EAZ urges govt to develop local human capital
By Kabanda Chulu
Thu 27 May 2010, 04:00 CAT
ECONOMICS Association of Zambia (EAZ) Copperbelt chapter chairperson Prof John Lungu has challenged government to put in place strategies to develop local human capital since Foreign Direct Investment (FDI) will never develop this country.
Commenting on the various interventions government has been putting in place to attain economic development over the past few years, Prof Lungu said other countries were getting there but Zambia was still lagging behind.
“We need to put money into young people because they are the entrepreneurs of the future so that when they are educated, they will be in a position to partner with those bringing FDI, you know multinational companies are very crafty they will just make money and leave and in the absence of human capital this country will not be developed,” Prof Lungu said.
“Look at the Asian Tigers, they realised many years ago that their countries can only develop if people embrace education and when FDI started coming, people were ready to do things the right way. So government should be talking about quality of jobs and not just job creation under FDI. Actually government should start thinking about strategies that will develop human capital as a way of developing this country.”
Under the MMD’s policy of economic liberalisation which is anchored on privatisation of state-owned entities, Zambia has seen massive investments under FDI that has resulted in stable macro-economic indicators but this development has not been translated into tangible issues that could benefit ordinary people.
Labels: EAZ, JOHN LUNGU, LABOUR
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Prof Lungu lauds govt’s increased stake in mines
Written by Fridah Zinyama
Tuesday, March 17, 2009 2:36:59 PM
COPPERBELT University (CBU) professor in the School of Business John Lungu has welcomed the government’s decision to increase its stake in mining companies from 15 per cent to 25 per cent.
Prof Lungu yesterday said the decision to increasing government shareholding in mines to over 25 per cent would help the sector survive difficult economic times.
“The private sector is driven by high profit margins and it is normal for them to want to withdraw in times of economic recession,” he said. “On the other hand, government is more interested in providing social services to its people. This is why in such economic times, government’s decision to increase its stake is welcome as it will help the private sector to share the burden of high production costs.”
Mines minister Maxwell Mwale last week announced that the government intended to increase its shareholding in mining companies and other operations from 15 to 25 per cent to allow it to have a stronger influence in decision making over the problems the industry was facing.
Prof Lungu said if the government had the resources, it was right to consider increasing its stake in the mining sector as it would bring about flexibility in the industry.
“I say that there will be flexibility in the industry because when things improve economically and copper prices increase on the international market, the Zambian people will also benefit,” he said. “This is unlike what happened in the past when government’s stake in the mining industry was limited.”
Prof Lungu further said it was important that the government maintained a good presence in the mining industry in order for the citizens to benefit from the mineral resources, unlike what had happened in the past.
Labels: JOHN LUNGU, MINING, NATIONALISATION
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COMMENT - I guess the foreign mining companies have no lack of 'representation' in parliament.
Prof Lungu welcomes plans to nationalise copper mines
Written by Kabanda Chulu, Fridah Zinyama and Chiwoyu Sinyangwe
Friday, January 09, 2009 5:42:58 AM
COPPERBELT University Professor John Lungu yesterday said
the government has a duty to take over copper mines if the private sector has failed to operate effectively.However, former Mineworkers Union of Zambia (MUZ) national treasurer Davies Mwila has said the government should find more meaningful ways of revamping the mines than nationalisation as the mining companies were likely to become loss-making entities under state ownership.
Meanwhile, Economic Association of Zambia (EAZ) executive member Bob Liebenthal has said nationalising the mines at a time when copper prices are down will not help alleviate the problems the economy is currently experiencing.
Reacting to President Rupiah Banda’s statement that the government was considering nationalising copper mining companies that were experiencing operational difficulties, Prof Lungu said there was need to increase the participation and broaden the shareholding of Zambians in the mining industry.
“Government should not just restrict itself to those companies facing operational difficulties but even those which are performing well because this is the time to increase and broaden the participation of Zambians in the copper mining sector,” Prof Lungu said.
“There is a change in the paradigm of how businesses were operating worldwide and due to many factors which the private sector are involved in that results in some operational difficulties, government has a duty to take over and it is not nationalisation per se but this is a purpose of avoiding job losses and it is cardinal.”
He said Zambia could run its copper mines effectively if only the government could be disciplined and applied corporate governance principles when operating the mines.
“It is true ZCCM Investment Holdings holds some stake but that is just a basket for government, which needs to be opened up for these shares to start trading at the stock exchange, then we can have a say in the mines since the idea is to increase local shareholding,” said Prof Lungu.
“I don’t think we can fail to run the mines since the mines currently are run by Zambians and the capacity is there but what is needed is to be disciplined and to apply corporate governance principles so that the profits are not consumed.”
And Mwila, who is also Patriotic Front (PF) Chipili member of parliament, said the ruling MMD’s policy is that of liberalization of the economy and nationalisation of industries.
“This government has got only a temporal capacity to run the mines while waiting for investors since government does not have the money, for example, if government can take over Luanshya Copper Mines, losses of over US $ 4 million will be recorded every month,” said Mwila.
“Hence I am not in agreement that the mines should be nationalised because this will be like going back to one party governance system and also the MMD will be going back against their policies of liberalisation.”
And Liebenthal said it was understandable that everyone was concerned about the situation on the Copperbelt.
“But the fact is that copper prices have gone down on the international market and this has made it difficult for the mines to operate viably. Operating costs are very high when prices are down and it does not make economic sense to continue running a company without any changes,” he said. “It does not matter who is running a company; it can be a foreign investor or government but when a company is not making profits, some changes will have to be effected.”
Liebenthal said even if a company made use of some of its reserves [of funds] from the time when things were good, this could only be done for a short while and other drastic measures would have to be effected.
“On the other hand, nationalization is not going to do any good and will not change anything,” said Liebenthal.
And KONKOLA Copper Mines (KCM) has disclosed that it plans to start importing copper concentrate from the Frontier Mine in the DR Congo, which had banned the export of copper ores.
KCM stated in its latest edition of the Konkola News that it was talking to owners of the Frontier Mine in the Democratic Republic of Congo, (DRC) and the Chibuluma and Kansanshi Mines in Zambia to procure copper ore to be processed at the newly commissioned 300,000 tonnage capacity, Nchanga copper smelter.
Labels: BOB LIEBENTHAL, DAVIES MWILA, EAZ, JOHN LUNGU, KCM, MUZ, NATIONALISATION, NEOLIBERALISM
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Decline in copper prices a passing phase-Lungu
November 26, 2008
Copperbelt University Professor John Lungu has urged Zambians to stop worrying about the decline in copper prices because it is a passing phase.
Speaking during an Economics Association of Zambia public discussion in Kitwe on Monday evening, Prof Lungu said Zambians should not worry because economies of India and China were growing.
Prof Lungu said it was important that Zambia handled the copper sector with care because the country’s economy was largely dependant on it.
MUZ president, Rayford Mbulu said 286 miners at Bwana Mkubwa Mine had lost their jobs and were due to get their terminal benefits today, while 50 other miners at Kansanshi were likely to lose their jobs. He said 26 other workers at Chambishi Metals slag dump had been sent on forced leave, but that reasons given for the job cuts were not justifiable.
Mr Mbulu wondered why mines should retrench workers when the current copper prices were more than double what they used to be in the past.
He said mines must remember that when copper prices were fetching US$10,000, they did very little for the communities in which they operated.
Mr Mbulu said there was no justification for mines to retrench miners because they had already made huge profits.
Mr Mbulu said there was need for the Government’s intervention in the matter as the union believed that the situation needed political will.
Mines Minister, Maxwell Mwale, says the job cuts at Bwana Mkubwa mine are not related to the fall in copper prices caused by the global financial crisis.
Mr. Mwale says Bwana Mkubwa mine has been experiencing operational challenges because it no longer processes copper ore from the Democractic Republic of Congo which has banned copper ore exports.
He said this in an interview with ZNBC news in Lusaka.
Mr. Mwale has appealed to mine investors not to send the industry into panic because copper prices are still favourable.
Universty of Zambia (UNZA) head of mining engineering, Mathias Mpande has also called on mining companies not to retrench workers on the basis of falling copper prices or the global economic recession.
Dr Mpande said in an interview in Lusaka yesterday that there was no need for retrenchments because mining companies in Zambia would continue operating profitably despite the falling copper prices and global economic recession.
Dr Mpande said by the time most of the firms came to invest into the country, prices of copper were very high and, as such, the companies made huge profits to warrant them to continue their operations.
“The mines are going to still remain profitable. Mopani, for example, has made large investments. By the time they were investing everything was on their side and they have made profits to continue operating even in the face of global economic crisis.
“I cannot see any mine closing down because there is enough copper. A mine can only close if there is no copper or it is not happy with the prevailing Government policies but not because of the global economic recession,” Dr Mpande said.
He said if any mining company in the country were to close, it would do so because it wanted to and not that it was not profitable to remain in existence owing to the global economic crunch.
With the case of Zambia, he said, possibilities of mines closing owing to the economic crunch were minimal because Chinese and Indian investors whose countries were not adversely affected by the global economic recession mostly owned them.
“India and China are not going to go under and so most of the mines on the Copperbelt will still be profitable,” Dr Mpande said.
He, however, advised the Government to come to the aid of mining companies by offering them some incentives.
He said, Government could, for example, exempt some mining firms from paying certain taxes until such a time that copper prices and the global economy stabilised.
Dr Mpande said the trend the world over had been that governments assisted the running of mining firms by offering them tax exemptions.
He said with Chinese and Indian economies remaining buoyant, the Government could enter into an agreement to directly export copper concentrates to the two countries to secure jobs for citizens working in the mines.
Dr Mpande said it was not too late for the Government to start negotiating with its counterparts in the two countries so that direct export of copper concentrates to China and India could start.
Times of Zambia/ZNBC
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Labels: COPPER, EAZ, JOHN LUNGU, MATHIAS MPANDE, MINING, MUZ, RAYFORD MBULU
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