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Friday, September 25, 2020

Answers to Africa and Zambia’s future development is through domestic resource mobilisation- Mutati

Economy Answers to Africa and Zambia’s future development is through domestic resource mobilisation-...

Hon. Felix Mutati with CDC chief executive officer Diana Noble after having a successful meeting.
Hon. Felix Mutati with CDC chief executive officer Diana Noble after having a successful meeting.

Zambia’s Finance Minister Honourable Felix Mutati has said the long-term answer to development of Africa in general and Zambia in particular is enhanced domestic resource mobilisation.

He said this during a meeting with the Commonwealth Development Corporation (CDC), the UK’s development finance arm that has expressed interest to invest in the Kalungwishi Hydro generation project. The project investment cost is estimated at US$690 million with an installed capacity of 247 MW.

In an exclusive interview after a meeting with CDC in London on Wednesday, Hon. Mutati said that aid dependence was not sustainable for Zambia and Africa in general. He stressed the significance of the complimentary role that investment plays in sustainable development.

“The key issue about the economic recovery in Zambia is that unless you get quality investments that contribute to the treasury through taxes, it is difficult to boost domestic revenues. We can get money from our cooperating partners such as DFID who are helping us with education, health and public finance, but the dependence on such support is necessary but not sustainable. You need to depend on yourself, and the future of Zambia and Africa in general is domestic resource mobilisation, which is going to be the long-term answer to development. For me it is the long term answer to recovery of the Zambian economy going forward, which will create jobs, create wealth and much more importantly, inclusive growth,” he said.

The Minister said that the answer to inclusive growth is investment such as that made by CDC in the agriculture sector, through Zambeef supporting out growers. He said that such investments could transform the economy and create inclusive growth.

“We are focusing on two sectors of Energy and Agriculture in line with the Seventh National Development. Last year, we suffered a 50 percent power deficit, which negatively impacted not only agriculture but also other major sectors such as industry and mining. Power is central to economic development and having answered to power then you have to answer to areas where you can generate and bring hope to the people, and agriculture becomes your number one choice because of the number of people that depend the sector,” he said.
And the Minister said that CDC investment in Zambia has created jobs and contributed to economic development in the country. He noted that CDC has been present in Zambia for over 50 years in Zambia through its investment in Chilanga Cement made in 1949 and remained involved in Chilanga Cement for a number of years and led the company to be the first business to be listed on the Lusaka Stock Exchange in 1995.
He said that apart from Chilanga Cement, CDC also invested in the Kariba Dam and last year invested $65 million in Zambeef. The investment will enable Zambeef to grow the business, in particular its cold chain food processing businesses as well as expanding its distribution and retailing platform within Zambia and adjoining markets. This will widen Zambian consumers’ access to Zambeef’s range of products.

“Recently CDC invested $65 million and what that has done is that it has provided the diversity in Zambeef, going into hatchery, therefore creating an opportunity of increasing the space for tax revenue collection. For me I see this as a cure for dealing with the disease called fiscal deficit, and is a key component for the recovery programme,” he said.
Mr. Mutati also said that CDC is considering investing in hydro generation and that the Group will reach out to its partners for possible co-financing some of the projects.
“On the Government side, we shall ensure that we facilitate by eliminating obstacles to the realization of the investment and will implement policies that support such investments,” he said.

He also said that CDC had agreed to come and hold an investment forum in Zambia in April, 2017 that will look at how it could make funds available, through the Commercial Banks, to support long term lending to SMEs and Medium sized companies and how it can support anchor investors such as Zambeef to expand their operations including out growers and how CDC can structure venture capital, to handle new investment ventures.

And CDC Chief Executive Officer Diana Noble said CDC was happy to work with Zambia and will continue partnering with the country because it was committed to economic development.
Earlier Hon. Mutati had a meeting with Hon. James Wharton, Minister of state for DFID, during which he said that DFID was a significant partner to Zambia which had supported the country in areas such as public finance management reforms, water and sanitation, health and social protection.

“We had a program with DFID which came to an end in December, so the purpose of the meeting was to agree the next round of discussions with DFID on another program. For us the programme should reflect the priorities in the recovery programme for Zambia mainly focusing on energy and agriculture as key pillars to turn the economy around” Mutati said. He also confirmed that the DFID Minister has agreed to meet in Lusaka in four weeks’ time at which the two countries will start discussions on construction of a new strategy for support that DFID will provide to Zambia.

The Minister was accompanied to DFID and CDC by: Mr. Mukuli Chikuba, Ministry of Finance Permanent Secretary (Economic Management and Finance), Zambia’s High Commissioner to the United Kingdom, His Excellency Mr. Muyeba Chikonde, officials from the Ministry of Finance and Zambia High Commission in London.


    • Enhanced domestic resource mobilisation doesn’t mean over taxing citizens. You will meet your monthly tax collection for the next three months but thereafter fail to even collect half of your targets because your unfair aggressive ways of collecting taxes is killing small businesses. Then there is this issue of having a TPIN for all account holders, it will hurt the economy badly when people stop taking their savings to banks.

    • Internal resource mobilisation should also involve improved internal revenue collection through:

      1. fiscal policy that tackles international transfer pricing and associated split profit risks by copper mining companies to deal with tax avoidance/evasion and illegal banking of copper receipts in tax havens
      2. building capacity of revenue collectors and fiscal policy analysts to include transfer pricing accountants, lawyers and economists
      3. international collaboration with other extractive mining countries in SADC, AU and G20 countries.

  1. Let it start with you PF id10ts donating the millions you are busy stealing.

    I want to hear ka chakolwa lungu say I am donating $10 million dollars. Then I will encourage my people start donate as well on condition that Kachakolwa lungu hands over power to HH.

  2. Mr Mutati i for one will not accept answers from D- minus students like PF government.May an economic prescription from finance ministers from Singapore ,Taiwan or Malaysia will suffice.

  3. The trouble with you Mutati and your boss is you don’t listen to good advice and you are stubborn!

    You also have no idea of how to turn around a failing economy. Your strategies at this are just making a bad situation worse.

    You don’t stimulate an economy by increasing the cost of doing business or introducing more legislation and SIs like you have done in the transport sector. There are better measures you can put in place than restricting movement of goods and services! For example, the movement of our main forex earner has been severely restricted.

    You also need to work on the expenditure side. Your government is too bloated, your civil service which takes 50% of revenue needs trimming – it’s currently inefficient and corrupt!

  4. We are in acatch a catch 22 ….we trim the public service then where do these people get income. No income then poverty cycle starts. Am sure poverty contributes to corruption….we need a think tank to find initiatives to resolve our social and economic problems.. think tank must include all sectioms of society not just governmennt and big business.

  5. Iwe stop telling us that economics text book gibberish which we can read for ourselves. Tell us what you plan to do and give us a forecast of the development we should expect during this illegal term. Mutations is a remote control text book.

  6. Ba Mutati well spoken: But when are you going to implement all your thoughts. Guys you have brains but who is the stumbling block. I thought the pipo we borrow money from some don’t even have copper, emerald, good vegetation. Think of that song Nyirenda sang: WE MUTIMA WANDI WINENUKA. Manpower we have, University graduates we have. But what has gone wrong Ba Mutati. Instead of ZNS making roads, we go to Chinese. ZNS can construct roads and once you pay them they will not take money away like Chinese. Think of this and implement some these ideas. Thanks Bwana Finance Minister.

  7. @ Mentor, thanks for that. I fail to understand why ZNS has not been used for such projects. You just wonder what they talk about in their cabinet meetings.

  8. Problem mutati gets too excited akawona muzungu mukazi. Here where I am in UK visiting abasungu they are all over because they can tell a man of substance. Abasungu been there done that so ine don’t phase me.

  9. Mutati must realize economic recovery is a collective effort. The first and biggest loophole we have is corruption. Something that has become a key criterion for PF thugs. All they know is looting national resources. If measures like the late LPM put in place then that is the start. Second is legitmacy of Lungu has to be resolved. Sometime you cheat and get away with it but Lungu must prove through an independent party that he truly won. The issue here is many know that are going to jail if there is a change of government so they want to loot. He is also at randsom by the people that funded the rigging process who want to loot national resouces and influence his decision. He will never have an independent mind and focus on the Zambian people who are the most important. Third you need more…

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