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(ZIMPAPERS) Reason Wafawarova:- Michael Sata striking the dragon

Reason Wafawarova:- Michael Sata striking the dragon
Thursday, 20 October 2011 00:00
Reason Wafawarova

Zambia, though to a lesser extent, had like Zimbabwe been conquered by force and fraud. In 1890, King Lewanika of the Lozi (Barotse) tribe gave the British South Africa Company the same sort of mining concessions they had fraudulently won from King Lobengula in Zimbabwe.

Once again the Lewanika concession was used to give validity to the conquest, not only of the Lozi, but of all other Zambian tribes - the same way the Lobengula concession was used to validate the conquest not only of the Ndebele people, but also of the majority Shona and other smaller tribes of Zimbabwe.

The colonialists adopted a very casual way of settling the fate of the native Africans they had colonised.

The border dispute between the British and the Portuguese in 1903 was resolved by the two parties agreeing to invite the King of Italy to draw the boundary on a piece of paper, for example.

A thoroughly independent arbitrator, living in blissful ignorance of the people of the Zambezi Valley, King Emmanuel took up his pen on May 30, 1905, and drew what we today call the Zambia-Angola border.

He simply drew a line down the 22 degrees line of longitude east and the matter was thus resolved. Those in attendance applauded and two countries were created, just like that.

Zambia attracted the interest of imperialist multinationals and that of apartheid South Africa after the discovery of huge copper deposits in what we now call the Copperbelt, and that was in the late 1920s. The Anglo-American Corporation and the Rhodesia Selection Trust (RST) became the first two major mining companies to control the copper industry in Zambia.

Like in Zimbabwe and South Africa the Zambian copper mines developed an informal colour bar where skilled jobs were reserved for whites, while the mass of unskilled black miners provided the labour base - albeit on slave wages.

Zambia was never directly controlled by the settlers, but was a colony run in their interests. The country became more dependent on the white South during the period 1953 to 1963, when it was part of the Federation of Rhodesia and Nyasaland (Malawi).
The Federation was dominated by the settlers of Southern Rhodesia (Zimbabwe) who used the copper revenues to develop their own economy and expanded their manufacturing industries at the expense of the other two territories, which were effectively reduced to captive markets. Unlike Southern Rhodesia that was settler controlled, Northern Rhodesia was run by a British colonial regime. When decolonisation gathered pace in Sub-Saharan Africa the Tory government in London was prepared to give way to the demands of African nationalists for independence.

The British colonial regimes in Zambia and Malawi easily gave up power to the majority Africans while the settlers in Ian Smith's Rhodesia defied Britain and took control of the country by unilaterally declaring independence from Britain.
The Kenneth Kaunda led United National Independence Party became the main nationalist party during the last years of the Federation, and the party was primarily based on the mine workers of the Copperbelt - the traditional king making region of Zambia.

UNIP thwarted Prime Minister Roy Welensky's machinations to derail efforts towards independence. Kaunda needed to defeat the one time nationalist party; the African National Congress led by Harry Nkumbula - a party that had degenerated into the role of a collaborator with the settlers, just like the United African National Congress led by Muzorewa did in Ian Smith's Rhodesia.

After Kenneth Kaunda swept to power in the 1964 pre-independence elections, independent Zambia remained closely integrated into the economic complex dominated by South Africa, especially because the copper mines were owned by Anglo-American and RST.

At independence copper accounted for 92 percent of the country's exports, contributed 53 percent of the total government revenue, and supplied 47 percent of the net domestic product. Kaunda nationalised the BSA Company's royalty rights over the copper mines, but this did not alter the structure of the economic power in Zambia. The BSA Company was replaced by a new and much more powerful Charter Consolidated, headquartered in London, but controlled by Anglo-American.

The rest of Zambia's economy was run by companies based in apartheid South Africa and in Rhodesia. Barclays, Standard Bank and the Netherlands Bank of South Africa were the major banking institutions and many of Zambia's firms were run from Salisbury (Harare) the capital of Rhodesia, of course now Zimbabwe. Anglo-American provided coal for Zambia's copper mines from Wankie Colliery in Rhodesia, and Lake Kariba provided most of Zambia's power supplies - the Lake being a shared facility between the two countries up to this day.

In the late 1970s Zanu's Chimurenga, a London newsletter, carried a report on "the lack of self-reliance in the economy and administration of Zambia."

Kenneth Kaunda's policies had tried in vain to lessen the dependence of Zambia on the West and on South Africa. He had even tried state-run investment projects carried out by the Industrial Development Corporation (Indeco). There was very little to show for this effort, especially given that Zambia had to share the pain of economic sanctions with Ian Smith's regime in Rhodesia, by virtue of being co-lateral damage of the Salisbury based industrialists.

When wages doubled between 1964 and 1970 and the cost of living rose by 50 percent Zambia began to experience political squabbles within UNIP. Critics blamed it on Kaunda's "Zambianisation" program, where indigenous Zambians had replaced whites in managerial and administrative jobs.

This is the same argument peddled after Robert Mugabe reclaimed colonially stolen farmlands for the benefit of landless Zimbabweans. They argue that replacing a white person with a black one is an equation that guarantees futility. Some attributed the development to the militancy and power of the miners of the Copperbelt, who had forced a 22 percent salary increment through a series of strikes.

In 1968, Kaunda was facing a general election threatened by the opposition ANC, and by the rising power of his own deputy, Simon Kapwepwe. He had to come up with the "Mulungushi Economic Revolution", calling for the replacement of Asian retailers with Africans, stopping the outflow of capital and the repatriation of profits by foreign business people, and announcing that Indeco would take 51 percent share holding in 25 leading foreign-controlled companies.

In 1969 Kaunda came up with the Zambia Consolidated Copper Mines (ZCCM) and that way Zambia took much control of its mining sector. In 1991 Frederick Chiluba defeated Kenneth Kaunda riding mainly on the weakening of the Zambian Kwacha and the rising cost of living. The IMF and the World Bank immediately started calling for the privatisation of ZCCM. This led to the calls for Zambia to declare bankruptcy and to claim Highly Indebted Poor Countries (HIPC) status. In 1999 the Zambian government was still reluctant to privatise ZCCM and all the major donors conspired to withdraw US$530 million in aid, and at this point the Chiluba government gave in.

These donors argued that ZCCM was losing up to US$1 million a day, and that there was no capacity on the part of the body to efficiently run copper mining in Zambia. When privatising ZCCM the Finance Minister Edith Nawakwi had this to say:

"We were told by advisors, who included the (IMF) and the World Bank, - that there (was) no copper in Nchanga Mine (and) Mufulira was supposed to have five years' life left and all production models that could be employed were showing that, for the next 20 years, Zambian copper would not make a profit. Conversely, if the Government privatised, we would be able to access debt relief, and this was a huge carrot in front of us. We had no option (but to go ahead)."

Tendai Biti of Zimbabwe fought hard to have Zimbabwe declare HIPC status in 2009, and he also has been working hard to obtain IMF/World Bank "expert advice". What the Zambians were told about Nchanga and Mufulira was nothing but absolute lies. The mines are leading producers of copper in Zambia today. These blatant liars are what Biti prays for day and night, probably calling the name of the Almighty in vain.

After the privatisation of ZCCM in April 2000 production of copper increased to 535 000 metric tonnes in 2007, further increasing to 700 000 metric tonnes in 2009 and projections by the Rupiah Banda government were that production would up 100 000 metric tonnes by 2014.

The privatisation itself started with China buying Chambishi Copper Mine for a mere US$20 million in 1998, through China Non-Ferrous Metals Mining Company (CNMC). In 2006 China invested US$200 000 000 in a copper smelter.

Other companies doing copper mining in Zambia include Vedanta Resources, a London listed company based in India, which bought a controlling stake in Kongola Copper Mine for only US$48,2 million; Glencore International AG controlling 73,1 percent of Mopani Copper Mine; with Canadian First Quantum Minerals controlling 16,9 percent, and ZCCM-IH controlling just 10 percent.

First Quantum also has various shareholdings in Bwana Mkuba Copper Mine, Kansashi, Luamita, Mufulira, Nkana and Mwinilunga. Australia's Equinox Resources and US-based Phelps Dodge Mining run the

Lumwana Joint Venture with the former controlling 51 percent while the later has 49 percent. Zambians provide cheap labour.

However, majority investment in Zambia's copper industry is in the hands of the Chinese through CNMC. They control 80 percent of Luanshya Copper Mines and the multinational signed a US$600 million for a 2012 copper mining deal at the Mufulira Tailings Dam. Now enters Michael Sata, the man who served as a Governor for Lusaka under Kenneth Kaunda, deserting UNIP for Frederick Chiluba's Movement for Multi-party Democracy (MMD) in 1990, and also serving in three ministerial portfolios under Chiluba, apart from being the MMD's organising Secretary. He formed his own Patriotic Front party after an ugly power struggle with Frederick Chiluba and his appointed successor Levy Mwanawasa.

The man carried the vote to Zambia's presidency mainly because he unleashed venomous criticism to the cruel fact that between 2002 and 2006 Zambia only managed to get US$752 million in taxes from its entire mining sector. Added to this Zambia exported copper worth US$3 billion and out of that amount the country only got US$70 million.

This was mainly because the late Levy Mwanawasa and his successor Rupiah Banda gave tax exemptions of up to 15 years to foreign investors, including to the Chinese. It is also because the same regime(s) generously reduced royal taxes on copper mining from 3 percent to 0,6 percent, all in a bid to attract foreign direct investment.
Thirdly, the investors in the mining sector have turned to casualisation of labour to maximise on profits while minimising on labour costs. Michael Sata has publicly cited Chinese investors as part of the culprits on this matter. He has threatened to expel those who fail to comply. The new Zambian President has decided to end Zambia's long walk in copper exploitation by introducing sweeping changes to the country's investment regime. He needs to remove the ridiculously generous tax exemption periods as much as he needs to raise the corporate tax rate far higher than 0.6 percent.

He has threatened to kick out any foreign investors who do not respect Zambia's labour laws, and he won votes in the Copperbelt because he promised to end casualisation of labour. He has to fulfil that promise, or else the suffering of our people in Zambia will never end. Zambia we are one and together we will overcome.

It is homeland or death!

Labels: ANGLO-AMERICAN, COLONIALISM, DEBEERS, MICHAEL SATA, NEOCOLONIALISM, NEOLIBERALISM, PRIVATISATION, REASON WAFAWAROVA, World Bank, ZAMBIA

posted by MrK @ 1:50 PM