The Zambia Institute for Policy Analysis and Research has warned that imposing significant new charges in the mining sector at a time of declining international demand for copper may have adverse impacts on Zambia’s economy.
Mineral Royalty rates have been increased in the 2019 National Budget by between 25 percent and 67 percent across the different price bands which represents a 25 percent increase in fees at current copper prices.
The Zambia Institute for Policy Analysis and Research Knowledge Manager Euphrasia Mapulanga said even if revenue is higher, the charges could cost Zambia economically if investment is deferred or production lowered as was the case in 2015.
Meanwhile, Ms. Mapulanga said the 4 percent Gross Domestic Product Growth projected in the 2019 National Budget is achievable but not without risks.
She has noted that the debt burden, exchange rate volatility, subdued growth rates in agriculture caused by climate change could all persist in 2019 and has called on Government to focus on playing a more facilitative role in creating a conducive environment for private sector investment, and a private sector led recovery in order to mitigate the impact in the face of fiscal consolidation.
“This also calls for elimination of constraints that make it difficult for the private sector to contribute positively to economic growth and therefore achieving the set growth target for 2019”, She added.
And on Public Resource Management, Ms. Mapulanga has called on Government to lay a strong foundation for fiscal consolidation by implementing the improved resource management processes pronounced in the 2019 Budget.
“These and measures from previous Budgets including the Revision to the Public Procurement Act, the National Land Titling Programme, The Planning and Budgeting Bill and reforms to improve the efficiency of State-Owned Enterprises that are yet to be implemented are long overdue”, She said.