Maravi

(STICKY) Dr Musokotwane justifies incentives given to mines

COMMENT - The 'incentive' of paying no tax is done so the mines can keep all of their profits. I don't see what is so difficult to understand about that. While exporting $5 billion a year, the mining sector is not there 'to create jobs'. It is there to capitalize other economic sectors. Allowing them not to pay taxes is a crime against the people and economy of Zambia. The so-called jobs in mining are nothing compared to the jobs that can be created in agriculture, let alone manufacturing.

Dr Musokotwane justifies incentives given to mines
By Fridah Zinyama
Fri 15 Jan. 2010, 04:01 CAT

FINANCE minister Dr Situmbeko Musokotwane has justified the incentives given to the mining sector during the on-set of the global financial crisis, saying the action was necessary if the country's economy was to survive.

During the dissemination workshop yesterday on ‘The impact of the global financial crisis on Business and Employment in Zambia’, Dr Musokotwane said the government’s biggest concern during the on-set of the economic crisis was saving the mining sector because of the critical role that it played in the country’s economy.

“Our main concern was the impact that would have occurred in the country had the mining companies been allowed to close,” he said. “As it is, it has taken the new investor of the Luanshya Copper Mine one year to start production.”

Dr Musokotwane explained that the impact would have been much worse had government allowed the mining companies to close without any intervention as it would have taken longer for them to re-start production once new investors were found.

“Our intention was prevention rather than cure,” he said. “We are confident that with the action that government has taken more jobs will be created this year in the mining sector.”

Dr. Musokotwane said the sub-contractors to the mining sector were the worse hit by the financial crisis, as some companies had to be liquidated.

“The mining sector itself was affected but the ones indirectly affected were the contractors,” he said.

And International Labour Organisation (ILO) director Gerry Finnegan said about 52 million workers globally lost their jobs due to the impact of the global financial crisis.

Finnegan said the mining and tourism sectors were the worst hit by the financial crisis, which resulted in the many job losses experienced.

“In Zambia, instinctively, we knew that the crisis could not ignore Zambian workers,” he said. “Increasingly, in the last quarter of 2008 and in 2009, we were aware of workers losing their jobs particularly in mining and tourism.”

Meanwhile, Mine- Workers Union of Zambia (MUZ) president Rayford Mbulu accused some mining companies of fulfilling their sinister intentions of retrenching employees’ by way of the opportunity which the global financial crisis created.

“What was surprising was that while others were busy retrenching their workers, other mining companies maintained their workforce when they were also facing the same challenges as the other companies,” he said.

Mbulu said the government also gave a lot of incentives to the mining sector to help them survive the crisis hence they should have exercised some lenience towards their employees.

And Zambia Federation of Employers president Dr George Chabwera said even though the country had recorded some positive macro economic trends, the country had not witnessed any growth in employment.

“We also continue to remain apprehensive of the effects of the crisis on job creation in the country. We remain apprehensive because we do not see any new jobs being created in future,” said Dr Chabwera.

Labels: CORRUPTION, GEORGE CHABWERA, GERRY FINNEGAN, LABOUR, RAYFORD MBULU, SITUMBEKO MUSOKOTWANE, WINDFALL TAX

posted by MrK @ 5:07 PM