Social Economist and Marketer Kelvin Chisanga say copper’s good performance on the international market signals positive economic trajectory for Zambia.
The copper has in recent months shown some relatively good performances, as it jumped to 3.3% to settle at $9,507.50 a metric ton on the London Metal Exchange.
Mr. Chisanga said copper’s stable prices demonstrated in recent times can support Zambia’s economic fundamentals during the New Dawn government’s budget transition period.
Mr. Chisanga, who is also a Business Administrator and Communication Strategist, also called for a stable mine tax regime.
“The expectations of having over three (3) million metric tonnes projections for copper’s output capacity or production in the next 10 years is such a welcome idea, given the circumstances that we have reduced some of the risk factors that the mining regime had quite experienced in the last 10 to 15 years where there were some seemingly aggressive policy inconsistencies since 2008, which may have been blamed on market fundamentals as well as policymakers,” he said.
“The red metal (copper) commodity has shown some relatively good performances, as it jumped to 3.3% to settle at $9,507.50 a metric ton on the LME, and this is seen to show a biggest gain recorded so far in just two solid months, hopefully this will be trend to continue seeing going forward, we anticipate that the red metal’s stable prices can support Zambia’s economic fundamentals during the new government’s budget transition period, as it takes down to start stabilising within the course of first quarter of 2022.”
Mr. Chisanga said it was unfortunate that Zambia has not had a stable mine taxation system in several years.
“It’s indeed regrettably to note that Zambia has changed mining tax regime for about 15 times, which has been very unhealthy for the economy, despite receiving a bad shape in 2016. It is however commonly to state that Zambia’s economy at some points came under a serious stress between the financial period of 2015 and 2016 as external headwinds coupled with domestic pressure played a severe card on our economy.”
“As we saw on how Copper prices were drastically plunged by a margin of more than 20 percent during the same financial period, and this was mainly attributed to a reduced global demand scale that had characterised with our solid commodity partner China.Even though, the country’s gross domestic product (GDP) grew at 2.8 percent in 2015 and 3.3 percent in 2016 respectively, though it recorded a figure much lower than the average 7.4 percent which was seen between 2004 and 2014, with the application of mineral royalty and there is growing evidence that the proposed MRT did extremely well despite having a projected revenue loss of about K3.2 billion for the planned 2022 fescues, it is highly anticipated that copper’s continued steady path line of growth trajectory may give us some compensatory benefits from the upward consumptive demands being projected as we will also have a good uptake in terms of productive output based on market assurance in the manufacturing of electric cars,” Mr. Chisanga stated.
He is also calling for mineral diversification that would see Zambia utilize more miners for its benefit beside the traditional copper and cobalt.
“Mining sector in the Zambian economy is such a huge sectorial undertaking, a key backbone to the nation’s economic structure. I think it’s good to note that the new government has undertaken a serious swift and bold actions to settle for withholding tax, VAT, import and export duty, and the mineral royalty tax which is strongly believed to have worked pretty well around 2014, as it was structured as a special mechanism to response to the then global commodity price slump which had taken place in the year 2014,” Mr. Chisanga observed.
“We further need to strongly make some necessary policies of promoting rapid economic diversification within the mining sector, targeting mineral resource or base outside copper so that we can quickly make special response to sectorial dominant challenges being faced with an overall mining industry in the Zambian case.”
Mr. Chisanga concluded:”It will be encouraging for government to remain quite resolute and steadfast to the negotiations of mineral royalties, with a view of ensuring that they don’t take negotiations further down given the circumstances that revenue from copper sales does not hit into our national treasury except for tax receipts and other related financial instruments.”
That should be a good signal for HH’s economic revival agenda.Zambia’s economy will recover from 10yrs of PF stagnation.
And you rush to IMF with a begging bowl to plead for hand outs and give foreigners tax incentives so they can steal all your natural resources….kikikikikiki chimbwi no plan asokonezeka bongo bongo….
How positive, when foreign mining firms will be walking away smiling to their foreign banks without paying mining royalties to the Zambian government? I am sure foreign mining firms cannot believe African governments can be this stupid.
Only if we owned the mines and IMF is not running the show. As it is we will just be watching copper leaving the country with nothing coming back. The capitalist is already giving tax incentives to the mines.
In the short to medium term, production will remain constant at 800k. There’s no solid pledge right now from any investor to spend billions for new mines as the global economy is sluggish. So the upnd went forth to make MRT deductible in the hope that production will hit 3m tons in the mid to long term. Analysts have put the increase in production beyond 2030.
Now what’s the country’s benefit as at now??? If upnd had concentrated on the current, make Mopani, KCM, Zambia Gold etc work, we would’ve had short term benefit. Manje, who knows what they signed to with their sponsors??? IMF is in control for now….
A good breather away from the day to day political fuss. Let’s talk economics Zambia. We must strive to understand the way our economy works and more so, begin to learn how to manage our resources effectively. While politics/politicians can be substituted time and again, economics is a continuum because it guarantees the food, clothes, shelter or medicine we all need every day.
That said, I long for the day when we Zambians will finally find a way of extracting and adding value to our copper ourselves so that we become direct beneficiaries of copper exports on the global market. Until that day, I’m afraid we will continue to experience exploitation.
Fools! Instead of thinking of how we can manage and own these mines in the future he’s talking about future taxation, when infact 95% of profits are going to foreigners, while they leave nothing but pollution and slave wages, taxes are just peanuts, were getting ripped off and it’s our fault we don’t have the brains/balls as a country
Instead of thinking of how we can manage and own these mines in the future he’s talking about future taxation, when infact 95% of profits are going to foreigners, while they leave nothing but pollution and slave wages, taxes are just peanuts, were getting ripped off and it’s our fault we don’t have the brains/balls as a country
Well, direct economic benefits from high copper prices will only logically accrue and boost Economic Activities if Copper Exports Proceeds are Repatriated back into the Country , and not retained Off Shore, We need all Copper proceeds to come back to the Central Bank, or Local commercial banks, in order to directly impact on the Exchange Rate!
Maybe the author is just looking for a job in the new dawn administration. How do high copper prices benefit zambia when we don’t own the mines and these multinational companies mine our copper tax free?
You can even extract ten million tonnes of copper but under the current arrangements, benefit for zambia,zeris no.