By Alice Pearce – Senior Researcher at PMRC

In a bid to address the high unemployment levels in Zambia the Government has been implementing a number of empowerment programmes, particularly those under the Ministry of Youth, Sport and Arts, Ministry of Community Development and Social Welfare, the Department of Gender, Citizens Economic Empowerment Commission and more recently, the Ministry of Local Government and Rural Development, among others, targeted at supporting the economic empowerment drive of the women and youth. These programmes are aimed at fostering job creation and economic growth through entrepreneurship as a vehicle. These programmes also provide citizens opportunities to participate in the growth of the economy by accessing capital to invest in viable business ventures.

Although the empowerment programme initiative is commendable as it supports innovation and entrepreneurship which are the critical pillars for economic growth and social and economic inclusion, notable challenges have been observed in the effective management and accountability of empowerment funds to derive real economic benefit to the beneficiaries as well as the government at large.

Therefore, financial literacy has emerged as an essential pre-requisite for effective and efficient management of the funds accessed by beneficiaries venturing into businesses under the current empowerment programmes. Not only will enhancing the financial literacy of beneficiaries increase the sense of ownership within beneficiaries of the funds, it will equally enable them to fully take control of the opportunities available to them and guarantee their businesses to be self-sufficient. However, findings from the 2020 FinScope survey indicate that a significant amount of the population experience low financial capabilities with financial inclusion recorded at 71.2% for men and 67.9% for women. This has been attributed to low levels of financial literacy which is largely skewed towards the urban population at 31.9% and 16.2% among rural households. Hence, limited financial literacy remains a major barrier for the successful implementation of economic empowerment programmes in order to transform the economic outcomes of ordinary citizens.

It is crucial to note that empowerment should not only be about access to seed capital, it should rather focus on providing a comprehensive programme that is sustainable by giving more power to beneficiaries through education, information, coaching and counseling, as well as amplify the possibilities to get or create a job or business, access micro-credits and ICT networks in order to inculcate business values in the beneficiaries, particularly for those who are not typically familiar with running a profitable business. Further, enhancing relevant trade skills has the potential to make beneficiaries competitive in their respective fields in order to maximise profit margins. Hence, Government is urged to consider integrating these aspects into the current empowerment programmes.

Furthermore, there is need to create guidelines that clearly identify eligible candidates through a robust mechanism that seeks to provide tailored mentorship and training programmes of candidates to actualise their business proposals. At the onset of the empowerment programme, eligible beneficiaries should be taught financial literacy courses before fully embarking on their investments as this will form the basic foundation for the success of the programme. Similarly, building the capacity of candidates in requisite financial, negotiation, marketing and product development skills is necessary to effectively achieve the goals of empowerment programmes.

Moreover, enhanced financial literacy skills will enable beneficiaries to effectively track their expenditure and balance their income with expenditure which is critical for assessing the profitability of the venture. By embedding basic business management practices and principles into the current empowerment programmes will enable candidates to understand the basics of business management and develop their competencies to generate and sustain their income while improving the sustainability of the empowerment programmes, particularly in the case of revolving funds were beneficiaries need to pay back loans. Equally, for funds accessed as grants, beneficiaries need to account for the funds in order to achieve the goal of the programme that has a multiplier effect which should trickle down to improved quality of life of the beneficiaries and direct economic benefits within the community as well as the local economy.

In addition, when beneficiaries of empowerment programmes are financially literate, it can be expected that there will be a general motivation to access formal financial services in order to expand their businesses as they will be able to have balanced and well documented business transactions. Therefore, there is need to facilitate linkages between financial lending institutions and beneficiaries of empowerment programmes in order to improve financial inclusion through technical assistance that relevant financial service providers are able to give to the beneficiaries. This will also nurture the skill of saving and growing the savings of the business which is critical for the evolution of the business from one of empowerment to that of self-sustainability.

The Policy Monitoring and Research Centre (PMRC) is a public policy think tank that was established in 2012 to promote public understanding through research and education. Our role is to encourage and facilitate debate on social and economic policy issues critical to national development. PMRC’s vision is “Unlocking Zambia’s Potential” through evidence-based policy research analysis and reform proposals. www.pmrc.com

PMRC is a grant-aided institution under Gazette Notice No. 123 of 2021 within the Ministry of Finance and National Planning.

The institutions’ core analytical areas include; economic Development, Good Governance, Natural Resources & the Environment, and Social Development & Livelihoods.

Within these work areas, PMRC seeks to:

• Promote public understanding through research and education;
• Encourage debate on social and economic policy issues critical to national development;
• Disseminate research-based policy reform proposals; and
• Support the Government in recommending policies and procedures critical for national development.

To deliver its mandate PMRC works with, and leverages pragmatic information, communication, and outreach networks of various institutions. These include Government, Civil Society Organizations (CSO), Academia, International Organizations and Cooperating Partners, National Assembly, Private Sector, and the Media. This approach of collaboration has enhanced PMRC’s relevance to national development through awareness of public policy.

Organizations striving for best practices in corporate governance will have in place a Board Charter that all board members understand and formally commit to through selection, induction and annual review process. Whilst the development and documentation of a board charter is generally unique to each organization and reflects the specific nuances of the business, several core components should be included in every such document.

It is against this background that the Policy Monitoring and Research Centre (PMRC) proposes to contract a legal/ corporate governance expert to develop a Board Charter that will form the basis for the operations of the PMRC Board of Governors as enshrined in the institutional constitution.

Objectives of the Assignment

The main objective of the assignment is to develop a Board Charter to set out the key values of the Policy Monitoring and Research Centre (PMRC) Board of Governors. To provide a concise overview of the roles and responsibilities of the Board of Governors, power of the Board, various board committees and their roles, separation of roles between the board and management, and the policies and practices in respect of corporate governance matters.

Scope and Objectives of the Assignment

The consultant will develop a charter with the following;

1. Terms of reference and person specification for board composition.
2. Standard Operations Procedures/Manual (SOP) Meeting operations (No of meetings, quorum, notices, etc).
3. Roles and responsibilities of the board and propose working committees.
4. Code of conduct for board members.
5. Board appraisal.
6. Risk management.
7. Reporting mechanisms.
8. Legal implications and provisions.

Expected deliverables

• Inception report.
• Board Charter.

Timeframe

This assignment will be executed over 10-working days.

Consultant specifications

• A Bachelor of Laws degree or any related field.
• Postgraduate Diploma in Legal Practice.
• A Legal Practicing Certificate is an added advantage.
• At least 10 years of experience in legal practice.
• At least seven (7) years of professional experience in the development of board charters.
• Proven experience in the development of board documents as evidenced by at least two case studies.
• Member of a corporate body.

Knowledge and skills

Working knowledge of Zambian laws is an added advantage.

Application procedure

Expressions of interest clearly marked “Expression of Interest for Consultancy to Provide Services for the Development of a Board Charter” must be submitted via email only to info@pmrczambia.net and copy human.resource@pmrczambia.net.

The closing date for the Expression of Interest is 22nd July 2022 at 17:00hrs Local Time. Late Expressions of interest will not be accepted.

Applications must be addressed to:

The Acting Executive Director

Policy Monitoring and Research Centre

Corner of John Mbita and Nationalist roads, Ridgeway

Private Bag, KL 10

Lusaka.

By PMRC Researchers – Emmanuel Mumba and Mabvuto Lungu

INTRODUCTION 

Over the period 2019 to 2021, inflation in Zambia has been higher than the 6-8 percent target range. Inflation averaged 9.1 percent in 2019, 15.6 percent in 2020 and rose further to an average of 22.1 percent in 2021. Inflation is a broad measure involving goods and services and not only consumer food. It measures the overall impact of price changes for a diversified set of products and services. Calculating the overall inflation rate for a country requires an index with broader coverage of items called basket. Depending on the country and its consumption habits of the majority of the population, the basket will have different goods. Some goods might record a drop-in prices and others may increase and the overall value of inflation will depend on the weight of each of the goods with respect to the whole basket.

 In 2019 and 2020, the increase in inflation was mainly attributed to the depreciation of the Kwacha against the trading currencies, and upward adjustments in energy prices (fuel pump prices and electricity tariffs). Upward pressures on food prices following the adverse impact of the 2018/19 drought and trade disruptions, that followed the lockdown measures taken in response to the COVID-19 pandemic in early 2020, also contributed to rising inflation. The higher inflation outturn in 2021, was also associated with a sustained increase in food prices and the depreciation of the Kwacha until the second half of the year.  The inflation in Zambia is as a result of price changes on several goods and services. In a hypothetical example, using one of the most consumed items in the country (cooking oil) from the basket for illustration purposes for a period January to April. Suppose the initial price of cooking oil in January is K70 and over the next months, increases to K100, K125, and K135 in February, March and April respectively, the rates at which the price of cooking oil increased from January to April are K30, K25 and K10 respectively as shown below. 

K70 K100K125K135 or   when expressed in percentage change. The rate at which prices of cooking was increasing from one month to another at a decreasing rate is what is called inflation. Therefore, a reduction in the inflation rate does not mean a reduction in the prices of goods and services but the reduction in the rate at which prices are increasing.

EFFORTS TOWARDS REDUCTION IN INFLATION BY GOVERNMENT 

Government has been using a mixture of monetary and fiscal measures to control the rate of inflation towards its aspiration of an inflation rate of between 6-8 percent.  Some of the key measures that the Government has been using to control inflation are not limited to the following: 

The monetary policy being one of the major tools used by the central bank to control inflation has been instrumental during this period. The Monetary Policy Committee (MPC), at its November 22-23, 2021 Meeting, decided to raise the Monetary Policy Rate by 50 basis points to 9.0 percent. This was done in order to help steer inflation to single digits in 2022 and to within the 6-8 percent target range by mid-2023 as stated in the 2022 Budget Address. As anticipated, a sharp decline was experienced in the inflation rate and during the previous two MPC meetings (in February 2022 and May 2022) the MPC rate has been maintained at 9%.

In the 2022 national budget, the Government initiated a number of reforms to support the agriculture, livestock and fisheries sectors. These included among others, the removal of 5% customs duty on the importation of cattle breeding stock and suspension of 5% customs duty on grandparent and/or parent stock of day-old chicks. These actions and many others have drastically addressed the supply shocks and moderately improved the price movements in food items such as meat. Subsequently arresting food inflation from a whole year high of 31.6 % in August 2021 to 9.7% in June 2022.

The Kwacha has been stable for the past few months in trading against major currencies, which has contributed to a reduction in inflation. In the last three months, the Kwacha has sustainably been on a bullish trend appreciating averagely at 5.8% monthly against the US dollar. This performance has been anchored on enhanced fiscal consolidation measures, positive market sentiments emanating from the progress made on the IMF Extended Credit Facilities with its accompanied debt structuring programme and support from the Central Bank through its open market operations. Other factors that have buoyed up the Kwacha sprung from the encouraging dollar-quoted tax declarations from the mining sector. These factors have unwaveringly reduced the imports value basket for the imports-dependent local manufacturing sector, reducing production costs and thus, moderating consumer price levels. 

Government is urged to continue with its fiscal consolidation measures towards achieving a stable single-digit inflation rate which will positively impact the prices of goods and services in the long term. Lastly, in order for the gains of the single digital inflation to be realised and yield economic dividends through the reduction of the cost of living, there is need for continued stability of the exchange rate as well as stable fuel prices which are critical determinants for the cost of goods and services through its impact on the cost of production. 

Equitable access to and ownership of land is cardinal in fostering socio-economic development that results in empowerment for all citizens. However, key sections of society such as women, youth and persons with disabilities have continued to face barriers in the acquisition and ownership of land. This is partly attributed to social practices and beliefs as well as the lack of economic inclusion, which have excluded certain sections of society from owning land by virtue of their socio-economic status, physical ability and gender.

The United Nations Charter of 1945 which Zambia is a signatory to, recognises human rights and economic and social development as closely interrelated. The Charter acknowledges the implications of insecure land tenure on people’s livelihoods, dignity and survival. Hence, there is need for changes in societal norms to ensure that vulnerable groups have unrestricted access to land, secure land rights and are empowered to make their own decisions about land use.

Given the dual nature of Zambia’s land tenure, women, youth and persons with disabilities tend to hold land on customary tenure because it is cheaper and relatively easier to access than state land. However, the lack of security of land due to inadequate documentation to claim ownership has made it easier for people to be displaced. Recognising this challenge, Government has been rolling out a National Land Titling Programme in order to secure land ownership rights to land holders. However, there is an urgent need to amend the 1995 Lands Act in order to guarantee customary land rights.

As a fulfillment to Government’s commitment to uphold human rights, the 2021 National Lands Policy was instituted to address the various challenges related to access and control over land and its resources with special recognition to women, youth and persons with disabilities. This is especially important since securing land rights reduces their vulnerability through increased individual agency and socio-economic status.

Several policy measures have been put in place in order to allow for equitable land distribution. These include; facilitating the ownership of land by Zambian citizens in order to promote decent livelihoods and socio-economic development, regulating the land ownership of non-Zambians in order to facilitate reasonable access to land, achieving a gender sensitive and youth friendly land sector which is inclusive of persons living with disabilities and other socially marginalized groups, strengthening the land allocation mechanisms in order to improve security of tenure, among others.

Additionally, land distribution quotas have been effected in order to improve access and ownership of the resource. Government has revised land distribution quotas to 50% of available land for alienation being reserved for women and 20% for the youth and Persons with Disabilities. This pronouncement is also in line with promoting gender equality and socio-economic inclusion of women, the youth and persons with disabilities as envisaged in the National Gender Policy, National Youth Policy and National Disability Policy. It has also aided in uplifting livelihoods and enhancing greater participation of all citizens in national development.

Furthermore, Government’s revision of the contractual age for youths to own land from 21 to 18 years will make land more accessible to young people and enable them to contribute to the growth of the economy by venturing in agricultural and entrepreneurial activities. This affirmative step will empower women, youths and persons with disabilities through ownership of assets, which can be used as collateral to obtain financing from formal financial lending institutions such as banks. These policy measures need to be implemented effectively in order to enhance access and ownership of land to key groups and other marginalised persons in line with Government’s aspirations of promoting gender equality, inclusivity as well as equitable distribution of the country’s resources.

  By Alice Pearce- Senior Researcher