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Monday, 24 August 2009

Still undermining Zambia's development

"Last week, we were amazed that 682 tonnes of nickel was exported at 10,000 dollars per tonne per nickel, meaning six million dollars altogether. The minister of finance was asked how much did government earn? He said government earned 300,000 dollars. So where is the other money? It has gone. The current mineral regime is not fair to Zambians."
Former Finance Minister Ng'andu Magande part of a growing momentum for mining tax reforms. Feels like 2007 all over again. The argument then like now is simple : a profit based tax is not ideal when you are dealing with foreign investors because of significant asymmetric information. The truth is time and time again, mining companies have proved to be smarter than government. In addition, ordinary Zambians have little trust that government acts in their interests. We need a simple mining windfall regime that any person can verify. In my view the only reason government dropped the windfall tax was to pull a wall over ordinary Zambians.

1 comment:

  1. Mining, despite been the main economic activity generating sector in Zambia- continues waddling in zombie like progression without sufficient regulation or oversight.
    You will remember the late LPM had decreed that a review of licensing and threatened to revoke mining licenses for though in breach of government law by 31 March 2008.
    Yet nothing has come out that process. So much money is generated from mining activity in Zambia,e.g Zambia accounts for 20% of global emerald sales- this by it self is worth 500M-1B US $.
    Elected/retired Politicians make the majority of those benefiting from illicit sale of mining produce. When know their names, it is time to begin naming and shaming these national development undermining elements.

    Joseph Mwansa
    Kabwe, Zambia

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