Government ran out of finances for projects - Musokotwane

COMMENT - Watch these 'developoment project' which pick up in an election year.

Government ran out of finances for projects - Musokotwane
By Ndinawe Simpelwe
Sat 09 July 2011, 17:00 CAT

FINANCE minister Situmbeko Musokotwane says the country has a backlog of infrastructure development that needs to be addressed immediately.

Musokotwane said in interview that the government was unable to find money to offset the backlog that had characterised almost all the towns in the country hence the move to channel mining taxes towards infrastructure.

He justified the government’s move to use the money that it would recover from First Quantum Minerals in unpaid mining taxes for developing infrastructure in the country.

“We had no confidence that the money would come from the mines. Now that they will pay us, the money from FQM will go to infrastructure development because we all know that we have a backlog in terms of infrastructure,” Musokotwane said.

He said the money would be used to build roads and improve existing infrastructure in the country.

He said infrastructure was important to any country as it also played an important role in the economy.

FQM would start paying tax arrears to the Zambian government after an agreement was reached on new tax measures that were introduced in 2008.

In 2008 the government introduced new tax measures for the mines which included among them increasing mineral royalty from 0.6 per cent to 3 per cent and company tax from 25 per cent to 30 per cent a move that mining firms opposed.

However, Musokotwane recently announced that the government and the mining companies had reached an agreement for mining firms to start paying the tax in arrears.

He said FQM would pay the government US $224 million most of which he said would be used for infrastructure development.

Musokotwane was reacting to concerns raised by civil society organisations over the use of funds on projects that were not budgeted for.