Maravi

Zambia not being run by strong leaders - Nawakwi

Zambia not being run by strong leaders - Nawakwi
By Patson Chilemba
Sun 20 Mar. 2011, 04:01 CAT

ZAMBIA is being run by people who are not strong enough to drive the nation's development agenda, says FDD president Edith Nawakwi. In an interview, Nawakwi said ideally all the mining companies were supposed to bank their monies locally and only externalise dividends and profits.

“But it is just the problem that we have had in this country where we are not strong enough. This country is not being run by people who are strong enough,” Nawakwi said.

“Look at Botswana which has diamond. Where is their money (proceeds of diamond sales) banked? The answer is Botswana. Even if you go to Angola, to create business you have to have a local partner.”

Nawakwi said when the kwacha started depreciating, those in government said it was because of the global crunch and declining copper prices.

She said the copper prices had risen considerably yet the kwacha had continued to depreciate.

“I have repeatedly said that investors are nothing but people who are looking to maximise profits…unless we as Zambians realise that to create wealth, we need to create a wealthy middle class in this country and without this, the country is going to be perpetually toiling to support foreigners,” Nawakwi said. “In this particular case of the exchange rate policy, the only way to address this imbalance in the trade pattern which does not favour Zambians but foreign capital is for us…specifically the minister of finance…to dollarise this economy even for one month.”

Nawakwi said in this case foreign investors would begin to cash in their dollars.

“If you go to Zimbabwe you don't hear of Zimbabwe dollars, you hear of the US dollar and the rand, and the inflation rate is far lower there than Mr finance minister Situmbeko Musokotwane's,” Nawakwi said. “Inflation rate, why? Because there is parity in the trade.”

Nawakwi said the kwacha could only be managed if the mines cashed in more dollars in the economy.

She observed that all the money that was earned from copper by the mining companies was banked out of the country with only a few dollars being brought back to pay Zesco electricity bills and wages.

“Nothing is paid locally,” Nawakwi said. “Even the subcontractors in the mines are from India if it is KCM Konkola Copper Mines. The Zambians are just given jobs of supplying paper. How can you then expect the Zambian kwacha to have any respect on the market?”

The kwacha was now trading in the range of K4,700 to K4,900 against the US dollar but was in the range of K3,600 when the global crunch started in 2008.

Nawakwi said since the 1970s the economic policy was tailored to support the copper mines.

“It made sense at the time when we as a country owned these copper mines. When I was minister of finance we borrowed US $6million from a private bank to pay wages. It made sense for us to ask for more kwachas because we were paying our millions in kwacha,” Nawakwi said. “Now these mines are earning dollars, let us have these mines pay our workers in dollars.”

She said the inflation rate was rising on account of several factors but key among them was the almost US $2 price for a litre of petrol.

“To resolve the problem over the exchange rate, let us dollarise the economy, get all those infesters investors, these tourists investors to bank their turnover profits locally and only externalise profits and dividends. Let us create a middle class,” she said.

Nawakwi said Zambia had been dubbed as one of the leading trading nations in Sub-Saharan Africa that was not a pleasant label for any country.

“We can't even manufacture tooth picks, except for toilet paper by Softex. We can't even manufacture salt, even if we have salt pans in Mpika. We have to import everything,” said Nawakwi. “Now I can assure you that as long as we do nothing about our current disadvantaged position and you have a currency which is locally generated like the kwacha, you are not going to see your currency improving at all.”

Labels: EDITH NAWAKWI, FDI

posted by MrK @ 6:18 AM