The National Constitution And Business

The National Constitution amending process has been extended for a further four months to finalize outstanding issues before presenting the amendments to Parliament for implementation.

At the moment about half the number of set up committees have concluded their deliberations and detailed their recommendations. The other half is yet to complete this task.

Private Investment is fundamentally hinged on the system of Governance and subsidiary laws that affect the operations, profitability, and sustainability of any company. The more facilitative, rational, and predictable the systems are, the more attractive will be the country for private investment.

The public debates in the media that have characterized the constitution amending teams gravitate more towards specific legislation than towards substantive constitution principles.

This is seen in the citizenship dialogue where the constitution team is more engaged in detailing the various permutations of Zambian citizenship description, than to simply state the principles to be used to determine citizenship and what rights, obligations and responsibilities that a citizen has in the country.

The details of citizenship tend to change from decade to decade as the country evolves and as the world evolves too. These details are therefore amended as required by using the subsidiary laws, which in the case of citizenship would be the Citizenship Act. This subsidiary law route provides an avenue to avoid constitution changes every now and then. In fact, within the provisions of some Acts, a Minister may issue a Statutory Instrument to introduce some new rules and regulations that are deemed not to need Parliamentary approval and Presidential assent. These mechanisms facilitate the running and management of a country in a reasonably efficient manner, and yet provide for checks and balances by using the constitution as the basic references, and the judiciary to interpret the constitution and all subsidiary laws when a dispute arises.

The dialogue on Public Finance has not surfaced the value, importance, and impact of the role of the office of the Accountant General. The discussions concentrated much more on the role of the Auditor General which is very important, but should not take away from the fact that auditing is a function that looks at historical records and therefore at best, can only offer advice on how to better manage and account for public finances. On the other hand, the role of the Accountant General is to develop accounting systems for the public sector, to monitor and evaluate how the systems are employed, and to develop and implement any corrective measures that may be necessary. This is where the real work is in as far as managing and accounting for public finance. The constitution should highlight the role and value of the Accountant General and articulate the principles and mandate of this office.

If the constitution amendment process is going to look at detail, then we run the risk of introducing so many specific provisions that will be challenged in our courts of law. We may end up with a permanent constitution review commission that will be fire fighting and fixing the problems that will have been introduced in this current constitution amending initiative.

The current difficulties in interpreting the ZDA Act is a good case in point. The Act highlights the investment bands that attract various levels of incentives, but does not specify a minimum investment amount for an investor that s looking to start business in Zambia and is not looking for any incentives. The immigration department has its own interpretation, the ZDA has its own interpretation, the Ministry of Commerce has its own interpretation, and one may suggest that the judiciary will have its own interpretation too. The various interpretations may not all be the same. Therein lies our investment attraction dilemma. The various interpretations invoke different responses from the various Governemnt Ministries and we end up with a very difficult investment climate with unseen barriers. These hidden barriers may be the reason why any significant investor in Zambia seeks to have audience with the State President in an effort to thwart off any negative actions that may be taken by members of the Civil Service.

One may ask then, what amendments can be done that will offer a significant shift forwards in our Governance system?

It seems there are many areas that an enthusiastic team of intellectuals may want to change in the constitution, but fundamentally there may be only a few key areas that make good common sense.

For instance, changes in the constitution that guarantee the separation of powers whereby the legislature, the executive and the judiciary become totally independent organs, will fundamentally change the system of governance. This measure will introduce checks and balances amongst the three arms of governance that would essentially free the public from being government watchdogs and whistle blowers. The legislature would hold the executive accountable, the judiciary would hold both the legislature and executive accountable, the legislature sets up the judiciary, and the electorate holds the legislature accountable.

This fundamental change in governance requires that parliamentarians cannot become members of the executive and vice versa, and that the judiciary is funded immediately and independently as per the constitution to remove any possibilities of compromise of functions, or the judiciary being held to ransom through selective financing by thee executive.

In addition, the legislature would need to be held accountable to the electorate and therefore the constitution may want to have a recall clause for members of parliament that are found to be wanting by their electorate. This power of recall will provide the checks and balances on members of parliament. The people who voted them in will have the power to petition their members of parliament out of office if necessary.

The rest is dependent on how forceful we are as a country in ensuring that our Civil Service operates within the rules and regulations provided. It is folly to attempt to always put in place a hard rule in a system where some degree of discretion is required. The remedy to ensuring that the discretion is not abused, is to hold the office bearer accountable for his or her actions, and to mete out the appropriate punishment for conduct that is unprofessional or not in the best interests of the public.

A constitution that develops responsive members of parliament, an accountable executive, and an independent and unbiased judiciary, is a constitution that will be responding to the wished of the people. It will also be a constitution that will promote economic development, attract investment, and provide an atmosphere of peace, stability, and equity in the nation.

Published 29 September 2009

Linkages

This is an interesting time of the year as the budget for 2010 is being discussed within Government circles, and Sixth National Development Plan (SNDP) is being formulated to cover the period 2011 To 2015.

The private sector and civil society are also articulating their aspirations and hopes for 2010 as snippets of the budget are released to the public.

The question a reasonable manager will ask in the midst of all these dialogues is, what are the linkages between the budget goals and the investment being made in the economy to realise these goals? What are the linkages between the Medium Term Expenditure Framework (MTEF) covering 2008 to 2010, and the national budgets? What are the linkages between the MTEF and the Fifth National Development Plan (FNDP)? What are the linkages between the FNDP and our Vision 2030 goals?

Results based planning demands that these linkages be in place and that they are strongly established such that they become benchmarks for Government monitoring and evaluation, and where required, generate interventions that keep the plans, projects, and programs on course.

With these ideas in mind we can all step back and look again at the current dialogue that is going on in respect to Zambia’s economic development agenda.

If we look at the recently released Green Paper articulating the MTEF 2010-2012 and the budget for 2010, we note that last years budget was developed on the theme ‘Enhancing Growth through Competitiveness and Diversification.’ It will be interesting to see how last years theme will link with this year’s theme that is yet to be officially announced. Hopefully, there will be some natural linkage that will describe in one phrase what the economic game plan for 2010 will be.

The 2010 budget looks to continuing to enhance rural development and key sub sectors including tourism, agriculture and manufacturing. The manufacturers look to Government to support their development and growth through reduction, and in some cases, removal of taxes on inputs and raw materials for manufacturing. They also call for a rationalisation of some imported products that land in Zambia cheaper than the importation of the sum of the components that the products are made of. This situation promotes import trade and discourages local assembly or manufacturing.

Calls were made for zero rating all inputs for products that are Value Added Tax (VAT) exempt, because the current scenario is that the import VAT component only adds to the cost of the final product to the end user. Manufacturers clearly call for provisions in the budget that will place the manufacturing sector as a significant contributor to the economy as per the aspirations of the FNDP and the Vision 2030.

Similar expressions have been articulated by investors in the Tourism and Agriculture sectors.

The budget however does not have clear linkages to support this view. Investments will be made in developing infrastructure covering roads, hospitals, and schools in an effort to stimulate growth and development, but the main issues presented to the Government by the private sector are yet to be addressed. The expectations are that the 2010 budget will respond to this challenge since Government has stated it will target new growth opportunities and diversify exports in the agriculture, manufacturing and tourism sectors.

The 2010 budget does however, look to opening up new farming blocks which directly links to the aspirations of the FNDP and Vision 2030. The concern with this endeavour that currently focuses on the Nansanga Farming block, is that the articulated goal is to attract foreign investment into Zambia without placing much emphasis on supporting and facilitating Zambian farmers into the program. It will be folly to expect Zambia’s aspirations to be met by only foreign investment. Will the 2010 budget address this concern?

Government seeks to promote agriculture through programs that will support irrigation, livestock development, fisheries development, inputs for small scale farmers, and provision of the relevant extension services. One cannot help but conclude that this focus is considered small scale farmer targeted, and commercial farming still attracts more Government attention.

It may be useful to recognise that in many parts of the world including India and china, the small scale farmer is the heart and soul of agriculture production and domestic food security. Again, the linkages between all forms of farming and the goals of our FNDP and Vision 2030 should be clearly noted and strategic investments in developing these linkages must be made. The calls by the farming sector for Government to zero rate all agriculture equipment, machinery and inputs is therefore a serious call to be considered in the 2010 budget.

It is encouraging to note that government expects to formally operationalise the Warehouse Receipting System for selected agriculture produce. This is a very positive benchmark towards stimulating food production in the country to achieve self sufficiency in a sustainable manner.

Mining has been on the negotiation table much of 2009 and the proposed investment in the Mines Safety Department is not only very welcome, but stands out as an indictment on how irresponsible we have conducted ourselves as a nation in protecting our people working in the mining industry. This new endeavour links in with the mandate of the Ministry of Mines and the goals of our vision for safe mines development in the foreseeable future.

The Government plans to recapitalize the Zambia Wildlife Authority (ZAWA) and develop the roads in the National Parks and Game Management Areas. This is long overdue as Government investment in developing the tourism sector which is supposed to be one of the main economic pillars of the FNDP and the national economic diversification program.

The MTEF articulates that Government plans to expand electricity generation in order to support private sector growth. Although there is emphasis to attract private sector investment in the electricity generation sector, case studies across the world clearly show that this sector demands public investment much like in the case of road construction. There is a social economic dimension to both road building and electricity provision. The desired goals of the fiscal budget, the FNDP and even Vision 2030, are largely based on the premise that there will be adequate electricity to support domestic consumption, commercial activities, and industrial production nationwide. To this end, the cost of electricity becomes a direct factor impacting on the price of the goods or services produced by the Zambian based private sector.

The linkages between the aspirations of all our economic and social development plans and the cost of electricity does not seem to be acknowledged by our economic planners and least of all by ZESCO. ZESCO continues to market the Cost Reflective Tariff argument as the basis for attracting private sector investment. No attempts are being made to rationalise and streamline the high cost of running the company which may be the reasons why the tariffs are being revised upwards every few months. The sums are simple; the higher the electricity tariffs, the higher the cost of production, and the slower the economy will grow.

Government must give this issue more serious thought and be wary of the new free market thinking on strategic energy resources, if Zambia is to avoid a parallel energy crisis much the same as the current economic crisis that the world is currently experiencing. It is worth recognising that the economic mess that world is in today is because of the advice of some seemingly clever, free market sub prime economic wizards, that looked smart at the time.

ZESCO will do well to focus on managing the current electricity capacity by innovating ways of bringing the public on board to use electricity more efficiently, wisely, and sparingly, rather than to always look for a way to increase their revenues at the tax payers cost.

Caution must be taken when looking at the expectations of revenues in the 2010 budget. Domestic revenues are pegged to be K11.5 trillion from K9.3 trillion in 2008. This is a tall order as this expectation is not linked to the current slowdown in domestic private sector businesses.

The revenue projected in 2010 in respect to Grants is K 13.8 trillion as compared to K12.8 trillion in 2009. Again, how do these figures link to what is going on in the developed world where these grants are sourced from? There is a high possibility that these revenues will not be realised as our cooperating partners struggle with the economic pressures in their own countries.

Zambia has a growing informal sector that now rivals the formal sector. How can we link this to financing the fiscal budget? What options are there for a graduated flat tax to be paid by informal enterprises? How are we linking the 2010 budget with the new COMESA Customs Union initiative to ensure that Zambia emerges a winner? How positively placed will Zambia be when we sign the Interim Economic Partnership Agreement with the EU later this year?

Government has described how it intends to right-size itself so that the Civil Service will become respondent to the private sector needs and rightfully become the link to enhanced economic development and prosperity. Hopefully the 2010 budget will articulate this program more lucidly.

It is important to capture the final message that is passed on to the country in the MTEF and Budget 2010 Green Paper. A challenge is thrown to the private sector to take advantage of the newly created opportunities by Government to create wealth, by fully and aggressively participating in the development agenda of the nation.

The private sector is further challenged to rise up and expand its capacity so that it can ably participate in Government programme of rebuilding the country.

The response to these challenges is squarely based on how meaningfully Government can link its programs to address the concerns and requirements of the private sector.

Published 22 September 2009

State Of Our Economy

The Government has projected to spend a total of K57.2 trillion on programmes that will make a direct contribution to improved service delivery, economic growth and poverty reduction between 2010 and 2012.

This is contained in the Medium Term Expenditure Framework information release to the public by the Secretary to the Cabinet.

In addition, Government is currently dialoguing on the development of the Six National Development Plan (SNDF) which is expected to be completed over the next 12 months.

Government targets are to direct 18 per cent of total expenditure towards capital projects and to continue to supplement the human resources capacity in the health and education sectors over the next five years totalling 18,500 new employees.

Non essential expenditure is targeted to be reduced in 2010 and this covers reductions in hosting workshops outside workstations, reduction the procurement of non essential motor vehicles, and the reduction of trips abroad.

However, the Government will continue to support Agriculture development through the Farmers Input Support Programme (FISP), Strategic Food Reserve (SFR) programme, and the Food Security Pack. The total package for this support will be around K550 billion.

Government targets for infrastructure development which include rural electrification, roads, schools, and health facilities will cost the treasury around 4.34 per cent of Gross Domestic Product (GDP).

Other key infrastructure programs will include the development of farming blocks and Multi Facility Economic Zones.

Government plans to fund the Citizens Economic Empowerment Fund (CEEF) with K40 billion and aims to pay interest on domestic debt of K1.88 trillion in 2010.

To a large extent the 2010 national budget is already being articulated through these benchmarks and the official 9 October presentation will fill in the details.

It will be prudent to step back and look at the gains and successes of the Fifth National Development Plan and the current Medium Term Expenditure Framework before going in at the deep end of yet another set of development programs. History arms us with information to usefully tackle the future.

Zambia has often suffered from lack of investment into programs that we have adopted. And alas, because the programs are not always domestic but are sometimes regional, we end up being the fertile market for our more organised and committed neighbours.

To mitigate against this phenomenon which has plagued Zambia over the last three decades, we must now link our capital expenditure projects with our expected economic activities in the private sector.

Let’s build MFEZ’s where Zambians will invest. Let’s target road and electricity infrastructure to areas where our people will be facilitated to engage in economic productivity. Let’s focus our CEEF on sectors of activity that will yield good returns for the investors and fit into the domestic and regional development model.

It is encouraging to note that in the Agriculture sector the synergies and linkages from producers, to traders, to processors, to markets, are being strategically developed and this can be emulated in other economic sectors with proper planning and investment.

Alongside the announcements on excerpts of the 2010 budget and the vision for the next Medium Term Expenditure Framework (MTEF) and the SNDP, we note that Cabinet is vigoursly working on the Agriculture Amendment Bill that seeks to ensure market access for small-scale farmers.

The bill which incorporates the warehouse receipt system aims to enable a farmer or groups of farmers to enter into a contract and have their commodities stored so that they can use the storage warehouse receipt to access credit.

This initiative will set some standards for selected food produce and will assign value in a transparent manner thereby attracting the financial sector to support agriculture more aggressively than is the current situation.

This will facilitate increased volumes of trade in the commodity markets and through the Zambia Agricultural Commodity Exchange (Zamace) across the country.

Last Sunday was the deadline for street vendors in Lusaka to voluntarily vacate the streets or be forced out.

This initiative by the Lusaka City Council in concert with the Local Government Ministry and the Home Affairs Ministry is an attempt to clean the streets of Lusaka. K2 billion is being spent on the exercise but our history tells us that the initiative does the trick for a few months after which the streets soon see new vendors.

Street vendors in other cities and towns are likely to suffer the same ultimatums with time.

Although attempts are being made to sensitize the vendors one cannot help stating the obvious – where will I go?

Lusaka City Council has stated that the council was ready to deal with the situation once and for all as vendors had no reason to continue trading on the streets of Lusaka following the opening of the new Soweto Market, which was constructed at a huge cost for the benefit of the traders.

Somebody out there must be blind or irrational. The stalls and spaces in the markets are insufficient in number to accommodate all the street vendors in the city centre of Lusaka. In addition, every year over 200,000 school leavers are poured onto our streets to fend for themselves. It is obvious that if we are to accommodate all the street vendors both present and future, we must have a continuous market building program that will absorb the new entrants each year until the developing job market begins to absorb them.

A brief walk through the various markets in Lusaka reveals that all stalls are fully utilised and there are even street vendors in the markets themselves!

Government and the Lusaka City Council must be realistic. Many residents of Lusaka would rather negotiate with street vendors as they travel through the city, than to bow to their demands at night when they attack our houses due to lack of economic activity after being thrown off the streets.

Published 15 September 2009

Building Zambia

Our Commerce Minister Mutati and his team are working double time to market Zambia to the outside world. President Banda joins the effort whenever possible by inviting foreign investors at most public gatherings, and on his visits within the region and abroad.

Recently Commerce Minister Mutati commented on the initiative to develop the Lusaka East Multi Facility Economic sub Zone that will include the creation of the New Airport City in Chongwe district. The urgency to roll out the project was reported as the reason that the China Minister of Commerce would be visiting Zambia to discuss the implementation of the sub zone. At some point a group of Chinese Multi Facility Economic Zone (MFEZ) experts presented a conceptual master plan for the sub zone to illustrate the initiative.

In an effort to support and facilitate the new sub zone and Airport City development, Minister Mutati stated that Zambian Government was ready to make the necessary changes to the legal framework.

This news comes with excitement and enthusiasm but one cannot help feel some unexplained reservations.

The Parliamentary committee that attended the MFEZ seminar in China, and the Shanghai Yangpu Forum, extracted comments on some issues that may help to bring out the source of the unease and discomfort experienced by many Zambians.

At this seminar Chinese representative Zhou Zhen Bang said China will involve local people in the development of the Lusaka economic sub-zone whose first phase is expected to be completed over a period of two to three years depending on the infrastructure to be built.

Another Chinese delegate Su Yunsheng said under the master plan, the New Airport City is expected to accommodate over 100,000 people while other parts of the city will be for industrial and commercial activities.

Currently a Zambian delegation is in China attending the Third International Forum on Yangpu Development. The forum is organised by the United Nations and focuses on South-South Global Assets and Technology Exchange (SS-GATE). The forum, which opened last week, attracted nine other African countries and aims to promote economic development in developing countries.

SS-GATE president, Haisheng Wang said that countries like Zambia will get the chance to find new sources of investment during the forum.

The unease amongst the Zambian people seems to emanate from lack of ownership by Zambians, in projects that are based in Zambia, and affect the lives of many Zambians.

The sentiments can be paralleled to those in Lesotho where many Chinese firms have set up businesses but are not well received by the Basotho people on the ground.

General discussions with the citizenry indicate that the basic issue is one of lack of equity by the local people.

This phenomenon is not new to Lesotho. It is one that is often considered by any investor. Businesses usually want to be accepted by the community in which they operate.

To this end, businesses will put resources into social investments for the benefit of the community and include the development of play parks for children, investment in schools and clinics for the general community, and the holding of staff events to motivate productivity and corporate identity. Shoprite for example has gone out of its way to motivate Zambian producers of fresh vegetables, meat, and poultry to supply the multinational chain store with local products. As a result, there is very little public resistance and distrust of the development agenda of this investment, and Zambian suppliers will be the first to defend the economic opportunities that are offered to the local community of this supermarket chain.

The public sector will do the country a good turn to follow this blueprint as Zambia markets the investment opportunities to the outside world.

These new initiatives of MFEZ’s and Foreign Direct Investment (FDI) promotion require support and backup of Zambians on the ground, through engagement and dialogue. Furthermore, many Zambian businesses may not have the capacity to compete with foreign investors who come fully financed by their Governments or parent companies and with overseas sales contracts already in place. There are however, many opportunities for Zambian businesses to engage with the new foreign investors by offering local inputs and services to the larger corporations. Zambian businesses can be forewarned about the impending activities of the incoming investors and begin to forearm themselves with new equipment and human resources to deliver goods and services in the economic value chain that should be established.

Many developing countries have ignored these basic facts and found themselves in a situation where foreign investors import all products to support their businesses which include stationery, uniforms, furniture, and even labour.

In addition, other developing countries experience situations where the local people become hostile towards foreign investment and deliberately campaign to frustrate the investment, thereby resulting in a shut down and pullout of otherwise useful business to the economy.

A strong case therefore exists for our public officials in Government to ensure that all the economic development initiatives which are of great cost to the taxpayer, should be complemented by similar marketing efforts to the people of Zambia.

At the end of the day, Zambians will eventually inherit the earth here. Leaving the Zambian private sector out of the equation is parallel to leaving one’s own children out of the family economic development program. If more of the family that are engaged in the process, the more likely we are to experience fruitful and sustained development. The chosen few tend to only look out for themselves and eliminate the greater majority from participating in developing the nation.

Lesotho has learned some hard lessons, the United States is rapidly closing up to foreign trade with the east, Zimbabwe is a good case study, while countries such as India, China, and the Asian Tigers have all embraced their local people in building their future quite successfully.

Many collaborating partners out there have often lamented to us, that the responsibility of economically developing Zambia belongs to Zambians. No amount of economic aid and foreign support can replace the necessity for Zambians to be in the forefront of building Zambia.

Published 8 September 2009

Mining - Pill or Poison?

Recently, the Chamber of Mines noted that the mining sector wanted stable and long term policies that would reduce unnecessary risks to their investments. This was stated as a benchmark for sustained private investment in the mining sector.

The chamber called for consistency so that any changes to mining policies should not result in a fundamental shift in the direction of the industry.

Examples were cited of the 2008 introduction of a 15 percent profit variable tax and a 25 percent mineral windfall tax which upset foreign mining firms.

This year the mining industry is set to achieve the targeted production of 600,000 tonnes of copper and the Chamber of Mines notes that the country can achieve the target provided that all other factors such as reliable supply of power and other logistical arrangements are met.

There are planned expansions and upgrades at Mopani Copper Mine (MCM), and the resumption of operations at LCM and Chambishi Metals Plc later this year. Konkola Copper Mines (KCM), is in the process of developing a major copper mine.

In an effort to support the mining sector, Copperbelt Energy Corporation (CEC) states that it will raise supply by about 25% in the next two years to match rising demand from new mining projects

CEC acknowledged that power demand from the mines would increase to around 700 MW and 800 MW from the current 430 MW.

CEC is planning to embark on the development of smaller power stations around the country to supplement the power generation primarily carried out by ZESCO.

There is a necessity for ZESCO to also strategize how to generate and supply the higher demand for power that the mining industry will need over the next ten years. This consideration will not only put ZESCO into considerable debt, but is also likely to put the country into long term debt as it backs up ZESCO.

Mining commentators from the private sector and academia highlight that mining taxes only account for two per cent of government’s total annual revenue.

There are calls for the immediate restoration of the 2008 mining fiscal regime abandoned this year following pressure from the mining companies. This is in view of the rising prices of copper from a low of US$2, 900 per tonne to a current high of about US $6,146 per tonne on the London Metal Exchange.

These calls are based on attempts to reach a win-win situation for both Government and the investors in the mining sector.

The opportunities that arise from high copper prices and more taxes from the sector include additional income to finance the diversification of the economy, and a meaningful move from our mono-dependence on copper.

Zambia is said to be a country with one of the lowest earnings from the mining sector, while developed countries like the United States earn mining taxes as high as 17 per cent of the country’s total revenue earnings.

Many Zambians argue that the mining sector is consuming the bulk of electricity, uses the bulk of all transport infrastructures, and enjoys the lowest cost for all logistics, and yet it is only contributing to two per cent to the Government treasury.

Multi National Companies (MNCs) which have subsidiaries in the country’s mining industry are perceived to be buying minerals such as copper at the gate price which is lower than that of the London Metal Exchange (LME). Government is therefore urged to put in place a policy where companies which are subsidiaries of multinational companies should be discouraged from doing “insider trading” where they sell to the parent company at a gate price which is lower than the LME price.

On the ground in the mining towns, residents experience rapid degradation of their roads because of damage caused by trucks carrying mining equipment, exports, and ore. The environment is impacted by effluents from mining activities that affect people’s health and agriculture production. These effluents include smoke, slag dumps, and chemicals pumped into local rivers and streams. In some areas noise pollution is experienced by residents in close proximity to mining activities.

It must be acknowledged that mining is an activity that damages the environment and leaves behind holes, tunnels, and cavities that could leave vast lands unusable for many years to come.

One can therefore understand why the public is so concerned with the operations of the mining industry, and look to ensure that the mining sector helps to develop the economy in such a strategic way that even when the mining activities come to an end, there will have been sufficient investment into diversification to stomach the legacy of derelict buildings and barren lands that mining often leaves behind.

To this end, there are some immediate practical steps that the Government can take to reel in the taxes that the mining sector should be paying.

The notion that Zambia has a liberalized economy whereby open trade should take place without public monitoring, is wrong.

The role of Government is not to impede economic development, but Government does have a responsibility to monitor and evaluate all economic activity in the country such that the correct taxes can be collected, and that the activities being conducted are in the best interests of the country.

This basic management of the economy requires that all mining exports must be accounted for through shipping documents processed by the Zambia Revenue Authority, and that all proceeds for the exports are accounted for by remittances to Zambia through the several commercial banks. This basic form of accountability ensures that Zambia gets her fair share of taxes.

This does not stop the mining companies from spending their money as they see fit, but ensures that solid and reliable figures are recorded for the purposes of calculating the taxes due to Government.

Furthermore, even if the export earrings are kept in Zambian banks even for only two days, the availability of foreign currency to the banking sector will be much greater and subsequently provide for a healthy liquidity of foreign exchange to support local businesses thereby instrumentally financing the national economic diversification program.

Mining is now bringing in more profits and the trend appears to be that of rising copper prices for at least the next few years.

It is high time that we took advantage of this windfall by converting the earnings into greater revenues for the national treasury, and investment capital for the other sectors including Agriculture, Manufacturing, Tourism, and Services.

Published 1 September 2009