productive purposes and repayments are made to the bank as per the schedule given to them.

“Please bear in mind that the loans being extended are not being extended as a donation or charity and all of you must emulate the example set up the earlier group.I am confident that you will not let us down which will help our bank to extend additional loans to new groups,” Mr Gupta said.

Commenting on the facility Central Bank governor, Michael Gondwe said the Micro-Credit scheme provides a real opportunity to improve the welfare of the poor people in the country.

Bank of Zambia (BoZ) was delighted to note that Indo Zambia Bank had waived the collateral and guarantee requirements, which have in the past proved to be a major barrier for the marginalised to access finance.

He said financial inclusion in Zambia continues to be a challenge regardless of the positive economic performance that the country had achieved in the recent past.

Despite the entry of new banks and the expansion of products and services by market players, Dr Gondwe said some parts of Zambia had no banking and formal financial services.

He said it was important for the women and communities to form organised groups to make full use of the Self Group Micro Lending Schemes for them to realise their visions and grow their small businesses saying that successful businesses begin from small project.

He said the scheme represents a major shift from the traditional loan schemes that have for a long time characterised traditional banking models in Zambia which target the higher end of the market.

“The group also assist in ensuring that defaults by members are minimal due to peer pressure to pay back the loans both from within the group and from other groups,” Dr Gondwe said.

Further, the growth of Micro, Small and Medium Enterprises (MSME) as a driver for job and wealth creation and ultimately development in all spheres of life cannot be overemphasised.

Dr Gondwe said the Government was cognisant of the need to provide various policy options for financing enterprises affordably, efficiently and effectively and providing opportunities to enhance personal welfare and quality of living.

He requested the financial service providers to pay more attention understanding the opportunities in the Zambian market and to have loan staff who understand the challenges of the MSMEs in the country.

Everest chairperson Margret Mwankomesha said her group had managed to receive KR20,000 under the Micro-Credit scheme and would distribute it to the group members to beef up their businesses.

Ms Mwankomesha said the support groups are empowering in that they provide members with the opportunity to take on new meaningful roles.

She said the funds would be used to increase their poultry business adding that early this year the group had an opportunity to access a grant worth KR10, 000 which had helped them to grow their businesses.

“We are based in Chipata Township and we have 16 members and we will share the KR20,000 loan from Indo Zambia Bank to increase our poultry business and we are very delighted that the bank has given us an opportunity to borrow money from them,” Ms Mwankomesha said.

Ideally, the groups support their members in rediscovering new roles and responsibilities, which have been lost, which in turn helps them to gain back control of their lives.

Another group based in George Township said, access to finance had been a major challenge and it was gratifying to note that Indo Zambia Bank was thinking about the plight of the poor marketers.

Tiyanjane chairperson Frasier Mvula said they had accessed KR10,000 from the bank which would be shared among group members.

“The funds would help us grow our business and we need to manage the funds so that we can be able to pay back the money. We want to encourage other women in the market to form groups and access loans as a group to grow their business further,” Ms Mvula said.

Therefore, banks and financial institutions need to disaggregate their portfolio and targets and put in place strategies that will help them to better understand and serve the diverse markets.

First and foremost, I want to point out that Non Governmental Organisation (NGOs) who are organising the demonstrations in Lusaka are not being sincere.

As far as I can see, the fight against the removal of fuel and mealie meal subsidies is a lone one and is not representative in any way of my poor relatives back in the village whose only source of a meal is soaked cassava and pounded maize. Subsidies on fuel and maize have always and will always benefit the rich of the NGO’s and not the poor.

Fellow Zambians, if we want to see development in this country now and even in future, then it only makes sense that one generation pays for it. The solution to our poverty levels lies squarely on us.

Removal of subsidies is one way of paying for the development. Surely, where else can money to develop this country come from, especially that donors such as the USA, UK are also struggling to meet the needs of their people? Most NGO’s consist of individuals who are well educated.

Therefore they should be the first to understand better the long term benefit of the recent move by government. How else do NGO’S think we are going to have all those roads constructed or repaired or even our rural clinics and schools built from which most of our poor benefit ? By borrowing? Further, removal of subsidy on maize will make us each find a piece of land and grow our own food.

I have lived all my life as a miner but during the last ten years I have never used my salary to buy mealie-meal or beans. Zambians be assured that this subsidy removal does not affect the poor but the elitist in Lusaka. It is in fact the cost of their living which has gone up.

The poor in this fight are just being used as scape-goats. Many of the men and women we are seeing on the streets clad in black are people who can afford to buy a six pack of alcohol each day for the same price as a bag of mealie-meal.

Removal of subsidies on mealie-meal will also level the market for such products as rice and potatoes which to a good number of Zambians especially women have equal or even more value than the so called staple food.

It is true, removal of subsidies may cost the PF elections, but if I were PF, I would choose to lose an election doing the right thing than the wrong thing.

Mukuka Chilufya

Chambishi Mine Township

On the other side of this fence were three justices who by similarity of their surnames, predictably dismissed the State’s appeal, saying High Court judge Fulgence Chisanga did not misdirect herself on the matter and that any person who felt aggrieved by the exercise of executive power could challenge it through court action.

Accusations of unethical conduct leveled against Zambia’s judiciary have done severe damage to the public’s trust in the judicial system at a politically inauspicious time like now, as observed by President Michael Sata.

The current situation does not put judges in a good light at all and they must do what is necessary to restore their reputation. Though, it is important that the Judicial Complaints Authority be allowed to do its work and take a detailed look at the allegations made against the judiciary.

But a major drawback in the current regulatory system for policing judicial conduct is the fact that serving judges head them and can, therefore, be put in the rather awkward, compromising situation of taking decisions against their brother or sister judges, some of whom are their close friends.

To avoid this conflict of interest, it is therefore imperative for the Tribunal to take the lead in advocating for judicial reforms.

Mubanga Luchembe

I believe people need to budget for them to effectively plan. They need to know in advance. Quiet alright, we know the date of the game and can reserve something for that day but the actual figures should also be known in good time for such good and meaningful planning.

My humble appeal to FAZ is to consider conservative and reasonable fares so as to give chance to many soccer loving Zambians to watch and cheer their national team. The gate charges should not be exhorbitant but affordable to all. Proposedly and ofcourse in my own opinion, besides the VIP, the gate charges must not exceed K50. This will certainly allow a lot of us to watch the match.

May i take this opportunity to wish our team all the best as they take on Lesotho.

Lupupa Kusensela

A KABWE housewife has narrated  in a magistrate’s  court how a prophet allegedly raped her, while he was conducting healing prayers for her.


The woman narrated before Kabwe resident magistrate Jennifer Bwalya that on March 14, this year, she travelled to Kasavasa area to see the prophet who was in the company of another person for prayers.

This is in a case in which the prophet, Anthony Musoka is facing one count of rape.

She told the court that two prophets went to Kasavasa area where they camped for a week and that it was during that time when her friend informed her about the personal prayers.

The woman told the court that she wanted personal prayers because she was experiencing prolonged menses.
 She said when she arrived in Kasavasa, she found a lot of people who were waiting to be attended to.

When her turn came, she met Musoka who was with another prophet identified as Stanley Chikwepele. 

She said Musoka told  her that  for her  problem to end,  she  needed  to bring with her clothes, a chicken, body lotion, KR10, and a 2.5 litre empty container.

Musoka also asked her to cut off the middle toe of the chicken and put the dripping blood in a container.

She told the court that the prophet told her to mix chicken blood and water and get to a maize field where the purported prayers were to be conducted.
When they got to the field, he made her to kneel, while holding a chicken.

She said the prophet later poured the blooded water on her and started praying for her.


To her surprise, Musoka pinned the woman to the ground and raped her.
She said she told her husband of the ordeal and the matter was reported to the police.


Another witness Felistus Ngamba testified that she recalled two prophets going to their area to conduct prayers and was shocked to learn that one of them had raped the woman.


The magistrate adjourned the case to Thursday for continuation of trial.