Monday, January 29, 2007
We started today with a visit to the Ministry of Finance, where we met with Pamela Kasese Bwalya.
Ms. Bwalya explained to us that since 2000, Zambia’s debt has shrunk from $7 billion to about $700 million, creating space in the budget, enabling the country to do more for its people...or so we thought We learned that debt relief will free up $40 million in the 2007 budget. The priority areas for using this money includes agriculture, agriculture, water and sanitation, education and health.
We were surprised to learn that the amount of savings was so small –- and almost all of it due to IMF debt cancellation. Based on a debt sustainability analysis by the World Bank which finds Zambia’s debt to be “sustainable,” Zambia is ineligible for more concessional credits from the World Bank. This means that World Bank debt cancellation won’t actually free up additional resources in Zambia in 2007.
In presenting the government’s priorities, Bwalya pointed to the government’s new Fifth National Development Plan, which outlines the government’s plans to meet the Millennium Development Goals. But they have a more than $750 million financing gap to reach the goals.
As we asked Ms. Bwalya what we could do, she suggested we lobby our government and other donors to provide more grants to Zambia to enable it to reach its development goals.
After the Ministry, we went to visit our friends at the Catholic Center for Justice, Development and Peace (CCJDP). There we met Mulima Kufesika-Akapelwa, Emmanuel Mali, and Namukolo Liywalli, who are working hard to monitor how the government uses the funds released by debt relief and to work to hold the government accountable for promises to increase social sector spending.
Mulima confirmed that “the need is too great compared to the monies we are receiving.”
We also talked about the role of the IMF in Zambia. Right now CCJDP and other groups we have met including Jubilee Zambia, Jesuit Center for Theological Reflection, and Civil Society for Poverty Reduction are very concerned about an IMF proposal to put in a Value Added Tax (VAT). The tax would be applied to books, mosquito nets, food, and drugs. The organizations are understandably concerned that these taxes would hit the poorest hardest.
While it is clear that Zambia needs to increase its tax revenue -– a critical source of finance to ensure its development -– many in our group wondered about corporate taxes in Zambia. We learned that many foreign companies are given five year tax holidays! Common practice at the end of five years is that the companies disband, and re-form under a new name so that can preserve their tax holiday.
We also learned that Zambia gets only miniscule royalties on the extraction of its copper. The mining companies pay almost nothing for removing the valuable metal, while charging buyers a price that more than makes a profit. The group agreed that rather than charge the poor a tax on food, it was high time that corporations paid their fair share in Zambia.
We also learned about privatization. The government, under the direction of the IMF has recently privatized the national bank. Organizations are concerned about the impacts of this privatization on small farmers and small business. Will the new Dutch company which owns the national bank extend them loans?
We’ll be meeting the IMF Resident Representative Joseph Kakzoa in Zambia tomorrow, and we have a lot of questions for him. We’ll report on how it goes tomorrow.
We ended the day with a visit to an amazing organization called Women for Change led by Emily Sikazwe. This amazing group, founded in 1992, works with more than 600 groups and more than 200,000 people in the most rural and isolated parts of Zambia. They do economic empowerment, human rights education, HIV/AIDS prevention, and advocacy.
As Emily told us, “Poverty is human made and so humans can eradicate it. Debt can be cancelled by human beings because we created it.”
Women for Change works directly in rural areas and they also mobilize. Emily told us the story of how they demonstrated outside a hotel where the IMF mission was meeting in Zambia last year. They got arrested. “We get arrested, we get bashed, we get threatened with deportation, but life goes on,” she said.
As we were getting ready to leave Emily invited us to her home for our final dinner before we depart for home on Tuesday night! We are looking forward to some great Zambian nshima with Emily and our other friends on our last night here.
--Neil Watkins
We started today with a visit to the Ministry of Finance, where we met with Pamela Kasese Bwalya.
Ms. Bwalya explained to us that since 2000, Zambia’s debt has shrunk from $7 billion to about $700 million, creating space in the budget, enabling the country to do more for its people...or so we thought We learned that debt relief will free up $40 million in the 2007 budget. The priority areas for using this money includes agriculture, agriculture, water and sanitation, education and health.
We were surprised to learn that the amount of savings was so small –- and almost all of it due to IMF debt cancellation. Based on a debt sustainability analysis by the World Bank which finds Zambia’s debt to be “sustainable,” Zambia is ineligible for more concessional credits from the World Bank. This means that World Bank debt cancellation won’t actually free up additional resources in Zambia in 2007.
In presenting the government’s priorities, Bwalya pointed to the government’s new Fifth National Development Plan, which outlines the government’s plans to meet the Millennium Development Goals. But they have a more than $750 million financing gap to reach the goals.
As we asked Ms. Bwalya what we could do, she suggested we lobby our government and other donors to provide more grants to Zambia to enable it to reach its development goals.
After the Ministry, we went to visit our friends at the Catholic Center for Justice, Development and Peace (CCJDP). There we met Mulima Kufesika-Akapelwa, Emmanuel Mali, and Namukolo Liywalli, who are working hard to monitor how the government uses the funds released by debt relief and to work to hold the government accountable for promises to increase social sector spending.
Mulima confirmed that “the need is too great compared to the monies we are receiving.”
We also talked about the role of the IMF in Zambia. Right now CCJDP and other groups we have met including Jubilee Zambia, Jesuit Center for Theological Reflection, and Civil Society for Poverty Reduction are very concerned about an IMF proposal to put in a Value Added Tax (VAT). The tax would be applied to books, mosquito nets, food, and drugs. The organizations are understandably concerned that these taxes would hit the poorest hardest.
While it is clear that Zambia needs to increase its tax revenue -– a critical source of finance to ensure its development -– many in our group wondered about corporate taxes in Zambia. We learned that many foreign companies are given five year tax holidays! Common practice at the end of five years is that the companies disband, and re-form under a new name so that can preserve their tax holiday.
We also learned that Zambia gets only miniscule royalties on the extraction of its copper. The mining companies pay almost nothing for removing the valuable metal, while charging buyers a price that more than makes a profit. The group agreed that rather than charge the poor a tax on food, it was high time that corporations paid their fair share in Zambia.
We also learned about privatization. The government, under the direction of the IMF has recently privatized the national bank. Organizations are concerned about the impacts of this privatization on small farmers and small business. Will the new Dutch company which owns the national bank extend them loans?
We’ll be meeting the IMF Resident Representative Joseph Kakzoa in Zambia tomorrow, and we have a lot of questions for him. We’ll report on how it goes tomorrow.
We ended the day with a visit to an amazing organization called Women for Change led by Emily Sikazwe. This amazing group, founded in 1992, works with more than 600 groups and more than 200,000 people in the most rural and isolated parts of Zambia. They do economic empowerment, human rights education, HIV/AIDS prevention, and advocacy.
As Emily told us, “Poverty is human made and so humans can eradicate it. Debt can be cancelled by human beings because we created it.”
Women for Change works directly in rural areas and they also mobilize. Emily told us the story of how they demonstrated outside a hotel where the IMF mission was meeting in Zambia last year. They got arrested. “We get arrested, we get bashed, we get threatened with deportation, but life goes on,” she said.
As we were getting ready to leave Emily invited us to her home for our final dinner before we depart for home on Tuesday night! We are looking forward to some great Zambian nshima with Emily and our other friends on our last night here.
--Neil Watkins
I will pray honestly for your orginization. There is nothing impossible with God.
Women are anointed to do exploits for God.
(Daniel 11:28, 32)
Be blessed,
Sarah Anderson
Posted by: Sarah Anderson | January 30, 2007 at 07:43 PM