'Think of alternative staple foods'
By Agness Changala, Darius Kapembwa and Vincent Chilikima
Sun 26 May 2013, 14:01 CAT
ZAMBIAN Vision Foundation president Chilufya Luchembe says the current debate over the removal of maize subsidies gives Zambians an opportunity to think of alternative staple foods. And North Western Province minister Nathaniel Mubukwanu has described the decision by the government to remove fuel and maize subsidies as a step in the right direction.
Meanwhile, a Kitwe resident on Friday staged a lone protest against the anticipated increase in mealie-meal prices following the government's recent removal of fuel and maize subsidies.
Luchembe, in a statement, stated that instead of engaging in shadow boxing politics with the government over the removal of subsides, the general citizenry and all stakeholders should take the opportunity to think broadly and strategically about the national staple food and diversify into other crops.
He stated that there was nothing that forbids the country from adopting and promoting other food crops such as cassava, finger millet, rice and potatoes as national staple foods.
Luchembe stated that cassava was a drought-resistant crop that the nation could adopt alongside maize as a national staple food.
"Cassava and other crops such as finger millet, rice and potatoes demand relatively less production cost compared to maize," he stated.
Luchembe stated that countries such as South Africa, Nigeria and Tanzania, among many others, had more than one major staple meal, which had resulted in their politics being more development-focused than consumption-oriented.
Luchembe urged the Ministry of Agriculture to open up their network of diversifying the production of variety crops using the comparative advantage of every province.
And Zambia Small-Scale Farmers Network stated that subsidies to millers and consumers did not benefit the ordinary Zambian as they were working in the interest of the former who were making huge profits out of them.
Network national coordinator Boyd Liambai asked the government to establish milling plants in all districts to curtail the monopoly of the few millers that were producing mealie-meal.
He stated that the move would necessitate a reduction in mealie-meal prices in the short term.
Liambai also appealed to the government to increase the input packs to the farmers at production level to increase yields.
Global Partnership for Africa Development Limited (GPAD) regional coordinator Edward Nsama stated that subsidies on fuel and maize had for a long time been a drain on the national resources, leaving the Treasury "completely empty" and forcing the government to run its affairs on borrowed money from the World Bank, International Monetary Fund and many other international lending institutions.
Meanwhile, Makesa Kalifungwa, a Kitwe businessman, on Friday wore black clothes and stuck two big posters on his body with inscriptions reading: "poor people are saying NO! Do not increase mealie-meal and fuel" in protest against the removal of fuel and maize subsidies.
He dismissed the government's explanation that the removal of subsidies was aimed at channelling funds to social sectors that would enhance poverty reduction amongst the poor people in the long term.
"Their explanation does not hold water, it simply does not add up. This decision is not in the interest of the poor people, it's against the spirit of competitiveness because our neighbours like Botswana and Zimbabwe have cheaper fuel, so investors will prefer going there and it will also affect the cost of doing business which will go up," Kalifungwa said.
He said the government should come up with a formula of identifying rich companies and individuals that did not deserve subsidies instead of generalising the matter.
Kalifungwa said maize was seen as an expensive crop to continue subsidising because there was no value addition on the commodity and that it was always sold out to neighbouring countries in raw form.
"There should be value addition on maize so that the benefits of subsidising maize could be realised through profitable sales of other maize products," he said.
Kalifungwa attracted curious onlookers as he moved around streets in the main business district.
And speaking when two Finnish government ministers and their 40-member business delegation paid a courtesy call on him, Mubukwanu said the government's bold decision to remove fuel and maize subsidies had become a contentious issue despite its socio-economic benefits to the populace.
He explained that the government saw it prudent to save K300 million every month by removing subsidies on maize, adding that the money saved would be invested in infrastructure development for the benefit of many people rather than supporting consumption.
"People in rural areas, who are the majority of the citizens, live off their own produce but face the challenges of inadequate educational and health facilities. So government wants to re-channel resources to the most critical infrastructure required by the general public," said Mubukwanu.
And after touring Kansanshi mine, Finnish Minister for International Development Heidi Hautala said she was impressed with the Zambian government's policies because they were intended to benefit the local people.
She said Zambia being a member of the Extractive Industries Transparency Initiative had demonstrated compliance to the initiative's principles by introducing financial legislation that would be of benefit to the local people and government.
Hautala explained that one of the EITI principles encouraged member countries to prudently use natural resource wealth for sustainable economic growth that contributes to sustainable development and poverty reduction.
She added that the management of natural resource wealth for the benefit of a country's citizens is in the domain of sovereign governments to be exercised in the interests of their national development.
Hautala further said transparency by governments and companies in the extractive industry and the need to enhance public financial management and accountability is an important EITI principle, adding that financial transparency enhances the environment for domestic and foreign direct investments.
"EITI is committed to encouraging high standards of transparency and accountability in public life, government operations and in business. Payments' disclosure in member countries should involve all extractive industry companies operating in that country," she said.
Hautala also assured Mubukwanu that her government had a plan to support forestry in North Western and Muchinga provinces, adding that attention would go towards environmental issues and particularly renewable resources such as tree planting.
And Finnish Minister for European Affairs and Foreign Trade Alexander Stubb said his first impression of Zambia is positive.
He said it was phenomenal to see how Kansanshi mine was contributing to the development of the nation and the local community.
Stubb disclosed that his business delegation was represented by 25 Finnish companies whom he was optimistic would have "a good story to tell others back home in Finland about Zambia's economic environment and investment opportunities".
Meanwhile, Kansanshi Mining Plc public relations manager Godfrey Msiska said First Quantum Minerals had raised its profile from humble beginnings to a company of international reputation, going by the frequency of international visits to the mine.
Labels: BOYD LIAMBAI, CHILUFYA LUCHEMBE, EDWARD NSAMA, EITI, HEIDI HAUTALA, MAIZE, STAPLE FOODS, ZAMBIAN VISION FOUNDATION
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EITI report shows K8bn disparity in mine taxes
By Kabanda Chulu
Fri 17 May 2013, 14:00 CAT
A latest reconciliation report has revealed a huge discrepancy amounting to KR8.8 million relating to payments made by mining companies and what was received by government and its agencies.
Meanwhile, Zambia has expanded the scope of the Extractive Industries Transparency Initiative (EITI) beyond mining to include forestry, fisheries and tourism to promote transparency in revenue collection across various economic sectors.
Briefing the press in Lusaka yesterday, EITI head of secretariat Siforiano Banda said discrepancies arose out of misunderstanding import Value Added Tax (VAT) and non-refundable VAT.
The EITI secretariat uses the materialistic method to identify companies which should be captured in the report.
"This method entails us to get to ZRA and find out companies that pay taxes amounting to more than KR2.5 million thresholds and the latest report is based on 2010 accounts and mining companies reported that they paid KR3.794 billion but government reported receiving KR3.785 billion," he said.
"So we have a difference of KR8.8 million and this is mainly attributed to misunderstanding of import VAT and non-refundable VAT because most companies don't fully understand this component and ZRA should help some companies to understand these taxes."
And Banda said Zambia had become the 15th country out of 35 in the world that had attained EITI compliance status.
"This implies that Zambia has put in place effective processes for enhancing transparency and accountability in the mining sector to enable the country maximise benefits from the sector," he said.
"Attaining compliance status also means that the country should now expand its focus to include other sectors that support the economy so that revenue collection is maximised when industry players declare what they pay and the government also discloses how much it has received."
He urged civil society to become active and monitor that revenue collected was used to promote people's livelihoods.
"With mining, we also want to include other minerals such as cobalt, emeralds and manganese. In future, we intend to look at what is supposed to be paid and how revenue was used since currently we just produce reports," said Banda.
Labels: CORRUPTION, EITI, MINING, SIFORIANO BANDA, TAX EVASION
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Mines to provide detailed info
By Kabanda Chulu in Lusaka and Edwin Mbulo in Livingstone
Mon 18 June 2012, 13:22 CAT
GOVERNMENT has with immediate effect put in place regulations to compel mining companies to provide information on
tonnage, type and grade of ore mined including
operating cost sheet and
production figures aimed at increasing revenue to the treasury.
According to Statutory Instrument No. 34 of 2012, mining companies would be required to submit reports on the recovery percentages and efficiency of all mining and metallurgical processes and balance sheet showing the disposition of all metal and mineral products depleted from the ore reserves.
Other requirements for mining companies include providing a statement of work carried out on capital products and expenditure and availing quantities and grade of end products produced, quantities sold and average price of selling prices.
Announcing the development last Friday, mines minister Christopher Yaluma said mining was Zambia's key economic sector.
"Its performance in terms of mineral production has been improving over the years but this improvement has not been matched with corresponding increase in revenue to government, so we have reviewed legislation in order to independently monitor the production and export of minerals and failure to comply will result in revocation of licences and other punitive measures," he said.
Meanwhile, Zambia Extractive Industry Transparency Initiative head of secretariat Siforiano Banda said the main cause of the un-reconciled discrepancies in the mining sector was due to lack of details of the payments by both companies and government.
According to the ZEITI 2009 reconciliation report presented during capacity building workshop for civil society and media organisation at Protea Hotel, documentation indicates that mines contributed K2.6 trillion while the government received a total of K2.5 trillion from the mines in 2009.
"There is need to follow up and minimise the discrepancies in the extractive sector and all stakeholders to cooperate in order to promote transparency in the extractive industry in order for the country to benefit from natural resources. The main causes of the un-reconciled discrepancies were due to lack of details of the payments by both companies and government," Banda said.
He said there was need to create an enabling environment for doing business in the country's mining sector and strike a balance that would benefit both investors and the government.
Banda said out of the K2.5 trillion received by the government, there was a net discrepancy of K31.4 billion, representing 1.2 per cent of government receipts
And council member Talent Ng'andwe said ZEITI promotes governance and sought to reduce the risk of diversion or misappropriation of funds from the country's extractive industry.
And according to the report, Konkola Copper Mines was the largest contributor in the mining sector while Zambia Revenue Authority was the largest contributor to the treasury in the country through the payment of Pay as You Earn taxes.
The report further indicates that in terms of copper production in 2009, Kansashi Mining Plc was the highest producer of copper ore at 244,979 tonnes per annum where as Grizzly Mine had the highest emerald production with 193,179,800 carats per annum.
Zambia decided to join the EITI because of the perceived lack of transparency after the privatisation of the mining sector in 2009.
Labels: EITI, MINING
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ZEITI expert bemoans inaccurate production figures in mines
By Misheck Wangwe in Kitwe
Thu 14 June 2012, 13:22 CAT
THE Zambia Extractive Industry Transparency Initiative says the country will never maximise its profits from mining if the PF government does not address illicit capital flaws being perpetrated by mining companies.
ZEITI expert Talent Ng'andwe said inaccurate declarations of copper, cobalt and emerald production by foreign mining firms was one of the major reasons sustainable economic development in Zambia had not been achieved for many years.
Ng'andwe said the argument the mining companies were putting up that they could not report production figures because some mining company's outputs were very low and were producing low grade copper should not be tolerated.
He said in the previous MMD regime, there were a lot of secrecy in mining production due to vested interests that made it difficult for Zambians to see tangible benefits from the mining sector.
He said the manner in which many mining companies were conducting business was tantamount to tax evasion as there was no transparency in their production.
Ng'andwe said a lot needed to be done in terms of government policy on mining to ensure that accurate revenue is collected from the country's mineral resources to enhance national development.
"Extractive companies like we have mines in Zambia, they are generating a lot of revenues which is failing to contribute to the growth of African economies, Zambia is an example and this is due to illicit capital flaws which are as a result of inadequate monitoring and tracking mechanisms. Our tax authorities, the ZRA must be present at the point of production," he said.
Ng'andwe said the main purpose of disclosing the revenue remitted to the government by the mining companies was to promote transparency and accountability in the use of natural resources to ensure that all citizens and mining towns benefit from the process.
He said stringent mining monitoring mechanisms, coupled with level headedness and responsible corporate citizenship from foreign investors in the mining sector, was critical to enhancing economic development.
"The PF government has a responsibility to make sure that they unbundle the secrecy that surrounded the mining operations during the previous regime and make sure they make mining companies account through initiatives like the EITI. If they compel mining companies to report the figures that they produce then the watchdogs who are civil society will be able to tell that the figures are accurate and the proceeds will enhance economic development," said Ng'andwe.
Labels: CHISELEBWE NG'ANDWE, EITI, MINING, TAX EVASION, ZRA
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COMMENT - We're way beyond 'calling on Glencore to pay it's fair share of taxes'. Glencore is guilt of massive tax evasion. That is theft from the Zambian state, the Zambian people and the Zambian economy. And thieves must to go to prison.
Explain tax avoidance reports, ActionAid tells Glencore
By Gift Chanda and Kabanda Chulu
Wed 07 Sep. 2011, 13:58 CAT
ACTIONAID Zambia has challenged Glencore to "clear the air" on tax avoidance allegations in Zambia before embracing the Extractive Industries Transparency Initiative (EITI). Country representative Pamela Chisanga said Glencore, the owners of Mopani Copper Mine, should not sidetrack from clearing its name on the tax avoidance issues her institution raised last year.
Last week, there were assertions that commodities trader, Glencore, would own up support for a global standard on transparency in natural resources by declaring its support to the Extractive Industries Transparency Initiative (EITI), an initiative which promotes principles of ethical behaviour at natural resources companies.
Glencore has been notable by its absence from a list of EITI backers that reads like a Who's Who of natural resource giants. The list includes Anglo American, BHP Billiton, BP, Shell and fellow commodities trader Noble Energy.
"Much as we appreciate Glencore's position to support various initiatives, like EITI, we would still want Glencore not to use this to sidetrack from the real issues that we have been calling on in terms of how they should be paying their fair share of tax to Zambia," Chisanga said.
"We are a little bit concerned that these measures are being used to cover up the wrongdoing of Glencore."
Chisanga said the time Glencore has decided to raise its support is wrong considering the issues surrounding the institution. The Swiss-based company's transformation into a public company has been littered with embarrassing accusations over corporate governance including allegations - denied by the company - that it avoided tax in Zambia.
The controversy emerged after the leaking of a report into internal controls at Mopani, which was carried out in 2009 by accountants Grant Thornton at the request of the government.
The dossier stated there had been an "unexplainable" increase in Mopani's costs between 2006 and 2008 that allowed it to minimise its stated profits and lower its tax bill.
"We are yet to see how events unfold but we will not relent from calling upon Glencore to pay its fair share of taxes," Chisanga said.
She said time had come for heightened transparency levels in the extractive industry. Chisanga said multinational companies need to be more transparent if the country is to benefit from its resources.
"And to achieve this, we have always called upon the multinational corporations, the private sector to collaborate and work with civil society even in terms of providing information regularly for us to get an understanding of what is happening within these industries," Chisanga said.
And during the ongoing Comprehensive Africa Agriculture Development Plan (CAADP) consultative meeting for non-state actors (civil society and others) in Lusaka yesterday, Chisanga said there was need to use agriculture as an avenue to attain economic development.
She said Zambia should urgently implement practical and inclusive policies that will result in the maize bumper harvest to significantly reduce hunger and food insecurity.
"We need partnerships that will bring the missing voices to influence the agriculture policies, for instance, Zambia has recorded a number of milestones in the last two farming seasons and yet the sector has had huge challenges in ensuring food security and reducing hunger so how do we ensure that agriculture is managed to bring desired results?" Chisanga asked.
"Women are underrepresented yet they produce most of the foods that we eat. What are we doing to ensure that their voices are heard and we have a bumper harvest but what policies do we have to ensure that hunger is reduced and what measures are we putting in place to make agriculture as a base for sustainable development and economic growth?"
Chisanga, however, said the challenges of the agriculture sector cannot be left to government and cooperating partners alone.
"This calls for a significant shift in broadening the space to accommodate the voices of non state actors in all important decisions because CAADP is government led but not government owned or controlled. As such, it provides a nexus through which to structure and coordinate non state actor participation," said Chisanga.
Labels: ACTIONAID, EITI, GLENCORE INTERNATIONAL AG, MOPANI, TAX EVASION
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COMMENT - The MMD is just blowing smoke. You can't 'urge' mining companies to make less profit. They are not going to 'hear the call'. They are under legal obligation to maximize profits (unlike the government apparently) and as a result, mining policy cannot be left up to them.
Government reviewing 2008 mining fiscal regime
By Chiwoyu Sinyangwe
Fri 17 June 2011, 12:20 CAT
THE government is currently altering the 2008 mining fiscal regime credited with higher taxation for mines to bring it in line with “international best practices”, says mines minister Maxwell Mwale. And Vice-President George Kunda says there is need to improve transparency in the mining sector to promote good governance in the country.
Mwale told key industry leaders attending the inaugural two-day
Zambia International Mining and Energy Conference (ZIMEC) in Lusaka today that
the 2008 mining fiscal regime was not adequate to deal with current dynamics in the sector.
Mwale said the government’s focus was to attract more players in the mining sector by providing incentives to investors.
“My government is aware of the mines development cycle and the need to improve the attractiveness of investing in Zambia’s mining industry,” said Mwale in a keynote address to the conference dominated by foreign mining firms.
“To this effect, the Mines and minerals development Act of 2008 is undergoing review to bring it in line with international best practices and ensure that sector contributes to economic growth.”
After years of Development Agreements with foreign mining firms which the country was tied to under the World Bank and International Monetary Fund-influenced chaotic privatisation of the vast copper mining, the government under late president Levy Mwanawasa in 2008, introduced a new fiscal regime to raise Zambia’s revenue collection from the mining sector – the country’s main economic stay.
The new law praised by key interest groups in the country but disputed by the foreign mining firms among other things raised corporate tax to 30 per cent, mineral royalty to three percent from 0.6, introduced a windfall tax of 25 per cent in times of unprecedented high international copper prices.
Mwale also said there was need for the government to ensure benefits accruing in the sector in current high metal prices were invested in priority areas, as the current growth in mining sector was unsustainable.
“Any sudden slump in either the price or demand of copper may negatively impact on the growth of the sector and subsequently, on economic growth,” said Mwale.
“Therefore, the government has a challenge to ensure that benefits accruing from the sector in these times of high prices are invested in sustainable economic activities.”
And Vice-President Kunda urged mining firms to support the Extractive Industries Transparency Initiative (EITI) to improve management of minerals to benefit the country.
“Transparency is a tenet of good governance and I urge all stakeholders to be actively involved so that we achieve the objective of subscribing to the initiative,” said Vice-President Kunda.
Among the mining firms attending the conference included giant mining BHP Billiton, Brazil’s Vale, First Quantum Minerals London-listed, and Canadian and Australian-listed Equinox Minerals, while conspicuously missing is Mopani and Konkola copper mines.
Labels: EITI, GEORGE KUNDA, MAXWELL MWALE, WINDFALL TAX
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(STICKY) EITI questions foreign mining firms’ tax figures
EITI questions foreign mining firms’ tax figures
By Chiwoyu Sinyangwe
Wed 11 May 2011, 21:20 CAT
ZAMBIA Extractive Industries Transparency Initiative says trusting the integrity of figures foreign mining firms submit on their production levels and what they pay in taxes is still a challenge.
The first-ever independent reconciliation on Zambia’s implementation of the Extractive Industries Transparency Initiative (EITI) revealed a net discrepancy of K12. 31 billion between what mining companies paid and what the government received in 2008.
EITI, which is a programme that among other activities seeks to reconcile what the extractive industries, chiefly the mining sector in the country, pay to the government compared to what the government receives, based its conclusions on the books of the mining firms which are audited to international standards.
Speaking during the presentation on EITI and on the reconciler report on Tuesday, head of the Zambia EITI Secretariat Siforiano Banda (right) said verifying authenticity of figures from foreign mining firms still remained a challenge.
"Even now when the validator was looking at responses by these companies...we still have some questions," Banda said. "Was this audited to international standards? So, it’s something we have to keep working on to ensure these things are audited to international standards."
Following revelations of glaring irregularities and inconsistency in production and revenue figures that Mopani Copper Mines submits to Zambia Revenue Authority for tax administration after a pilot audit, most of which hinge on its links to its parent company Glencore AG, the mine argued that the report was "flawed" as the firm was annually audited to "international standards".
Banda said international audit firms stood to lose credibility if their audit results are found wanting.
But according to an audit conducted by lead auditors - Grant Thornton Zambia and Econ Pöyry, a Nordic based global consulting and engineering company, there was clear indications from the comparative analyses that there were major problems with both revenues and costs of Mopani Copper mines.
"As Mopani was audited to international standards, but then after, it was discovered they had problems…," Banda said.
"They could have some reasons why such a thing happened but of course auditing firms which audit these companies are international firms with international credibility and I don't think they will risk their names just to give false figures."
Banda also said the Office of the Auditor General had started doing reconciliation to determine the source of the absolute discrepancy of K247 billion and net discrepancy of K12.31 billion between what mining companies paid and what the government received in 2008.
Labels: CORRUPTION, EITI, MINING, TAX EVASION, WINDFALL TAX
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Bulk of mining taxes comes from workers
15 February 2011
The Citizen
Dar es Salaam: Despite claims of a boom in Tanzania's mining industry, the bulk of taxes paid to the government comprises deductions from the workers' wages and not levies on extracted minerals, it has been revealed.At least 54.5 per cent of the taxes collected from mining, gas and oil companies in the country is being paid by ordinary workers in form of various taxes, according to a new report released here yesterday by the Tanzania Extractive Industries Transparency Initiative (TEITI).
According to the report, the government depends more on labour tax than production by mining companies to boost revenue from the sector.
Commenting on the report, a development analyst criticised the government for concentrating on attracting investment in mining instead of planning the sector's development. "We have established that minerals, gas and oil are not contributing as required to the national income," said Mr Bubelwa Kaiza, executive director of Concern for Development Initiatives in Africa (ForDIA.
He told a mining stakeholders' meeting here yesterday that most of the income attributed to the sector was collected as pay-as-you-earn (PAYE) taxation on wages.
Researchers have established that most of foreign investors in the sector were not contributing effectively to the government revenue, Mr Kaiza asserted.
According to the TEITI report, apart from labour taxes which account for over 50 per cent of receipts from the mining sector, stamp duty contributes a mere 0.3 per cent, mining lease 0.9 per cent and import duty adds 34 per cent. "There are many investment attractions in the mining sector than the profit which is expected to be generated from projects. We are paying more than we get," said Mr Kaiza.
For nearly 50 years of national independence there has been no strong presence of local investors in the exploration and exploitation of minerals, gas and oil deposits in the country. "Investors are always coming from abroad because Tanzanians have neither the technology nor the required capital to run such enterprises which are capital intensive," Mr Kaiza observed.
In his opinion, Tanzania's failure to capitalize on its abundant mineral wealth was due to lack of strong mining policies and information on the part of the government while the population generally was not enlightened about mining issues.
In 2009 Tanzania became EITI candidate country, a preliminary stage towards membership.
Mr Kaiza hailed the report as a very important tool for the development of the mining sector saying "it provides a direction on where the sector is heading to."
The report notes as an outstanding issue the fact that mining companies recorded huge amounts of money paid to the government while the treasury had no evidence to verify receipt of the payments.
"The report shows that no single cent has been paid to the treasury by these mining companies," said Mr Kaiza, suggesting that the government should order investors to deposit their cash in local banks in order to boost the country's economic development.
While the government claimed it received a paltry amount of money, he said it has been established that the Tanzania Revenue Authority (TRA) and the ministry of Energy and Minerals have been collecting taxes from mining, gas and oil companies.
In July 2010 the MSG called on all major mining, oil and gas companies to submit reports on all payments that they made to the Government and its agencies. The companies obliged accordingly within a two-week deadline.
It was revealed last week that over Sh24 billion which mining companies claim to have paid in taxes could not be traced on government books. An audit conducted by Hart Nurse Ltd confirmed that the Government acknowledged receipt of less amount of money than what the companies claimed they had actually paid.
Multi-Stakeholder Group (MSG) of the Tanzania Extractive Industries Transparency Initiative (TEITI) contracted Hart Nurse Ltd to examine the payments made by the major mining and gas operating companies to the government for the period of July 2008 -June 2009. Chaired by retired Judge Mark Bomani, TEITI operates as a local affiliate of global Extraction Industries Transparency Initiatives (EITI). Hart group has established that the extractive companies paid about Sh89 billion to the government, which, in turn, reported to have received Sh64 billion only.
At the launch of the report, Mr Bomani said that copies of the document would be handed to relevant authorities so that the discrepancy could be investigated and ironed out.
In addition, Mr Bomani said the report would be submitted to the Controller and Auditor General's office for further evaluation to establish the causes of such differences in revenues.
But, he said that the reconciler was also making efforts to find out the cause of discrepancy. "After further assessment we will establish whether there were cases of improper accounting, conversion from US dollars into shillings or misuse of the money collected," he added.
Labels: EITI, NEOLIBERALISM, PAYE, TANZANIA
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COMMENT - K247 billion, at K5000/$, that is $49.4 milion. The mines should be paying $1100 million in taxes and dividends. My guess that this $49.4 million goes some way into explaining why they don't, and why the MMD is not keen on levying taxes or receiving dividends from the mining sector.
Mining firms, govt in K247bn discrepancy
By Chiwoyu Sinyangwe
Thu 24 Feb. 2011, 04:00 CAT
AN independent reconciliation has revealed an absolute discrepancy of
K247 billion between what mining companies paid and what the government received in 2008. And the reconcillors said the mines and the government agencies were not fully supportive towards the independent reconciliation report.
The independent reconciliation, the first ever report in Zambia's implementation of the Extractive Industries Transparency Initiative (EITI), indicated that there was a net discrepancy of K12.31 billion.
According to the report by the Zambian branch of the accounting firm, Price Waterhouse Coopers (PwC), and based on the 2008 audited books, the discrepancy was caused by among other things, problems of documentation, exchange rates, and lack of supporting documents.
“The discrepancy does not represent missing payments from extractive companies but rather discrepancies which we have unable to investigate further and conclude thereon due to limited supporting documentation and limited time frame of the independent reconciliation,” said PwC Zambia director Nitesh Patel during the presentation in Lusaka on Tuesday.
The findings of the independent reconciliation report, a crucial component for Zambia to become a compliant country to EITI, also revealed that 86 per cent of the unresolved discrepancies had arisen from four payment streams - namely, non-refundable VAT accounting for 35 per cent, import VAT at 26 per cent, customs/import duty at 16 per cent and corporate tax at nine per cent.
“Of the total discrepancies of K421 billion, approximately K174 billion of these discrepancies have been resolved, leaving K247 billion of unresolved discrepancies,” said Patel.
PwC stated that in some cases, there was no consistency between supporting documents and the information on completed reporting templates.
“A number of mines and agencies did not provide us with documentation to support the amounts reported on the completed reporting template,” said PwC. “A number of parties in the exercise misunderstood the payments and receipts requested for. Information related to payments made through the third parties like clearing agents was not easily accessible by some parties."
Mines minister Maxwell Mwale said the challenge of Zambia EITI was to follow-up on the discrepancies and take remedial action.
Mwale also directed Zambia EITI to start the reconciliation process for 2009 and 2010 reports.
“I am, therefore, directing the EITI council to investigate the source of the discrepancy,” said Mwale.
“The independent reconcilers have suggested areas of improvement for future reports and hence Zambia EITI Council should take note and ensure these recommendations are implemented.”
Some of the highlights in the report included certain reporting standards which indicated the government collected more revenue than what the firms paid.
EITI aims to strengthen governance by improving transparency and accountability in the extractives sector by improving governance in resource-rich countries through the verification and full publication of company payments and government revenues.
Labels: CORRUPTION, EITI, MAXWELL MWALE, VAT
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Mopani’s tax issues provoke debate
By Kabanda Chulu in Kitwe and Gift Chanda in Lusaka
Sun 13 Feb. 2011, 03:59 CAT
TAX payment irregularities revealed by the audit report at Mopani mines has silenced all arguments against the reintroduction of a simplified mining revenue collection system such as the windfall tax, says Dr Fred Mutesa.And Consumer Unity and Trust Society (CUTS) International has called for an industry-wide audit to be conducted in the mining sector to ascertain the true extent to which companies are evading taxes and how much Zambia has lost so far.
Meanwhile, Nkana PF parliamentarian Mwenya Musenge has challenged finance and mines ministers, Situmbeko Musokotwane and Maxwell Mwale, respectively, to stop acting as if they ‘know it all’ because their mining policies had failed resulting in Zambia losing millions of dollars.
Commenting on revelations of tax payment irregularities and inconsistent production figures that are submitted to the ZRA, Dr Mutesa, who is Zambian Empowerment for Development (ZED) president, said the right thinking Zambians had been vindicated for calling for fair and equitable taxes from the mines.
“If not properly checked, multinational companies such as Mopani and many other mines will continue to under invoice and under price for purpose of tax avoidance and evasion. So it is time to come up with a tax regime that is easier to enforce and collect revenue and also to compel the mines to do more on corporate social responsibility since copper is a waste asset and soon we shall very negative environmental liabilities,” Dr Mutesa said.
And CUTS stated that the irregularities reveled at Mopani mines were just a tip of an iceberg of how much more dirty business was going on in the mining industry. It stated that the government should own up on the basis of the revelations and carry out an industry-wide audit to ascertain the true extent of the tendencies to evade taxes as the only way to ascertain how much the country had so far lost in taxes.
CUTS further stated that the government should treat the revelations as a wake-up call to institute measures that would not only address the glaring revelations but end the abuse of the country's resources especially in the mining sector.
It urged the government to stiffen regulations under the Extractive Industry Transparency Initiative which will compel the mining firms to release timely and accurately financial figures.
“There is no doubt that the weaknesses of Zambia Revenue Authority have been exploited and a lot of money siphoned out of the country through methods such as deliberate failure to appreciate the tenets of transfer pricing and through accounting manipulation. This is a clear sign of tax avoidance and evasion and this should be a wake-up call for the government,” CUTS stated in a press release.
CUTS also called for the reintroduction of the windfall tax.
“It is common knowledge that profit based tax system are a problem given the capacity of the Zambia Revenue Authority hence the urgent need to revert to volume and sales based taxes,” CUTS advised.
It stated that mining firms had continued to make profits even at the expense of the consumers’ health.
“Not long ago, Konkola Copper mine polluted the Kafue River for the second time putting the health of workers and consumers at risk. It is important that we take a courageous step on our natural resources and we must realize that Zambia will only develop from its natural resources, copper being the main product,” stated CUTS.
Mopani operates mining units in Kitwe and Mufulira is 73.1 per cent owned by the Swiss commodity trader, Glencore AG.
And Musenge said the MMD government and its ministers should listen and realise that Zambians had been given a raw deal by the so-called mining investors.
“The unpleasant thing is that we have lost money because of the adamancy by Situmbeko and Mwale who insist that the mines are not making profit,” said Musenge.
“In 2008 during debates to amend the mines and minerals Bill, I proposed the establishment of a Minerals Accountability Directorate which should monitor from extraction to finished products and come up with independent figures and then advise ZRA on how much to collect as revenue since ZRA lacks capacity to genuinely tax the mines.”
Southern Africa Resource Watch (SARW) Zambia Representative Edward Lange said irregularities revealed in the audit report were a clear indication that Zambia should quickly be part of the Extractive Industries Transparency Initiative (EITI) where the mines would be compelled to publish how much they paid in taxes.
“If The Post did not publish this report, we wouldn’t have known about it and it shows the arrogance and hostilities which these mines have towards Zambia because they have government backing. And time to build the capacity of ZRA is now so that we avoid losing out,” said Lange.
Government with support from co-operating partners commissioned a pilot audit conducted by Grant Thornton and Econ Poyry of Norway, that revealed inconsistencies in production and revenue figures Mopani submits to ZRA for tax administration.
Dr Musokotwane has not acted on the findings of the report despite receiving it in August last year before the budget announcement.
Labels: CUTS, EITI, FRED MUTESA, MOPANI, MWENYA MUSENGE, SARW, TAX EVASION, WINDFALL TAX
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Zambia to become EITI compliant
By Kabanda Chulu in Kitwe
Thu 02 Dec. 2010, 03:59 CAT
ZAMBIA is expected to become an Extractive Industries Transparency Initiative compliant country by May 2011 if the first EITI report to be based on 2008 audited accounts is completed by February 2011.
The main objective of attaining EITI status is to
publish what mining companies pay to government agencies and at the same time to publish what government agencies receive as revenue from mining companies.
During the capacity building and training workshop for mining companies and government agencies involved in the EITI process in Zambia, mines permanent secretary Godwin Beene said in Chingola that there was need for transparency so that people can see apparent benefits from the country’s natural resources.
“Consultants, Price-waterhouse Coopers has been contracted to prepare Zambia’s EITI report and the data on payments and revenues for mining companies and government agencies respectively will be collected by the consultant using a template which has been developed for this purpose and it is expected that this information should be readily available.”
Several mining companies, civil society organisations and government agencies such as municipal councils and the revenue authority attended the workshop.
Labels: EITI, GODWIN BEENE, TRANSPARANCY
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CSPR launches budget execution barometer
By Sututu Katundu
Fri 03 Dec. 2010, 04:00 CAT
A CIVIL society organisation yesterday launched the national budget execution barometer, which seeks to measure the government’s performance in overall implementation of the national document.
Civil Society for Poverty Reduction executive director Patrick Mucheleka said the barometer would respond to the country’s poor performance by rating and tracking the government on service delivery and budget execution in specific critical areas.
Mucheleka said the barometer would also look at how budget allocations affected people’s livelihoods at community and national levels.
“It measures and rates government in terms of timeliness in releasing funds, adequacy, participatory in the bedrock of indicators that are used to calculate the barometer,” Mucheleka said.
The indicators include the citizens’ participation and civic engagement in developing processes which focus on issues of promoting participatory budgeting by linking state obligations with citizen entitlements thus promoting community voices in the decision-making process.
The second theme is pro-poor resource management execution and management which focuses on the prioritisation of resources to key development areas such as health, education, water and sanitation, social protection, agriculture and infrastructure, execution of these resources as well as ring-fencing of pro-poor development allocations.
The third theme is transparency and accountability which focuses on mechanisms being used to ring-fence pro-poor resources, accountability of these resources and the mechanisms used by the local and national government structures to explain and justify its decisions, policies and programmes.
The other indicators focus on basic service delivery and management, equity and human development.
CSPR said the government should place more emphasis on poverty reduction programmes through increased allocations in the national budget to expedite economic production and the rural people’s partcipation.
It said the government needed to conceptualise human development as a series of investments to increase capacity, to promote a more equitable and inclusive society and to catalyse accelerated, broad-based economic growth.
CSPR proposed the scaling up of investment in rural development programmes with priority placed on rural infrastructure development, small scale farmers and micro business.
CSPR advised the government to stimulate equity initiatives within various ministries and improve on priority setting and targeting resources to identified priorities.
The organisation said the government should strengthen public participation in the budgetary process by deliberately creating spaces for civil society participation.
CSPR said fiscal policies also needed to address equitable redistribution of resources and investment in high pay-back areas.
Labels: CSPR, EITI, MINING, PATRICK MUCHELEKA, TRANSPARANCY
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Windfall tax on copper was wrong - Mulenga
By Speedwell Mupuchi in Chingola and Kabanda Chulu in Accra, Gh
Tue 31 Aug. 2010, 04:00 CAT
THE windfall tax on copper was a big mistake for our country, Tranter Zambia chief executive officer Sixtus Mulenga noted last week, saying
the recently abolished tax would have killed the mining industry.But Third World Network (TWN) Africa has said
the failure to implement windfall taxes by the governments of Zambia and Tanzania illustrates the lack of courage and confidence to proceed on reforms aimed at increasing national benefits from the minerals sector.
And University of Ghana lecturer Thomas Akabzaa has challenged mineral- dependant countries like Zambia to align incentives given to foreign investors to national development policy goals that define the role of mineral resources in national development.
Making a presentation on the role of mining companies at the launch of the preparation of the first Extractive Industry Transparency Initiative (EITI) report for Zambia in Chingola on Friday, Dr Mulenga said the much-talked-about windfall tax was a wrong tax.
“The reason it’s a wrong tax is because it charges tax on revenue. Everybody who is in business, you know that when you run a business…the laws say that you pay tax on your profits…Mining companies are paying that tax. Windfall tax was a big mistake for our country because we started charging tax on revenue. If you charge tax on revenue it means you kill the business, it won’t grow,” he said.
[What a bullshit. The mining companies are supposed to pay mineral royalty tax, which is also a tax on revenues, except that it is only 3% of revenues. It isn't 'killing the industry' in Zambia or in Chile, where they have the same tax on revenues. - MrK]
Dr Mulenga said for people to perpetuate the idea that mining companies still must pay the “monstrous windfall tax” was not good for Zambia in terms of investment.
“…It takes 10 to 15 years just to do mineral exploration and develop a mine… and during all this period the mining companies have been borrowing money. The latest mining project here is Lumwana, Lumwana has a lot of money to pay back to the funders who funded that project, so Lumwana has no big bags of money that people feel they should lump on them because their revenue apparently looks big, so they must scoop that cream, no, there is no cream,” said Mulenga who is Albidon Mine’s former general manager for corporate affairs.
[How much money is 'a lot of money', 'Dr.' Mulenga? - MrK]
Dr Mulenga also dismissed the notion that mining companies were externalising all their profits, saying it took time to develop a mine and that money was used in mine development projects to ensure sustainability. He also said good governance, credibility of signed agreements and stability of a political regime were criteria used by the mines when deciding where to invest. He noted that Zambia was currently classified under clearly poor performance together with Bolivia, Central African Republic, Congo, Liberia, Niger, Philipines, Sierra Leone, worse than Zimbabwe, Jordan, Togo, Peru, Gabon, South Africa and Tanzania which were classified under weak performance with relatively better performance in few economic and social sectors. Chile, Botswana, Malaysia, Tunisia, Ghana and Mexico are classified under better performers.
“We want Zambia’s international rating to improve because the mining world has changed dramatically. Major companies are looking for countries with good governance, political stability and an investor friendly environment,” he said.
Dr Mulenga noted that Zambia had unique opportunities to fully exploit its natural resources.
“We want the mining companies to feel safe, secure and use Zambia as a springboard for growth. We believe transparency is very important,” said Dr Mulenga.
But TWN Africa programme officer for environment unit Abdulai Darimani said minerals and metals had historically played a key role in Africa’s trade and investment relations with the rest of the world.
Darimani said mining had remained a significant part of the continent’s trade and investment with more than 40 of the 53 countries producing or have known reserves of some type of minerals or metals.
“…37 of the 53 African countries rely on mining as the largest sector for economy activity with 70 per cent of Zambia’s foreign trade income coming from copper and cobalt while gold constitute a third of Ghana’s foreign earnings and since 2003, prices of various minerals and metals have been rising dramatically on the world markets, reaching very high levels in the first quarter of 2008 and this rise in prices of mineral commodity contributed to the overall (Africa) recorded growth of 5.7 per cent in 2008,” Darimani said.
“However, there was consensus that mineral producing and exporting countries did not derive optimum benefits from the price boom and this consensus translated into action to review existing contracts and pieces of legislation as well as overall reform of the mining tax regimes to improve benefits to national economies and development (under new taxes Zambia projected to earn US $ 415 million in 2009) but just as the momentum to review and reform was about to pick up the financial crisis set in and it resulted in severe economic shocks, undermined government’s capacity to deliver and slow down the pace of overall economic growth and development.”
He said the reversal in prices resulted in collapse of mines and related sectors, job losses, environmental liability, loss of government revenue and retreat of the state in some countries.
“The reversal also has implications for the possibilities of alternatives which Tanzania and Zambia failed to utilise and decided to suspend well intended policies and introduced measures which intensify orthodox economic policies that tax the poor to subsidize the rich and corporations,” said Darimani.
“The failure to implement mining windfall taxes by Tanzania and Zambia are examples that illustrates the lack of courage and confidence to proceed on reforms that aimed at increasing national benefits from the minerals sector and the solution to insulate mineral dependant economies lies in tackling the transmission channels which is both a technical issue as much as it is a political issue and this is why we should return to the era of the nationalist movements which resulted in the independence of African countries and the social movements hold the hope to this dream.”
And Dr Akabzaa said policy directions in the mining industry throughout times had been dictated by global trends and external actors.
“One attribute of the industry is the traditional lack of developed linkage with the rest of national economy in most mineral endowed African countries and little effort is made to address national and regional maximization of mining benefits such as value addition and more than 40 countries have adjusted terms (removal of windfall taxes) since 2000 with the majority in favour of companies though a few in Latin America and Australia favour government,” Dr Akabzaa said.
“There is need to harmonise the lack of coherence between national economic development plans and mineral policy and legislation and the incentives given to foreign investors must therefore be tailored to specific prescribed national development policy goals that define the role of the mineral resources in national development.”
He said Africa had remained impoverished and the number of poor people was on the increase despite the continent’s mineral wealth and the massive foreign direct investment to the sector.
“Africa’s role in the global economy is shrinking and its share of world trade has fallen from three percent in the 1950s to only one per cent today. Actually the role of the mineral sector in the economic development of the continent on the whole is suspect, for instance, while the sector accounts for on average over 60 percent of foreign exchange earnings, it contributes on average less than 10 percent to GDP of mineral endowed African countries and accounts for on the average about two percent of total employment of the region,” said Dr Akabzaa.
“So there must be an immediate development of a national mineral policy through a well coordinated public participation and with clear national vision on what the country expects from their mineral wealth and governments must foster development and closer collaboration among mining sector governmental institutions, research and academic institutions.”
And during the EITI report preparation launch, mines minister Maxwell Mwale, in a speech read by mines permanent secretary Dr Godwin Beene, noted that EITI would enhance transparency and accountability in management of the country’s mineral resources.
Mwale noted that preparatory work for Zambia to become an EITI compliant country by May 2011 was progressing with ongoing process to prepare the first report.
He said the implementation of the EITI had not been legislated in many countries and there was need for agreement among stakeholders.
Mwale said the extractive industry and government agencies were required to provide accurate information timely on request and that difficulties should not arise because the reconciler would be requesting for audited accounts.
Earlier, Dr Beene said there was need to attract eagles in Zambia’s extractive industry and not sparrows which fly away at the slightest turbulence. He said Zambians wanted to see a profitable extractive industry.
Dr Beene said the EITI which would require the involvement of large-scale mines and gemstone companies would improve governance, revenue collection and provide a forum for collaboration in addition to improving sovereign and corporate rating.
Labels: EITI, SIXTUS MULENGA, THOMAS AKABZAA, TRANTER ZAMBIA, WINDFALL TAX
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‘It’s unnecessary to project mining expected revenue’
Written by Chiwoyu Sinyangwe
Thursday, February 19, 2009 7:12:54 PM
ZAMBIA Revenue Authority (ZRA) Commissioner General Chriticles Mwansa has said it is unnecessary to give a projection of the expected revenue from the mines this year after an alteration to the 2008 mining fiscal regime.
In an interview, Mwansa said the projected US $415 million that the government expected to earn from the mining sector last year was used for evaluating the performance of the new taxes introduced.
Mwansa said this in the wake of some concerns that the government should make public the projected revenue earnings from the mining sector this year which was expected to decline on account of changes to the 2008 mining fiscal regime which has seen the windfall tax completely scrapped off and replaced with a variable profit tax.
He explained that revenues from the mining sector would be treated just like any other taxes. Mwansa however said ZRA would continue to make public revenues that would come directly from the country’s largest foreign exchange earner.
“In the current setup, it is not necessary because we have now reverted to the normal regime…the projections were made last year because we wanted to know how much would be collected and that is we put it aside,” Mwansa explained.
“But as we collect the taxes, we will be able to isolate that this is tax from mines. For example mineral royalty is specific to them (mining companies).”
Mwansa said any other ‘normal’ taxes attributed to the mining sector would be profiled together with other taxes such as the company tax, Pay As You Earn (PAYE) and the Value Added Tax (VAT).
But an economic expert who declined to be named said there was need for the government to clearly state the expected revenues from the mining sector this year, considering the significant drop in copper prices on the international market.
“I think the main taxes from the mining companies come from the royalties, corporate tax and income tax but I am sure they should be able to give a projection of the expected revenue from the mining sector,” the expert said.
“I don’t why they (government) shouldn’t…I am sure they should give that number and I am sure they must have the number and I am sure it must come out in parliament as they debate the budget.”
The expert also said it would be difficult for the government to fully appreciate the challenges facing the mining sector in the absence of the expected revenues from the mines.
“This is why the Extractive Industries Transparency Initiative (EITI) is very important so that every one gets much better information of what is really going on but I think there is a reasonable chance that they (mines) can avoid further redundancy but at the same time, they will recover,” explained the expert.
Labels: CHRITICLES MWANSA, EITI, MINING, TAXATION, WINDFALL TAX, ZRA
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World Bank, IMF advise govt on resource management
By Joan Chirwa
Saturday August 25, 2007 [04:00]
WORLD Bank and IMF research officials have advised the Zambian government to ensure transparent management of natural resources in view of the expected increase in fiscal gains from copper exports. In a Joint Staff Advisory Note (JSAN) of the Poverty Reduction Strategy Paper (PRSP) progress report for Zambia prepared jointly by the World Bank and International Monetary Fund (IMF), it is noted that the mining sector in Zambia had recovered because of large investments and favourable global market conditions.
“In this regard, Zambia’s intention to join the Extractive Industry Transparency Initiative, which supports improved governance in resource-rich countries through the verification and full publication of company payments and government revenues from oil, gas, and mining, is a welcome first step,” the Bretton Wood institutions have noted.
The objective of the JSAN is to provide focused, frank, and constructive feedback to the country on progress in implementing its second Poverty Reduction Strategy Paper (PRSP)-the Fifth National Development Programme (FNDP).
The report released on Wednesday, commended the government for taking steps to reform the fiscal regime of the mining sector while preserving Zambia as a competitive, credible, and attractive investment destination.
The two Bretton Wood institutions are however calling for the inclusion of an additional revenue-sharing mechanism that would capture a higher share of mineral rents for government during the period of abnormally high international prices for minerals.
The IMF and World Bank note that such a device is currently not part of the proposed reforms.
They have also urged the government to pay its bills on time and rebalance tariffs in the utility sector such that they reflect full cost, attract investors and allow for increased access to electricity, water and sanitation services and at the same time improve Zambia’s competitiveness.
“In many utility sectors, however, tariffs are not set such that they cover full costs or are set in a manner that they decrease competitiveness or favour a particular sector,” they stated. “In addition, arrears between government agencies and utilities continue to cause difficulty within the sector.”
The World Bank and IMF also indicate that improved implementation of the Private Sector Development (PSD) and the Financial Sector Development Programme (FSDP), as emphasised in the 2007 budget speech, was essential if the growth objectives of the FNDP are to be realised.
“The PSD initiative, including Zambia’s FSDP, articulates many of the key measures needed to create a better business environment and investment climate in Zambia. The concern is, therefore, with implementation, as progress under both the PSD initiative and the FSDP has been slow,” they stated. “For example, ease of trading across Zambia’s borders continues to rank in the bottom deciles of countries in the “Doing Business” indicators, the license fee for an international telecommunications gateway remains prohibitively high, while the resolution of insolvent non-bank financial institutions has faced repeated delays and overall access to the financing system is low, with fewer than 15 per cent of Zambians holding a bank account.”
Labels: EITI, GOVERNANCE, IMF, PRSP, World Bank
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'Zambia, Botswana have big challenge'
By Joan Chirwa
Tuesday August 07, 2007 [04:01]
Botswana’s President Festus Mogae, who graced this year’s 81st agricultural and commercial show which ended yesterday, said Zambia and Botswana had the biggest challenge of turning their vast natural resources into wealth. And Zambia Agricultural and Commercial Show Society president William Saunders has said the implementation of the recently enacted Citizens’ Economic Empowerment (CEE) Act was the most difficult task for the government.
During his official address to the show, President Mogae said the immediate challenge of the two countries was the fight against poverty and under-development.
“For countries that are richly endowed with natural resources such as Zambia and Botswana, the challenge is also how to turn that blessing of abundant natural resources in to tangible benefits for our people,” President Mogae said. “I therefore find the show’s theme of ‘Economic Empowerment’ to be most appropriate.”
President Mogae further indicated that his country has joined the Extractive Industries Transparency Initiative (EITI) that seeks to promote transparency among countries rich in natural resources such as minerals.
Zambia is yet to join the EITI, an institution that seeks to resolve one of the most striking paradoxes of the African continent where countries with vast natural wealth are among the poorest in the world.
“We have nothing to hide. That is why our countries have readily submitted to rigorous checks as under the Kimberly Process with respect to the sale of diamonds. Botswana has also joined the Extractive Industries Transparency Initiative to assure the world that its resources are for development and the economic empowerment of its citizens,” Mogae said.
He further said Botswana and Zambia should be proud of the successful eradication of tsetse flies along the border areas.
“Our 2006 aerial spraying on Botswana side also covered a small portion of about 200 square kilometers of Western Zambia. We are of course fully aware that the destructive tsetse flies do not respect political boundaries. Botswana stands ready to co-operate further with Zambia in its eradication efforts,” said Mogae.
The Agricultural and Commercial Show is an annual event that sums up activities of the district and provincial agricultural shows held usually after each harvest period across the country.
There has been an enormous growth recorded in the agriculture sector over the past few years, with the industry generating between 18 to 20 per cent of the national Gross Domestic Product (GDP).
And Saunders in his address to the just ended 81st Agricultural and Commercial Show themed ‘Economic Empowerment’, noted that the legislation of the CEE Act was not as tasking as the implementation of the legal document.
“Legislation of the empowerment Act was the easy part, the hard part is ensuring that empowerment truly empowers the grass roots of our society and this requires a commitment from us all. But it must be workable in a natural way-that is to say all successful development occurs because it is easy to embrace by us all, it is not forced upon any of the participants at any stage,” Saunders said.
‘This is a challenge to us all. I am extremely honoured that the President of Botswana is gracing us with his presence to officially open the show. Since independence in 1966, Botswana has transformed from a near-subsistence economy into one of the wealthiest and fastest growing countries in Africa.”
Saunders further said the discovery of mineral resources and the growing livestock sector accounted the large portion of Botswana’s exports.
“Although the agriculture sector now accounts for less than five per cent of your total exports, it is an important source of employment in your country. All these achievements made by Botswana cannot come on a silver plate, but are a result of sound economic management by the people of that country,” Saunders said.
“I have no doubt you (President Mogae) have a deep understanding about the economic turmoil Zambia has gone through but also that you would recognise the benefits are ultimately greater than pain.”
Zambia’s President Levy Mwanawasa who also attended the show said: “I hope that this show will contribute to the regional economic integration especially that the number of foreign exhibitors has increased. The show will help boost business opportunities and thereby contributing to regional economic integration.”
Labels: BOTSWANA, EITI, FESTUS MOGAE, MINING
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