MMD President Nevers Mumba has laughed off suggestions that his party left the country’s economy in tatters when it was voted out of office in 2011.

Speaking when he featured on Mazabuka community radio station Wednesday afternoon, Dr. Mumba said unlike the MMD who inherited a ruined economy from UNIP in 1991, the PF inherited an economy in good sharp which they have destroyed in record time due to bad governance.

He observed that all the economic structures that the former ruling party created so as to ensure continued prosperity have been destroyed by the PF hence the slowdown in the Zambian economy. 

He accused the PF of being the most corrupt government that Zambia has ever had.

Dr Mumba also accused President Sata of using corruption as a political weapon against some senior government officials.

Asked if he had evidence of the alleged corruption in the PF government and if he had reported the cases to the Anti-Corruption Commission, Dr. Mumba said evidence of corruption was everywhere citing the awarding of road contracts to cadres who do not have equipment to work on the roads who later sell the contracts to the Chinese contractors at a profit.

“Evidence of corruption is everywhere because the people they are giving contracts come to us and brag about these things. These people are our brothers, our cousins and friends, so we see evidence of massive corruption every day,” he said.

He added, “We are compiling evidence so that when we take it to the ACC, there will be no shadow of doubt that some individuals in the PF are corrupt.”  

And Dr Mumba has accused the PF government of failing to control cattle diseases in the Southern province.

Dr Mumba said it is the responsibility of the government to ensure that the challenges facing cattle farmers are resolved.

He said the people of Southern Province are being denied access to the other markets for their cattle due to restrictions imposed on the movement of cattle as a result of animal diseases.

Meanwhile, the opposition leader says the PF should not brag about the projections of a bumper harvest because if the country is indeed going to have a bumper harvest it will not be due to the good policies of the PF government but the hard work of the people in Southern Province and the country at large.

Dr. Mumba also encouraged MMD members in the province to forget about the perceived wrangles at the MMD secretariat and concentrate on reorganizing the party in the province and ensure that it bounces back to power in 2016.

He said it was the responsibility of everyone in the party to ensure that the party does not go in to extinction as it is a trend in most African countries once a party loses power.

He urged members to take advantage of the good record that the party left when it lost power and ensure that it is voted back.

Dr. Mumba is in Southern Province to kick start party auditing and mobilization throughout the country as the former ruling party gauges its popularity.

He is accompanied by party Vice National Secretary Edger Kembe.

Former Commerce, Trade and Industry Minister, Felix Mutati, has observed that the depreciation of the Kwacha against the major foreign currencies has affected the construction industry which relies very much on imported materials.

Mr. Mutati told QFM Business News in an interview that this has resulted in the volumes of employment in the construction industry being negatively affected.

He said government should initiate new mechanisms of revenue collection and ensure there is compression of expenditure if the kwacha is to regain its strength.

Mr. Mutati stated that there is also need to minimise the deficit to allow the private sector to have better access to the financial sector.

He said if such measures can be put in place, the country%u2019s economy will be headed for greater heights.

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Flashback: IMF, World Bank pressured govt to privatise mines – Nawakwi

By Chiwoyu Sinyangwe and Chibaula Silwamba
Friday November 02, 2007 

FORMER finance minister Edith Nawakwi has revealed that the IMF and the World Bank pressured the Zambian government to privatise the mines on the pretext that copper prices would not increase in 20 years.

According to a report by Action for Southern Africa (ACTSA), Christian Aid, and Scotland’s Aid Agency entitled, “Undermining development, Copper mining in Zambia” dated October 2007, Nawakwi – who is Forum for Democracy and Development president – admitted that the International Monetary Fund (IMF) and the World Bank told the Zambian government that copper prices would never increase, hence they should privatise the mines.

“We were told by advisers, who included the International Monetary Fund and the World Bank, that not in my life time would the price of copper change. They put production models on the table and told us that there (was) no copper in Nchanga Mine, Mufulira was supposed to have five years life left and all the production models that could be employed were showing that for the next 20 years, Zambian copper would not make a profit,

” the report quoted Nawakwi as having told its author in an interview on July 26, 2007.

“Conversely, if we privatised we would be able to access debt relief, and this was a huge carrot in front of us – like waving medicine in front of a dying woman. We had no option (but to go ahead).”

According to the report, Nawakwi stated that one of the arguments in favour of privatisation was that it would save the government money by relieving them from propping up an enterprise losing up to US $1 million a day. The report further revealed that in 1999, the donors withheld aid to Zambia until the government agreed to privatise the mines.

“Privatisation of ZCCM (Zambia Consolidated Copper Mines) was a condition repeatedly attached to several loans from both these institutions (IMF and World Bank) and was a pre-condition for Zambia to qualify for debt relief through the Highly Indebted Poor Countries (HIPC) initiative. In 1999, with the Zambian government still reluctant to privatise ZCCM, major donors withheld some US $530 million in aid until the government conceded,” the report revealed.

“ZCCM’s assets were split into seven sections and sold to various investors, though the company was able to retain shares in some of the units – including in KCM (Konkola Copper Mine) – through the creation of a holding company called ZCCM-IH (Zambia Consolidated Copper Mines Investment Holding).”

According to the report, the negotiators argued that increased investment by the new mine owners would generate significant profits that would be channelled back to the Zambian government through taxation and dividends.

“Although this has happened to some extent, evidence from a variety of reports suggests that the amount of revenue transferred to the Zambian government by new mining companies is relatively small compared to the revenues transferred to governments in other resource-rich countries,” the report read. “For example, according to Christian Aid’s Rich Seam report, Botswana’s largest diamond mining company Debswana pays at least 70 per cent of its profits to the government through revenue transfers of different sorts, including dividends.”

On financial benefits from the development agreements with the mines, the report points to the fact that Vedanta’s annual report does not detail the amount of net profit that KCM makes in various financial years or how much was paid to the Zambian government in various forms of revenue transfers.

“Given the lack of information available, the figures cited below are approximate. We firmly believe that Zambia was placed under considerable pressure, which weakened its bargaining position, leaving it unable to replicate models that had been successfully applied elsewhere,”

read the report.

The report indicated that in the financial year 2006/07, KCM would have paid in excess of US $6.1 million despite the company extracting ore that generated revenues in excess of US $1 billion.

It also stated that it was not clear whether the mining companies had paid “even these low rates of royalties”. The report also highlighted the practice of price participation that evidenced Zambia’s weak negotiating position.

“Price participation constitutes a separate contract in its own right. We’ve been unable to obtain a copy of the contract, but a ZCCM official told us that, if the price of copper at the London Metal Exchange exceeds a specific benchmark (US $2,700 -2,800 per tonne) then government through ZCCM-IH starts to claim back a certain percentage (in KCM’s case, 25 per cent) of the difference between the benchmark price and the current price,” read the report.

“According to the same official, ZCCM-IH rarely receives the full percentage as “there are conditions (attached) and a cap on the amount that ZCCM can receive from KCM in one year (roughly US $16 – 19 million). In our view the net result of these clauses is that the Zambian government is unable to derive what would normally be considered its rightful or normal rewards from the extraction of the country’s key natural resource.

“One would expect that the Zambian government/ZCCM to benefit from these profits through its shareholding in KCM. However, sources suggest that KCM has distributed only four percent of its net profit to shareholders in form of dividends for the financial year 2007.”

Recommendations that were made

• The authors of the report recommended an end to the culture of secrecy that surrounded the mining industry.
• It recommended that development agreements should be published.
• “The mining companies should pay the Zambian government a larger share of the difference between the actual copper price and the trigger copper price in the price participation scheme, and also pay value added tax at local business rates,” the report recommended.
• “Develop the political will and institutional capacity to effectively enforce existing labour, safety and environmental legislation, update national pollution laws in line with the latest World health Organisation guidelines, and to ensure that companies agree to include these standards in their environmental management plans as part on the renegotiations process.”
• They also recommended that the Zambian government revisit the development agreements from the perspective of the Zambian people rather than that of the companies.
• They also recommended that mining companies approach the renegotiation exercise, not as an opportunity to pursue their own interests, rather to revise the government’s share of revenue upwards for the long-term benefits of both parties.