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Thursday, 21 October 2010

The social cost of our mines..

I would strongly urge the hon. Minister of Finance and National Planning, whom I think is the right person to do this, to conduct a detailed social cost-benefit analysis of the taxation system of every dollar made on the copper that leaves this country or every dollar that comes into this country from the sale of copper. He needs to do this for our benefit, the benefit of the people of Zambia and in particular we, their representatives. We need to know how many ngwees or cents of that money is expended on the Zambian infrastructure, Zambian education system and the Government’s general revenue. What is our share of our own wealth as it goes out of the country, not in vague terms of a few thousand jobs here and there, but what are we actually getting as a country?
Guy Scott echoing a point I have been making for sometime. When looking at the appropriate fiscal system for the mines one needs to adopt a "social" or "societal" approach. At present it is very much the case that mines are subsidised since they are free riders of social infrastructure. There's good reason why the government has never undertaken the sort of cost benefit analysis proposed by Mr Scott, it would be negative due to the gigantic revenue leakage from the system. We don't even need to do this for existing mines - a simple CBA for a new mining would also be negative. I have reviewed carefully all the Impact Assessments produced for the Environmental Council of Zambia, it is noticeable that not a single one does proper cost benefit analysis for a new investment. Now, I don't think that is because the ECZ is not aware of the need for thorough analysis or has no access to experts to quality assure the Impact Assessments submitted to them, its just that they don't care.

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