United Party for National Development(UPND) President Hakainde Hichilema has issued a statement in response to Patriotic Front (PF) take on his solutions to deal with job losses due to mines scaling back.
Wednesday, PF said that the announcement by Anglo America to lay off 85 000 workers had exposed UPND leader, Hakainde Hichilema’s lies and deceit about his plans for the mining sector.
PF Information and Publicity chairperson, Frank Bwalya said that Zambians now know that Mr. Hichilema lied when he promised miners on the Copperbelt that Anglo America will save their jobs once he is voted into power.
Father Bwalya said it was sad that Mr. Hichilema’s continued attribution of the loss of jobs on the mines to President Edgar Lungu’s leadership.
He challenged Mr. Hichilema and the Post Newspaper to tell Zambians if Mr. Lungu is also the President for countries where Anglo America will lay off workers.
Father Bwalya advised the opposition leaders to stop misleading Zambians because no amount of deceit will hoodwink citizens to vote for them.
Anglo America had announced that it will downsize its workforce from 135 000 to 50 000 due to drop in commodity prices.
Below is Mr Hichilema’s response to Father Bwalya’s statement
UPND restates strong commitment to mine workers and suppliers
It has been drawn to our attention that certain individuals are spreading malicious rumours regarding our reaction to recent layoffs in the mining sector and our proposed intervention after the people of Zambia elect us into office in 2016.
Rather than waste further time bemoaning the vicious insults from Government and the PF cadres we want to take this opportunity to restate our position and our strong commitment to the affected workers, contractors and suppliers.
Simply put the recent layoffs are a tragedy. There is no cause for celebration by anyone. Each and every worker that has lost their job has numerous dependents, and coming at a time when the price of bread has doubled in just a few short months it is clear that many families are now facing extreme hardship. Let us draw a parallel, whereas the US just created not less than 200,000 jobs as more than 10,000 of our miners were losing jobs. We will try to put this into perspective, a miner supports 5 other people in their house hold, a job loss for a miner immediately consigns 5 people to poverty, essentially 50,000 plus people on the Copperbelt have lost a source of livelihood.
While it is clear that lower copper prices have presented a challenge to copper mines in recent months, we have to ask ourselves why it is that companies are choosing to cut back or close their Zambian operations specifically. There are two key factors in this equation: firstly, the electricity crisis, and secondly, government interference. And this is a fact, Chile whose economy could be said to also be copper dependent has not had a single mine close operations. They have not cut down half the production like what has happened in Zambia. Chile projects 6 million metric tons in 2015, they have cut back that production to 5.94 million, where as Zambia projected 900,000 but have cut back to 441,000 due to cost of doing business driven by bad and inconsistent fiscal policies.
The PF has been in government for four years and in that time we have seen four different mining tax regimes. You do not have to be an economist to see that changing the tax regime willy nilly is bad for business. It is also symptomatic of a broader lack of direction and haphazard approach, which isn’t good enough and arguably is an insult to those employed in the sector. What is even worse is threatening private capital every time they make a business decision. Imagine you are selling fritters by the roadside, and every time you increase prices, the Government threatens you, would you be safe and confident of such a Government?
The failure of the PF to identify the looming electricity shortfall before its onset, acknowledge the causes of the crisis, or manage and communicate a sensible load shedding schedule have increased costs for the mines. This is an obvious problem at a time of low prices. Business goes through cycles but we should understand that it’s incumbent upon Governments to ameliorate tough times when business hits turbulence and not kick them further down by holding back their VAT refunds, money they would have used to maintain the fired miners.
After four years of PF government it is the above is the situation we find ourselves in; so the question becomes what would we do differently? Here is a breakdown of how the UPND would seek to protect our workers and businesses that operate in the sector:
Repair relationships – The only way to deliver sustainable growth of the sector, and thereby protect jobs, is through constructive engagement with mining companies, unions and contractors. That means listening with an open mind, consulting extensively before changing the rules and regulations, regular communication with the various parties and not responding with empty angry threats at the first sign of trouble. This is what we are doing in February 2016 during the Mining Indaba in Cape Town.
Create a competitive environment – We can protect our own mines by ensuring they are more competitive. This means addressing the current electricity crisis and learning from what other countries are doing to attract investment even at times of low prices. It also means regulatory stability, as even before the recent fall in prices we have seen investment decisions postponed that could have created more jobs due to the uncertainty. As PF is issuing threats they have no time to listen to the mining houses on the cost structure which has led to job losses.
Protect our workers – Thousands of Zambians work in the mining sector, and thousands more depend on the income of a relative who works in the sector including children and vulnerable people as we have stated above. These people need a Government that prioritises their jobs, ensures adequate support systems are in place and that has contingency plans for various price scenarios.
Build up reserves – The PF has failed to use the time of high prices to build up reserves to be used at times of low prices. It is well known that commodity prices are cyclical and that there will therefore be times of high prices and times of low. To not plan for this is extremely short sighted.
Diversification – By diversifying our economy we can reduce our reliance on mining, meaning that if the industry contracts Zambian workers and businesses have other opportunities open to them. In the current situation we already have high levels of unemployment but if we can stimulate growth and investment in areas such as tourism, agribusiness and retail then opportunities for workers to re-train or suppliers to themselves diversify will increase.
A final few words of advice to our colleagues in the PF: how many more times do we have to say it? If you focus as much time and energy serving the people of Zambia as you do slandering your political opponents then, with a bit of direction, progress can be made. But ultimately the perfect description of the PF approach is this “If the only tool you have is a hammer, all problems will look like nails!” So it is with the PF that all they have to offer as solution to our challenges are political manoeuvres, such as preventing freedom of movement and slandering political opponents, when in fact what Zambia needs now is good economic management.
“Together We Can”