Maravi

Zambia still far from developing oil resourses, says Magande

Zambia still far from developing oil resourses, says Magande
By Joan Chirwa
Monday October 01, 2007 [04:00]

ZAMBIA is still very far from developing its oil resources owing to the amount of money involved in the whole process, finance and national planning minister Ng’andu Magande has said. And Magande has disclosed Zambia’s plans to contract a debt of US$39 million (approximately K149.9 billion) from the Chinese government next month.

During the non-tax revenue collectors’ workshop in Lusaka on Saturday, Magande indicated that as much as the country’s north western part had recorded positive signs of oil deposits, it would take Zambia some time before the petroleum industry could be developed.

“In order for us to know how much oil we have in North Western Province, we need to sink boreholes of about 10 kilometres deep,” Magande said. “Each borehole costs around US$10 million (approximately K38.4 billion) and we need about ten boreholes to get good results. Efforts are being made to have the process done early but this will take some time.”

Magande said the current prices of fuel in the country were difficult to control because Zambia was not a petroleum-producing country.
“We have always been importing fuel and we have to increase the import levels because of the rising demand for the commodities. The country therefore needs more money to do this,” he said.

Magande also said Zambia urgently needs a new constitution before 2011 in order to incorporate issues of the national budget.
Magande indicated that the speedy enactment of the Budget Act for inclusion in the national constitution would enable presentation of the budget before each financial year as opposed to the current format where the country’s financial plan is released within the budget year.

“What we want is for the budget to be presented before the beginning of the budget year. For how long are we going to wait to have this done?” Magande asked. “The current constitution says the budget should be presented within the budget year and be discussed for 90 days before approval. This gives the government only nine months to implement its programmes.”

Magande said failure to have the budget presented before the budget year would lead to increased balances of unspent government money in its account at the Central Bank.

“This is the reason why there is still about K700 billion lying idle in the government account at the Bank of Zambia. Already, we have a few months left before the end of the year, and this period is very difficult to implement programmes because of the weather pattern,” Magande said. “That is why I say we need a new constitution before 2011. If the budget is presented early, government departments will have enough time to finish up procedures for implementation of programmes.”

And Magande disclosed that Zambia would next month contract another debt totalling US $39 million (approximately K149.9 billion) from the Chinese government for the purchase of equipment to be used in maintenance of feeder roads in the country.

“I will be travelling to China next month where another debt will be signed. We are hoping to get 27 pieces of equipment which will be used to rehabilitate feeder roads across the country,” said Magande.

“We are hoping that once we get these pieces of equipment, feeder roads will be paved and properly done by the end of next year.”

Labels: DEVELOPMENT, OIL

posted by MrK @ 9:18 AM