Govt not ready to recapitalise NCZ, says Musokotwane
Govt not ready to recapitalise NCZ, says MusokotwaneWritten by Ernest Chanda
Tuesday, February 17, 2009 4:52:22 PM
FINANCE minister Dr Situmbeko Musokotwane has said the government is not ready to recapitalise Nitrogen Chemicals of Zambia (NCZ).
And the Economics Association of Zambia (EAZ) has supported government's cancellation of the windfall tax on the mines.
Appearing before an Expanded Parliamentary Committee on Estimates in Lusaka yesterday, Dr Musokotwane said it was a hard process for the government to run the fertiliser-making plant.
This was in response to a committee member who is also Bwacha (PF) member of parliament, Lombe Mulenga, who wanted to know why the government was not recapitalising NCZ to produce cheaper fertiliser and create jobs for Zambians.
The committee, chaired by Lukulu East member of parliament, Batuke Imenda, comprises chairpersons of all parliamentary select committees.
Dr Musokotwane said the government would rather have NCZ run by private entities.
"The technology available at NCZ at the moment is in problems, but as government we are open to Zambians who can run NCZ and produce fertiliser. If they can produce that fertiliser cheaply as suggested, then we will be ready to buy from them. As for now, it is a hard process for government to run NCZ. Anybody can come and we shall discuss with them if they want to invest in the company," Dr Musokotwane said.
And Dr Musokotwane said he might consider increasing the Constituency Development Fund (CDF) in this year's budget as demanded by members of parliament.
"Honourable members should know first of all that we have a squeezed budget. If we increase CDF to K1 billion across the board as they have proposed it would attract an extra K8.2 billion to offset the deficit. And where would government get this money from? We surely will do something to adjust the CDF within this budget, but not as demanded by the honourable members of parliament,î he said.
"It is impossible to increase to K1 billion this year, but we would rather start with something so that in the next few years we shall reach K1 billion as demanded. But we must also realise that as we demand this increase, it means that somebody else in the economy must generate this money."
Dr Musokotwane said if the demanded increment were to be effected this year, other projects would suffer.
"If we do it now, Nansaga Agriculture Development and Kasaba Bay tourism development projects would suffer. And these projects are a seed that we want to plant for the future, so let's start them now. Remember that when you plant a seed, it grows to affect the next generation, and that is what we are trying to do," said Dr Musokotwane.
And EAZ supported the government's cancellation of the windfall tax on mines.
Association president Mwilola Imakando told the committee that such tax would have made it difficult for the mines to operate effectively amidst the global credit crunch.
"...There was a designed fault in the windfall tax arrangement on the mining sector. Government ignored the production side, and we are glad that in fact, the government has just shown that it is a listening government by cancelling the windfall tax. That is just about what any government can do because production costs in the mining sector are just too high," said Imakando.
Labels: EAZ, NCZ, PARASTATALS, SITUMBEKO MUSOKOTWANE, WINDFALL TAX
posted by MrK @ 4:52 PM
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