C CEEC Inte ernal Bullletin
Issu ue 4 - SPE ECIAL ISSUE E COMMEMO ORATING WO ORLD AIDS DAY D – 1 DEC CEMBER 200 08
REF FLECTION:: ECO ONOMIC IM MPACT OF HIV/AIDS S ON BUS SINESS
INSIDE N THIS ISSUE
IMPA ACT ON THE BOTTOM‐LIN NE Therre is evidencee from multin national companies, as weell as small and medium en nterprises, revealing r that companies are being b forced to address the issues of HIV//AIDS, TB, and a malaria n not for reassons of goo od corporate citizensship, but out of sheer selff interest. AID DS strikes individualss in their most productivee years. Todaay, overr 37 million people p living with HIV aree between th he agess of 15‐49. Th he greatest number of new infections is targeeting the futture workforrce, young ad dults betweeen the aages of 15 to 24 years of age. For companies possessing p workforces w in n regions that havee high rates of HIV infectio on or burgeon ning epidemiccs, the ggrowing HIV rrates in the w workforce and d communitiees in which they operate increasse the cost off business as a result of:
E Economic Imp pact of HIV/AIDS on Busine ess
2 2008 Global Coalition C Busin ness Awards
S SANDVIK Minin ng and Constrruction
C CEEC Program mme News and d Updates
process SSector Code development d C Case study: BD DS Voucher Schemes – Zam mbia
________________ _________ _______ “The onlly thing that spreads faaster than HIV/AIDS is H i a positivee attitude” – anonymou us
Profitability: With h a greater number of em mployees fallin ng sick due to HIV/AIDS, companies aree faced witth increeased costs due d to rising costs of heaalth insurancce, sick leave and funeral benefitts. Companiees also have tto bearr the costs off recruiting and a training new staff. HIV also threatens ecconomic prossperity by pu utting nation nal econ nomies at risk, deterring investment and a decreasin ng . outp put for foreign n exchange
________________ _________ ________
Prod ductivity: Pro oduction line es, management structurees and cohesion in the workplacce are directly undermineed by in ncreased abssenteeism from sickness,, caring for ill family memberss, and prep paring for and a attendin ng funeerals of AIDS vvictims. Greatter staff turno over also lead ds to knowledge k an nd skill loss among emp ployees. Loweer moraale due to illness and losss of co‐workers threaten ns the sstable environ nment neede ed to sustain o operations.
Continued d on Page 2
CEEC Internal Bulletin REFLECTION: ECONOMIC IMPACT OF HIV/AIDS ON [Continued from Page 1]
IMPACT ON MACROECONOMIC STABILITY HIV/AIDS devastates the fabrics of society in sub‐ Saharan Africa. The disease is escalating rampantly in the world's fastest growing markets, including China, India and Russia. AIDS stands to alter economic potential and political stability in our world's most fragile economies as a result of: National Budgetary Constraints: A weakened economy and the increased demand for healthcare services strains public sector capacity. AIDS forces countries to reassess budgeting decisions, as they must decide whether to shift spending priorities to create more available money for growing healthcare needs. Currently, per capita health spending per year in the world's least developed countries is $US 11. In high‐ income countries, this number increases astronomically to $US 1,907.(i) The decline in consumer spending as a result of HIV/AIDS is also associated with a decrease in government revenue. The growing need for services and declining revenue leaves governments with increasing deficits, deterring the possibility of foreign investment. Loss of Human Capital: Overall losses in GDP have been difficult to model. Some estimates reveal losses of up to 2‐3% in nations with HIV infection over 10%. A recent report by Heidelberg University and the World Bank argues that many estimations are modest, failing to account for loss in human capital, the increasing numbers of AIDS orphans worldwide and the loss of skills and education over generations.(ii) Over 15 million children under 15 years of age have lost parents to the disease, a number that is expected to almost double to 25 million by 2010. Where poverty and armed conflict exist simultaneously, HIV/AIDS becomes a development setback that can erase nearly four decades of economic progress.
Impact on National Security
AIDS is decimating economies and destabilizing armed forces around the world. The cruel irony of the disease is that it spreads faster and is most deadly in countries that are burdened with widespread poverty and armed conflict. Particularly dangerous and heartbreaking is the widespread presence of abandoned and orphaned children as a result of HIV/AIDS, often unable to get the nutrition, education, and skills transfers required for them to be a fully productive workforce. AIDS orphans are particularly vulnerable to violence, exploitation and abuse. Orphan exploitation can take the form of child soldiers, laborers or sex workers. By 2010 the number of children orphaned by AIDS in Africa alone will number around 18 million. On a global level, civil and international conflicts contribute to the spread of HIV as populations are destabilized and armies move across new territories. HIV is attacking the armed forces of African countries at more than double the rate of local populations.
CEEC Internal Bulletin _____________________________________________________________________________ 2008 GLOBAL BUSINESS COALITION AWARDS FOR COMPANIES FIGHTING HIV/AIDS, TB, & MALARIA [From Business Day December 1 2008]
_____________________________________________________________________________ At a decisive crossroads in the struggle against global epidemics, the Global Business Coalition on HIV/AIDS, Tuberculosis and Malaria has honored nine companies implementing the most sophisticated, effective programs using the particular and pivotal capabilities of business to fight disease. The South African company Xstrata Coal received an award for its work in developing a public‐private partnership with the health and social services department in Mpumalanga, South Africa, to improve HIV services at clinics in communities where the company operates. The Standard Bank has been awarded for its HIV/AIDS program, which uses a storytelling technique to reduce HIV‐associated stigma and to encourage employees to be tested for the virus. The company also provides HIV‐positive employees with treatment and care. In addition, Telkom was awarded for its efforts to promote HIV testing and counseling among employees and their families. Two‐thirds of Telkom employees and their partners have been tested for HIV since the program was implemented. GBC also recognized Becton, Dickinson and Company for its efforts to improve access to TB diagnostic equipment in developing countries. Exxon Mobile for committing $45 million to malaria research, and community disease control and advocacy. Other GBC award recipients include Viacom for HIV/AIDS leadership, Johnson & Johnson for its work with the mothers2mothers program, BBC World Service Trust for its HIV/AIDS media campaign in India and the Italian bank Intesa Sanpaola for its community project in Malawi.
“We are talking not only about a crisis – but a catastrophic situation with impact far beyond the sub‐ Saharan African region. Demographics will be altered as Aids takes the lives of people in their most productive years. As business leaders, we have a unique contribution to make to the fight against AIDS by bringing together governments, communities, and businesses in the common fight against AIDS. Investing in AIDS is investing for the future of
humanity” –Jan Leschly, Care Capital
In addition, the Global Business Coalition commended the following companies for their outstanding work: •
• • •
Commended Women & Girls: Levi Strauss & Co. Sandvik Mining and Construction Zambia Limited Commended Workplace HIV/AIDS: East African Breweries Limited Accor Commended Testing & Counseling HIV/AIDS: Dunavant Zambia Ltd. BRALIRWA SA Commended Community Philanthropy HIV/AIDS: Total E&P Angola Cisneros Group of Companies Thanda Private Game Reserve Commended Expanded Community Initiatives HIV/AIDS: Mercedes‐Benz SA Rio Tinto Debswana Diamond Company Commended Core Competence: Pfizer Inc Nike, Inc. SA BD (Becton, Dickinson and Company) Commended Tuberculosis: Total Myanmar Tibotec Commended Malaria: DHL
CEEC Internal Bulletin Commended: Women & Girls
REGION: ZAMBIA INDUSTRY TYPE: MINING CONTRACTOR COMPANY: SANDVIK WEBSITE: www.miningandconstruction.sandvik.com Since 2005, Sandvik has supported Women’s Clubs in Zambia’s Copperbelt Province, provided community outreach and education on HIV/AIDS, and offered counseling and support for couples and families to help educate women and girls about HIV/AIDS, impart skills, and create new opportunities for individual empowerment. Goals To empower women and girls with knowledge and skills—including information on HIV/AIDS and income generation—to be influential in the workplace, household and community. Program Scope Women’s Clubs operate in Kitwe, Chililabombwe, Mufulira and Luanshya, Zambia and have a total of 210 active members. To complement and support these efforts, Sandvik partners with the Swedish Workplace HIV and AIDS Programme, Zambia Health Education and Communications Trust, Zambia Business Coalition on AIDS, Zambia National Broadcasting Corporation and National AIDS Council. Outcomes To date, 112 couples, 213 individual employees and 78 individual spouses have undergone on‐site VCT. According to the Zambia National Broadcasting Corporation, two million listeners tune in to Sandvik’s weekly radio show, “Women on the Move.” Of the 210 active members in Sandvik’s Women’s Clubs, 115 have attended formal training on income generating activities.
ABOUT SANDVIK MINING AND CONSTRUCTION Sandvik Mining and Construction Zambia Limited is the single largest supplier of underground equipment to the Zambian copper mining industry. In the past seven years it has also become the biggest service provider to the mining industry for underground equipment performance contracts. THE COMMENDED PROGRAM Situated within the context of Zambia’s male‐ dominated mining industry, Sandvik’s Women’s Clubs provide a glimpse of the tremendous potential of HIV/AIDS programming for women and girls to serve as a catalyst for empowerment in the workplace and community. In 2005, Sandvik established Women’s Clubs in four towns in Zambia where the company has major operations. Women’s Clubs are completely member‐driven; their activities include trainings and workshops on topics such as sexual harassment and income generation, which help educate women and girls about HIV/AIDS while creating a safe space for open discussion. Program activities at Women’s Clubs are coupled with community outreach by Sandvik experts (including monthly talks on HIV/AIDS, hygiene and infant care for new mothers), and counseling and support services at Kitwe Central Hospital, Salem Children’s Village and community organizations. Program staff, volunteer counselors and peer educators also facilitates discussions with couples about voluntary counseling and testing (VCT) in employees’ homes to address stigma and increase VCT uptake. CRITICAL SUCCESS FACTORS Providing Leadership Opportunities for People Living with HIV Since the program’s inception, HIV‐positive employees have served as advisors for Sandvik’s programs. In 2004, for example, Henry Chihana, a Heavy Equipment Repair Technician, disclosed his status and became an in‐house advocate. He was later elected Chairman of the Workplace Committee and his ideas spurred the establishment of Women’s Clubs.
CEEC Internal Bulletin Soliciting Feedback from Employees Prior to Implementation Throughout the planning of the program, employees provided critical input and feedback. This consultation secured buy‐in from employees and paved the way for easier implementation and better uptake of program services. BROADLY APPLICABLE PRINCIPLES Integrated Fundraising Mechanisms Ensure Sustainability In order to promote ownership, Sandvik provides Women’s Clubs with seed money for income generating activities such as tie and dye, home décor and catering. Funds generated from the sale of items produced during trainings are retained by the club to supplement costs of subsequent trainings and other activities thereby ensuring the program’s sustainability. Focus Groups Help Refine Strategies and Enhance Impact As a result of the lessons learned through focus groups, Sandvik adopted a two‐pronged approach to VCT where shared confidentiality was promoted and also written into the company policy and where on‐ site VCT was made available. As a result of this, VCT uptake at focus group sessions subsequently rose from 50 percent to an average of 95 percent.
LOAN DISBURSEMENTS: The following citizen‐ owned companies have had their projects appraised during the month of November and will soon be issued with loans. Client Judbry Enterprises Mopao Enterprises Ltd Mutanda Leisure Resort Ltd JAZZ Engineering Ltd JEDA Engineering Ltd
Nature of Loan
Establishment of a bakery in Kazungula Working capital to procure cement stocks Rehabilitation of a lodge and procurement of furniture and fittings Procurement and installation of a Lathe machine Procurement and installation of a Lathe machine
K184,902,680.00 K50,000,000.00 K250,000,000.00
Honorable R. Taima, MP, Conducts familiarization Tour of CEEC The Honourable Deputy Minister for Ministry of Commerce, Trade and Industry, Honorable Richard Taima, MP��conducted a familiarization tour of the Citizenship Economic Empowerment Commission on 2nd December 2008. He appreciated the DG’s presentation on the noble tasks of empowering citizens in spite of the many challenges that CEEC was facing. He could not agree much more with the DG that the impression that the majority of the people have is that CEEC is about empowerment funds. He stated that “There is much more that needs to be done to make the elite, the parliamentarians and the general citizenry appreciate the empowerment crusade that CEEC is pursuing through the nine pillar of empowerment.” He pledged to join others in the Ministry in giving support to the noble cause of CEEC but emphasized the fact that despite the difficulties CEEC was encountering in its process of delivering empowerment, the society at large was waiting for results. The people want to see tangible results on the ground related to poverty reduction, wealth creation and reduced income inequalities.
Deputy Minister, Honourable Taima, second from left, with CEEC Director General, Mrs. Mabel Mungomba (second from right), CEEC Finance Director, Mr. Dean Chanda (right) and CEEC Director of Empowerment Programmes, Mr. Richardo Lupenga (far left)
CEEC Internal Bulletin
CEEC has made two staff hires recently. Mr. Alinani Simukonda (left) has been hired for the position of Executive Assistant to the Director General. Mr. Simukonda was formerly the Head of Business Development at Intermarket Banking Corporation where he was in‐charge of Commercial Banking Business‐retail and corporate banking. Mr. Simukonda will be actively involved in office coordination in terms of operations of the Commission, networking with key stakeholders, and advising the Director General on selected assignments related to Empowerment Programmes in Zambia. Mr. Simukonda is married with three children. CEEC also hired Ms Kasapo Mutoni (right), formerly the Human Resource and Administration Officer for Public Services Pensions Fund. Ms Mutoni will be managing issues related to staff welfare as the new CEEC Human Resource Manager. Ms Mutoni loves going to the gym and cooking. She is engaged and has one daughter. A big welcome to the two of you!
Corrigenda – Training of Trainers in Credit Appraisal – Mwila Mutale In the last CEEC Bulletin, Mwila Mutale was omitted as part of the team that facilitated the Credit Appraisal Workshop. Mwila is the Credit Control and Risk Manager at CEEC and participated in the Credit Appraisal Workshop that was organized by the Planning and Coordination Manager for PECs. His facilitation role involved taking participants through issues relating to structuring loans; post disbursement credit administration, security handling and common risks faced by businesses and mitigating against them. Our apologies Mwila for that grave omission!
CEEC Internal Bulletin Progress on the sector code development process The Technical Working Groups (TWGs) under the Agriculture Sector Code Development Work have finalized their work in drafting the sector code. ZNFU as the lead organization managed to lead the drafting process during the past two months by bringing together a number of key stakeholders to drive the process. The groups had been meeting from October 2008 to November 2008 with a four‐fold purpose: Ranking the nine pillars of economic empowerment; determining the elements of the score card; ascertaining the weightings of the score card; identifying opportunities and challenges in the Sector to enhance opportunities within the sector; identifying the responsibilities that the stakeholders would need to undertake and identifying mega‐projects that the sector would undertake to bring out empowerment as well as the mechanisms for undertaking such projects. The development process included a participatory process with players and stakeholders within the Agriculture Sector. The TWGs each looked at a pillar of economic empowerment. Each group selected a chairperson and a secretary. Groups were provided a framework sample from the South African BEE scorecard. The groups were also expected to consult and refer to the CEEC Act, CEEC Guidelines to Developing Economic Empowerment Sector Codes, the Fifth National Development Plan and the Vision 2030. Groups that had met earlier had their work evaluated by colleagues that met later. The Chairpersons of the TWGs were selected to be part of the Sector Council. The council is currently sitting to culminate the recommendations made by all the TWGs before these are eventually passed to the CEEC for scrutiny.
The following pertinent issues were repeatedly raised during the meeting: • Participants felt that there should be a relationship between the sector codes and the disbursements of funds in order to ascertain that favorable empowerment of citizens. • The Agriculture Sector consists of many unregistered businesses. PACRO encouraged the agriculture sector to focus on registering their businesses as doing so increased their chances for funding from the CEEC. Participants were further informed that through formalization of businesses, there was more revenue for the state. • Access to land by citizens was visibly linked to the first pillar promoting economic empowerment, without which it deterred economic empowerment in the Agriculture sector. Although a Land Act exists, the system still has many problems in surveying and land registration that has affected ownership of land among citizens. There is a need to have the defects fixed in order for the Agriculture Sector to benefit from the formal land system. • It was essential that the Procurement Act fosters an entrepreneurship culture amongst previously disadvantaged groups. • The co‐operatives were identified as strategic avenues through which socio‐ economic development programmes could be delivered to the people, particularly the smallholder farmers in the rural sector.
CEEC Internal Bulletin
It was hoped that with the empowerment fund and skills development, these co‐operatives could be developed into autonomous, viable and demand driven co‐operations that could promote the economic empowerment of Zambian citizens. The Citizens’ Economic Empowerment Commission is expected to continue the process of driving sector code development process during the coming months. It has been established that a lot of sensitization has to made to the general public and key stakeholders on the relevance and meaning of the sector codes. The public and the sectors have to be continually reminded that: • The process of developing the sector codes, expresses the commitment of all stakeholders in the sector to the empowerment and transformation of the sector and its commitment to working collectively to ensure that opportunities and benefits of the sector are extended to all Zambians. • The codes are to be developed to advance the objectives of the Citizens Economic Empowerment Act. • The codes constitute a framework and establishes the principles upon which citizen economic empowerment will be implemented in the agriculture sector. • The code provides the basis for the sector’s engagement with other stakeholders, including government and the private sector. Apart from the agriculture sector, other sectors have slowly shown interest in developing the code but have not gone far due to financial constraints. Most sectors have identified key stakeholders and are ready to begin developing their codes or be trained in the sector code development process. With much participation and involvement by all stakeholders, the processes are likely to enhance the empowerment process in the coming months.
ZACCI EXECUTIVE COMMITTEE
ZACCI elected new Executive Committee members during their AGM held on Friday 28 November 2008, the Executive Committee is now as follows: Mr. Hanson Sindowe – Chairperson Mr. Geoffrey Sakulanda ‐ Vice Chairperson South Mr. Eddie Kapungulya ‐ Vice Chairperson North Mr. Ezekiel Sekele – Treasurer Mr. Abel Mkandawire – Trustee Mr. Ashok Oza – Trustee Mr. Wamulume Kalabo ‐ Immediate Past Chairperson
ZNFU '4455' scheme Farmers can use SMS to locate buyers for maize, goats, cattle, beans, ground nuts, honey etc via the ZNFU ‘4455 scheme’. To find out more about the ZNFU '4455' scheme - which was set up by AfriConnect's iSMS team - you can visit www.farmprices.co.zm website which details how you can access the information. Try it! For example, send an SMS with the word 'beef' to '4455' and you will receive back a list of all the buyers and how much they will pay. You can also narrow it down by province/district if you know the right short-code. A user guide is at http://www.farmprices.co.zm/media/smsi nfo.pdf The cost to the users is K630.
C CEEC Inte ernal Bullletin The traditional fun nding approaach outlines how the externaal donor takkes on the single role off sponsor, while the governm ment receivees the funding for a conven ntional subsid dy programm me. The BDSS provider charges the normaal rate but government covers a known percentage of the costs of acquiringg the BDS. The beeneficiary wiill only be expected e to meet the balancee cost after the governmeent subsidy co omponent has beeen deducted d. The government has complete control which leavees little or no o room for beneficiary b ownersship. In thee voucher scheme s insp pired by the market development appro oach, govern nment only deals d with DS facilitator, who man nages both the BDS the BD provideer and the en nd client by d distributing vo ouchers to the client, and reedeeming vo ouchers for the BDS provideer and later p paying them aafter confirmiing service deliverry. The facilitator further accountss for the voucheers redeemed d and paymeents made to o the BDS provideer. This modeel serves as th he benchmark for most BDS‐Vo oucher prograams.
BD DS Voucher Schemess – The Zambian Experience so far – PART 1 Re eproduced with w permiss sion from ZA ACSIMBA
BD DS voucher scchemes have been implem mented in maany countriess with different levels off success, thee BDS vouch her approach h is in line with the maarket develo opment apprroach, which h is now gen nerally adoptted as a morre sustainablee manner forr Business Developme ent Servicees (BDS) com mpared with the trad ditional BDS funding approach (see ffigures below)
Lesson ns learnt Studiess of existing vvoucher schem mes have pointed to a variancce in practicess. Lessons fro om SME voucher schemees in Kenya and South Afriica are tabulaated below: SME vo oucher schem me in Kenya Main FFeatures • Differrent condition ns applied to different levels of enterrprise sophisttication • Gave room for thee SME client tto graduate to o become a BDSS provider • Government was tthe main drivver • It had d a focus on vvocational skills and busineess manaagement train ning Lessons Learned • Goveernment shou uld not be thee administrato or. Private secto or should adm minister • BDS p providers sho ould be upgraaded through TOTs • Subsidy should bee reduced to eencourage sustaainability at all levels of inttervention Prepaare an exit strrategy for witthdrawal from m vouch her‐dominateed market
CEEC Internal Bulletin BDS Voucher Schemes – The Zambian Experience so far – PART 1 (continued from pg 9) RSA Youth Fund Voucher program Main Features • Tight selection criteria • Geographically oriented • Growth sector focus • Young people bias • Strong cost‐sharing component Lessons Learned • Maintain a flexible list of service providers. Eliminate non‐performers • Offer financial resources to institutions that show interest in opening new offices in un‐ serviced areas, or designing new products and services • Publish performance indicators and progress towards them • Examine the needs of different client groups • Allocating agents should be supported in their service to clients and made aware of complimentary programs • Make operational systems easy to follow • Contract an internal audit service in each of the provinces where the program operates. Charge penalties to reduce fraud and bad practices • Decentralize scheme to manage high volume Strengthen supervision.
The Zambia BDS voucher system program The program is currently being piloted in four districts of Zambia: Livingstone, Petauke, Mumbwa and Kasama before it is eventually rolled out to other districts. The Zambia BDS voucher system program has used many of the international lessons learnt into its program design. The overall objective of the voucher program is to contribute to sustainable growth/development in the Zambian SME sector, contributing to Zambia’s economic development and poverty reduction goals. The immediate objective is to stimulate demand for targeted BDS among the SME sector and linked to this; stimulate SME BDS product development by Zambian BDS providers.
The target group is based on the ZNFU and ZCSMBA SME membership, who in this instance are the clients making use of the vouchers, and is linked to the SME membership of the Business Associations. For reasons of creating maximum impact within the SME sector, the following criterion applies: • High labour intensity • Potential for growth • Potential impact (jobs, income, export opportunities, etc.) • Women participation level • Ability by BDS providers to provide SME BDS • Demand for BDS services in sector Phased approach The BDS voucher program will be implemented in three distinctive phases, namely: • The establishment phase, which foresees a 3‐year phase during which the voucher system will be established. This phase will receive major funding support from donors with limited but important GRZ (+/‐ 15 %) funding. The establishment phase lays the operational foundation for the subsequent phases • The expansion phase of around 5 years, with more GRZ, private sector and donor resources. Donor resources will be phased out towards the end of this phase. • The consolidation phase of 3‐4 years, consolidating the program and shift funding from GRZ towards the private sector. Program outputs The program is expected to achieve the following after a while: • BDS voucher program, enabling SMEs to access BDS services improving their efficiency, profitability, turnover, employment, etc. established and operational • Specific BDS services aimed at the Zambian small and medium enterprises sector developed by Zambian BDS providers • BDS facilitators able to operate their decentralized functions within the BDS voucher scheme • ZDA able to fulfill its fund manager contracting and program monitoring role in the BDS voucher scheme Information on the roles that various stakeholders play in the management of the fund, the program set-up and voucher movement will be included in the next bulletin.