Maravi

Zambia not benefitting from copper - Mtesa

COMMENT - The money needed to diversify the economy is to be collected now. The MMD is acting like a vampire squid (to use Matt Taibbi's metaphore for GS bank), allowing foreign mining conglomerates to suck the lifeblood out of the country. This money is needed to build agriculture, manufacturing and infrastructure, as well as provide basic services to the population. Instead, the MMD values it's 'relationship' with the miners more than it does national development. They may even see non-foreign owned national development as a threat to their hold on power, as it would provide the opposition with alternative sources of funding (see what happened to Finance Bank for that reason).

Zambia not benefitting from copper - Mtesa
By Chiwoyu Sinyangwe
Thu 13 Jan. 2011, 04:00 CAT

THE current regime should replace “windfall tax” if they don’t like the term but the concept of allowing Zambia benefit from current high copper prices should not be dismissed, says Ambassador Love Mtesa.

International copper prices on the London Metal Exchange (LME) have continued to rally despite intermittent losses with three-month copper delivery on the London Metals Exchange trading around US $9,557 a tonne.

The surge in copper prices has prompted strong calls on the government to re-introduce the windfall tax to enable the country tap into current “abnormal profits” being enjoyed by the mines.

The government has, however, remained defiant, arguing that the variable profit tax which is measured in accordance with the profit and cost margins presented by mining was enough to help the country tap into the gains being made by mining firms.

In an interview, Ambassador Mtesa, who is also the executive chairman of the Zambian chapter of CUTS International, said there was urgent need to revisit the current mine taxation.

Ambassador Mtesa regretted the government’s continued resistance to calls for increased revenue collections.

“…By the time copper prices would start cooling down, the foreign mining ‘firms would be laughing all the way to the bank’ while the country would have nothing to show for the copper extracted,” Ambassador Mtesa said.

He observed that although the current surge would boost investor confidence into the country’s main economic stay, it was poor judgement for the government not to tax them properly to make “hay while the sun shines”.

“I know it is important to safeguard investments but the large corporations should also not be allowed to milk the country instead of helping it to grow,” Ambassador Mtesa said.

“If they the government don’t like the word windfall tax, let them replace it. It doesn’t matter if they change the name, but whatever they will come up with should translate in increasing revenue collections to improve the lives and welfare of the people.”

Ambassador Mtesa said the country was not benefiting from the vast copper mining sector despite its position as Africa’s top copper producer.

“The over 70 per cent of the population are poor and lack basic essentials such as shelter,” said Ambassador Mtesa.

“The issue of revenue collection from the mining companies is an issue of human rights for Zambia, and mind you copper will one day finish.”

Labels: FDI, LOVE MTESA, NEOLIBERALISM, WINDFALL TAX

posted by MrK @ 8:49 AM