Over the past year Jacana supported the trained welders and drillers in expanding their business. It is time to view the current situation.
There are 4 welders and 14 drillers actively engaged in producing pumps, drilling boreholes and pump installation. The welders have been able to expand their existing welding companies with the production of pumps and drilling equipment. It is more difficult for the drillers.They often come from small villages, earned their income by digging wells and are not accustomed to dealing with money commercially – unlike the welders. In addition, many of the drillers have had little or no education and some of them can not even read or write. Nevertheless all 14 drillers are very good at their profession. But to manage a company you also have to be able to keep your books, sell the product, put money aside to be able to replace your tools, etc. So far we see this is not always going well, of course, at the same time we also see that there is a market for manual borehole drilling, because there are now 25 satisfied customers who have already made use of their services without any sponsorship.
This year the Ministry of Water has introduced a new law in which all drillers must have a drilling license whether they drill with a machine or by hand. Water Resource Management Authority (WARMA) that regulates the licenses requires that the drillers have an officially recognized company, otherwise they can not apply for a license.The registration costs are approximately € 200/year, which is a huge amount for the drillers.
By the end of December 2018, the sponsored projects will come to an end. So it’s time to find a solution.
Which type of business fits best with the drillers?
Elizabeth Chipeta, a lawyer and Jacana’s board member, has investigated various Zambian business forms and, together with the group of drillers, has drawn the following conclusions:
- It is out of the question that every driller can currently set up his own company under individual license.This is too expensive and for some who can not read or write it is not feasible.
- A limited company with shareholders is also not an option, because too much regulation is involved and the group is still too inexperienced for that.
- The best option is to set up a cooperative.This form is common in rural areas in the agricultural sector. Some drillers are even already members of an agricultural cooperative.The government also stimulates this form in rural areas, some of the advantages are tax benefits and low annual costs.
- WARMA, after consultation with Jacana, has acknowledged the cooperative form and in this way only one drilling license has to be applied for, instead of 14.This saves approximately € 2,600/year equivalent to almost 3 boreholes with pump.
After the group has agreed to set up a cooperative, they have chosen a name and, under the supervision of Jacana, started working on drafting a management structure, statutes, rules and business plans. According to Zambian law, board members must be elected from the members of the cooperative and the manager comes from outside. The group proposed unanimously Pious Nyirongo (employee of Jacana) as manager.
After consultation, Pious has accepted this position and Jacana has offered to finance the costs for the manager in 2019.
Results until October 2018
As a cooperative, a number of important steps have already been taken:
- Cooperative is officially registered and the WARMA certificate has been granted.
- Posters are distributed in the city.
- Messages are placed on social media platforms.
- The web-site www.emd-zambia.com is under constrution.
- Two representatives cycle through the district and sell boreholes on a commission basis.
- Almost all 80 families where the drillers have ever installed a pump have been visited. They like to be a sales representatives, receive some flyers and receive a small commission for each client.
- For 30 days an advertisement will be announced four times a day on the radio and six times per day on Chipata TV (total costs €210).
- The cooperative has now sent its first concept note and made contact with Members of Parliament who occasionally have some money for water supplies in rural Zambia.
Although the cooperative is less than a month old, good results have already been achieved. People from the region who have heard the TV or radio know where to find the cooperative. People react from all over Zambia through the internet. This shows that there is a need for affordable pumps and boreholes throughout Zambia. We, Jacana, learn from this that our work can not be limited to Chipata district.