Friday, November 02, 2007

World Bank endorses revision of mining agreements

World Bank endorses revision of mining agreements
By Florence Bupe
Friday November 02, 2007 [03:00]

THE World Bank fully supports the government’s efforts to renegotiate development agreements with the mines, country manager Kapil Kapoor has said. And Kapoor has observed that there is need for Zambia to accelerate its economic growth in order to realise the vision to turn the country into a middle-income zone.

Speaking at a media breakfast yesterday, Kapoor said the Zambian government had made the right decision to renegotiate development agreements because this would ensure that the country benefits more from the industry.

We fully support government’s efforts to revise mining agreements. Zambia should be able to benefit more from high commodity prices and use the earnings to improve other sectors of the economy,” Kapoor said. “This country should take a leaf from Botswana, which has over the last few years utilised its diamond revenues to improve other economic sectors.”

Government is in the process of renegotiating development agreements with the mines following increased copper prices on the international market, and is targeted at raising mineral royalties and corporate tax, among others.

And Kapoor has challenged the government to enhance citizen participation in the country’s economic activities if the vision to turn the country into a middle-income area is to be attained.

“There should be increased emphasis on broader economic participation by average Zambians if this country is to increase its income levels. We are also working out a strategy to increase sustainable competition on the economic platform,” he said.

Kapoor said Zambia needed to raise its Gross Domestic Product (GDP) status from the present average of five per cent to eight per cent or above.

“As a bank, we have a dual challenge to get Zambia to accelerate its GDP growth, and also to get more Zambians further involved in economic activities,” Kapoor said. “The bank wants to be responsive to Zambia’s needs through increased entrepreneurship capacity and sustainable job creation.”

Meanwhile, Kapoor has expressed confidence that Zambia is a credit worthy country, but cautioned the country against falling into a debt trap.

He said the government should utilise borrowed money prudently by investing in key economic sectors that would yield higher returns to avoid being unnecessarily indebted.

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