Maravi

Musokotwane links economic volatility to excessive dependence on copper

COMMENT - If only Zambia had access to the funds to diversify the economy. The types of hundreds of millions a year that would come from the Windfall Tax... Now that would be revolutionary thinking, 'if you can call it thinking' (to quote Dr. Situmbeko Musokotwane).

Musokotwane links economic volatility to excessive dependence on copper
By Abigail Chaponda in Ndola
Wed 17 Feb. 2010, 04:00 CAT

FINANCE minister Dr Situmbeko Musokotwane has said Zambia’s dependence on copper as the only large medium source of economic growth and foreign exchange earnings has led to tremendous economic volatility over the last decade.

During a Copperbelt business seminar on trade and investment opportunities at Mukuba Hotel in Ndola yesterday, Dr Musokotwane said the excessive dependence on copper left the economy vulnerable to external shocks such as international commodity prices, exchange rates and global trade volumes.

He said increased investments in sectors like agriculture, tourism and manufacturing could help build economic resilience in the face of external shocks.

Dr Musokotwane said there was need to increase returns to Zambia’s resource exploitation through value addition. He said Zambia’s copper reserves must be treated as a gift to be shared across generations.

“We ensure that we derive maximum returns from each tonne of copper that is mined. This can only be achieved through investment into processing that adds value in the sector. As government we will continue to focus on providing a welcoming environment to both domestic and foreign investment,” he said.

Dr Musokotwane said the government had been keen on promoting value addition and import substitution.

“The ongoing development of the Chambishi M-Facility Economic Zone as a centre for excellence for metal technologies is an embodiment of these principles. To date more than eight firms have been licensed to operate in the zone, with the anchor being the US $300 million Chambishi Copper Smelter. When completed, firms operating within the zone are expected to bring in close to US $900 million in annual turnover.”

He said the other area of concern was the poor quality of the rail infrastructure.
Dr Musokotwane revealed that a Chinese team would be visiting Tanzania Zambia Railways (TAZARA) to assess the railway line.

He said investment into the Copperbelt was an integral part of the government’s diversification and value addition strategies

Dr Musokotwane challenged Zambians to take up challenging investment opportunities in order to help revamp the economy.

“The Democratic Republic of Congo and Angola are two vast markets that rely heavily on neighbouring countries for imports. As a nation, however, we have not taken advantage of these prospective markets. Most of DRC’s food imports come from South Africa, and Angola relies heavily on Brazil for poultry imports. Yet these are two commodities that have abundant potential in Zambia particularly here on the Copperbelt,” he said. “I speak with confidence when I assure you that chickens consumed in Angola do not have to speak Portuguese and the Angolan market would just be as welcoming to chickens from Zambia.”

He said the growing investment in the agriculture sector had attracted a US $50 million investment by Chayton Capital into dormant agricultural farms on the Copperbelt and Central provinces.

And Dr Musokotwane urged Zambians not to listen to people who claimed that investors would steal local people’s jobs.

“Investors are good, they are not going to steal your jobs, and they are going to create jobs. Investment is one of the pillars of Zambia’s economy,” Dr Musokotwane said.

And Copperbelt minister Mwansa Mbulakulima said Zambia’s economy was not competing with the southern region because Zambians lacked confidence to take up big challenges.

Mbulakulima also said Zambia would not develop because of politicking.

“The problem we have is politicking. Whenever someone says that investors are coming, a lot of people will rise to start politicising. We need to change from this, Zambia is our country and when good things come, we all benefit,” said Mbulakulima.

Labels: COPPER, ECONOMIC DIVERSIFICATION, SITUMBEKO MUSOKOTWANE, WINDFALL TAX

posted by MrK @ 3:14 PM