Gov’t to abolish Car Ownership Schemes for Parastatals

As budgets squeeze, one of the first areas that many companies including government look for cost savings is the company car fleet. It is often tempting to remove the unpredictable cost and admin burden of running the fleet and simply replace it with a fixed cash allowance.

This may appear to be an effective way to freeze the budget and remove the admin costs, but it exposes the company to risk. It makes the very big assumption that employees will spend their sudden increase in salary on a suitable car, but there are no controls over how an employee spends their cash allowance.

In reality, staff may choose to buy a vehicle that is wholly unsuitable for their job, or they may fail to adequately maintain or insure it for work purposes.

This is why when I stumbled on a circular from the Comptroller of Statutory Corporation advising parastatals to abolish Car Ownership Schemes which will be replaced by another cost effective systems, my heart momentarily stopped.

The new Corporate Manslaughter Act in the UK considers that a car used for business (however it is funded) is a place of work. Once ‘car allowance’ appears on an employee’s payslip, liability falls on the employer. If the cars are not found to be ‘fit for purpose’, are poorly maintained or the drivers have not received adequate instruction or training, then companies will be vulnerable to prosecution. Strict guidelines already exist for drivers on company business and employers are expected at the very least to have a suitable policy to demonstrate their duty of care to employees.

The Corporate Manslaughter  Act  is a landmark in law. For the first time, companies and organisations can be found guilty of corporate manslaughter as a result of serious management failures resulting in a gross breach of a duty of care.

The lack of control over how a cash allowance is spent also has implications for the environment. Staff may be tempted to buy older vehicles, which they believe will be cheaper for them to run, but these vehicles will undoubtedly increase the corporate carbon footprint ­ something that most company directors are becoming more and more concerned with.

One way to overcome the lack of controls, but maintain the cost and admin savings, is to introduce an employee car ownership scheme. Employee Car Ownership brings structure and control to a cash allowance scheme by dictating certain conditions regarding how the allowance is spent. Perhaps surprisingly, staff welcome this structure, because it takes the uncertainty out of budgeting their private car ownership.

Under Employee Car Ownership, the choice of cars is usually much wider than that on a traditional company car scheme, with significant discounts over high street prices. Unlike many other private car purchases, no lump sum deposit is needed. Fixed monthly payments cover all servicing and maintenance, including tyres and breakdown cover. The payments are protected against the driver leaving the employer, and the final value of the car is guaranteed, giving the owner various options at the end of the contract.

The whole system has the freedom of a cash allowance and the feel of a company car, without the personal tax implications.

Employers can, and do, impose a number of controls over the type of cars that can be bought within an Employee Car Ownership scheme. Various suitable vehicles can be included, and those deemed unsuitable for a particular job function (such as sports models or those with limited boot space) can be excluded.

Environmental controls are also becoming more prevalent in Employee Car Ownership schemes. Interestingly, Employee Car Ownership already helps reduce carbon emissions because drivers in their own vehicles are proven to cut down on unnecessary journeys ­ covering up to 15% fewer miles every year than their company car counterparts.

When staff need use of a car for work, it is no longer acceptable to simply hand them the cash to sort it out for themselves. Even staff who are occasional private car users at work need certain controls ­ for example, is their driving licence and COF up to date; are the tyres regularly checked; does the vehicle have the relevant category of insurance for business use? One way to exert control over private car users who claim the occasional business journey on expenses is to introduce an automatic approval system that ensures certain essential health and safety controls are being adhered to.

As the business world changes, companies need to adapt. To run their businesses efficiently costs have to be kept to a minimum. But costs are not the only factor; particularly where staff welfare is concerned.

The provision of cars is perhaps the only business cost where both sides can gain if the right system is in place.

Projects of Massive Proportion-The Chinese announce their intentions.

Forget some chinese nationals externalisation of forex from Malawi. Forget about someone trafficking of human private parts and some other crazy stuff (including procreation activities allegedly happening in Area 18) associated with the Chinese nationals currently involved in alot of contruction work around Lilongwe.

The chinese have embarked on projects that will change the face of Lilongwe for ever. To begin with, the imposing multi-million parliament building along the Presidential Drive in the Capital’s city centre which will be in use by November 2010 is a beauty.The new parliament building will have state of the art equipment for parliamentarians and journalists.

The second project is the 5-star Hotel and Conference centre opposite Sunbird Capital Hotel. Contractors are on site, delivering sand and the survey team doing their work. Heavy Machinery can be seen breaking and levelling the ground. Malawi will be able to host international conferences and enhance tourism prospects. The artists impression of the Hotel and Conference centre is a marvel.

As a soccer fan, I would fail if I didnt mention the proposed project of a sports arena to be contructed again in Lilongwe between Area 47 and Gulliver. The survey team are already on the Ground.This will have a capacity of 40,000 seats with potential to be increased to 65,000 seats. Again the design is grand.

The Chinese are funding the Karonga-Chitipa road which is sadly stalling but have done a good job so far. But will also finance the University of Science and Technology in the South of Malawi.

Economic Benefits fast facts

• Unemployment will reduce
• Tourism industry will be boosted.
• Attract direct and Indirect foreign Investment.
• Information flow will improve
• Enhanced economic activities between Malawi-Zambia-Tanzania
• To host international conferences with high forex potential.

If we put everything aside, including the emotive quota issue, Bingu is simply a visionary leader. Sceptics of the Shire-Zambezi Waterway will now agree with me that the project will crystalise and an inspection by the Vice President a couple of weeks ago shows that the project is at an advanced stage. God bless Malawi!!!!!!!!

Congrats Mr.President…..

I took a long break from this blog. First because I have been using the self-hosted platform (www.georgengambi.com) which is now inactive  and secondly because of the internet access being very erractic. I welcome you back to this closet nevertheless.

My focus today is on the results of the just announced Presidential and parliamentary elections. The inauguration ceremony is taking place at Kamuzu stadium as I write. The battle has been fought and won. Its been a difficult road to victory.

The Election results reflect two  things. One is that the power of God is at work in Malawi. The acceptance of the Election results by the former head of state Dr Bakili Muluzi contradict what nyasatimes (an internet based publication) alleged about war in Malawi after the General Elections. Some purely immature journalism at play!!! I commend Bakili and Cassim Chilumpha for their stance on the results of the Elections. Another Kenya or Zimbabwe is certainly not what we could have loved, in light of our limited resources.

The Elections were conducted in a peaceful atmosphere with almost zero incidents of violence which characterised the previous 3 elections. This confirms the strides we have achieved as Malawians in consolidating democratic values. The president has won with an overwhelming statistic across the country defying the traditional voting pattern based on regional boundaries. We united in our resolve to achieve a better Malawi through quality leadership that conspire to develop and not to destroy Malawi.

I congratulate the president as he takes oath of office, and encourage him to fearlessly and tirelessly pursue development programmes that characterised his leadership in the last five years of his office. The mandate that we have offered him should not be seen as a morning star rising announcing time for wealth accumulation and not wealth creation. He has at his disposal, the quality of representation in parliament evidenced by former academic intellectuals, former CEOs and ethical individuals. We hope to benefit from the level of numbers the DPP party has in the current house to pass Bills that will transform the lives of rural people. I have in mind the Caborabassa dam project to achieve rural electrification. However, let me warn the president against abusing the numbers to pass Bills that only will benefit very few-am opposed to the Quota system of selection to the university. 

On a personal note, I congratulate Albert Thindwa (my former secondary school teacher and a personal friend) for being elected to represent Rumphi East in parlament under DPP. I am disappointed with the people of Chirumba Nyungwe for voting Mr. Khwauli Msiska back into parliament. This is someone who nearly sold this country to the wolf (The Sad Term) when he conspired against the wish of Malawians to table the Bill. Bena Nyungwe, you could have done better!!!

To all the casulties, there is always next time. Unite, celebrate and work with winners in your respective constituencies. It is possible to serve communities outside parliament.

Accountancy Bodies Seek Protection of the term “Accountant”

The Association of Chartered Certified Accountants (ACCA) and other Accountancy bodies through the Consultative Committee of Accountancy Bodies (CCAB) is campaigning for legal protection for the term ‘accountant’. It believes that, in the same way that the term ‘solicitor’ means a client will have the services of a qualified solicitor, the term ‘accountant’ should denote the service is provided by a fully qualified accountant. A petition has since been lodged with the UK government (http://petitions.pm.gov.uk/Accountants/).

Presently, the term ‘accountant’ is not defined or protected by law. Anyone is able to set him or herself up as an accountant without professional training. This is a serious issue in terms of consumer protection. Every year, qualified accountants lose business to people who purport to offer accountancy services, but who are not qualified, regulated, or familiar with the latest changes to law and accounting standards. The public do not know the difference between a qualified accountant and someone calling themselves an accountant, and often end up getting wrong advice. Small businesses and individuals, believing they have engaged qualified accountants, are at risk from harmful and costly business advice from unqualified, unregulated, possibly uninsured advisers.

It observes that although some unqualified accountants may do good work, an unqualified accountant is not answerable to any regulatory body and so cannot be disciplined; further notes that legal protection of title is viewed as essential in professions where there is a substantial degree of public interest, for example for doctors, barristers, solicitors and auditors; feels that greater accountability needs to be introduced; and urges the Government to consider introducing legal protection for the term ‘accountant’.”

This campaign follows an increasing number of cases where people have been given poor advice by individuals claiming to be qualified accountants, when they have little or no professional training or qualifications to deal with complex financial issues. Too frequently, members of the public and small businesses believe they have engaged qualified accountants only to find out, to their loss, that the individuals are unqualified and not competent to act on their behalf.

According to the petition, the use of the term ‘’accountant’’ should be restricted to members of the prescribed accountancy bodies, who are subject to a range of significant regulatory and monitoring measures.

My take:
1-The ACCA and CCAB should clarify how Accountants trained at degree level or any other qualification should be viewed.

2-There is evidence to suggest that qualified accountants have often offered bad advice or service.History is repreat with examples such as Anderson, the Auditors and business advisors of the collapsed Enron.

3-Further clarification ought to be sought also on how such law would be enforced in different legal jurisdictions considering that the Accountancy bodies are global associations.

4-This campaign is viewed in many quarters as an infringement of the human rights of experienced and honourable accountants and as a crafty ploy to deprive accountants of other qualifications other than those qualified with the CCAB of their livelihood, acquire their businesses/clients without compensation and obtain a service monopoly which ultimately will be detrimental to consumer choice and potentially result in increasingly exorbitant accountancy and taxation fees.

5-There is also a danger that it will worsen unemployment figures as those affected will become jobless.

Accountancy Bodies Seek Protection of the term “Accountant”

The Association of Chartered Certified Accountants (ACCA) and other Accountancy bodies through the Consultative Committee of Accountancy Bodies (CCAB) is campaigning for legal protection for the term ‘accountant’. It believes that, in the same way that the term ‘solicitor’ means a client will have the services of a qualified solicitor, the term ‘accountant’ should denote the service is provided by a fully qualified accountant. A petition has since been lodged with the UK government (http://petitions.pm.gov.uk/Accountants/).

Presently, the term ‘accountant’ is not defined or protected by law. Anyone is able to set him or herself up as an accountant without professional training. This is a serious issue in terms of consumer protection. Every year, qualified accountants lose business to people who purport to offer accountancy services, but who are not qualified, regulated, or familiar with the latest changes to law and accounting standards. The public do not know the difference between a qualified accountant and someone calling themselves an accountant, and often end up getting wrong advice. Small businesses and individuals, believing they have engaged qualified accountants, are at risk from harmful and costly business advice from unqualified, unregulated, possibly uninsured advisers.

It observes that although some unqualified accountants may do good work, an unqualified accountant is not answerable to any regulatory body and so cannot be disciplined; further notes that legal protection of title is viewed as essential in professions where there is a substantial degree of public interest, for example for doctors, barristers, solicitors and auditors; feels that greater accountability needs to be introduced; and urges the Government to consider introducing legal protection for the term ‘accountant’.”

This campaign follows an increasing number of cases where people have been given poor advice by individuals claiming to be qualified accountants, when they have little or no professional training or qualifications to deal with complex financial issues. Too frequently, members of the public and small businesses believe they have engaged qualified accountants only to find out, to their loss, that the individuals are unqualified and not competent to act on their behalf.

According to the petition, the use of the term ‘’accountant’’ should be restricted to members of the prescribed accountancy bodies, who are subject to a range of significant regulatory and monitoring measures.

My take:
1-The ACCA and CCAB should clarify how Accountants trained at degree level or any other qualification should be viewed.

2-There is evidence to suggest that qualified accountants have often offered bad advice or service.History is repreat with examples such as Anderson, the Auditors and business advisors of the collapsed Enron.

3-Further clarification ought to be sought also on how such law would be enforced in different legal jurisdictions considering that the Accountancy bodies are global associations.

4-This campaign is viewed in many quarters as an infringement of the human rights of experienced and honourable accountants and as a crafty ploy to deprive accountants of other qualifications other than those qualified with the CCAB of their livelihood, acquire their businesses/clients without compensation and obtain a service monopoly which ultimately will be detrimental to consumer choice and potentially result in increasingly exorbitant accountancy and taxation fees.

5-There is also a danger that it will worsen unemployment figures as those affected will become jobless.

A banknote paper supplier withdraws from Zimbabwe.

On 1st July 2008, a German company Giesecke & Devrient(http://www.gi-de.com) which supplies banknote paper to different central banks was forced to withdraw from supplying the paper to the Reserve Bank of Zimbabwe. This followed international pressure. Zimbabwe’s hyperinflation forced the country’s central bank to print more Zim dollars creating demand for the German company’s banknote paper.

In a press statement the company said;
“Our decision is a reaction to the political tension in Zimbabwe, which is mounting significantly rather than easing as expected, and takes account of the critical evaluation by the international community, German government and general public,” explains Dr. Karsten Ottenberg, Chairman of the Management Board and CEO of Giesecke & Devrient GmbH.

In delivering banknotes and banknote paper, Giesecke & Devrient is subject to strict rules defined by the World Bank. The company continues to rely on the political and moral assessment provided by international trade regulators.”

Will this situation slow down the hyperinflation in Zimbabwe? What will the German company do with the profit it made whilst helping to accelerate the downward spiral of the Zimbabwe economy? What will the German goverment do with corporation tax received or receivable on profits from this transaction?

When a ship containing arms from China that were meant to be chanelled to Zimbabwe for use by the ZANU PF government, I felt that China was being insensitive to the whole saga that ensued just after the disputed March 27,2008 elections. However, today I ask you as I ask myself, was the world blind to see that this German company was constructively perpetrating the worst abuse on the people of Zimbabwe by supplying these papers for so long without condemnation?

Suprises at the Euro 2008

The ongoing Euro 2008, taking place in Austria and Swirtzland has not been short of suprises. Firstly the German 3-2 Portugal result which many never thought a team with probably the world player of the year (Ronaldo) could lose.Then came the Croatia -v- Turkey game in which Turkey won to proceed to semi-finals on penalties. But probably the biggest shock and my disappointed was the game Holland crushed to Russia in which the grand master Andre Arshavin run the show. Holland promised to be a force to be reckoned with at the start of the tournament but Arshavin and his Russian team-mates proved to us that the Dutch were simply over-rated. He was suspended in the first 2 games at the start of the tournament one of which, Russia lost to Spain 4-1. Tonight, the Russians have the opportunity to reply as they face Spain in the Semi-final game to determine who will face the Germans in the final.

But perhaps the most important person for Russia is their coach, Guus Hiddink. He has proven again that he is a genius who knows how to motivate under-dogs to realise their potential. To take Andre Arshavin to the tournament knowing that he would miss the 1st two games takes some courage and stubbornness. But this is the sort of judgement which separates real football managers from pretenders. High risk decisions are the most rewarding. He won numerous trophies in his native Holland, took South Korea to the Semi finals of the 2002 world cup, then did tremendous job at PSV then took Australia to the 2006 world cup. Australia played brilliantly against Italy but for the cruel penalty with dashed their chances of progressing.

The Germans progressed to the finals last night after seeing off the brave boys of Turkey. Whoever said that Football can be cruel was right. For starters, I did not see German winning this game as they were completely outplayed in every department but they took advantage of 3 Turkish mistakes to circumvert the danger.

England must respect Croatia and move on.

This week like many others, I have been watching the Euro 2008. Although it has failed to provide the thrill of Euro 2000, atleast we have been served with some entertainment value from notable teams such Holland, Spain and to a less extent Portugal.

Conspicously missing from the tournament is England national team who were knocked out from the qualifiers by Croatia. However, at the ongoing tournament Croatia struggled to beat Austria in their first game but luckily won 1-0 thanks to a 4th minute penalty converted by spurs bound Lucas Modric. In their usual style to influence popular opinion, the English tabloids picked on Croatia and their coach(Bilic), questioning how a team that was struggling to beat Austria were able to beat England. In essence the Journalists were saying that croatia are not good enough to be at the tournament over England. Today, Croatia responded to all doubting English people by beating German 2-1 to go top of their group, underlining the fact that the results they got against England(home and away) was not fluke.

I must say that am fed up of this attitude by English press. England national team is full of players with egos, and it is the press who overrate these seemingly useless players who earn tonnes of £££s a week for doing nothing. All they do is spend alot of time on Playstation and Xbox while other players such Ronaldo, Fabregas constantly work on their fitness to perfect their game. Then when the national team fails, they are quick to blame foreigners for their mess.

Sepp Blatter and the 6+5 rule

The FIFA president has since proposed that teams must feature 6 homegrown against 5 foreign players. The English FA has since welcomed the idea subject to further exploration. It is hoped that by adopting this rule, clubs may be able to nurture homegrown talent other than relying on talent from abroad. But why am I sceptical about this idea?? Firstly, it would restrict freedom of players and indeed clubs to play/purchase from wherever they want. Secondly, most clubs are owned by billionares who are not nationals of the country in which their football clubs are domiciled. Their interest may be at odds with say the FA. While FA may be interested in ensuring as many English players in a team as possible, club owners may be looking to purchase world class players who may add business value to the club.Thirdly, when Sepp Blatter embarks on journey such as this, he is up to something. I remember he duped the Football Association of Malawi by promising to fund the construction of Chiwembe stadium through GOAL project, but as it turned out all he wanted was a vote from FAM and as soon as he got it, Blatter disappeared. Today, Chiwembe stadium is nothing but a dream. He has since offered England to host the 2018 World Cup and he has now interested English people by proposing the 6+5 rule. Would this fella be enticing the FA for a vote? Would this be an attempt to silence the English media in their quest to investigate his involvement in corrupt practices at FIFA?

Anyway, all am saying is that England must learn to respect other nations. Croatia deserve to be at the Euro 2008 as they emerged top of the Group and beat England twice. The problem of falling Football standards has nothing to do with the influx of foreign players. What foreigners have done is to improve the premier league other than destroy it. England can not improve if they persistently blame others for the misdeed of their own creation.

State of the Economy

On the economic front, a special report has in part blamed migrants for the state of the British economy. It is alleged that migrants send alot of money abroad which does not help their economy. Koma abale!!!

I will not discuss this indepth but my understanding is that the credit crunch has been caused by a global phenomena, especially the USA housing market. The rising costs of crude oil has affected all countries and not Britain in isolation. The British economy is propelled by migrants who themselves earn less for hard labour while native British citizens sit phwii getting government social benefits. Migrants have been coming and settling in the UK since time in memorial, these were not attributed to as factors when the UK enjoyed economic success.

So as you can see, English people will blame foreigners for anything that goes against them.

Xenophobic South Africa is a shame.

When South Africans fought against the whitemans’ injustices during the apartheid era, everyone understood as the white man had imposed alot of unfair laws against our black brothers back then. The release of Nelson Mandela in the early 90s announced the new dawn of life for the people not only in South Africa but the southern Africa as a whole. It announced the morning star rising, announcing time for an end to violence and killings that had characterised a South Africa pre-1990.

However, the events of the past few weeks involving native south africans killing and beating fellow africans from sorrounding countries who migrated to that country for a better living have taken us back to the apartheid days. It is sad that South Africans feel that violence against people from other countries is the solution to their social and political problems. These demeaning actions are orchestrated by lazy xenophobic elements who wrongly portray foriegners as the cause of thier economic problems in South Africa. Countries in the west are luring immigrants who inturn boost their economies. Its a shame that majority of South Africans are peace loving people but scenes of xenophobic violence threaten to cast doubt over how well prepared the south african government is, interms of security during the 2010 FIFA world cup, the World cup which will attract the same foriegners whom the native south africans are now despising. South Africans travel and continue to do so to so many countries around the world. Would they be happy to be treated the way they are treating migrants in Johannesburg. Sadly, the officials in South Africa have not acted strongly to this madness by their people. The deployment of the army to assist police in crowd control has had to take international pressure.

I bet Thabo Mbeki in his usual drama will say, this is not a disgrace.The allegations that the government knew in January 2008 that there was trouble of xenophobic nature blewing will cast doubt over Thabo Mbeki’s leadership. Why did the government let the situation get out of hand notwithstanding the intel they they received? I call upon all south africans to respect the rule of law and human rights and stop venting their frustration for unfulfilled ANC government promises on innocent foreigners. I worry for my sister and other Malawians in Johannesburg who must be feeling worried everytime they walk along the streeets to and from work. South Africans must remember that the struggle against apartheid could not have been won without the support from neighbouring and other african countries who are now being condemned to death by barbaric people.

The Microsoft-Google-Yahoo Love Triangle

Some fews days ago, Microsoft withdrew its bid to acquire Yahoo after failing to agree to a price even after Microsoft raised its bid, which was about $5 billion more than the original offer. According to Yahoo CEO, the company was grossly undervalued by Microsoft. Consequently, Yahoo share price fell significantly following the withdrawal(BBC News,2008).

Now that the deal is no longer on the table, Yahoo must convince investors it can turn the company around and deliver on promises that it can grow its revenue at a pace that pleases Wall Street(equivalent of the City in London) and allows Yahoo to compete successfully against Google in online advertising.

Shareholders already are getting restless. Some Institutional shareholders plan to expand a complaint, originally filed as two lawsuits In March 2008, against the CEO and other members of Yahoo’s board of directors, saying they failed to act in the best interest of shareholders in rejecting Microsoft’s bid to buy Yahoo. It is expected that Yahoo will face similar law-suits in the coming months.

The attempt to acquire Yahoo by Microsoft was seen as an attempt to match Google on advertising revenue. It is alleged that Google played a part in undoing Microsoft bid for Yahoo to undermine Microsoft Advertising business(Yahoo News). Matter of fact, Yahoo did a test run on Google’s advertising Adsense inorder to discourage Microsoft from launching a hostile takeover bid (how smart of Google!!!). In the end Google wins in the Microsoft-Google-Yahoo triangle. But are Yahoo the most stupid in all this? How can a business out-source a strategic part of its business to a competitor?

The question is why would the CEO and other directors at Yahoo Inc. reject an offer which is seen by many analysts as a good offer at the expense of shareholders’ wishes? In the meantime, who is going to tame this animal-Google? Would Microsoft organic growth be enough to mount enough challenge.

In the end, the guys at Google are smart not only technically, but also business-wise. Sadly, it is the Yahoo shareholders who are the most victims.