Thu, 02 Nov 2017 11:51:53 +0000
Dear Editor,
In the last one month or so, our nation has been entertained with mixed comments regarding the 42 Fire Trucks that the Government of Zambia bought at a total cost of $42 million through a local company Grandview International.
I agree that a lot of people feel $42 million was quite exorbitant but the technicalities behind the specs and pricing are outside the scope of this analysis.
Allow me to illustrate some key positive elements the Public has not bothered to share on this transaction.
CITIZENS ECONOMIC EMPOWERMENT
This fire trucks tender went to a Zambian citizen owned local company and not a foreign company.
Our Government has been advocating for promotion of local empowerment under the Citizens Economic Empowerment Commission (CEEC)
In launching the 7th National Development Plan, HE President Edgar C. Lungu re-emphasised on this and I quote “To enhance competitiveness in the domestic and foreign markets, efforts will be directed towards supporting producers and exporters of Zambian products and safeguarding local industry from imports and unfair trade practices.”
In this regard, a foreign bidder should not create unfair competition in the tender process of products and services which will be financed by the Zambian treasury and benefit Zambians. Preferential treatment on Public Tenders should favour Zambian owned and controlled companies.
In the same 7th NDP President Lungu repeated his emphasis on the importance of joint ventures as the vehicle to our national development especially financing of public projects.
LOCAL TAXATION
Since Grandview International Ltd is a local Zambian company, established and governed under the Zambian Companies Act, this company can be audited at any time.
It will also be taxed by ZRA just like any other local company. our national treasury will again benefit through corporate taxes and emoluments based monthly taxes.
FOREIGN EXCHANGE STABILITY
Part of the $42 million paid to this local company could remain in local Commercial banks and this should help reduce unnecessary Foreign Exchange Pressure on our Kwacha.
Unlike a foreign company that sweeps all the money out of Zambia immediately they get paid.
For sustainable good kwacha performance against major foreign Currencies, we need to do more businesses with locally owned companies which will not externalise all their receipts.
SAFEGUARDING OF LOCAL JOBS
The employment security of staff members of Grandview International will be safeguarded through this transaction.
Unlike instances where a foreign owned company gets the contract, is handsomely paid then they disappear back to their countries leaving behind nothing.
Only local Companies can guarantee sustainable job security in Zambia.
CORPORATE SOCIAL RESPONSIBILITIES
I have been informed that this company is one of the major sponsors of a big Zambia Premier League Team based in Lusaka which is currently doing well in the MTN FAZ sponsored Premier League.
Unlike foreign tender “vultures”, this company will continue ploughing back in our community through the sponsorship of this club and other social responsibilities for many years to come.
CONCLUSION:
Zambia can only be developed when we put in measures at ZPPA that are pro-Zambian companies and pro-local initiative.
It is the Nigerian Economy that produced Aliko Dangote
It is the South African Economy that produced Patrice Motsepe.
If we don’t become selfish by starting to award more public tenders to local entrepreneurs, we should forget about real development and we shall continue being perceived as a Kantemba country for foreign firms who have no interest for local development.
We will keep admiring countries like South Africa which gives Tenders to its own Citizens owned companies through its Broad Based local empowerment Scores system.
Based on this local transaction, I congratulate the government of President Lungu for giving the money back to our local company and for sending a signal to foreign companies that there is pride in being Zambian.
Daaram Simakungwe
Kitwe +260953745200
