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Thursday, 21 March 2013

Mulungushi Is Not Wanted!

Davies Mwila (Deputy Defence Minister) says government will lease the Zambia China Mulungushi Textiles in Kabwe if negotiations with the Chinese to re-open the plant fail. Mr. Mwila says government is keen to have the Textile Company re-opened so that local people are employed. It has engaged the Chinese Embassy to help. Government owns 34 percent of shares in the Zambia China Mulungushi Textiles with the Chinese holding the rest. The textile was basically closed in 2008. The Ministry of Defence is tasked with reviving it.

The goal should not be creating jobs per se. It is easy to create any jobs - the goal is to create jobs that are sustainable in the long term. In other words jobs that are not being subsidised by tax payers. If the Chinese don't want to run the project it may be that Zambia is simply not competitive in this area. Some companies have to fail so that energy is put in areas where value addition can occur. It is called 'creative destruction'. We should not seek to maintain ventures at any cost. Let Government sell the project and retrain the workers to found jobs elsewhere. We need to be decisive as a nation.

Copyright © Zambian Economist 2013

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