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.

Would the Auditor General Review his own work???

I have just learnt that Mr Rexford Kampanje who was formerly the Accountant General has been confirmed as Auditor General. The parliament also confirmed the appointment of Lovemore Munlo as the Chief Justice.

I am not so much concerned by the appointment of Munlo, rather my concern hinges on the appointment of a fellow Accountant Rexford Kampanje. Normally, I should be celebrating at his appointment with hope that he is going to represent the interests of Accountants in Civil Service but most importantly he would institute controls within the civil service to avoid a repeat of the Field York Scandal and the K187m Education corruption from happening again by insuring amongst other things that procurement and expenditure authorisation procedures are adhered to by civil servants. Sadly am not celebrating and this why;

(a) Mr Kampanje is the former Accountant General, therefore by accepting the appointment, would he be auditing his own work? He has been at the OPC less than 12 months whilst waiting for parliamentary approval to become the Auditor General.

(b)Mr Kampanje is ACCA qualified. Under the code of professional ethics, Accountants must not take up appointment that would compromise their professional independence. So why would Kampanje accept the appointment? Is it because of political pressure?

Some few months ago the Finance Minister Goodall Gondwe rightly asserted that if Mr Kampanje was appointed Auditor General, he would be reviewing his own work. My view is that if we had good and transparent corporate governance structures in Malawi governement civil service, the proposal to appoint Kampanje should not have been made in the first place because there would be an obvious threat to independence. Would he be able to question accounts or expenditure he himself authorised?

The safeguard of appointing external auditors as suggested by the finance minister to avoid independence problems that may arise as a result of the appointment is not adequate. In any case, external auditors should be hired with or without the Auditor General in place. The appointment of an Auditor General does not subsume the need for independent external auditors, rather it is a way of setting up controls and monitoring of those controls in government and government departments. The external auditors should be appointed to act as an independent control to monitor tools set by the Auditor General and his team, otherwise , there might also be the danger that the AG woul be reviewing his own work.

The fact that the Malawi government has been without the Auditor General for quite a while is simply beyond me. Malawi is blessed with top Accountants who would uphold the moral standards by ensuring that government resourses are utilised effectively and efficiently. It is simply not right to have the position of Auditor General vacant for a long time. Does it suprise anyone why some corrupt practices in civil service have gone unchecked?

Although Kampanje has accepted the appointment, it has not come without its challenges. Firstly, there is a small matter where the Speaker’s ruling on parliamentary quorum is being challenged. This follows the boycotting of opposition MPs from deliberations. This means that the appointment was approved by the government side only. Is it legal? Would civil servants respect Kampanje?

Should the opposition succeed on their challenge of the parliamentary Quoram, the appointments of Munlo and Kampanje will be nullified. Is this cost effective on the part of government?

Am sure there are Malawians within the civil service equally capable and qualified if not better to carry out the duties of the office of the Auditor General. Is Mr Kampanje exceptionally good??

What is the difference between the Auditor General and Accountant General interms of ranking? What would motivate someone to take up one and leave the other? Is it a form of promotion or greed? Someone please educate me.

Fair Trade in Malawi’s Sugar, Tobacco, Cotton, etc

Most western organisations thrive on philanthropy. Firstly, because they genuinely believe in giving something back to society. This has brought arguments as to whether company directors are really interested in giving back to society or that the exercise is merely a marketing gimmick.

Well, both arguments hold true. Society benefits when organisations sponsor projects such as recycling to cut the rate of global warming but at the same time, an ethically minded organisation improves its image and therefore attracts new or continued custom. Corporate Social Responsibility(CSR) as is popularly known has become a fundamental concept for most companies, it is a vehicle through which both society and organisations benefits. Most governments are willing to give companies revenue or capital grants for undertaking specific CSR projects.

In Malawi, the National Insurance Company(NICO), National Bank of Malawi and SOBO are some of the organisations setting the tone for good CSR by sponsoring a variety of projects and sports.

During my undergraduate research here in the United Kingdom, I was intrigued to discover that TESCO which is the largest supermarket in the UK stocks Fair Trade Brown Sugar and Tea Bags from Malawi. Another German owned LIDL supermarket also sells this Fair Trade product(sugar). Both sell these products at above normal or prevailing market prices. Companies are involved in selling Fair Trade products not because they necessarily want to make a profit(costs are high) but simply to enhance image.

One of the attributes of Fair Trade is that companies such as TESCO have become so powerful, they promote good Labour practices in producing countries, discourage child labour as was the case with GAP in Thailand and India. However, I wonder if Malawi is benefitting from these Fair Trade practices? I ask this because my dad who has been a smallholder farmer in Nkhota-kota(Dwangwa) for nearly 30 years still lives in abject poverty. He gets peanuts every year and the reason advanced to him and other farmers for this situation is that of poor world prices for sugar. Whilst I do not believe this, and have my own theory I believe in the spirit of professionalism that my blog is not the right forum to address matters of this nature. Fair Trade has become such a political tool to force companies to reform. NIKE manufacturers of the popular brand of sports shoes was accused of exploiting cheap chinese labour paying just above £1 for the productions of a pair of shoes while they sold the same shoe in the UK, USA and many countries including china for over £100 making lots of million pounds in profits. It was until the company was faced with calls by rights groups for people to abandon NIKE products that the company asked their suppliers to improve working conditions. Today, as I write, NIKE enjoys massive publicity by premiership football stars. Matter of fact, Arsenal football club which I support are sponsored in part by NIKE. I dont wear NIKE products for personal reasons, one of which is that I cant afford them but also that substitute products such as AND1 are equally and fashion-wise impressive but cheaper.

There has never been a better time to promote Malawian products to the rest of the world than this. The government should support cotton, bananas, fishing, sugar associations to get Fair Trade accreditation and encourage western supermarkets to invest in the expansion of their supply chain that undercuts unscrupulous middlemen for fair prices. The wholesale liberalisation of the economy just over 10 years ago resulted in some dubious traders conning farmers into selling their produce at below acceptable prices using phoney bags and tampered with scales. For this to work indegeneous companies must adopt good CSR policies, that encourage enterpreneurship from their suppliers by adopting fair prices when buying raw materials. There is no point in encouraging foreign companies to intervene in our mess when we let our own companies make huge profits at the detriment of farmers. Directors motive should not only be profit maximisation- Profit is just one element of measuring an organisation’s success, all other things are equally important.

The economics in the Tobacco industry leaves alot to be desired. Too much politics and a strong cartel aimed at breaking farmers hearts through price fixing. Suffice to say that sales for 2008 as reported in different media outlets at both Lilongwe and Limbe auction flours seem to be putting a smile on farmers faces. I strongly hope that this trend shall continue and that it simply not a political ploy as 2009 general elections draw nearer.