By Merlyn Mwanza
Zambia is being taken backwards to 1964 without any shareholding in critical industries as in the shameful case of Kalumbila Mine, says former minister and diplomat Dr Mbita Chitala.
In a statement to Daily Revelation, Dr Chitala said Dr Kaunda tried to set up a proper base in terms of the country benefiting from its resources, and that even late president Levy Mwanawasa tried with the introduction of windfall tax, but for unexplained reasons his successor Rupiah Banda with his Finance minister Dr Situmbeko Musokotwane removed all that.
“For our country to start in earnest addressing poverty eradication , inequality and backwardness, we need a developmental state led by patriotic Zambians who will facilitate capital accumulation on an expanded scale. The closest we got to this was when President K. Kaunda nationalized our copper mines in 1968 and established buoyant parastatal sector that built a strong middle class through ZIMCO, INDECO, ZCCM, FINDECO and so on, exactly like South Korea, China, Singapore, Malaysia did. Unfortunately, Kaunda failed because of the global oil crisis and the drop in prices of our base metals engineered by finance capital,” Dr Chitala stated. “We again tried when President Levy Mwanawasa introduced windfall taxation of mines but again failed when President Rupiah Banda with his minister Hon Situmbeko Musokotwane strangely reversed this progressive policy direction.”
Dr Chitala observed that Zambians were also hoping that the return of Mopani and KCM to government would herald a progressive policy direction initiated by formee president Edgar, Lungu “but it appears, the UPND will be taking us back to the situation of 1964 where Zambia will have no shareholding or controlling interest as is the shameful case with Kalumbila Mine where Zambia has zero shareholding.”
“Such a public policy approach would continue the de-industrialization and exploitation of Zambia as this neo-colonial path will never allow Zambia to accumulate investable surpluses and build a strong middle class to address decisively poverty eradication, inequality and backwardness in our country,” Dr Chitala observed. “Many years ago, a friend of mine asked me a question why it would not be advisable to close all copper mines and open them when we or our future generations come to determine how to best mine and benefit our people. I was glad to hear when President Masisi of Botswana recently answered on our behalf when he complained that ‘we must either get a better deal or walk away completely. We must refuse to be enslaved. If this issue costs me electoral victory, then so be it. Your herdsman cannot claim ownership or greater benefit from your cattle.'”
Dr Chitala stated that a similar view was expressed by the late Tanzanian president Pombe Magufuli over their Gold and Gas and they both negotiated successfully with these so called foreign investors and won for their countries.
“It is really wonderful to note that Botswana recently forced De Beers Group to share the diamonds in a 10-year sales lease where the Botswana State-Owned Okavango Diamond Company will receive 30% of produce which will be scaled to 50% in the last year of the pact. De Beers has also been forced to pump $75 million towards a diamond fund which will invest in additional value for the Botswana economy. President Masisi complained that Botwana had been losing $15 billion every year for selling its diamonds raw without beneficiation. He noted that that beneficiation of Botswana diamonds into gems and jewellery was worth $100 billion,” Dr Chitala stated. “In other words, by Botswana taking over 30% of production, at the very least if they also get involved in beneficiation, they will earn not less than $30 billion annually from their diamonds.As for Zambia, many patriots have made suggestions on how we can benefit from our resources.”
He argued that at the very least, Zambia should find a leadership that will create a developmental state and implement policies in the interest of the country.
“Declare Copper, Cobalt, Gold, Emeralds, Sugalite strategic minerals as the Arabs and Norwegians did for their oil.Amend our Constitution to provide guarantees that not less than 51% local ownership in all mines. There must be sovereign ownership of all natural resources – Land, water, minerals.Abolish the foolish idea of allowing 100% deduction for exploration costs, development costs and making royalties tax deductible. This will mean that it is not Zambians who fund these projects. These costs in all countries are normal and investors offset them through their Profit and Loss Accounts,” Dr Chitala stated. “De-criminalize small scale mining of gemstones and simply provide for mechanisms for sharing production with the state 50-50 rising to 70% for the state.As for Copper and cobalt, share production 50/50 as Zambia’s contribution to the business is its ownership of the mineral. In fact, the mineral to be mined must first be valued and this would represent Zambia’s interest in the mine. This approach also takes care of the royalties which after all do not take into account the thieving enjoyed by these investors in value-added activities conducted outside Zambia’s jurisdiction. It is shameful to note that one Bank of Zambia published online indicated that Zambia collected $313.5 million in the third quarter of 2022 and collected only $115.8 million in 2022 of first quarter of 2023 because our leaders decided to make royalties tax deductible at Zambia’s expense.”
He implored Zambians to stop thinking that employment creation and tax payments by these investors is a benefit or an advantage to Zambia.
“This employment and tax payment is normal and without Zambians being employed and paying taxes, there would be no mining of our base metals. These costs are inherent in any business.We should also by deed promote value addition and beneficiation as President Kaunda tried to do in establishing ZAMEFA which we foolishly privatized to foreign interests. Our emeralds, Gold, sugilite and other gemstones must be first be processed in Zambia as is the case in all serious countries. On the basis of this, Zambia can easily establish a sovereign fund which Mwanawasa almost created but unfortunately passed away and was replaced by neo-colonialist lackeys and Kwame Nkrumah used to call them,” stated Dr Chitala. “This is what will create quality employment opportunities and expand our investable surpluses and decisively deal with poverty and backwardness. Yes, if we cannot do these minimal things for ourselves, we must leave these resources untapped until future generations can find more cost-reflective methods to extract these minerals from our land and process them to benefit our country.”
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