HIRE EXPERTS TO MAXIMIZE MINING ACTIVITIES. The end of the First Republic marked the near demise of our Mines in Zambia. Their subsistence was marred by little or no production. It was only after the Movement for Multi-party Democracy rose to power that the state of affairs in the nation begun to change. The introduction of a free-market economy in Zambia saw the entry of foreign investors who resuscitated most of the defunct industries, especially the mines. Ideally, the coming of foreigner investors is a welcome interchange because we are living in the era of globalisation. However, this interchange must come with benefits that accrue to both the investors and more so, the indigenous populace. However, as Zambian Voice we are of the view that most of these partnerships are ill-poised; the foreign investors seem to be accruing more benefits and long-term advantages to themselves as opposed to the indigenous Zambian who is only getting peanuts in return. The state of affairs leaves much to be desired. Vital questions such as “how much investment is put in the mines?” are not properly addressed with evidence-based facts and statistics. This is to our own detriment as a nation, because some of the agreements that are signed are based on the ‘unknown’ investment that is being put in. For example Zambia grants tax holidays and other rewarding incentives to investors without carrying out a proper long-term market and impact analysis on the economy. This makes it hard in economic terms to assess the ultimate loss or profit that the country suffers as a whole. It has been alleged that most profits are repatriated back to countries of origin and that most firms declare false profits to ensure minimal tax turn-over to the government. For example it is on record in parliament, as submitted by the Vice President, Guy Scott that the profit margin figures submitted by the mining giant KCM were not accurate. This robes the government of a huge source of revenue and careful investigation must be instituted to bring to light the hidden dealings of such firms. Without transparency and proper accountability measures it is difficult for the state to establish how much profits are made in these investments and therefore difficult to determine tax bans for the firms. Zambia can take a leaf from Kenya’s mining bill of 2014 that was published in the Kenya gazette on March 17th. The Keyanian mining Cabinet Secretary NajibBalala has said; international mining companies will be required to float at least 20 percent of their shares at the Nairobi securities exchange within four years after obtaining a mining licence.”(The Post Newspaper, 2nd April, 2014.) If this was implemented in Zambia it would allow more indigenous share-holders into the foreign firms resulting in better investment opportunities for the natives. Left unchecked, without due remittance of tax to government, this is a guaranteed recipe for making the foreign investors richer and the natives poorer. As Zambian Voice we endorse the need to review these partnerships so as to ensure growth for our own country and not just the investor’s interests. Zambia also needs to build capacity especially in the mining sector to ensure that the raw materials obtained from this sector are processed into finished goods that will attract a higher foreign exchange on the world market. Zambia needs to invest in hiring expert advice to be able to feed into the mining industry so as to ensure sustainability and a viable turn-over in this sector. By: Gertrude Chilufya
Posted on: Thu, 03 Apr 2014 10:27:57 +0000
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