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Dr Chigunta questions govt on investment plans

Dr Chigunta questions govt on investment plans
By Kabanda Chulu
Monday October 22, 2007 [04:00]

University of Zambia Development Studies lecturer Dr Francis Chigunta has observed that it is difficult to believe the government’s statement about the US $1.4 billion expected investments by December 2007. Commenting on the announcement by commerce minister Felix Mutati that Zambia would receive investment in excess of US $1.4 billion by the end of this year, Dr Chigunta said high levels of social compliance in the country without questioning government’s statement was wrong.

“Government deserves to be congratulated if at all the country will receive investments worth US $1.4 billion by December 2007, however, this position has raised serious doubts when you look at the recent World Bank report, which placed Zambia 117 out of 178 countries in terms of doing business, trade competitiveness and attraction of investments, so why should Zambia perform better than countries that have a good ranking?”

Dr Chigunta asked. “Mutati’s statement has raised issues about legitimacy because it is difficult to validate his comments and also will this perceived investment benefit the country in terms of net gains on its economic growth.”

Dr Chigunta said the intended investment also lacks clarity because there was no breakdown by sector, industry or country of origin.

“We do not even know if the perceived investments will cater for Greenfield or Brownfield categories or if it is portfolio investments, and we also do not know how much is actually coming in terms of trade inflows,” he said.

He said the assumption by Mutati that these investments were coming from outside the country was difficult to believe.

“For instance, the funding for the expansion projects at Zambia Sugar is not coming from outside the country but from within Zambia since local consumers of sugar are subsidising that project through the high sugar prices in Zambia,” said Dr Chigunta. “So it is difficult to believe Mutati’s assumption since most of the investment project’s funding is locally generated and not sourced abroad.”

Last week during the launch of the strategic plan for the Ministry of Commerce, Mutati said Zambia would receive by December 2007 investments in excess of US $ 1.4 billion, the highest in the region after South Africa.

Mutati said the government would ensure that benefits of investments trickle down to the people.

Labels: FRANCIS CHIGUNTA, INVESTMENT

posted by MrK @ 3:40 AM