Guy Scott’s contribution on President Lungu’s speech to Parliament

Dr Scott (Lusaka Central): Mr Speaker, I would like to take this opportunity to commend our Government and its representatives in this House. I include His Excellency the President and, in this context, the Governor of the Bank of Zambia for taking a mature attitude towards the problem of the market crisis because it could have gone much worse.

Sir, I am not saying it is a nice story which we would like to happen again. What I am saying is that given that it happened, there are various things that could have gone wrong. The exchange control regulations could have been re-introduced immediately. We know, from our experience, as mature politicians and students of economics, that that does not work however much we want it to work. It keeps all investors out. There are many people with millions and billions of dollars which they would like to keep in Zambia or have just removed from Zambia. However, they do not want to put it back where it is trapped by an exchange fence. So, controversial as it may be, I would say that they have exhibited maturity. It is not difficult to see where some of the maturity is coming from. Forty-one years ago, our hon. Minister of Finance presented his first Budget to this House. Now, forty-one years later, which is more than double his age, he is in charge of the economy again.

Laughter

Dr Scott: Sir, I knew him when he was still a youngster. I am sure that if something like this had happened at that time, he would have reached for his statutory instruments, left and right, and started shooting from the hip, except he already had the statutory instrument then. So, he did not have to do that. Now, he is able to take this as a negative market occurrence that needs to be market-managed, if I can put it that way.

Mr Speaker, the Governor of the Bank of Zambia is also a very experienced manager of these issues. We could have easily ended up throwing billions of dollars at this problem and not actually have achieved the solution. So, in this world of imperfects where nothing is as you would like it to be, I am glad that things are a little bit better than they might have been. I just hope that the hon. Minister does not come to this House with his new Budget next week or whenever and oblige me to withdraw my congratulations. I would rather not be forced to do that.

Sir, I just want to talk a lit bit about the side issue of maturity in the Government. My idea or take on various Parliaments and forms of Government institutions across the world is that they contain veterans and wise men and women, champions of the State who are a repository of this kind of stability and institutional memory and realism. I am sure Her Honour the Vice-President has been of great help to this Government. She can remember even longer back than I can because she is three years older and she is also part of what I would like to see as the establishment of the House of Lords presence of wise people who had had, like in her case, a whole life in politics, having been married to a very senior politician, to still bring help. I hope the idea that she seems to be currently selling out is a printing mistake of some sort because the last time she moved a Motion that the House adjourns, she said:

“I urge the hon. Members of Parliament, as they move around their constituencies, to identify young people who can be mentored into future leaders. We need to pass the baton to some of the young people who aspire to be politicians. Perhaps, this message is for hon. Members who have been in this House for the last twenty or twenty-five years.”

Mr Speaker, there is not a single hon. Member of Parliament who has been in this House even for fifteen years. I am in my third term and about twelve other people. We are the longest serving hon. Members. There are the two-termers and some of them have even been speaking earlier. However, most hon. Members are one-termers.

Sir, this Parliament is a body that suffers from instability and fluidity. Most hon. Members have to learn from first principles of legislation. There are, however, few who know these principles and can teach them.

Mr Mbulakulima: That is correct!

Dr Scott: So, we should not sacrifice the composition of this House just to pacify our cadres or anything of that sort. Passing on the baton of leadership should not be a question of short-term political convenience. The composition of this House is as good as the collective wisdom this country gets and we should ensure that it is strengthened and available to whatever the Government is doing. If some of the chaps – sorry, not chaps …

Laughter

Dr Scott: If some of the hon. Members on the front benches of your left agree with me, I must be on the right track …

Hon. Opposition Members: Hear, hear!

Dr Scott: … because there is nothing else I agree with them on.

Laughter

Dr Scott: I am a practical kind of person. I am a counter and I do not know how many times I have had to count the word ‘diversification’. I have heard Her Honour the Vice-President and many others in this House say that we need to diversify our economy so that we have something else to sell for United States Dollars. We need to diversify from just exporting copper which, at the moment, is not worth very much in United States Dollars.

I sat down with my friends to take a case example of how we can diversify and chose a commodity. Ideally, we looked at producing a commodity which involved adding value to copper, since we have plenty of it. Although we looked at this from an economic point of view, we also took into consideration the environment and chose something which is generally simple to make in Kalingalinga or somewhere like that.

Sir, we came up with a solar geyser. The hon. Minister of Commerce, Trade and Industry should know that Zambia is the only country in the world which does not make solar geysers. We get solar geysers from South Africa or China. We give other people our copper and they engineer it into pipes, radiators and so on and so forth to make a solar heater and send it back to Zambia where it is bought for a high price. At the prime of the last election, I think the Government bought and installed solar geysers on roof tops houses of police officers’ houses.

Laughter

Dr Scott: Other countries also use our copper in many other ways. We cannot even supply ourselves with a simple heating instrument which captures the sun’s energy. The sun’s basic function is to warm up the earth. All that we need to help the sun heat our water is a simple instrument. Solar geysers really work and I have switched over to them. The water is hot even at the crack of down.

Therefore, I wonder how we are such poor diversifiers that we are unable to produce this elementary object. This is a no-brainer, as they say in east England. One does not even need a brain to make these things. What is the problem? So, my friends and I consulted some businessmen. As usual, there was a long list of complaints. There are various issues that came up and I think the Government needs to attend to them.

The first one, of course, is the interest rate. If you are going to import a machine for making copper pipes, which also will be very useful in plumbing, because we import it for that as well, you need to borrow money. If your interest rate is 27 or 28 per cent, which it is at the moment, and you are trying to fight against the Chinese who are at 6 per cent and South Africans at about 9 per cent, you will lose. It is a very straightforward trade off. I mean you just look at the numbers side by side. You do not have to be mystified by it. This strays into straight based policy of trying to stop the private sector from borrowing money, but what is one to do in order to strengthen the currency market.

We are trying to stop the private sector and leave the Government unhindered in borrowing money. Hence this negative effect that you are sitting there and sending a customer to China over something which is not at all sophisticated, but is made on the other side of the world. You have to put it on a ship and bring it on a truck.

The second concern that was frequent among all the businessmen we were discussing with was they keep writing to the multi-facility economic zone (MFEZ) management and applying for plots to build factories on the 2,000 hectare establishment on the Leopards Hill Road.

Mr Speaker, there are two factories there, each of them about one hectare in a 2,000 hectare plot. Not even 1 per cent of the land has been used. There is a barley malting plant for Zambian Breweries to make lager, a small installation for a pharmacist to make pills and an office.

It is like – I do not know whether hon. Members can remember because it was many years ago – there was a film called Pirates Texas. I am sure Hon. Simuusa knows it because he plays the guitar.

Mr Simuusa laughed.

Dr Scott: This person in the film loses his memory and he is seen wondering around what looks like the MFEZ. It is a vast tract of bush with massive power lines and six-lane highways and people going from nowhere to nowhere. This fellow is stuck in Texas in the bush unable to know where and which way he should go.

Mr Speaker, it might be educational for us, as Parliament, to view the movie and see how he got out of the bush with the lack of development and proceeded from there. So, I think we should, somebody said, “walk the talk”. I agree with this. We used to do it in my office. We said, “If your mention the word ‘potential’ one more time, you pay K50.00 and again…

Laughter

Dr Scott: … and, again, a K100.00.” We all got drunk on the money that one sacrificed talking about potential and still the potential is just thin air.

This diversification is the same word basically. It is the same idea, but there is no actual, touchable, tangible, graspable reality to it unless you get in and look at the dirty details and make them come our way, as well as stop the corruption that also surrounds the licences and the number of organisations from the Zambia Bureau of Standards to the Zambia Environmental Management Agency (ZEMA), the Energy Regulation Board, you can go on and on. You will never get a chance to actually make your geyser in this country because you are too busy trying to find the person who is supposed to be in the office.

Sir, , I think I will just conclude my contribution because the story very nearly came out yesterday when the hon. Minister of Mines, Energy and Water Development was responding to a question from your left hand side where the answer was, “No, it is just a regulator.”

Laughter

Dr Scott: The question was what the Zambia Revenue Authority’s powers are as I understand it. Not the Zambia Revenue Authority but the Zambezi River Authority.

When the Kariba Dam was built and the power station on the southern bank was also built during the Federation of Rhodesia and Nyasaland, there was no competition between the two nations. There were no two owners, but only one which was the federation of Rhodesia and Nyasaland.

When the federation split, the power station was kept as a unitary entity operated by a company called the Central African Power Corporation (CAPCO) whose function was to operate this on a rule based neutral basis and ensure that both owners got their fair share. Even the power station in Zimbabwe, as it became, or Rhodesia, we, as Zambia, owned half of it. They also owned half of the so-called power station on the north side except it was very complicated because of having to evade sanctions by the World Bank by legal finangling. For some reason, we decided to split. I think it was in the 1990s. We decided to split this organisation so that we, as Zambia, have our power station, whereby if we want to turn it on, we turn it on and if we want to turn it off, we turn it off. There is a regulator now in place of CAPCO who is supposed to tell us that no, you cannot do that. This is part of the background to the story.

The timer in the Chamber went off.

Dr Scott: I will get another twenty minutes.

Laughter

Dr Scott: Do not worry, Sir. It does not really work that way. Basically, what we have now is a weak regulator sitting between two puppies drinking milk from the same saucer. If one does not lick fast enough, it will not get as much as the other one. The equity between and the neutrality of that installation has got to be restored somehow by effectively bringing back the judgmental status of the neutral body and the discipline between the two countries.

Sir, it is terribly difficult to have a situation where a whole sovereign country can be regulated by a foreign regulator. It cannot happen. It needs to be built into something which you can rely upon such that you are not going to finish the water by September and then look for another source like the ship stranded on the shores of Mozambique.

Sir, this has been made much worse by the 360 MW contraption which was turned on last year. I am the one who turned it on and I said, “Is there enough water for this?” It was a huge contraption and everybody said yes, but we were only taking the peeks, anyway. When I went to sleep at the hotel down from the Kariba Dam, all night and morning the water gushed past. Once they had their toy, they pushed the button, turned it on and left it and down went the water.

I think it is a legal managerial issue, hon. Minister, that has to be addressed. It is not just a technical issue. It is very difficult to share hydro electric facilities with other countries. It is extremely difficult between two countries. It is a well-known problem throughout the world and I think it needs to be addressed.

With these few words, I will end my contribution.

I thank you, Sir.