Nawakwi underscores need for windfall tax

Nawakwi underscores need for windfall tax
By Patson Chilemba
Sat 08 Jan. 2011, 04:01 CAT

RUPIAH Banda’s government’s indifference to the plight of Zambians will be the deciding factor in the 2011 general elections, says Edith Nawakwi.

In an interview, Nawakwi, who is FDD president, said it was saddening to see that the government had refused to listen to the people’s demands on many issues like re-introducing windfall tax on the mega profits the mines were making from copper sales.

“Can you imagine Nigeria is a far much greater economy than Zambia but they have introduced windfall tax on their oil, but here we don’t have? The people in front of us (leaders), they have eyes but they can’t see, or they can see but are not just interested,” Nawakwi said.

“They are indifferent, because if we have more money we will put up another university in Namushakende. We will build bridges. People are living in squalor in Misisi; we will build new houses as our friends are doing in other countries. But somebody is sitting in an air conditioned office at the Ministry of Finance and says ‘we can’t collect windfall tax’, and the President is watching.”

Nawakwi said while other countries were introducing windfall taxes on their resources, the Zambian government was busy arguing that doing the same here would distort the budget.

She said copper prices had hit an all time high of almost US $10,000 dollars per tonne and yet the “so-called professionals” like finance minister Situmbeko Musokotwane and Bank of Zambia Governor Dr Caleb Fundanga had failed to properly advise the nation to reintroduce windfall tax.

“These people must be fired before the people of Zambia fire the President this year. This is why I said we can’t continue subsidising the mines, can we dollarise the economy so that these mining companies can bring dollars to pay wages. When they are paying workers K400,000, that’s about US $100. When we dollarise they will be too embarrassed to pay the workers that amount,” Nawakwi said.

She said the government was failing to collect money from the mines and yet they were taxing Zambians through the nose.

“They say we don’t understand. Don’t we understand that our hospitals don’t have medicine, that our children don’t have jobs? He Musokotwane has not issued a single treasury minute on the new graduates from UNZA to be employed this year…now we just hear KCM, KCM and the money is going to London and India,” Nawakwi said.

“How much is remaining here? Throwing effluent in the Kafue river, they give us K10 million, is that ‘corporate governance’?”

Nawakwi said when the government sold the mines; the price of copper was hovering around US$2,900.

She said when she argued that the price was too low; the buyers said it was uneconomical for anyone at that time to invest into the Zambian economy, saying that was why the mines were sold for a song.

Nawakwi said the buyers projected that in their lifetime of 15-20 years, the price of copper would not go beyond US$3,000.

“That is how the story of windfall tax came in, ‘what would happen if their theory was proved to be wrong’? And all concerned said ‘let’s exploit the concept of sharing the profit unexpected at the time of the sale’,” Nawakwi said.

“Truly it has come to pass that the dip in copper prices was temporary. The price of copper has grown by over 100 per cent. What is in it now is not the royalty because the royalty was fixed. You can increase it by 10 per cent, it is nothing compared to the opportunity cost of a Zambian not owning a mine.”

Nawakwi said the country needed sober-minded people who were not self seeking to critically analyse the benefits of the mines on Zambians.

“I think the IMF should stop lending them government money because why are we getting into more debt when we can collect money? Why are we making shareholders in England, America and Australia richer than the shareholders in chief Mungule in Masaiti?” asked Nawakwi.

“Some of these issues will be the deciding factors on polling day. Of course how can you refuse to take money from the air, windfall tax, to buy medicine, to drain Misisi, to patch up Great North Road?”