Saturday, February 12, 2011
By Chibaula Silwamba
Sat 12 Feb. 2011, 04:01 CAT
EDITH Nawakwi has demanded the independent and comprehensive auditing of all foreign mining firms in Zambia following revelations of tax evasion by Mopani Copper Mine.
Commenting on revelations of glaring inconsistencies in production and revenue figures Mopani submits to Zambia Revenue Authority (ZRA) for tax administration, Nawakwi, a former finance minister, said there was a possibility of connivance between the government and mining companies.
“I think there is something up the sleeves. I don’t like to accuse my colleagues but the more they continue to insist that everything is okay, it raises a lot of suspicion on the ground,” Nawakwi said.
“My concern is that the Minister of Finance Dr Situmbeko Musokotwane is on record as saying that we Zambians don’t understand that he can get more money using his way of collecting tax. Now, his way of collecting tax is obviously costing us billions of kwacha.”
Nawakwi said Dr Musokotwane must be instructed immediately to start collecting windfall tax for the benefit of Zambians and condemned Mopani for evading tax.
“Since they are evading tax, they must be requested to start giving the government withholding tax until they present their reports,” Nawakwi said and demanded thorough auditing of the mines.
“Those in government think they know it all so they have closed themselves to any reasoning. They are not able to draw the expertise of Zambians to assist them. We don’t need British auditors; we have young men and women here who are qualified like those international auditors that can do the work.
“We have forensic auditors in the Ministry of Home Affairs and many professional auditors. There are people who worked in those mines who are still alive that can assist in auditing those mines. These people are more qualified and they know how these mines are evading paying tax; you don’t have to go and get someone from outside.”
Nawakwi, who is also FDD president, said Zambians must find a solution to mining companies’ tax evasion.
She said that Mopani could not do what it was doing in Zambia in England or Chile where authorities were strict. She urged Zambians not to be sleepy but ensure they benefited from their minerals.
“Chile is collecting more money from their copper than we have ever done here. Look at what Chile collected in 2006 and 2007; it was US $12 billion about K57.3 trillion before you even talk about other revenues. But it is the same copper, same value and same grade,” Nawakwi said.
“All we are told here by those in authority is that ‘you people don’t understand’. But these are issues of common sense. Even our advisors, the World Bank and our benefactors the EU, have told us to collect tax but those in government still argue that ‘you Zambians don’t understand’ and yet it’s the same government which wants to go and borrow more money from IMF.”
Nawakwi said Zambians must not sit and watch their economy being looted in the name of capitalism and respect for the market economy. She said the investors were nothing but tourists that come and go.
Nawakwi said international capital by its nature did not have a kind face.
“They government are saying to implement the Sixth National Development Plan, we have to borrow money. Why should we borrow money when the minister is refusing to collect tax? We need to sit as the country to discuss these issues,” said Nawakwi.
Mopani, which operates mining units in Kitwe and Mufulira, is 73.1 per cent owned by the Swiss commodity trader, Glencore AG, and the firm received a 48 euros million loan from the European Investment Bank.
By The Post
Sat 12 Feb. 2011, 04:00 CAT
Our politicians must not assume that the masses have no understanding of what they themselves do not understand.
It often happens that the masses outstrip our politicians and are eager to advance a step and that nevertheless our politicians fail to act as leaders of the masses and tail behind certain backward elements, reflecting their views and, moreover, mistaking them for those of the broad masses.
It is therefore very important for those in the leadership of our country to learn to listen to the views and advice of the masses.
They should be prepared to take the ideas of the masses and concentrate them, then go to the masses, persevere in the ideas and carry them through, so as to form correct ideas of leadership – such is the basic method of leadership.
If our politicians insisted on leading the masses to do anything against their will, they will certainly fail.
Our politicians should not also assume that everything they themselves understand is understood by the masses of our people.
Whether the masses understand it and are ready to take action can be discovered only by listening to them and by going into their midst.
There is need for our politicians to listen attentively to the voice of the masses.
To link oneself with the masses, one must act in accordance with the needs and wishes of the masses.
All work done for the masses must start from their needs and not from the desire of any individual, however well-intentioned.
The right policy is one that conforms to the demands of the masses. It is important for our politicians to rely on the masses, on everybody’s taking a hand, and avoid reliance on a few persons issuing orders.
Our politicians should never pretend to know what they don’t know. They should not feel ashamed to ask and learn from the masses.
And they should listen carefully to the views of the masses. It is said that one should be a pupil before one becomes a teacher.
It is wise to know the position of the masses, to learn from them before one starts issuing orders.
What the masses say may or may not be correct; after hearing it, our politicians must analyse it.
They must heed the correct views of the masses and act upon them.
They should also listen to the mistaken views of the masses; it is wrong not to listen to them at all.
Such views, however, are not to be acted upon but to be criticised.
The supreme test of the words and deeds of a politician is whether they conform with the highest interests and enjoy the support of the overwhelming majority of our people.
And this calls for our politicians to have largeness of mind. At no time and in no circumstances should they place their personal interests first; they should subordinate them to the interests of the nation and of the masses.
They must be ready at all times to stand up for the truth, because the truth is in the interest of the masses; they must be ready at all times to correct their mistakes, because mistakes are against the interests of the people.
They should set an example in being practical as well as far-sighted. For only by being practical can they fulfill their tasks efficiently, effectively and in an orderly manner.
And only far-sightedness can prevent them from losing their bearings in the march forward.
A leader must never be opinionated or domineering, thinking that he is good in everything while others are good in nothing; he must never brag or boast and lord it over others. Our politicians must learn to listen attentively to the views of people outside their political parties and let them have their say. If what they say is right, they ought to welcome it, and they should learn from their strong points; if it is wrong, they should learn to finish what they are saying and then patiently explain things to them.
We can have all the good structures required for the governance of our country but these by themselves will not guarantee us good leadership.
Good leadership will be achieved, not by the formalities of structures, but by the integrity, humaneness, accommodation, tolerance and ability to listen of the individual leader.
It is said that the ear of the leader must ring with the voices of the people and that stiff-neckedness, hotheads and cold hearts never solved anything.
We are saying all this to agree with the observations made by Dr Euston Chiputa, president of the University of Zambia Lecturers and Researchers Union, on the need for our leaders to find time to listen to advice and to the views of our people.
It is generally accepted that good leaders have been very good listeners. But as Dr Chiputa observes, it is not everything people say that must be implemented.
But again, it is not everything people say that should not be listened to or that should not be implemented.
Truly, the right to be heard does not mean the right to be taken seriously.
But it is very important for leaders to always mull over things and listen to the concerns and feelings of the masses because ultimately, this is where real power lies – real power lies with the masses.
It is therefore important to listen to the concerns being raised by the masses. It doesn’t profit one anything to ignore the voice of the masses and pretend all is well. It doesn’t equally pay to suppress the views and feelings of the masses.
It is such practices that lead to what we are today witnessing in Egypt.
It is such practices that led to what we saw in Mongu a fortnight or so ago. When the masses speak, the leaders should always listen.
This is so because the masses are the masters; are the ones who call the shots.
There is no servant who can survive for long without listening to the voice, concerns and wishes of the master.
It is said that leaders lead, but in the end, the people govern. To govern is to communicate.
And it is therefore not possible to govern effectively, efficiently and in an orderly way without being able to listen.
“People who listen when they are corrected will live, but those who will not admit that they are wrong are in danger” (Proverbs 10:17); “Conceited people do not like to be corrected; they never ask for advice from those who are wise” (Proverbs 15:12);
“Get all the advice you can, and you will succeed; without it, you will fail” (Proverbs 15:22);
“If you pay attention when you are corrected, you are wise. If you refuse to learn, you are hurting yourself. If you accept correction, you will become wiser” (Proverbs 15:31-32).
By Ernest Chanda
Sat 12 Feb. 2011, 04:02 CAT
PRESIDENT RUPIAH Banda says he can only release the 22 Lozis charged with treason when it is necessary to do so.
Responding to questions from journalists yesterday at Lusaka's City Airport before departure for Isoka on a one day working visit, President Banda said he could not be pressured by anyone into releasing the 22 treason detainees.
When reminded that the Catholic Bishops whom he met about two weeks ago had later in a statement appealed to him to release the detainees, President Banda expressed surprise at the Bishops’ statement.
“We have had our own discussions with the Bishops. We had a very long meeting with them. They know our position because we told them, and we know their position. So I’m surprised that they made that statement,” President Banda said. “In any case, as President of this country, I will make the decision when it’s necessary, not by pressure from somebody.”
President Banda said he agreed with the Litunga’s position that the Barotseland Agreement of 1964 was not about secession. He said Zambia was one country and that people could talk without using violence.
On the position of vice-president in the MMD which some party cadres have said should be left to Republican Vice-President George Kunda, President Banda called for fair competition on all positions.
“People have to declare their intentions freely then the people party members will decide what to do with them. I think leaders should not be like that, they should not be personal. People should choose their own candidates; you don’t vote for someone who you think will disrupt your country or organisation. I think that’s not right,” said President Banda.
By George Chellah in Mporokoso
Sat 12 Feb. 2011, 04:01 CAT
MMD is not a factor in Mporokoso, says PF leader Michael Sata. In an interview after addressing a public rally on Thursday, Sata said PF had a higher chance of scooping the Mporokoso parliamentary seat.
“It's clear that MMD is not a factor in Mporokoso although they have already started dishing out money to the electorate and we have seen it,” Sata said. “But even if they are rushing to dish out money, they are not a factor here at all. In fact, none of these other political parties that are contesting in this by-election are a factor. So PF stands a chance to win.”
Earlier, Sata told the crowd that attended his public rally that PF candidate and former sports deputy minister Maynard Misapa was the first to resign and forego all the luxuries that accompany the ministerial portfolio.
“If Misapa wanted to be selfish, he would have done what Felix Mutati commerce minister has done by neglecting his people in Lunte constituency just for him to remain a minister,” he said.
Sata said it was clear that the people of Mporokoso wanted a change of government.
“What you didn’t do when you were minister… go back and plead with the people. People want change and that change has to start with you,” Sata said. “If the people of Mporokoso change, even the other people we have in Northern Province will change.”
Sata condemned President Rupiah Banda and education minister Dora Siliya’s plans to lease or sell government schools.
If this government sells Mporokoso Secondary School, where will the children of the poor people go for school?” he asked.
Sata urged Misapa to look into the plight of the electorate once re-elected.
“You were member of parliament on MMD and you know the lies you told us. Just like they are lying today that when you elect Dominic Musonda MMD candidate they will do the Kasama-Mporokoso Road,” Sata said.
“The roads are so bad. I had a chance to drive through the Mporokoso-Kawambwa Road. A distance that is just about 150 kilometres took us seven hours to travel from Mporokoso to Kawambwa.”
Sata said Musonda, who is contesting on the MMD ticket, was member of parliament in Lunte constituency twice and he never did anything for the people there.
“Can Dominic show us what he did in Lunte? Until recently, Dominic was the district commissioner for Mporokoso district where he even failed to coordinate the slashing of overgrown grass in the district. Do you think when you elect him as MP that’s when he will work?” he asked.
Sata urged the people to get upset with the underdevelopment in Mporokoso by voting for Misapa.
“Make your own choice, no one will come and tell you. When they MMD come with gifts during this by-election just get,” he said.
Sata said the MMD was currently in a state of confusion.
“You must feel pity for the MMD. It's like when you see hippos running away from the waters and after that you now see a rabbit running towards the same river where bigger animals like hippos are fleeing, can you say that rabbit thinks?” Sata asked.
He said the country had been destroyed.
“There is no respect or dignity in the country anymore all because of poverty,” he said.
Sata urged the people of Mporokoso to get together and defeat the MMD, which was their greatest enemy.
By Sandra Lombe in Livingstone
Sat 12 Feb. 2011, 04:00 CAT
SOUTHERN Province has disbursed empowerment loans amounting to K7.8 billion from 2009 to date. Southern Province permanent secretary Gladys Kristafor said K500 million from the Citizens Economic Empowerment fund was disbursed to 24 projects as at January this year.
Kristafor said K7.3 billion, through the Citizens Economic Empowerment Commission (CEEC), was paid out prior to the decentralization of which about K1.9 billion was pumped into a banana project in Siavonga.
She said the province was currently awaiting the release of more funds to serve the remaining 50 projects.
“The new revised CEEC application forms up to K50 million will be placed with the respective district empowerment committees chaired by the district commissioners whose work will be to receive applications, appraise them and recommend viable business projects to the provincial empowerment committee for funding and help in the recovery of loans,” Kristafor told journalists on Thursday.
She urged the beneficiaries of the loans to honour their repayment, which was at only 12 percent interest rates, to allow other people to access the funds. Kristafor admitted that there were many concerns over the CEEC funds.
“It’s existing, the country is big. We have a lot of applications in the province but we can’t satisfy all,” she said.
Kristafor said some projects had not been funded because they were not viable and the applicants did not meet the requirements.
“This money is not given like spoon feeding people. It’s a facility that credible, viable people should get. We are trying our best to ensure deserving projects are serviced,” she said.
Kristafor said people in areas like Gwembe did not apply for the funds.
And provincial empowerment coordinator Trust Hakulipa said more needed to be done on the recovery of the monies. Hakulipa said Southern Province was among the provinces with the highest number of applicants.
“The volume of work is increasing. We have endeavoured to give response where it’s due,” he said.
He said some people had not been good at repaying the loans. Hakulipa said the processing and approval of the projects was supposed to take less than two months but at times delays were experienced due to lack of funding.
“Some delays admittedly can be on our part but some are on applicants who delay in bringing certain documents,” said Hakulipa.
By Patrick Mulenga
Sat 12 Feb. 2011, 04:00 CAT
The Grant Thornton/Econ Poyry audit report on Mopani Mines has exposed the duplicity and greed of foreign-owned mining companies. The revelation justifies calls to reinstate the windfall tax and revisit the exploitative development agreements without further delay.
However, it would be naïve to presume that Mopani is the only culprit, because all foreign mining companies have found Zambia to be a lucrative and hassle-free cash cow.
Needless to say, it is highly unlikely that Mopani will even bother to offer an explanation, let alone an apology; although we should anticipate a very robust defence on their behalf from the likes of Musokotwane, Felix Mutati and Dora Siliya, if not Rupiah Banda himself.
However the most disturbing aspect is that rather than prosecuting economic saboteurs or renegotiating the infamous development agreements in the national interest, the learned government lawyers are busy repealing good laws, defending convicted thieves and using the law to persecute perceived enemies of the MMD.
Unless a brave private lawyer offers to stand up and fight this injustice on behalf of the poor suffering Zambian masses, “none but ourselves can free our minds”.
A luta continua.
CHINESE Foreign Minister Yang Jiechi has urged Western countries to lift sanctions on Zimbabwe as he paid a visit to cement ties between the two countries.
"Let me be frank, we believe there should be lifting of sanctions by some countries," Yang told journalists after meeting President Robert Mugabe and senior government officials in Harare.
"China believes that Africa belongs to African countries and African people. African people are their own masters and all the others are just guests.
"We believe all nations should respect each other's sovereignty and territorial integrity."
The European Union and the United States imposed sanctions on Zimbabwe after presidential elections in 2002 that Western observers charged were rigged to hand Mugabe victory.
Yang also called for strengthened relations with Zimbabwe, which he called a "good brother".
"China and Zimbabwe have traditional friendship from the days of Zimbabwe's liberation struggle. Since then our relationship has moved forward," he said.
Mugabe commended China's support for Zimbabwe in the face of isolation by its former trading partners in the West over charges of human rights violations.
[Over land redistribution. The countries that have human rights issues but are not under US/UK/EU sanctions are too numerous to mention. - MrK]
"Our relations have a long historical background of cooperation which saw us before our independence being assisted by the Communist Party of China invariously to build the capacity that we used to demolish colonialism here," Mugabe said.
"We continue to interact in terms of development in other sectors. We still want that co-operation to intensify."
Prime Minister Morgan Tsvangirai also welcomed increased links with China, saying both countries would benefit from sustaining their burgeoning economic ties.
"On the economic side, China has various cooperation agreements with Zimbabwe," Tsvangirai said after meeting Yang.
"China's record in Africa is one where Africa benefits. I am here to confirm that there is definite benefit for Zimbabwe and China."
Yang and Zimbabwean Foreign Minister Simbarashe Mumbengegwi signed an agreement for a 50-million-yuan ($7.6-million, 5.6-million-euro) grant for Zimbabwe, a government official who attended the closed-door meeting told reporters. Terms of the grant were not released.
Yang's visit comes weeks after Zimbabwe's investment promotion minister, Tapiwa Mashakada, announced plans by the China Development Bank to fund investments worth $10 billion in Zimbabwe's mining, agriculture and infrastructure sectors.
Zimbabwe and China have political ties dating back to before Zimbabwe's independence, when Beijing provided arms and training to guerrillas fighting British colonial rule.
China has also been pivotal in protecting Zimbabwe at the United Nations. In 2008 China vetoed a UN Security Council resolution seeking sanctions against Harare.
Friday, February 11, 2011
Skrevet 16 Februar 2010
Mining, communities, and sustainable development, by Dr Camillus Kassala, 2/7/2010
This is a thorough analysis by an Interfaith platform that represents religious, civil society organizations in the Democratic Republic of Congo, South Africa, Tanzania, and Zambia.
As civil society, they recommend that the policy objectives of the AMP, the AU Ministers of Mining, and African governments consider that economics serve the peoples of Africa, that all country mining agreements, policies, and regulations ensure the sustainable development of Africa, and that continual dialogue with
civil society organizations, non- governmental organisations, and community based organizations is vital to meet the needs of African peoples.
1. Mining, communities and sustainable development
2. Draft Inputs onto the AMP Statement
1. Mining, communities and sustainable development
We are an Interfaith platform representing religious civil society organizations from Southern Africa, particularly from the Democratic Republic of Congo (DRC), South Africa, Tanzania and Zambia. The umbrella leadership organizations are:
the Council of Churches Zambia (CCZ), the Fellowship of Christian Councils in Southern Africa (FOCCISA) and the Tanzania Interfaith Committee which draws members from
BAKWATA (National Council of Muslims in Tanzania),
CCT (Christian Council of Tanzania) and
TEC (Tanzania Episcopal Conference).
Moved by religious beliefs and conviction, we have committed ourselves to that faith-based civic responsibility to advocate for socio-economic and environmental justice in the communities we serve. We hold the fundamental principle of the supremacy of humanity over materiality, which means that the source, the agent and the object of any economic ! activity including mining, is the human-person. Faith or religion is both a sociological and anthropological datum which has both political and socio-economic existential dimensions, not only among civic categories but also corporate citizens including mining companies and organizations.
Motivated and guided by the principle of supremacy of humanity over materiality, we are working towards the realization of integral and authentic socio-economic development through the promotion of socio-economic justice. This endeavour and struggle is a faith-based ethical imperative, and imperative which compels us to advocating against economic marginalization, social destitution and political peripherization – things which easily lead to social unrest, political instability, and breakdown of the nascent and fragile African democracies and / or even civil wars.
PURPOSE OF THE PRESENTATION
This presentation has a threefold purpose:
a) To share with you and critically analyze the local communities’ experiences which question the ultimate rationale of mining activities in terms of authentic Africa socio-economic development,
b) To point out and discuss the policy implications for our national governments, and
c) To suggest, recommend and urge our governments through you to take certain and definite measures that will make the mining sector a true socio-economic blessing and not anonymous curse against the developmental aspirations of the African people.
We are of the opinion that it is because of the very constraints referred to before that the imperative for the supremacy of humanity (i.e. Political integrity and socio-economic justice) over material (i.e. unrestrained profit maximization for materialistic happiness) is in order.
BACKGROUND / CONTEXT
The experiences, policy implications and the concomitant measures which we are obliged to look at together concern hotly and critically contested issues in the two areas of socio-economic justice and political i! ntegrity in the four countries chosen as representative cases.
These issues are:
a) Taxation regimes,
b) Environmental impacts,
c) Corporate Social Responsibility,
d) Governance: Local, Regional / Provincial and National levels
The first affirmation that we can make concerning African taxation regimes as regards mining and / or mineral extraction is that these regimes are such that the main beneficiaries of the mining boom in Africa are a handful of African political elites, the shareholders of the mining companies, the engineering, construction, and management consulting firms servicing the global mining industry, and the financial institutions backing these ventures.
This is so because these tax regimes are characterized by the following:
Revenue is foregone through tax evasion and avoidance Despite the four main functions that taxation serves in society (i.e. Revenue for development plans, redist! ributive revenue to achieve equitable development, repricing goods and services by the government to achieve social and environmental goals, stronger political representation as a consequence of citizens paying taxes), and despite the many types of taxes to raise revenue (e.g. Import, export, VAT, sales, income, local government, company profit, stamp duty, capital gains, withholding etc.), very unfortunately – with the exception of South Africa – mining taxation has been single-mindedly focused on encouraging mining companies to invest in exploration and extraction.
This is due to excessive tax concessions or tax subsidies and secret mining contracts characterized by tax breaks which often contradict national laws. As a result African governments have failed to collect significant budget revenue despite higher production and prices. Lower tax rates and tax exemptions
Mining companies in the case countries enjoy the following concessions:
- No VAT on imports / exports sales,
- No custom duties on imports / exports,
- Lower corporate income tax (CTI) rates,
- Lower withholding tax rates,
- No windfall / additional profit taxes,
- Lower royalties.
An empirical scrutiny of each of each the concessions reveal the
a) The trade liberalization for most of the African governments has come at a huge loss to the dramatic fall of import duties since the 1990’s –
only 30% of the revenue could be replaced. It could be argued, therefore, that a modest import duty would replace the revenue lost through VAT refunds or exemptions without deterring investment. Given that mining companies hardly declare taxable income, such duties are the most important source of mining revenue to the government.
b) As regards to corporate income tax, greater tax incentives don’t necessari! ly lead to more Foreign Direct Investments (FDIs) in the natural resource sector. The global consulting firm McKinsey report shows that tax holidays only detract value from investments that would be made. Even if the International Monetary Fund (IMF) believes that tax incentives narrow the tax base of low income countries unnecessarily and also complicate tax administration and are a major source of revenue loss and leakage from the taxed economy.
Some examples will illustrate this point.
In South Africa gold mining companies pay no tax if their declared profit falls below 5% of revenue. Such a low rate on corporate income tax is paralleled by the low rate of withholding taxes which stands at 12.5%, compared to Mexico, Chile and Greenland tax rates of 35% and 30% in Western Australia and Arizona and 20% in Poland and Zimbabwe. This shows how much revenue governments forgo due to low withholding taxes.
c) Regarding windfall taxes, man! y mining companies are unwilling to share the rents of mining activity with governments by pushing for windfall tax rate be reduced from 25% - 12.5%, and the variable profit of 15% to be abolished as was the case with the Zambian government in April 2008 when it amended it mining tax laws.
d) Finally, it is the royalties which have been the most contentious forms of income for governments. Despite the companies’ arguments for calculating royalties on profit basis rather than on the sales value, it can be argued that the distorting effects of such calculated royalties are much less serious in practice than in theory for all but the most marginal, grade-sensitive mines.
Moreover, royalties are an easy tax to monitor and collect, provided legal frameworks set out clear principles to guide mineral sales value calculation. The need for th! is is brought about by the fact that mining companies have very complex accounting structures and also are able to hide profits through transfer pricing. On top of this add the fact that many African authorities don’t have the know-how or resources to cross-check and audit the declared profits.
Perhaps by way of correctly concluding this point on tax rates, let me refer to the Tanzanian case as an example of the staggering loss of much needed revenue.
AngloGold Ashanti Geita mine produced 308 000 ounces of gold in 2006 with yielded gross profit of US$93million between 2002 and 2007. But AngloGold Ashanti has paid only US$1million in corporate income tax, and has announced to pay further corporate income tax only in 2011 – a full 11 years after starting operations. Also Barrick Gold reported a net income of US$97million between 2004 and the first half of 2007 but has not yet started paying corporate tax. The government has managed to earn only US$17.4million a year in royalties (2002 – 2006) because it charged royalties at! 3% of the net back value of gold exports, despite the fact that in the same period the companies exported around US$2.9billion!
If these royalties were to be increased to 5% (as recommended by a Presidential Commission) government revenues would stand at US$25million per annum or at US$145million over the five years. If this amount of money was spent, it could have paid for more than 3million people to be provided with education, infrastructure and water as per government’s budget of 2007/2008.
Manipulating tax base allowances
These are still serious problems with the way in which mining companies in Africa receive tax relief for the expenditure they incur on the cost of creating their mining operations. This has the consequences of suggesting that companies are making profit but as tax is due, and, and that of continuing tax deferral for many years, thus reducing the potential returns to African governments.
The contentious question here is:
Should tax subsidies, said to be a necessary measure to at tract new investors, given to compensate for operational costs due to little and undeveloped infrastructure? We are of the opinion that this can be acceptable if and only if these subsidies form part of a well-designed industrial mining strategy that aims to link mining activity to the transformation of the rest of the economy. The case in point here is South Africa: In 2007 mining companies which operate in most of expensive conditions because of underground mining, declared taxable profits of US$672billion and paid out US$127million to the government. On the contrary, in Tanzania where industrial mines have operated for only 10years, only one company has declared a small taxable income of US$1million!!
Tax avoidance by mining companies
Despite the Organization for Economic Cooperation and Development (OECD) Guidelines for Multinational Enterprises on not seeking or accepting exemptions related to taxation not in the statutory or regulatory frameworks mining ! companies in Africa enter into confidential agreements with governments to acquire special tax rates and concessions outside the statutory framework. These are included in Mining Development Agreements (MDAs) which are deemed to be legal commercial contracts and override national laws and national tax regimes.
Many African countries have MDAs with investors because the World Bank (WB) told them that their existing mining tax regimes are not conducive to private investments. As a result, high level politicians have made secret tax deals with individual mining companies which took advantage of the opportunity by pushing for as small a tax burden as possible.
The following examples from DRC, Tanzania and Zambia will illustrate the point.
a. Tanzania has had six MDAs with larger scale industrial miners over the last ten years. The gold mining companies sought significant exemptions from local government taxes, withholding taxes and fuel levies! . In the substantive laws, local government taxes are charged at 0.3% of the turnover value, but the MDAs stipulate that companies can only pay not more than US$200 000 a year, an amount that local governments have not been collecting. The MDAs also exempt companies from paying withholding taxes on interest to related parties e.g. parent companies / associates – though the 1998 law stipulates payment on withholding tax on the loans.
As regard to fuel levies exemption, it has been estimated (Bomani Commission) that Tsh39.8billion in 2006/2007 and Tsh59billion in 2007/2008 are amounts which have been foregone by the government to six large scale mining companies. MDAs have also set stamp duties at 0.3% which is less than one-tenth of the 4% rate stipulated in the law.
b. In Zambia the MDAs, negotiated in 1998 after the privatization of
Zambia Consolidated Copper Mines (ZCCM), offer huge tax exemptions to
mining companies. Konkola Copper Mines (KCM) and Mopani Copper Mines
(MCM) managed to get a deal whereby the pay only one-fi! fth of the
royalty stipulated in the law which stood at 0.6%. A further concession
allows the companies to defer royalty payments if their cash operating
margin is below zero. Companies also pushed for a reduction in
corporate income tax rates from 30% (per law) to 25% and an exemption
from the 10% withholding taxes (per law).
What were the consequences of these in terms of government revenues?
In 2006 the Zambian Minister of Finance in his budget speech estimated
that the country would earn less than US$11million from copper
royalties. This is compared to 1992 earnings at US$200million from
copper mining taxes, but in 2004 the country earned only around
US$8million in budget revenues despite copper production of 400 000
tones with average copper prices at US$2.868 per ton. Between 2002 and
2004 the government collected only US$3million in royalties. If the
companies had paid the 3% royalties on gross sales as per the Mining
and Mineral Act, the government would have earned an additional
US$63million – revenue which could h
ave been used to finance its national development strategy.
c. Finally, in DRC, Ernst & Young studies and audits of MDAs signed
since 1996 found that the state-owned mining firm got nothing of the
profits made by its venture with private mining companies due to the
terms of mining contracts. Hence, in 2007 the Parliamentary team which
investigated the contracts (signed 1996 – 2003) denounced high-level
political interference in the deals. This led to a review of all mining
contracts in 2007, which showed that none of the mining contracts
complied with the law.
The contracts entitled companies to complete exemption from any income
tax and royalty payments, received reduced tax rates or deferral of tax
payments for at least five years. Out of the reviewed 61 contracts, 39
were to be renegotiated and 22 were cancelled. The culture of
secrecy and private tax deals in contracts is systematic – and has
taken systematic proportions – across all African countries and is
embedded in mining companies’ was of doing business.
Mis-invoicing and tax evasion
A recent report by Global Financial Integrity of the United States
Centre for International Policy, estimates that between 2002 and 2006
about US$10billion left Africa every year as result of transfer
mis-pricing, i.e. by under-declaring the value of the companies exports
or overstating the prices of their imports.
a. One of the reasons for this to happen is the critical fact that
African mining tax authorities do not have the requisite skills to
audit the complex accounts of large multinational mining companies.
That is: there is a lack of the ability to monitor and regulate
fictitious high operating costs or inflated local costs, and therefore
mining companies exploit this weakness in law, financial and accounting
b) Environmental Impacts
Most mining and industrial activity in Africa is still conducted
unchecked by any ! environmental considerations despite the EIA reports
which do not tell what is happening on the ground. This has led to
accumulation of consequences now unfolding at a deeply perturbing rate.
A number of reports on EIA effectiveness reports that, for example acid
mine drainage (AMD) formed when exposed ores come into contact with
water and air; releases heavy metals and sulphates. This AMD poses a
threat to the local communities’ limited water resource, human health,
animal husbandry and food security to both humans and animals.
We are going to highlight the following environmental impacts, which we
believe are critical concerns for sustainable and integral development
of the African communities both in the Urban and Rural Areas:
i. Waste dumping
ii. Participation in EIAs
iii. Environmental Rehabilitation
iv. Corporate Social Responsibility
i) Waste Dumping
All methods of mining affect air, land and water.
In Afric! a, the most severe pollution is acid mine drainage (AMD)
because it can contaminate surrounding soil, ground water and surface
water. The formation of acid mine causes particulates which can be
composed of noxious materials such as arsenic, cadmium and lead. These
particulates affect human life adversely by contributing to illnesses
related to the respiratory trait but they can also be ingested or
absorbed through the skin.
Waste dumping also causes physical disturbances which may contribute to
the decline of wildlife and plant species. These types of disturbances
are worsened by water-pollution which include acid mine drainage, metal
contamination and sediments which affects fisheries, swimming, domestic
water supply, irrigation and other uses of streams and rivers.
ii) Participation in the EIAs and poor EIAs by corporations
Since most of mining companies are from English-speaking countries; EIA
reports are yet to be explained in the languages t! he local people
will understand. For this reason, many corporation giv
e misleading or misguiding EIA reports which cannot be understood or
corrected by the local communities. Involvement of the people lacking
and the lack of the government’s proper and effective oversight or
supervision has led to mining becoming a poor environmental performer
because of degradation associated with operations and the legacy of
abandoned mine sites, toxic waste, acid rock drainage and a generally
iii) Environmental rehabilitation Programmes
With the exception of South Africa the remaining case countries do
not have rehabilitation programmes, which are being executed.
iv) Corporate Social Responsibility
Perhaps it is fair at this point to point out that when it comes to CSR
issues there are hopeful signs that many companies have established CSR
programmes, foundations and or trusts to focus on the issue. However,
in Sub-Saharan Africa, governance gaps are still quite large. It is
also important to ! note that significant contributions to CSR in
Africa by international initiatives including those of Oxfam, Australia
and Canada. The major obstacle to the implementation of these
initiatives in Southern Africa have been weak governance capacity,
corruption and even armed conflict.
These obstacles have been experienced through false and unfulfilled
promises caused by superficial consultations and misinformation/lack f
information on key issues like employment, economic livelihoods and
local cultural values. Also such obstacles have expressed themselves in
terms of forced evictions, lack of respect for human rights and
dignity. However, we believe that CSR in Africa will depend much on
community participation, appropriate knowledge transfer and meaningful
ploughing back into the local communities. This belief is encouraged by
the fact that Anglo Ziwele Empowerment Initiative in South Africa has
managed to do exactly that by using ventures like ScanMin Africa,
Springbock Trucking Company, Lang Leather and Tyre Corporations
through the provision of skills development programmes and strategic
Although mining sector developments are driven by global trends; they
take place in national and sub national contexts. Many of the African
countries which host mining companies are more focused in collecting
rents for distribution for supporters regardless of the political and
ethical imperatives despite the fact that mining companies which have
been accomplices to corrupt politicians have had their failure or
successes determined by the degree of governance involved. At the local
level governance issues have been taken over by the mining companies at
the expense of the national and regional levels and vice versa. Quite
after, it is a matter of corrupt governance more than weak governance.
This raises the question: Does a company have an ethical obligation to
undertake a political economy analysis in order to determine who will
reap most the benefits of! the mining investment?
Thanks to EITI which tracks payments and receipts of fiscal revenues to
ensure that all payments go into government revenues – more and more
governments are now feeling the pressure to ensure that the revenues
will be used well. At the regional level, governance issues are about
the handling of mineral reserves crossing national boundaries; for that
reason regional integration endeavours should consider well the
implications of these for large mining companies in terms of promoting
regional cooperation. All in all, the following challenges are still
bedevilling government commitments by both companies and governments’
governance policy implementation frameworks and delayed or deferred
follow-ups and monitoring, lack of political will and interference from
outside during policy formulation processes.
At the beginning of this presentation it was pointed out that the
interfaith CSOs are aware of the technical, budgetary and political
constraints that our African governments ar
e victims of. However, it is precisely because of these constraints
that the critical prioritization between ‘people’ and ‘profits’ becomes
an imperative choice dilemma. Because of that, we suggest, recommend,
and urge you, who are democratic representatives of our people to
receive, deliberate about and sincerely consider the following:
Formulation of policies, laws and regulations which are
people-centred, which would engage mining investors to learn the rules
and regulations dealing with the local communities, their customs,
culture, language, mining experiences, local protocols and to inform
these communities the plans, applications and the potential
environmental problems and concerns and their respective mitigation
measures. Revisiting and responding effectively and efficiently to the
allegations of crimes against human rights – which are very well
documented by respectable independent research organizations and to put
to task the responsible companies through t! he use of and with the
help of relevant bodies.
To ensure that companies registered on stock exchange implement the
international financial reporting standards (IFRS’s), this will require
them to report on their financial operations and remittances to
government and other structures. In this way we, the citizens and our
representatives in the parliaments can monitor the financial flows
between percent companies and subsidiaries and detect tax avoidance
To collaborate with the UN Economic Commission for Africa to develop
and publish user friendly guide on mining taxation; and to require
mining companies by law to use EITI reporting template in their annual
financial reports. African governments should stop the practice of
granting tax exemptions to mining companies in mining contracts: all
tax rates and terms should be legislated in the substantive law and
confirmed in mining development agreements.
African Parliaments should pass laws requiri! ng mining development
agreements to be ratified by parliaments and mad
e public – here we congratulate Ghana and Sierra Leone for doing that.
African governments should insist upon bilateral and multilateral
donors to scale up their financial assistance for governments to
improve their capacity to monitor and audit the accounts of mining
companies and review their mining tax regimes, on the condition that
the African governments are free to use the funds to buy legal and
other technical assistance from any service provider through just
(inter) national tendering processes.
Countries must develop Citizen Charters on Mining so to provide
guidance towards the development of the communities parallel to SIAs
Commitment to sustainable and integral development is not only the
right, responsible and ethical approach to managing the earth’s natural
resources and safe guarding the health of the planet for future
generations but also it makes sound business sense. Hence we believe
that where information is sha! red, truly and adequately and
consultative dialogue promoted; there can be minimal misunderstanding
and unnecessary confrontation.
We therefore, believe you will give serious considerations to the
recommendations and we are confident that is implemented they will
produce sweet and nourishing fruits from the African tree of socio-economic justice.
By way of closing this presentation: it has been said, “Give to God
what belongs to God and Caesar, what belongs to Caesar.” We of the
Inter Faith civil society organizations are asking you to give what
belong to your electorates and people of Africa, that which is
sustainable, integral, empowering, people-centered and automatically
Selected / Sourced Bibliography:
1. “Breaking the Curse: How Transparent Taxation and Fair Taxes Can
Turn Africa’s Mineral Wealth into Development”, Open Society Institute
of Southern Africa, Johannesburg; Third World Network Africa,! ACCRA;
Tax Justice Network Africa, Nairobi; Action Aid International,
Johannesburg; and Christian Aid, London (2007).
2. Linda Starke (ed.) (2002), “Breaking New Ground: Mining, Minerals
and Sustainable Development: The Report of the MMSD Project, Earthscan,
3. Hinde, C. (ed.), (2010), Mining Journal, Aspermont UK: Albert
House, January 22, p.2
4. The Policy Gap (2008) – Series: A Focus on Mining in Malawi,
South Africa and Zambia, Platinum Mining Industry, CSR Review.
5. Mining Review Africa (2010), “A World of Experience, Edele Elof.
South Africa, pp 10-11
6. “Breaking the Curse” (2010), African Analyst Quartely, vol. 1, pp
34 – 52, (Shikana Media: South Africa)
7. Furter, e. (2009), “Business Culture and Governance Require
Introspection”, Miners Choice, vol. 2, no. 7, July. Centurion: South
8. Cloete, K. (2010), “Africa on the Map: The 2009 Global Economic
Symposium”, Africa Decisions, Issue no. 1, Highsbury Safika Media:
South Africa, p. 26 ff.
9. Guest, P. (2009), “Fragi! le States Back on Global Agenda”, This
is Africa – A Global Perspective, Financial Times Business, December
Issue, p. 43
10. Ngwenya, T. (2009), “Joy Empowers Community”, Joy Mining, Joy
Global Inc. Company: www.joy.com, p. 25
11. Higgiuson, S. & Wheeler, A. (2010), “Environmental and Legal
Issues: E.U. & North America, Mining Market Review, Willis
Publishers: London, p. 58 – 62
12. Glaser, A. (2010) (ed.), “Poland’s KGHM Packs its Bags”, Africa
Mining Intelligence, no. 218, January 13, p. 3 – Indigo Publications
1. Mr John Capel
Executive Director: Benchmarks Foundation
2. Malcolm Damon
Director: Economic Justice Network of FOCCISA
3. Dr Camillus Kassala
Facilitator: TEC Justice & Peace Commission
4. Sheik Suleiman Lolila
Secretary General: National Muslim Council of Tanzania
5. Rev. Moses Lucas Mwale
President: Council of Churches in Zambia
6. Dr Leonard Mtaita
Secretary General: Christian Council of Tanzania
7. Mr Moreblessings Chidaushe
Regional Advisor: Economic Justice Programme
8. Mr Mvuyisi April
Programme Officer: Accountable Governance Programme
9. Ms Sofia Svarfvar
Policy Officer: Economic Justice Network of FOCCISA
10. Mr Evans Rubara
Policy and Advocacy Advisor: Council of Chu! rches in Zambia
1. The New SA Minerals Royalties Law, which will be effective from 1
March 2010, stipulates that a minimum of 0.5% royalty will be paid and
then up to a maximum of between 5% and 7% (Mining Review: Africa Issue
1, January 2010 p.17)
2. See the report ‘Breaking the Curse: how Transparent Taxation and
Fair Taxes can turn Africa’s Mineral Wealth into Development’, and
published by Open Society Institute of Southern Africa, Johannesburg
3. See African Analyst Quarterly, Vol. 5 Issue 1, 2010 pg 43
4. For example, Africa Mining Intelligence, issue no. 218 of January
13, 2010 reports that in November 2009, a contract signed in 1996 by
Societe’ de Development Industrielet Minier du Congo (Sodomico) and a
Polish company KGHM was annulled. According to the Commission, the
USD5,000/month farming-out lease KGHM paid to Sodomico was
5. See for example SA’s Joy Mining Machi
nery and Rio Tinto’s programmes in Zimbabwe and Madagascar apart from
2. Draft Inputs onto the AMP Statement
As civil society, we believe the policy objectives of the AMP and
the AU Ministers of Mining and that of African governments should start
1. Economics is there to serve the people, and in
recognizing this principle, it must also be noted that the community in
the starting point of economic life, and thus should shape policy
development thus mineral resources extraction must be done in a people
– centered humane developmental approach, that is based in transparency
and accountability, and that enhances people’s dignity and livelihood
2. Policy development around mineral resources to move away
from the popular, yet failed mechanism of trickle-down to one that is
more holistic, by recognizing that minerals under the ground
belong to all and should first and foremost benefit the communities
surrounding mining, and contribute to the overall development of the
country, this means reviewing all country mining agreements, policies
and regulations to ensure the sustainable development of Africa;
3. In order to achieve this, continual dialogue with civil
society organizations, non- governmental organisations and community
based organizations is vital to achieve a more sustainable and
developmental path that meets the needs of African people
By Nyasa Times
Published: February 9, 2011
The Dictionary Project of Foundation Heart for Malawi offers important news for the 20 million native and expatriate speakers and users of the South-Central African language of Chichewa. By the way, let no one feel offended by the usage of the word Chichewa. The actual name of the language may be Chinyanja, but in this article Dr. Steven Paas, the leader of the Project, prefers to call it Chichewa, because under that name it has become universally known.
In January 2011 two events happened that signify the progress of Chichewa as a language in general, and of Chichewa Lexicography in particular. The one pertains to the origin of Chichewa as a written language, and the other refers to modern Chichewa history.
The first event took place in Mandala House, Blantyre, Malawi’s first and oldest building in European style. In the upper storey of the building the Archives of the Society of Malawi can be found. On 31 January 2011 on a somewhat forgotten shelf Librarian Dora Wimbush was happy enough to find a copy of the first-ever book that includes Chichewa in writing. It is entitled ‘Dictionary of the Kiniassa Language’. Of course the name Kiniassa cannot mislead us, being Swahili for ‘language of the lake’, which unmistakenly refers to Chinyanja, i.e. Chichewa in this article. In the years 1850-1860 the dictionary was compiled by a German missionary, Johannes Rebmann, in Mombasa (present-day Kenya). Rebmann worked for the Anglican Church Missionary Society (CMS). He sourced the book, of some 180 pages in A5 size, from a Malawian slave, Salimini, who originated from Mphande near Ntchisi.
Here we have the historical bridge between oral and written Chichewa. The book was first printed in 1877, but before that year hand-written copies circulated and were used by the first European travellers and missionaries in Malawi.
If David Livingstone possessed a copy, it would explain why the famous explorer showed some command of Chichewa during his five journeys in Malawi in the years 1858 and 1867. Bishop MacKenzie and his party of the Universities’ Mission to Central Africa (UMCA) may have used Rebmann’s vocabulary at their first Anglican attempt for mission in Malawi in 1861. No doubt Robert Laws, Henry Henderson, Duff MacDonald, James Steward, Edward D. Young etc., who in 1875 were the first Scottish missionaries in Malawi, used the manuscript, and from 1877 they must have used the printed book.
When the Anglicans under bishop Tozer returned to Malawi in 1881 they must have used printed copies of the Kiniassa Dictionary made by Rebmann, who after all was an employee of a fellow-Anglican mission organisation. The book was printed in Basle and in London, but of course the copies were mainly destined for usage in Africa. Where are they now? There must be more copies around in Malawi at present.
D.D. Phiri once saw the book in the National Archives in Zomba, but unfortunately later he could not trace it anymore. Another copy is with Menno Welling, a Dutch anthropologist of the Catholic University of Malawi. The book in Mandala House is the second copy Paas has ever seen, after the one he discovered in the Archives of the Basler Mission in Switzerland, where Rebmann trained to be a missionary.
Fortunately today the book is accessible to the general public on the internet, as Google has published a digitized version. On 27 and 28 January at Zomba Theological College Paas was given an opportunity to lecture on the origin of written Chichewa to an audience of students, theologians, and linguists. This marks a growing interest in the continuation of research of the history of Chichewa lexicography.
The second event in January 2011 pertained to the latest publication in the chain of lexicographical works of Chichewa. Through a process, which started in 1997 Paas in 2010 published the second edition of a combined Chichewa-English and English-Chichewa Dictionary of 858 pages (size A5). The book has been in shops in Malawi and Zambia since mid-2010. In January 4000 copies were distributed for free to pupils, teachers and libraries of some 30 secondary schools in Malawi. Namikango Mission and the Tithandizane Educational Programme provided for the logistics of the operation. The Nation has covered the campaign by including a series of adverts during the months October to December, and two articles in their paper of 30 January 2011. By free distribution to learners who have no economical means of their own the Dictionary Project of Foundation Heart for Malawi wants to provide a tool for communication to Chichewa spoken Africa, thus promoting education and development. This is being enabled by those who buy the book for themselves and for others, and by those who sponsor the Project. Apart from the book the Dictionary is accessible online.
Although the process of compilation, edition and publication is led by an Azungu (= European) researcher, the dictionary’s position is quite different from its predecessors, which faded out from publicity sooner or later, especially when they were completely donor-driven foreign enterprises. The book is the result of the work of a team of Malawian contributors. Malawian institutions as the Centre for Language Studies and the Malawi Institute of Education have shown a firm interest in the continuity of the process and the book. These factors make Paas’ Chichewa Dictionary a genuinely Malawian enterprise that will last.
* Written by Steven Paas
 For further information on Rebmann, see: http://www.johannes-rebmann-stiftung.de/en/start.html
 See: http://www.chichewadictionary.org/pictures
 See: http://www.chichewadictionary.org/ under: Latest News
 See: http://translate.chichewadictionary.org/
Tagged with: Chichewa dictionary
By Nyasa Times
Published: February 11, 2011
Malawi’s capital Lilongwe will on Monday temporarily become another Egypt’s Cairo when thousands of disgruntled Malawians will take to the street over the persistent fuel scarcity in the country.
Over the last few days, Malawi’s fuel crisis has deteriorated grinding businesses to a halt as desperate motorists have been waiting in vain for supplies at various pump stations while thousands have been sleeping at filling stations across the country.
Tired with the development, the Human Rights Consultative Committee (HRCC) has organized a civil society action on fuel where thousands of Malawians are expected to peacefully demonstrate in the capital.
Bamusi: Seeks to follow the Egyptian protest, in a peaceful way
Calling it the ‘Big Bicycle March On The Fuel Crisis’, HRCC National Coordinator Mavuto Bamusi says in a statement, the grand march and peaceful demonstration has been organized against the persistent and continuous fuel shortage in the country.
Bamusi says the demonstration is a collective action with civil society networks and institutions. Among them are the Civil Society Coalition for Quality Basic Education (CSCQBE), Malawi Health Equity Network
(MHEN), Malawi Congress of Trade Unions (MCTU), Council for NGOs in Malawi (CONGOMA), Malawi Human Rights Youth Network (MHRYN), National Organisation of Nurses and Midwives (NOMN), Malawi Economic Justice Network (MEJN) and MANERELA.
The civil society Grand March and Peaceful Demonstration on Fuel will take place on 14th February from 08:00am starting from outside the Pacific Hotel.
The protesters will march and demonstrate all the way to the Office of President at Capital Hill through Parliament gates and it is expected to end at 11:30am.
“This is a peaceful demonstration and it is organized on principles of non-violence. We are therefore inviting members of the general public and any other willing persons to join this peaceful march,” says Bamusi in the statement.
Participants to the grand march are being asked to bring a bicycle (not a must but extremely important), a whistle or a vuvuzelah and put on red and black attire or any similar combination (not a must but also extremely important).
“Tell your friends via email, or sms or by word of mouth about the march and why it is important for them to take part in this peaceful non violent march against the fuel crisis,” concludes the statement.
Meanwhile, Malawians, inspired by the thousands of protesters in Egypt, have welcomed the idea and applauded the civil society’s gesture in initiating the move and are ready to participate in the grand march.
Many people interviewed by Nyasa Times in Blantyre Central Business District (CBD) on Friday morning indicated they were eager to take part in the grand march.
“What is it that can fell us to do the same as our friends in Cairo? The only problem is that it is being held in Lilongwe. We are tired with this old man as well,” commented one woman selling bananas along the streets of Blantyre.
“He [Bingu wa Mutharika] should step down he has failed us, he has failed the country. Nobody can trust him any more.”
And on Thursday, Malawi’s Energy and Mining Minister Grain Malunga told the nation he cannot resign as a cabinet minister because of the fuel crisis and instead blamed the country’s commercial banks for not providing forex to operators to import fuel.
He said in an interview on Capital FM that he is going to abdicate his position if the fuel situation does not improve by this weekend.
“Have I failed the country to pay for fuel or have I failed the country because I cannot generate enough forex, what is the logic here?… I am not going to resign because the issue of fuel is clearly manifested in the lack of payment for importation of fuel and this is contributed by the commercial banks,” Malunga told the radio.
Malawians have however argued that forex is being depleted because of President Bingu wa Mutharika globetrotting habit and his government’s extravagance which, among others, include the controversial purchase of Hummers and a presidential private jet.—Nyasa Times
by Staff Reporter
ARTHUR Mutambara’s membership of the MDC was revoked at an emergency meeting of the party’s national council on Thursday, but the party resolved to let him stay on as Deputy Prime Minister in the unity government, but not on its ticket.
The MDC said it took the position after President Robert Mugabe told the party’s newly-elected leader Welshman Ncube “in no uncertain terms” on Wednesday that he would not swear him in as Deputy Prime Minister.
Now the MDC says it considers Mutambara a Zanu PF member, and would be seeking an amendment to the 2008 power sharing pact, known as the Global Political Agreement, to reflect that.
MDC secretary general Priscilla Misihairabwi, speaking after the party’s national council voted by a two thirds majority to expel Mutambara, said they would be writing to South African President Jacob Zuma – the regionally-appointed mediator in Zimbabwe – to seek the amendment.
Misihairabwi said Ncube met Mugabe a second time this week on Wednesday and the President made it clear he wanted Mutambara to stay.
“President Mugabe said ‘you can tell your national council that mina (me) as Robert Mugabe angifuni (I don’t want)’,” she said.
“Interestingly, he said go and fight and defeat him. When Ncube pointed out that Mutambara was defeated at congress, he said go and fight him in court,” she said.
She said Mutambara was not his own man as it was clear he had been consulting and seeking advice from Mugabe.
“We are now saying given Mugabe’s stance, they [Zanu PF] can have that position that was allocated to us, so that Mutambara becomes their Deputy Prime Minister. We have effectively donated the DPM post and Mutambara to Zanu PF,” she said.
MDC secretary for legal affairs David Coltart said the party took the decision not to fight for the DPM post after the realisation that a buy-in from other GPA principals was needed if they were to remove Mutambara.
“Courts are also used as a delay mechanism to delay political goals,” he said.
Misihairabwi said they would not be seeking to occupy the deputy premiership and would now focus on rebuilding their party and preparing for elections.
"We want to give Arthur the position that he so desperately wants and hopefully we will have less public fights than we are having because we know its driven by him wanting to be Deputy Prime Minister. He said it to me personally."
The GPA, signed in September 2008, allocated Zanu PF the presidency and two vice presidents; the Morgan Tsvangirai-led MDC the premiership and a deputy premiership and the Mutambara-led MDC a deputy premiership.
The parties also allocated ministerial portfolios to reflect the March 2008 general election vote share, with Zanu PF getting 15, Tsvangirai's MDC 13 and the Mutambara MDC three.
But with all the MDC's three ministers -- Ncube, Misihairabwi and David Coltart -- at Thursday's national council meeting, the party says Mutambara will not speak for it in government.
Only on Wednesday, Mutambara had tried to pre-empt his expulsion by purporting to fire Ncube. But it was immediately pointed out that he has no such authority under the party's constitution.
Mutambara, who led the party since 2006, resisted attempts to move him over and make him Minister for Regional Integration, with Ncube replacing him as Deputy Prime Minister.
The robotics professor claimed that as a signatory to the GPA, his position was guaranteed and he should be allowed to stay on for the life of the unity government.
By: Nancy Pasipanodya
Posted: Friday, February 11, 2011 3:17 am
ONLY a day after reclaiming the presidency of the smaller formation of the Movement for Democratic Change (MDC), Zimbabwe's Deputy Prime Minister was on Thursday fired from the party by the new national council of that party.
Professor Arthur Mutambara, who on Wednesday took a pre-emptive move to fire Welshman Ncube who was elected as the new MDC leader in January this year. Mutambara was fired for defying the formation's decision to recall him from his post as Deputy PM in the inclusive Government to pave way for the new leader, Ncube.
The party's new Secretary General, Priscilla Misihairabwi-Mushonga, speaking after the party’s national council voted to expel Mutambara, said they will now be writing to Zimbabwe mediator South African President Jacob Zuma to seek an amendment to the Global Political Agreement (GPA).
"We want to give Arthur (Mutambara) the position that he so desperately wants and hopefully we will have less public fights than we are having because we know its driven by him wanting to be deputy prime minister. He said it to me personally," said Misihairabwi-Mushonga.
The position of DPM was created under the GPA, and has to be filled by the leader of the MDC formation.
Mutambara had occupied that post by virtue of his leadership and had to relinquish that post for the new leader of that MDC formation.
On Thursday Ncube indicated that he will no longer contest to be sworn in as deputy prime minister, but also reiterated that Mutambara would not be representing the MDC in the inclusive Government.
The MDC national council says it now considers Mutambara a Zanu-PF member and will not be redeploying him to a lesser ministerial post, as they had indicated earlier.
By Sututu Katundu
Fri 11 Feb. 2011, 04:00 CAT
THE Zambian tax regime has been largely influenced by donors than by initiatives of the government, says ZICA.
Presenting a submission before the Parliamentary Committee on Estimates on Zambia’s Tax System, Zambia Institute of Chartered Accountants (ZICA) president Chintu Mulendema said government’s lack of initiatives on the tax system was leading to ineffective implementation of tax legislation in as far as taxation of mining companies was concerned.
Mulendema said the Zambia Revenue Authority (ZRA) needed to work with other institutions in order to effectively combat tax evasion schemes.
He also said the indiscriminate granting of tax holidays by the Zambia Development Agency (ZDA) will ultimately negatively impact the performance of ZRA in as far as income tax collections is concerned.
He said a number of existing and new business in priority sectors have been granted tax holidays that exempt them from paying tax for five years from the year that they first make profits.
Mulendema said ZRA should effectively audit large-scale extraction companies.
“This is critical especially at this critical moment when the prices of minerals are good and prospects look better,” said Mulendema.
By The Post
Fri 11 Feb. 2011, 04:00 CAT
The Drug Enforcement Commission’s seizure of Michael Sata’s automobiles on allegations of money laundering did not make sense from the beginning.
It was clear from the very beginning that this was a case of political harassment using the Drug Enforcement Commission. But in trying to embarrass Michael, the Drug Enforcement Commission has instead embarrassed itself in the eyes of all fair-minded and honest people. Anyone with a sense of justice, fairness and honesty can see that theirs was a mission to harass Michael and politically humiliate him.
It was clear to all that there was nothing wrong or illegal that Michael had done to warrant the seizure of his two automobiles. So much political propaganda was made by the Drug Enforcement Commission on behalf of those who today control it, those who appoint its top management, those in power. The Drug Enforcement Commission has become a political black hound, a vuvuzela for those in power and their political party, the MMD. The Drug Enforcement Commission has lost credibility, public support and respect. It is now seen by most of our people as a department of the ruling MMD and of being under the direction of the political leadership of that party. It is not surprising that MMD cadres of all ranks can today make the Drug Enforcement Commission move and do ridiculous things like they did with Michael’s automobiles.
This is not the way to run public institutions that were created for very good and legitimate reasons to fight crimes committed against our people and humanity in general. We wonder how officers who worked very hard to establish the good reputation that the Drug Enforcement Commission enjoyed in our country and in our region feel today to see the abusive way in which this institution is being managed. The Drug Enforcement Commission has lost its head; it is an embarrassment and it is not worth taxpayers’ funding. It is really a disgraced organisation that deserves no one’s respect and support. It has been turned into an arm of the MMD for the harassment and humiliation of its political opponents, of those its leaders detest.
The Drug Enforcement Commission is an institution that seems to be managed by spineless and shameless characters. If those who lead the Drug Enforcement Commission have any sense of justice and fairness in their hearts, they would not hesitate to apologise to Michael for the inconvenience and embarrassment they have caused him through the seizure of his automobiles on baseless allegations from a hopeless cadre who is nothing but a political prostitute, a political pimp. How can an institution that belongs to the people, that is funded by the taxpayer accept to be abused by cheap characters in this way? We have no doubt one day, some people will have to answer for the destruction and abuse of the Drug Enforcement Commission. What is difficult in just telling the public and Michael that they were wrong in what they did against him and that they are sorry and asking for understanding and forgiveness from him? But what we see is a hopeless pretence that there is something wrong that Michael did that needs to be investigated and acted upon by the Bank of Zambia and the Zambia Revenue Authority. Anyway, it’s not surprising that the Drug Enforcement Commission can bring in the Bank of Zambia and the Revenue Authority. This is simply because they know very well that these institutions are also open to abuse by those in power to fix their political opponents and those they don’t like. We have recently witnessed how the Bank of Zambia has been made to deal with Finance Bank and its principal shareholder Rajan Mahtani. For whatever his wrongs, misdeeds – which may be many – Rajan and Finance Bank wouldn’t have been dealt with the way they have been dealt with if they were friends or were liked by those in power. As for the Zambia Revenue Authority, we all know how it is often abused to fix taxpayers who are not in good terms with those controlling government, those appointing or promoting its managers. We wonder what institutions will retain some credibility in the eyes of our people at the end of Rupiah Banda’s government. One day they, will have to account for this criminal abuse of public institutions that were created for very good and legitimate reasons to serve our people.
We are not against legitimate law enforcement. And no one is or should be above the law, which is, after all, the creation of the people, not something imposed upon them. If a Michael Sata has committed a crime, he should be treated in the same way as any other citizen who has committed a similar crime – no more, no less. There should be fairness in the administration of our criminal justice system. One’s political affiliation, or lack of it, should not be an issue. But today it is an issue. It is the first consideration in how our law enforcement agencies deal with you.
And we know very well that in every society throughout history, those who administer the criminal justice system hold power with the potential for abuse and tyranny. In the name of the state, individuals have been unfairly treated, harassed, brutalised and humiliated without legal justification – and often without any formal charges ever being brought. This is the case with the confiscation of Michael’s automobiles and the attempt to humiliate him by portraying him as a criminal involved in money laundering and all sorts of illegal deals. No decent society, no decent people can tolerate such abuses.
Every state, including ours, must have the power to maintain order and punish criminal acts, but the rules and procedures by which the state enforces its laws must be public and explicit, not secret, arbitrary or subject to political manipulation by those in power. This is what the rule of law entails – the right to equality before the law or equal protection of the law as it is often phrased. And this is fundamental to any just and democratic society. Whether opponent or ally of those in power – all are entitled to equal protection before the law. And under no circumstances should those in power impose additional inequalities; they should be required to deal evenly and equally with all citizens. When this is done, both law and democracy are served in our country. Let’s not allow such injustices, such arbitrariness to go unchallenged, undenounced.
By Chibaula Silwamba
Fri 11 Feb. 2011, 04:02 CAT
BAROTSELAND will never secede from Zambia, says senior chief Inyambo Yeta of the Lozi people of Western Province.
Speaking when he led a group of 15 Lozi Indunas to present a report of the Barotse National Council (BNC) to the government following violence last month that led to two deaths in Mongu after police fought running battles with activists advocating for the restoration of the Barotseland Agreement of 1964, chief Yeta said Barotseland Western Province would remain part of Zambia.
"The Barotseland Agreement 1964 does not provide for separation or indeed secession as has been sensationalised over a period of time. The Barotseland Agreement is about national integration and unity and that was the intention of our forefathers," chief Inyambo said.
"Therefore, in discussing the Barotseland Agreement 1964, we are not in any way giving credence to calls for secession."
He said advocating for the restoration of Barotseland Agreement was not synonymous with secession and hoped that the nation would understand that distinction.
"I am not saying that there are no pockets of groups who have taken a very extreme view. Indeed we have heard some people calling for secession. That has nothing to do with the Barotseland Agreement 1964. That is a different matter all together," Chief Inyambo Yeta said.
"I want to make it very clear on behalf of his royal highness The Litunga that Barotseland is part of Zambia and will remain part of Zambia."
Chief Inyambo said the Barotse National Conference meeting was convened in the backdrop of the discontent that manifested itself in rioting and subsequent action on the part of government to bring about order and stability in Western Province. He said the Barotseland Royal Establishment had never advocated for violence as a means to achieve any cause and that would be its position, now and in future.
"Therefore, we wish to make very clear that those of our people who have taken this line of thought of violence and action are at variance with what the royal establishment stands for and what its values are," chief Inyambo said. "We wish to caution that we believe that the Barotseland Agreement 1964 should be a document that should be discussed with government."
He thanked President Banda for inviting discussions on the Barotseland Agreement 1964.
"We welcome this and we stand ready to engage government with regard to the Barotseland Agreement," said chief Inyambo.
And President Banda assured chief Inyambo and his delegation that his government would receive the report with the seriousness and honour it deserved.
President Banda, during the meeting held at State House, was flanked by Vice-President George Kunda, Zambia Security Intelligence Services director general Regis Phiri, home affairs minister Mkhondo Lungu, local government minister Dr Brian Chituwo, other government officials and presidential aides.
Chambishi miners riot
By Mwila Chansa and Darious Kapembwa
Fri 11 Feb. 2011, 04:01 CAT
MINERS at Chambishi NFCA mine rioted on Wednesday night burning three vehicles to ashes, looting their canteen and smashing windows on some buildings.
The miners’ action is said to have been spurred by their on-going discontent over terminal benefits following their transfer from NFCA mining department to JCHX, a new company that has been formed within NFCA.
According to Copperbelt Division Commanding officer Dr Martin Malama, police had quelled the situation by 03:00 hours yesterday.
“There was a riotous situation by workers at Chambishi mine at about 22:00 to 23:00 hours on Wednesday. Three jeeps were burnt to ashes, two other extensively damagaed, canteen broken into and items looted and windows to some buildings damaged,” Dr Malama said.
He said the workers also broke into the accounts department but nothing valuable was stolen.
Dr Malama said windows of the administration block were smashed and the guardroom was burnt.
“This is the impending agitation continuing from the earlier industrial action, we are on the ground and the situation is quiet,” he said.
Dr Malama said dialogue was always better than violence.
About three weeks ago, workers at the same mine protested over alleged under-payment of their terminal benefits since their transfer from NFCA mining department to another company JCHX.
The angry workers then said it was a mockery for management to pay some of them as little as K500,000 for their terminal benefits when copper prices were so high and production at the firm was good.
The workers were on strike for about three days and only returned to work after assurances that their grievances would be addressed by mid February.
The miners also complained of oppression and injustice at the mine.
According to sources in Chambishi, the workers were agitated by management giving notices to perceived ring-leaders that they would not be reporting for work and that they would be given one month salaries.
By Moses Kuwema
Fri 11 Feb. 2011, 04:01 CAT
THE current minimum wage at K419,000 is the best because many people are happy with it, says labour minister Austin Liato.
In an interview, Liato claimed that many people were happy with the minimum wage, adding that it was a product of consensus between employees, employers and the government.
"We consulted widely so it’s not an issue that was implemented unilaterally; it’s a product of consensus. In arriving at the minimum wage we took a lot of things into account, the interest of both workers and employers," Liato said.
He said the government wanted to ensure that even small companies continued to survive in order to protect jobs.
"We have to tread carefully that whilst we want employees to earn something meaningful, we also do not overprice them out of jobs, so the minimum wage as it is now is the best," he said.
And Liato has advised workers at Evelyn Hone College that have staged a sit-in to dialogue with their employers.
Liato said there was no reason for the workers to go on strike before they could exhaust all the channels of resolving their problems, which include going to his ministry if they reached a stalemate with their employers.
"Workers’ conditions of service remain an on-going process. There will be no time in any working environment where you will say now we have reached the end of conditions of service improvement, we won't do it anymore. So everyone must understand that the normal way of improving these conditions of service is not through illegal means like sit-in protest," he said.
Liato also advised employers against being rigid in dealing with issues of their employees' conditions of service.
By Mutale Kapekele
Fri 11 Feb. 2011, 04:00 CAT
THE international Monetary Fund says the implementation of the Sixth National Development Plan will require an increase in external borrowing.
Responding to a press query on the SNDP, IMF resident representative Perry Perone advised Zambia to negotiate the best loan terms when contracting external debt for the implementation of the SNDP.
“Our preliminary view is that the SNDP sets ambitious macroeconomic targets to increase revenue collection, control recurrent expenditures, and increase public expenditures on much needed development projects,” Perone stated.
“Even though the fiscal space for development expenditures would be augmented under the proposed revenue and expenditure projections, the magnitude of the proposed development spending will require an increase in external borrowing, some of which will be on non-concessional terms. In this regard, the IMF has encouraged the Zambian government to negotiate the best possible terms for these loans and to ensure that the projects that will be financed are economically viable so that they will generate the revenues to repay the loans.”
He stated that the IMF also supported the SNDP's goal to foster broad-based economic growth stating that this will help to generate jobs and reduce poverty.
Perone stated that the macroeconomic achievements under the Fifth National Development Plan were good, given the difficult external environment during the implementation period (2005-2010).
“During the last five years, Zambia enjoyed sustained high real economic growth, inflation (which hurts the poor more than those that are well-off) was lowered to single digits, and domestic and external government debt was kept to manageable levels,” stated Perone.
“In navigating the recent world financial and economic crisis, the government pursued prudent macroeconomic policies and real economic growth in Zambia turned out to be higher than that of most other countries in the region.”
By Moses Kuwema
Fri 11 Feb. 2011, 04:01 CAT
MIKE Mulongoti should show the nation what he has done for the party before he contests the position of vice-president, according to an MMD official. Chilekwa Munkonge, the Lusaka Central Constituency MMD chairman, said much as works and supply minister Mulongoti had a democratic right to stand for any position, there was need for him to show what he had done for the party especially the grassroots.
“We shall elect people according to what they have done for the party and the nation. We as the grassroots have not seen any works that have been done by honourable Mulongoti but if he feels he has really worked hard for the party, then it’s okay; we have no objection. But I hope he will be able to stand the pressure which will be there at the convention,” Munkonge said in an interview yesterday.
And Federation of Free Trade Unions of Zambia (FFTUZ) president Joyce Nonde Simukoko said the freezing of the position of vice-president in the MMD should not be allowed to continue because it negated the principle of democracy on which the party was founded in 1990.
Simukoko commended the PF and the MMD for holding provincial elections as this was the only way in which their members could participate in the democratic process of electing leaders to represent them at various levels.
Mulongoti announced his candidature for the MMD vice-presidency on Wednesday. The MMD national convention is slated for April 5 this year.
By Maluba Jere
Fri 11 Feb. 2011, 04:01 CAT
LUSAKA High Court judge Evans Hamaundu has reserved ruling to February 18, 2011 on whether or not Vice-President George Kunda's wife, Irene, should be struck out as a plaintiff in a case where Michael Sata has been sued for defamation.
Sata's lawyers last week asked the court to strike out Vice-President Kunda's wife, Irene, who is the second plaintiff in a case where the Patriotic Front leader has been sued for defamation.
According to a notice of intention to raise preliminary issue pursuant to 0.14 r 5 (2) of the High Court rules, chapter 27 of the Laws of Zambia, Sata's lawyers raised the preliminary issue on grounds that Irene was improperly joined to the proceedings.
“Take notice that at the hearing of the matter on 3rd February 2011 at 09:00 hours, the defendants herein will raise a preliminary issue on the ground that the second plaintiff is improperly joined to these proceedings and should therefore be struck out,” said the defence.
The matter which came up for hearing before judge Evans Hamaundu in chambers could therefore not proceed because the plaintiffs were only served with the notice a day before and needed time to respond.
In this matter, George Kunda and Company as a firm and Irene have sued Sata and QFM Radio claiming damages for libel contained in a radio interview aired when Sata featured on a programme on January 18, 2010.
Vice-President Kunda's firm is also claiming damages for libel against Sata and QFM in an article entitled 'Sata unearths a K3.5 billion scam...as he writes to RB to investigate his vice George Kunda'.
Vice-President Kunda's firm also wants an injunction restraining Sata and QFM whether by themselves and or their agents from further broadcasting and publishing the defamatory words complained of or any similar libel concerning the plaintiffs.
They are also claiming interest and costs. The plaintiffs were expected to respond to the preliminary issue raised by the state by yesterday.
When the matter came up for arguments in chambers yesterday, judge Hamaundu reserved ruling to a later date while the main matter has been adjourned to May this year.
Mine law to be revised
From MARTIN KAPENDE in Cape Town
ZAMBIA is to re-enact the 2008 Mines and Minerals Development Act to put it in line with the changing environment and in conformity with stakeholders’ participation. The changes will be in line with consultation with various stakeholders including increasing the upper limits of prospecting areas explorers can hold from 1,000 km2 to 2,000km2 to promote conceptual large-scale exploration.
Minister of Mines and Minerals Development Maxwell Mwale told an African Mining Ministerial Forum here that the revision will see the maximum tenure of a prospecting licence increased from seven to 10 years with an initial period of four years and two subsequent renewals of three years each.
He said this is expected to give companies sufficient time to conduct conclusive prospecting operations over the licence areas and also compensate for the lost time from November to April due to the rainy season, which makes access to exploration areas virtually impossible.
The Ministerial Forum was held at the ‘Investing in Africa Mining Indaba 2011’, which has attracted about 6,000 people from the initially projected 4,500 delegates.
Mr Mwale said the upper limit of an area of large-scale mining a licensee can hold has been increased from 250km2 to 1,500km2 to accommodate large mine development where ore bodies may be scattered over a larger area.
The minister also said Zambia has reviewed the type of licences that can be issued from the current seven to five.
He said the licensing and granting authority will also be vested into one office, that of the director of mining cadastre under the proposed law to be re-enacted to enhance efficiency in the administration of mining rights and align it with international best practices.
He said in reviewing the Act, the government has adopted a give and take approach and cautioned investors that the ministry will use the ‘use or lose it principle’, adding that the exploration law says if a firm does not use the licence then it can lose it.
And Government has abandoned calling for bids for oil and gas exploration, but will allow companies that want to simply procure the data and pay for the blocks while it has also reserved seven blocks for itself.
So far, out of the 23 oil and gas blocks demarcated, government has awarded 11 blocks to local and foreign investors while seven have been reserved for itself.
Meanwhile, the minister said he was not aware that First Quantum Minerals (FQM) had kept in its accounts about US$300 million unpaid dividends to ZCCM-IH, of which it owns itself a 20 percent stake in (FQM).
He was responding to a question from one of the minority shareholders in ZCCM-IH who wanted to know when Government will put its foot down to ensure FQM pays the dividends due to ZCCM-IH.
But the minister said FQM had been one of the companies paying higher taxes to Government and had found the environment in Zambia attractive to invest in.
Mr Mwale urged investors to come to invest in Zambia and outlined the various mining opportunities and minerals available for them.
Zambia has been stable and maintained the corporate tax of 30 percent, three percent mineral royalty of gross value, plus 15 percent withholding tax on interest, dividends, royalties and management fees coupled with 100 percent capital allowance on machinery.