By Agness Changala
USA based Zambian professor Cecil Mbolela says the decision by the Bank of Zambia (BOZ) to raise the statutory reserve ratio is a superficial way of stabilising the kwacha.
And Prof Mbolela, an Adjunct Professor at Governance State University in University Park, Illinois, United States, says mining is a security issue which all citizens in Zambia and abroad should be speaking out about
On Monday, BOZ
issued a circular to commercial banks, notifying them that effective November13, 2023, the statutory reserve ratio will be raised by 3 percent on both local foreign currency deposits, including government deposits and Vostro account deposits.
When asked by Daily Revelation to give his views on the decision by BOZ to raise the statutory ratio, Prof Mbolela observed that Zambia was not generating foreign exchange to beef up the BOZ reserves.
“All the celebrated investments from investors, mining operations and selling of minerals, Zambia ain’t generating foreign exchange to beef up the BOZ reserves, so the monetary policy to require the banking sector to increase reserves is a superficial way of stabilising the Kwacha,” Prof Mbolela said.
He wondered why all the “Hichilemanomics” policies are not benefiting Zambia.
He said mining is also not earning Zambia foreign exchange saying this is also an issue.
“We have talked about subsidies and the impact of expatriating revenue outside Zambia,” he said.
And Prof Mbolela has wondered why President Hichilema, all members of Parliament and his advisors are destroying Zambia’s wealth and no one seems to care.
He has observed that Zambians are disengaged and not holding the UPND accountable for destroying the country’s wealth.
He said he is surprised that the Church and the Non-Governmental Organizations (NGOs) and many other stakeholders don’t seem to care.
“I think the issue you should raise is why no one cares in Zambia about the state of affairs. Church is mute. Opposition are fighting each other. Both UPND and PF lawmakers are mute and not existent in speaking up on issues that affect Zambia,” Prof Mbolela said.
Meanwhile, Prof Mbolela said Vedanta will use Zambia’s resources to raise revenue to pay off its debts.
He said Vedanta is broke and sitting on a mountain of debt yet it has been given to run Konkola Copper Mines (KCM).
“It’s one poor decision over and over. Vedanta is broke and sitting on mountains of debts seeking to raise over $2 billion to $3 billion to pay its bond holders, in the next two years, the same Vedanta has been given to KCM,” Prof Mbolela said. “So it will use Zambia’s resources to raise revenue to pay off its debt. How is this an investment for Zambia? He asked.
Prof Mbolela further said the people of Zambia, whether from PF or UPND are charged with the Constitutional powers to set policies in which both Zambians and investors create wealth from their God given resources.
He said he has always questioned PF or UPND, the wisdom of leaders in allowing investors to create wealth in Zambia but at the same time, the government of Zambia was destroying wealth by not taxing investors.
Prof Mbolela said the first thing one sees from Zambia not earning any foreign revenue from her mining operations, was through the exchange rate.
He said when Zambia earns foreign revenues, her balance sheet increases and that strengthens the Kwacha.
“Currently, is it not the case and yet the new dawn has signed loads of memorandum of understandings, talked about foreign pledges and is constantly unveiling new mining investors. Why isn’t Zambia benefiting from such announcements or agreements?” asked Prof Mbolela. “But ultimately, President Hakainde and his predecessors set policy in Zambia and the question for me is whether deciding to not tax investors, creating wealth for themselves, using Zambia’s resources, is in the best interest of the President or the country,” said Prof Mbolela.
