Savings Groups- What to do with growth?

20th November, 2013
Arusha

This afternoon I attended a discussion on Savings Groups (SG) as part of a training course that I am attending at Arusha's Snow Crest Hotel, Tanzania. The panelists included Kuria Wanjau of Financial Sector Deepening (FSD), Francis Songela of Care Tanzania W -Power Project, Simon Karoki of CRS Kenya and Courteney O'Connell of World Relief (WR).



Savings Group tool kit



There is no doubt that there is a SG revolution in Africa. SG are a group of self selecting individuals that come together for purposes of saving and lending to achieve their financial aspirations. Formation, training and mentoring of groups in an area is initially initiated by external agents such as International Non-governmental Organisations (INGOs), local NGO (could be faith based organisations or non faith based organisations) using various methodologies. Groups birthed out of these first generation groups either form spontaneously or are replicated by trained field agents, group members who have graduated from an SG and so on and so forth.

Savings Group at work in St. Theresa, Ibenga, Zambia

In today's discussion some of the key issues on the table were: the pressure for results and meeting targets by implementing agencies (IAs) versus the quality of the trainings and sustainability of the groups; is linking SGs to formal banks the way to go?; are SGs really reaching the poor as claimed by many IAs? what is the future of the savings movement? What are some of the concerns?

 

These are some of the views expressed by the discussants:

• SGs are becoming attractive to formal banking. This will help in expanding the outreach of formal banking institutions into rural areas. Formal Financial Services play a complimentary role to SGs especially for security reasons e.g. when the amount of money in the  'box' is huge especially towards 'share out'. Opening an account with a bank would guarantee the safety of the funds.
• The financial market should develop products that are attractive to the SG.  
• Linking SG to formal banking will give raise to issues of consumer protection. Information sharing with groups will be key in ensuring their interests are protected.
• The constantly changing operational environment is affecting quality of programme delivery.
• There is concern that government policy (or regulation) may dilute the original purpose of SGs e.g. by introduction of formal registration/taxation or promotion of conflicting approaches.
• Introducing service providers e.g. banks gives a wider choice to the SG and individual members.
• Lack of transparency e.g. trainers are in some cases taking advantage of groups and members leading to people losing money.
• Technology  will improve the efficiency of SGs e.g. mobile phone technology can reach those who do not want to below to groups but would like to save/or borrow.
• There are opportunities for linking SG to other initiatives e.g. clean energy.

There is no doubt that many practitioners and keen followers of the savings revolution are eager to see what will follow. The most important thing is that the SGs should define how they will evolve so that the are not 'swallowed' by banks or other formal institutions. They should continue to re-invest themselves and to service their interests and those of their members above anything else. Their destiny is in their hands.

 

Choices of a career woman: it's complicated!

Freedom of choice is when you can decide what you want, where you want to be and how you will get there in any aspects related to your life. Every worker has aspirations on where they see themselves in the near future and beyond. However, choices that some people have may be limited by a number of factors. This is more so if you are woman. In today's world many people believe that it does not matter whether you are a woman or man the sky is the limit. But is this really true for all women in all parts of the world? Granted the answer is no. There are several traditional values and norms that dictate what women can and are able to do. This is also true for girls in some cultures.

The story of Malala of Pakistan which hit headlines around the world tells it all. Girls may freely choice to go to school but their choice is limited in some cases by the society or culture in which they are born. For some girls the choice may be limited by the socio-economic classes in which they are born. In post-independence Africa may girl children did not go as far as high school because their parents thought it was wiser for them to pay for the boys in their households' education than for the girls. After all in their thinking the girl would marry and be taken care of by her husband in the future. These assertions have slowly changed even in the most traditional societies. Girls and boys are now given the same opportunity to go to school and attain higher education. Affirmative action by many institutions of higher learning have also contributed to attainment of higher education by girls in many developing countries.

Now back to the issue of women. In Zambia's modern society most of the traditional barriers to women's progression in life in urban set ups have been minimised. Women are free to marry who they want, have the number of children they want and own their own property. However, there are still some barriers when it comes to climbing up the corporate ladder. Despite being a signatory to the SADC Gender Protocol Zambia has not yet achieved a 30% representation of women in decision making in many sectors of society. The number of women in cabinet positions keeps on fluctuating between 2-6 at any given time since independence. The number of women Members of Parliament is also much lower in relation to men. There have been several campaigns (e.g. 50-50 campaign by the Zambia Women's Lobby Group) and projects to prepare women for election to ward councils and parliament but these have yielded little results. In the corporate world women have not fared any better. A few women have held senior positions in prominent companies and banks. Some of these include Mizinga Meru (Standard Chartered Bank Zambia Limited Managing Director), Ireen Muyenga (Zambia State Insurance Corporation Managing Director) to mention a few.

The question is why has this situation changed so little? What factors affect women's progression at individual, household, community, national and global levels? There are no simple answers. One of the key things to consider is the trade offs that have to be made with any choice. There are trade off between focusing on your career or your family and friends at a personal/individual level. This may also be a key factor at community level. To excel in any position, in the corporate, political, business or any other sector you need to be results oriented and dedicated to what you are doing. In many societies, women are regarded as the nucleus of the family. Therefore this means that whatever choices they make have to ensure that the family is not adversely affected. This means that women may have limited choices when they have a young family and more when their children are older. The limitations that comes with a young family may result in missed opportunities. This is more so in societies where there is stereotyping of gender roles.

Until recently, most cultures in Zambia reserved the role of child care for women. Children between 0-5 years would naturally be expected to be taken care of by their mothers or other women and girls in the family. However this trend is slowly changing especially in urban societies where women are increasingly working away from home. Even then most people who take up child care jobs are women. In my experience, I have only heard of one case where a young mother opted to employ a male nanny for her children. In this case the her children were male. Many mothers continue to trust female 'helpers' more when they need to leave their children in someone else's care.

Some women choose to take up part-time jobs or to work from home so that they are not deprived of the opportunity to participate fully in raising their children. Again, such a choice will affect one's ability to take on more demanding responsibilities in their career. From a family perspective choosing to engage fully in raising your kids by working from home or not having any formal job at all is an excellent thing to do. It requires a lot of self sacrifice to contribute to raising your children at the expense of your career progression. Working away from home may sometimes require working away from town and having to send days from your family. This is even more demanding in terms of the trade off involved. This can be quiet stressful for some women especially when they have young children or a baby to take care of. Some employers have flexible working conditions that allow women to travel with their infants especially when they are nursing.

 

Working women will continue to face some of these tough choices. What matters is where you are at in your career and what you think is important for you. One of the things that I always do when I am faced with tough choices is to have a serious reflection over whatever situation I am facing and look at what is best for me and the people that I care about. One thing is for sure. The first instinct is for one to base their choice on what is best for them. However, if we have to be honest we also need to reflect on how our decisions directly affect those we care about especially our family. This is where it really gets tricky and it is only when selfless interest are at play when rational people will put the interest of others before their own. It takes a lot of sacrifice to do this and more often than not most rational women will put their family first at the expense of their own climb up the career ladder. However, like anything else there are always some exceptions.

 

Removal and Reduction of Subsidies by Zambian Government: What a reaction?

The Zambian government recently announced the reduction and in some cases complete removal of some consumption and production subsidies. This has resulted in widespread reactions from various quarters of the Republic. Nearly everyday there is a headline or inside story in print and electronic media about subsidies from politicians, faith leaders and other interested parties. Subsidies have been removed on fuel, maize and  reduced on fertilisers. Government has been subsidising fuel and fertilisers for over ten years while maize subsidies were introduced in 2012 in reaction to rising mealie meal prices. Maize is a political crop and maize mealie meal political food. Elections are won and lost based on how government handles the production and marketing of maize as well as the production and sale of mealie meal. As a result, there have been a lot of reaction both from leaders from the ruling Patriotic Front and the opposition political parties over the removal and reduction of subsidies.

The ruling party and government are justifying the removal of fuel and maize subsidies by arguing that millions of kwacha that can be used to develop infrastructure development in rural areas are spent on subsidising the rich. Further, they have argued that the funds that will be saved will be used to build schools, roads, hospitals and other capital goods and services in rural areas. They have also reduced the amount of fertiliser subsidies on the Farmer Import Support Programme (FISP) where beneficiaries will be required to pay 50% on every bag of fertiliser. According to a statement issued by the Ministry of Agriculture and Livestock, the funds that will be saved will be for agriculture diversification, irrigation development, research and extension, post-harvest management and infrastructure development (Post Newspaper, 6th June, 2013, pg 17).

Opposing views argue that subsidies should not have been removed. Attempts have been made to reverse the government policy through civil pressure but this has not yet succeeded. According to these views removal of fuels subsidies will increase the production costs in the economy and therefore result in rising prices of essential commodities in the short term. They have predicted that inflation will rise and the purchasing power of consumers will be eroded in the longer term. They have further argued that the removal of subsidies on maize will push up the price of mealie meal leaving the consumers at the mercy of private milling companies. It is further argued that increased fuel prices will push up transportation costs and further increase the cost of living. Reduction of fertiliser subsidies are also predicted to directly affect the food availability at rural household level as well as national food security.

Both opposing views are valid. However, since they have been delivered with great emotion from both ends it has really confused most common Zambians who are left wondering 'what is the truth?' Subsidies like taxes are measures that are implemented by government to address market failure or to redistribute income in the economy. There is no doubt that consumption subsidies such as the ones on fuel and maize in the long run are not sustainable. However, in the short run they assist in cushioning the negative impact of high fuel or food prices at the household level. If they are well managed and well targeted they can be used as a means of supporting very poor and vulnerable households to meet their basic needs. However, blanket provision of fuel and maize subsidies is unsustainable because even individuals that can afford the commodities at prevailing real market prices are also subsidised.

It is no secret that Zambia became a food deficit nation following the complete liberalisation of the agriculture sector in the early 1990s. The policies of liberalisation fostered very rapid change that removed government involvement in input supply and crop marketing. This policy  was disastrous because the vacuum left by the collapse of the National Agricultural Marketing Board (NAMBOARD) was not immediately filled by the private sector. This prompted government to reconsider its policy and re-engage in input supply and maize marketing through the establishment of the Food Reserve Agency and the Farmer Input Support Programme in the early 2000s. Fertiliser subsidies were introduced at 50% the cost of inputs. This was raised to higher levels in subsequent years. There is no doubt that the introduction of subsidies on fertilisers resulted in some positive impact on small holder farmer productivity. Over 80% of maize production in Zambia is done by small holder farmers. Therefore, the fact that Zambia became a food sufficient and surplus country in the last 10 years points to the fact that farm productivity increased. Of course, the provision of subsidies fertilisers and other inputs could be just one of the factors. Other factors are good climate, adoption of good agricultural practices such as conservation agriculture, early planting and so on and so forth. The direct benefits at farmer level were increased food availability and income. This increased the purchasing power of rural households who were now able to afford their nutrition needs as well as invest in capital assets such as iron roofing sheets, generators e.t.c.

 

The down side to this is that even individuals that were not eligible to benefit from the FISP also benefited through corruption. Huge amounts of money meant to benefit the vulnerable were instead supporting the elite. Several attempts were made to prevent this abuse but they were not very successful. In addition, the provision of maize seed with the fertiliser promoted maize production at the expense of other crops. This lack of diversification was a serious threat to household food security in low rainfall areas and during times of poor rainfall distribution in other areas. Maize is highly dependent on water and can not with stand long dry spells. There was also very limited funding to other institutional support relevant for efficient production at farm level such as agricultural extension. These gaps affected adoption of innovations at farm level. In addition, the available  human resource was directed towards administering FISP leaving very little time for provision of technical extension services. Further, there was little investment in irrigation despite the constant threat of drought induced by climate change making many agricultural dependent livelihoods highly vulnerable to food insecurity in poor rain seasons.

 



The assurance by the MAL that savings from subsidies will be used for diversification, irrigation development, research and extension, post harvest management and infrastructure development is highly welcome. It will be a pity if these funds are not retained in the agriculture sector budgetary allocation but redirected for staff emoluments and/or other sectors. It is widely agreed that agriculture has a lot of potential of reducing rural poverty by increasing food availability and utilisation as well as income accumulation. Whatever the case one hopes that this debate on subsidies will be constructive and result in a consensus that will move our nation forward and most importantly improve the well being for the rural poor for whom it is being said this sacrifice is being made.

Daily Reflections - Alive Publishing - Catholic Christian Books, Magazines and Newspapers - Catholic Shop - Books, Magazines, Newspapers, Jewellery

Daily Reflections - Alive Publishing - Catholic Christian Books, Magazines and Newspapers - Catholic Shop - Books, Magazines, Newspapers, Jewellery

Vincentians Celebrate Christmas at St. Joseph, Makoka

On Sunday 23^rd December, 2012 the Society for St. Vincent de Paul (SSVP) Conference at Chelston’s Our Heavenly Father Parish joined in the giving spirit that characterises Christmas by sharing an afternoon meal with community members around St. Joseph’s Parish in Makoka.  Makoka is one of the Out Stations in Chelston Parish situated around 15 Kilometers from the Airport roundabout in Chongwe District. Over 20 adults and 20 children from the community attended the party.

For several years now SSVP Chelston Conference has been holding annual Christmas Parties with the needy in Venter Compound at the Christian Brothers in Villa Wanga. To close off the theme of Unity and Collaboration the Conference decided to give a Christmas treaty to members of the Community in Makoka. Earlier in the year, Chelston Conference established contact with St. Joseph and the relationship has been growing from strength to Strength.

Cooking for this special event started at around 07:00hrs at Sr. Mbewe’s home situated in St. Stephen in Avondale. Various food stuffs were prepared including beef, chicken, potatoes, cabbage and Nshima. With the sky overcast with rainy clouds, Vincentians braved the rains and completed cooking to satisfaction around 12:00hrs. Thereafter, the food was ferried to Makoka using three motor vehicles in a heavy down pour. Thankfully the rains subsided by the time the entourage arrived at the Church where some community members were waiting to receive the visitors around 14:00hrs. It was a joyful occasion of sharing as Vincentians dished out the food and joined the community in taking the meal.