Finance Minister Alexander Chikwanda released a statement to Parliament last week with some interesting quotes.
#quote 1 - "In Zambia one would be over-stretching things to say the exchange rates are strictly a market determined function. The rates are determined by inter-bank arrangements and since the banks are, few and a cartel, there is quite clearly a pronounced element of manipulation"#quote 2 - "There is currently before this House, the Bank of Zambia Amendment Bill 2013which will enable government to regulate the foreign exchange system and monitor the balance of payments. Once the Bill is passed it will enable the Government to issue detailed regulations, including the requirement for export earnings to be repatriated. It is important to note, however, that companies will retain unfettered recourse to their foreign currency deposits through commercial banks.#quote 3 - "Zambia’s major earner of foreign exchange is the mining industry. Even on the basis of the current tax arrangements the country could earn enhanced revenues if the assessments were based on correct volumes of production. It is in this context that Zambia Revenue Authority is refining the monitoring systems of production in our mining industry"#quote 4 - "My colleague the Minister of Mines, Energy and Water Development has also taken a welcome initiative to put together a broadly based technical committee to assist with the monitoring of operations on the mines. We want to do things in responsible ways and still maintain Zambia as a credible investment destination which has policy consistence and predictability"
(Source : Parliament Online)
On #quote 1 everyone agrees. But then we may ask - if there's a cartel why did Mr Chikwanda give the banks a large corporate tax cut in the last Budget? Has Mr Chikwanda only found out about this "cartel" recently? Also the word "cartel" suggests collusion and illegal activities by banks. What is Mr Chikwanda doing about that?
On quote 2# - it sounds like government is pressing ahead with compelling banks to deposit cash in Zambia. But they'll keep it in dollars. We are trying to get hold of this Bill. Currently chasing the Parliamentary Clerk's Office.
Great to hear quote 3#. This has also been flagged up in the latest EITI report. It is clear that mining production figures need sorting out ASAP. #quote 4 again underlines progress being made on the mining front. Better days ahead.