Offload shares to public, Kanyama urges mines
Offload shares to public, Kanyama urges minesBy Kabanda Chulu
Tuesday January 15, 2008 [03:00]
ECONOMICS Association of Zambia (EAZ) national secretary Chibamba Kanyama has said mining companies should be asked to offload 10 per cent of their shares to the Zambian public through the stock markets. Commenting on President Mwanawasa’s announcement that the government would increase mineral taxes from 31.7 per cent to 47 per cent in order for the country to benefit from mining revenue, Kanyama yesterday said the mines actually called for government’s action.
“They should have voluntarily called for renegotiation of the agreements when the calls for higher taxes started a few years ago. In last year’s budget, finance minister Ng’andu Magande hinted on this issue but the mines decided to ignore him,” Kanyama said.
” But it is high time the mines offloaded at least 10 per cent of their stake to the Zambian public through the stock market. With the profits they are reaping, it looks likely they will not want to do so, but the longer they take, the more Zambians will push for even higher taxes than announced by President Mwanawasa and if their shareholders abroad are desperate about an immediate pay-back to their investment, let them offload their stake to Zambians who can redeem them now.”
He explained that the argument that the Zambian stock market was not deep enough was not true.
“Considering the over-subscription of the Copperbelt Energy Corporation shares, Zambiaa has enough liquidity to support the mining sector through the stock exchange to as much as US $1 billion and the moment they do so, government will be pleased that part of the gains in terms of high copper prices will be enjoyed by its citizens,” Kanyama said. “Under such circumstances, taxes can even drop and there will no longer be any debates about windfall taxes. But the mines have not shown good leadership and negotiation skills in this area and they are bound to pay a higher price in future.”
And Kanyama said the mining companies should not look at the government’s intention to increase taxes as policy reversal but an act aimed at redressing inequalities arising from wrongly drafted development agreements.
“There will certainly be a lot of resistance from the mines using their international influence on the new tax regime. The mines will see the pronouncement as policy reversal and will ensure this issue is reflected at the international forums at which Zambia will be singled out as a country, besides Zimbabwe, that has reversed on policy and their messages will be aimed at sending a signal that Zambia abrogates on agreements, cannot honour contracts with the private sector and should, therefore, not be taken as a worthy destination for foreign direct investment or any form of financing through the private bond market,” said Kanyama.
Labels: CHIBAMBA KANYAMA, EAZ, MINING
posted by MrK @ 6:08 AM
8 Comments:
There will certainly be a lot of resistance from the mines using their international influence on the new tax regime.
Maybe I'm not cynical enough, but I seriously doubt it. There is very little argument to be made against countries taxing their national resources. In fact, it is unsustainable to have countries receive aid instead, when much more money should come to them through taxation.
The mines will see the pronouncement as policy reversal and will ensure this issue is reflected at the international forums at which Zambia will be singled out as a country, besides Zimbabwe, that has reversed on policy and their messages will be aimed at sending a signal that Zambia abrogates on agreements, cannot honour contracts with the private sector and should, therefore, not be taken as a worthy destination for foreign direct investment or any form of financing through the private bond market,” said Kanyama.
And again, I seriously doubt that too. I wonder if mr. Kanyama could present any evidence of actions or agitation against Zambia, either in international organisations, or even in the world's press.
Because I can assure him that such actions would not only be ridiculous, they will be exposed and will appear ridiculous to any honest onlooker. Did foreign investment in Britain collapse, when Tony Blair announced a windfall tax on oil? I would like to see some evidence first.
The only detrimental thing to Zambia's reputation about this whole ordeal, is how the government was taken for a ride by the mining companies and the IMF. If anything, ending Zambia's reputation of being a doormat for international corporations will strengthen the country's image, as a country where shifty corporations are not 'protected' by the politicians of the day.
I take it Mr Kanyama is speculating on what minning companies may take. He is right to think in those term. Speaking from experience, in the corridors of the IMF and other board rooms those ideas will surface.
What ever an African country does that has an effect on the profits going to Europe will be received with a lot of mixed feelings( visible or not). Europeans want 100% returns on their investments( In this case taken after Taxation. Anything that is benefiting Africa is not wellcome in the eyes of invetsors from our partners in Europe.
Speaking from experience, in the corridors of the IMF and other board rooms those ideas will surface.
Do you have an example of the IMF retaliating against a country for raising taxes on foreign corporations?
Yes i do....
Well go on or take a hike.
Not on this forum.
Anon,
I am not being disrespectful, but you can understand my problem with taking an anonymous poster's word for it.
If you really want to tell me, e-mail me at tiger69_15@excite.com
I guarantee that I will keep your name out of it - I'm only concerned about verifying this information from other sources.
Thanks Mr K,unfortunately i'm also at pains to give away such information to someone i don't know.
While working for the world bank, I happen to have been a fool(in the name of patriotism) and passed on valuable information to someone who is known to me but somehow it ended in wrong hands. My friend was sucked as minister. I would love to volunteer information but not in this way. I'm so sorry Mr K and fellow readers. The only thing i can mention is that people who rule this world are not politicians but business men who fund politicians. It is very difficult to verify the information i have because you need someone who is inside or who heard it from a chief executive of a multinational company (personaly i heard him) asking a senior officer at the World Bank to change things to favor his company. Strange this world !
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