Government should take advantage of increased copper prices.

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BNB Press Release 8th September, 2017.

Zambia has a long history of mining and a large known resource base of copper and other metal deposits. It also has good potential for further discoveries and prosperity in the mining sector. Mining accounts for 12% of Zambia´s GDP and 70% of total export value. The sector is also a significant source of government revenue and formal employment, both directly and indirectly. Continuing to attract investment in the sector is crucial to the country’s economic growth. On 4th September, 2017, copper on the London Metal Exchange (LME) hit US$6920.25 per tonne for the first time in three years. Copper, had been trading below U$S5, 000 per tonne for a long period, which resulted in massive job losses in the mining sector, particularly in November 2015.

Rise in copper prices should put a smile on people’s faces because it ought to translate in improved living standards for Zambians due to increased foreign exchange earnings and potential job creation. Increase in foreign exchanges will sustain the appreciation of the kwacha against the dollar and will reduce inflation due to the fact that imports will become cheaper, this however might have a negative impact on the export sector. In line with the high copper prices mining companies should be able to recall employees who lost their jobs due to low copper prices, this will help mining companies to increase their levels of productivity and earn more.

The August 2017 JCTR Basic Needs Basket (BNB) for a family of five living in Lusaka stood at K4,928.37 which was K69.02 more than the July BNB which stood at K4,859.35. The increase in BNB was caused by increased prices of food commodities like; Kapenta which increased from K174.17 per Kg to K202.8 per Kg, Fish increased from K113.74 per KG to K134.83 per Kg and Charcoal increased from K143.75 per Kg to K154.17 per Kg. Prices of Mealie Meal reduced from K65.57 per 25kg breakfast bag to K62.33 per 25kg breakfast bag and Beans also reduced from K34.5 per Kg to K26.87 per kg. The drastic reduction in mealie meal and beans prices was attributed to the increased availability of maize grain and beans after a good farming season which the country experienced. Prices of Fish and Kapenta increased due to the scarcity of the two commodities. During cold seasons aquatic species opt to stay under water which makes it difficult to catch fish and kapenta hence the increase in prices.

The high cost of living continues to be a great challenge for many residents in Lusaka and many are lacking the required basic needs which a person is supposed to have as such it is preventing them from living a dignified life. In order to address these issues the JCTR advises government to take advantage of the increased copper prices by introducing a tax system that is responsive to increase in copper prices. This is important as it will help to keep operations open and prevent further job cuts when copper prices are low. For instance, the maximum tax band should be raised to 10% during a copper price boom so as to collect sufficient revenue when copper prices are high. In addition government should introduce a standard 15% (WHT) on dividends paid by a company holding a large scale mining license and carrying on the mining of base metals.

The JCTR strongly urges Government to enact the EITI bill backed by a policy that clearly spells out how transparency from the reports will amount into the much needed accountability. We ask Government to strengthen the Transfer Pricing Unit of the Zambia Revenue Authority (ZRA) to enable ZRA to effectively and efficiently curb the outflow of financial resources from the country perpetrated through aggressive tax planning practices by some mining companies in Zambia. We advocate for increased flow of information and transparency between mining companies and government to avoid any form of corruption. The increase in copper prices is a positive development but it must be used to diversify the economy particularly the agriculture sector as the increase might not be sustainable. This is because the sector is Labour intensive and will secure employment for many especially those in rural areas and those without skills.

8 COMMENTS

  1. vote

    We agree with this reasoning. Usually it’s a NO for outputs from this NGO(Opposition party in Christian disguise).

    Zambia must take control of the wealth from our mines which goes to
    Foreign lands mostly. The increase in copper prices has ALSO put a smile on people’s faces because, disruptive UPND told people that the drop in prices was due to PF failure and not international Markets. Some of us have long memories an can join up the truth.

  2. vote

    If you look at today’s politics, some who were just on Katondo Street are the richest, the wealthiest…you begin to ask yourself; where did they get so much money? What businesses did they do? Simply becoming politicians and they have amassed so much wealth! They have even forgotten about closing the gap between the rich and the poor. They have simply forgotten about the poor Zambians. The majority in government today did not even own a bicycle but today they have the most expensive vehicles. Where did they get so much money, properties in Zambia and outside Zambia? They have stolen from Zambians,”

    Fr laonde
    Mast on line.

  3. vote

    @ 2 Spaka like lilo, if you are a person who can reason just a little bit you will quickly see that UPNDonkey “party” itself is comprised of a majority of members and individuals who themselves are waiting for a chance to jump on the country’s wealth and **** it, in the event that their “party” were elected to rule the country. There are poverty stricken members and cadres, there are members whose businesses are not doing well (Mushipe), there are self confessed tenderpreneurs (GBM etc), there rich people who are poised for grand and not petty theft (who do you think funds underfive to hire choppers to fly during campaigns? Remember there is nothing for free our world of politics). I could go on and on, but suffice to ask you to think for yourself why the election loss of 2016 by…

  4. vote

    @ 2 Spaka……I could go on and on, but suffice to ask you to think for yourself why the election loss of 2016 by ********** was and is still too bitter to swallow, its not what you think as democracy, petition and all the hog wash that you Spaka are publicly fed on daily, but the frustration of the leaders at failure to win and change their fortune. That IS the source of the bitterness, that “OTHERS are enjoying” and “not US”.
    Someone (Njimbu) earlier pointed that one of the najor reasons why UPNDonkey “party” keeps losing elections is that Zambians do not know what they have to offer if they won government, what the Donkeys have not hidden from Zambians and have not denied or disputed is that they want a president from their own region. I know the mantra of some people who said…

  5. vote

    ……… I know the mantra of some people who said last year

    “now if you cannot speak our language, how are you going to work with us?”

    As I keep reminding all **********, they can never ever be the alternative government that Zambians seek for prosperity. The incumbent governnent and any one else SHALL ALWAYS be a better alternative than **********!

  6. vote

    It does not matter what underfive says in public or how many monkey eaters he appoints as vice president or running mate, his people on the ground in the stronghold tell a different story, THE true regional story, they do not even bother to hide it….because they believe verily that its underfive all the way into state house never mind that they are in the minority or that underfive has no presidential credentials to talk about…he is one one of them chapwa!

  7. vote

    Terrible

    So you agree that PF are looting and getting rich overnight ? And the best you can say is everyone will do that ?? Were you people born to be theives ?? Is stealing and enriching your selves all you think of ??

    Shame on you and all you kin theives

  8. vote

    I have yet to see one pf supporter who does not support stealing and looting, as long as it is pf doing the stealing it seems ok with you.

    What a shame what a bunch of hopless sons mother zambia has….

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