following indication that China will this year increase its
annual copper purchase from 600,000 to one million
tonnes, Finance and National Planning Minister,
Situmbeko Musokotwane has said.
Dr Musokotwane said in Lusaka yesterday that if implemented, China’s move would result in a deficit in the global copper requirement for 2009 and trigger higher prices.
The minister said this in a speech read for him by Secretary to the Treasury, Likolo Ndalamei during the second Corporate Governance award-giving ceremony held at Hotel Intercontinental.
Dr Musokotwane said despite having put in place various measures to support economic diversification, the Zambian Government would not abandon what it knew best: mining.
“This is the reason why we are optimistic with reports that China’s State Reserve Bureau may this year raise purchases of copper to one million metric tonnes from 600,000 tonnes.
“Such a measure, if implemented, ‘would easily turn the projected global surplus of between 350,000 tonnes and 400,000 tonnes this year’ into a deficit. This is an encouraging signal for the Zambian mining industry,” he said.
Dr Situmbeko said that Government was equally positive about the future copper prices, which had gained by 25 per cent on the London Metal Exchange (LME) within this year after falling by 54 per cent last year.
Currently, he said, the price stood at around US$3,862 per tonne after China’s copper imports jumped by 55 per cent last month. This price level is the highest since November 2008.
He, however, noted that in the 2009 budget, Government had put in place programmes to diversify the economy and increase the potential for wealth creation through agriculture, tourism and manufacturing.
Dr Musokotwane said his ministry would this year address some challenges faced in the governance of State-owned-enterprises some of which had been a drain on national coffers.
“To forestall this trend and improve overall performance, my ministry will reinforce measures aimed at improving oversight, supervision, general management, corporate governance, quality systems and service delivery in State-owned enterprises.
“In this regard, I am pleased to inform you that we have provided K2 billion in this year’s budget for strengthening the implementation of the automated trading system on the Lusaka Stock Exchange (LuSE),” he said
He said the growth of market capitalization on the LuSE over the last few years gave government hope that the market in Zambia, though experiencing a momentary reduction, was sustainable and a worthy choice for stock investments.
Dr Musokotwane noted that although share prices might have fallen, the overall performance of most listed companies had been satisfactory and was a testimony of the resilience of Zambia’s economy.
“The evidence of our market attractiveness is manifested by looking back at 2008 when K1.302 trillion was raised in seven issues on the Lusaka Stock Exchange. This means that on average, the LuSE market capitalisation grew from K13.07 trillion or US$ 3.188 billion in 2007 to K24.205 trillion or US$ 6.538 billion in 2008.
“As a result, market capitalisation to GDP ratio also grew from 40 per cent to 61 per cent. This scenario makes the Lusaka Stock Exchange an illustration of the stability of our economy and a demonstration of the depth of private sector development in Zambia,” he said.
[Times of Zambia]
In the midst of global economic turmoil, I find such statement hard to believe. Let’s wait and see.
tell me in another month time how correct this statement is. Becoz i too think we have seen the worst and there is geniune sentiment of recovery not jst in the mines but in the whole global industry. We are definately passed the trough.
Invest in shares now is the time. This is a one in a life time oportunity of making handsome killings.
Which tunnel? Let me read
Tunnel vision! lol
Getting philosophical for nothing. Lets call things by their real names. Its not a tunnel Zambia is in. Its in economic CRISIS!
About 25 years ago, KK saw ‘light at the end of state house tunnels’ but to date Zambians have not seen that light. So how come only one man in every 25 years in Zambia is gifted to see this light?
Good question! What tunnel? And what kind of light? If it’s koloboyi, it won’t last, if its from an electric bulb, it will be on for a little bit. And I know it is not sunlight, for you can’t see sunlight at the end of a tunnel. If you do, then that is not a tunnel but an ADIT.
So, what are they seeing and where?
tandiwe’s tunnel
uncalled for
I say praise the lord.Hallelujah!This is good news.Nine Chale mubomba ku LT?
Shani ba Chewe, awe ba tata, I’m just in a blogging mood today.
KK saw light….Kafupi saw the same light…LPM the same…Now even RB…..and yet we are still plodding in darkness not knowing which way to go!!
True, Zambia has always been in dire straights only the politicians dont see things as they are.
Musokotwane is a big let down.The chap said the GFC will not have any effect on Zambia,i find it difficult to believe that he says.
Mr. Musokotwane, you seem to be neglecting something very basic and fundamental:China’s economy is not self-dependant. They are also struggling to keep their own economy abreast, so they are very unlikely to raise their copper purchases as you assume. There is no local financial gain in times of global financial loss. The rest is self-explanatory.
Now RB is cozying with the swallow Chiluba. In my days, I will swallow them both!
By the way are you going to re-introduce windfall taxes.I wonder why Musokotwane dropped it.Thatwas a self regulating tax.”Dr Musokotwane said in Lusaka yesterday that if implemented,” Now what light is there when the whole thing is dependant on IF
Thats corruption and also lack of foresight. Thats why we are poor Wanzelu, we are incapable of projecting into the future. Who wouldn’t know that after the world teamed up to fight the crisis and here I mean the big giants, the recession would succumb in no time infact even before August, it will be over, then you remove windfall tax, what type of thinking is that? I respect Dr. Musokotwana socially but not professionally anymore and he will still be my friend anyway.
Mi i say and wonder……is it one of em dreams or visions?
Now that all those that came up wth the VISION 2030 at Ministry of Finance r no longer there i.e Dr. Mulungushi and Magande whoz gona continue from where they left it?
me
The same minister who is there now was part of the team and in fact one of the brain childs of the idea so not much change there…
The age of S. T .U .P .I. D ,Why didn’t we save ourselves when we had the chance and time
.
There we go again being optimistic about the dependency syndrome on copper, please Mr. Minister let us explore other avenues that will bring revenue to this country i.e. tourism, exporting energy on the form of electricity and farming.
Fact is without any robust reserves, we can not meaningfully diversify the economy from mining to agriculture, tourism or power exporting as you put it. Mining, under an ideal government, should have been the driving force behind development of all other sectors. We have nothing to show for all those high prices now because we are too quick to listen to foreigners and easily dismiss local advice and the opportunity was missed. Minus reserves or going back the IMF or WB and borrowing billions of Dollars to finance infrastructure development, we will continue singing about diversification until the Lord comes back!
“Mob. World Health Organization says Zambia can be able to feed the whole world with its fertile soil, good climate, copious water resource, etc.”
2 b honest whats lacking in zambia is a crop of politicians who spearhead the drive.
Prepare for hard times ahead.
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The Minister has made a good analysis of the future. We now need to take advantage of the high winds when they come to transform our economy away from copper quickly.
‘If implemented…’ and we all know that implimentation has always been the problem. We only hope the light they have seen wont switch off as we approach and then start going back.
Monk. Do you believe them? By the way ever since Zambia was born and even before, it has always had a light in all its tunnels. Zambia’s land is very fertile, we have plenty of water-rain, lakes, rivers, underground, etc. In addition the political climate is excellent, Zambia is geographically/strategically positioned to sell its products left right and centre, we have all the natural resource one can ask for, the tourism environment is superb. Apart from politicians, all zambians are peace-loving. Which light do you ask for? Trouble is Zambian politicians can’t think beyond copper.
” Trouble is Zambian politicians can’t think beyond copper. ”
I’m starting to think that it is centralisation that is a big culprit. All the power is vested in the President, maybe the ministers and who knows who else in the civil service.
Let’s decentralize budgets and powers to the local government level, where the people can have a direct say in how money is spent in their local area.
Even just getting parliament involved in decision making would increase transparancy, which is needed above all to start the fight against corruption. No deal should be made with any foreign company, unless it has been discussed in parliament.
Will this bring back the Zambian copper depedency syndrome which is actually malignant in its form and its metastasis has involved all parties,causing gangrene and necrosis of all the other sectors of economy?
Lesson,,,,1
I find this a bit hard to believe as well because commodity prices where dependent on Chinese demand which also depended on Western demand. So there is a link missing somewhere, although in their stimulus package, the chinese are talking of massive infrastructure development and job creation. Maybe with this in place, we might just see some moderate price increases but not to the level we saw mid last year. If the price reaches $4,200 – $4,500, we could even start skanking.
This sounds good Mr. Minister!Let’s hope things workout because iliko bad mwandini!Good luck to you all ministers as you carry out your national duties.Make sure that you work for those poor Zambians who put you into those ministerial positions other than enriching yourselves.PLEASE, advise H.E RB not to follow whatever these cadres come up with.Let’s work hard mwe ma Zambians and see our motherland at its highest economic level.
How do you work hard when you are out of work?!! Look at the UK. USA and all other countires, the govts are working hard to create jobs through stimulus packages because citizens can only work hard when they have jobs. We need our govt to come up with its own stimulus package to absorb all the skilled man-power which is out of employment on the Copperelt. We need a clear direction and stratgy, whether we borrow or dip into our reserves to create more jobs through infrastructure development, re-training man-power for new jobs like teachers, lecturers etc……
” We need our govt to come up with its own stimulus package to absorb all the skilled man-power which is out of employment on the Copperelt. ”
The miners should be put to work building farms and working them, which would do a lot for food security, unemployment, food prices, etc. It would even give government leverage over the mining companies, so they can’t threaten joblosses if they leave, to get another tax break.
Who knows… maybe this time someone is seeing a real light at the end of the tunnel..KK started peeping through that tunnel 44 years ago up to now I betcha he is still peeping..
and I think still peeping………
Zambians will not eat “hope based on Chinese possible intentions”. Solutions are required now for now!! Hunger will not wait.
l have been watching the markets and they have really ralleyed over the last fow days and we have seen commodity prices going up.l really hope they hold.
NO WEEKEND PIX TODAY????????
Here is how I see it!…The whole world is looking at China increasing its commodity demand as the only hope for recovery – at the same time, the Chinese economy is projected to lose about a 1 percentage point of earlier projected growth as a result of falling global demand of its goods. Further, the global economy is as well projected to shrienk by up to 1%. Now, for China to raise its Copper demand to a million tonnes, it has to project increasing demand for its copper based goods. Besides, the industrilised world which buys most of China is goods is projected weakly to grow at between 0 and 0.5%. The global auto industry is in a mess…I don’t really see China implementing those plans…
I don’t see that demand for copper-related goods rising. Industrialized countries are serious about recycling industry, which includes metals.
playing the devils advocate i do believe demand for copper is either constant or slowly raising, bullets are made from copper[stats show an increase in war every day, week, month etc, NOT that i support any war.], Cables that transport electricity r all copper, electrification is reaching an advanced stage in most African countries. We are told of a nu cell phone plant that will in Zed, and copper is definately one of major Ingredients they will use. demand is there we just need to harnace the demand to our advantage.
The whole world depends on American consumption. China depends on exports to USA. The export market is flat on its face. China hopes to stimulate her economy via $600bn mainly on construction projects. The hope is that this will consume a lot of our copper. Otherwise I dont see any other reason China would buy the said copper quantities.
What does China use our copper on? Has that consumptioned bounced back up?
Besides, at what price is China buying this copper.
” The whole world depends on American consumption. ”
And that is a huge hint – we need to emulate the USA, not try jack up exports, but develop our internal markets. And that will look different than the Malasyian and Singaporean models, because it will involve state works projects to crank up consumer incomes and develop entrepreneurial opportunities for our own people in farming and manufacturing. 80% of US GDP is driven by internal consumption.
To develop, we need to develop our internal markets.
BY THE WAY KK SAW MANY OF THOSE LIGHTS EVEN DURING THE COPPER PRICES BOOM. It is not about the rise in copper demand. But, how wisely the returns (profits) are spent. For how long have you been selling copper as country? Even b4 independence up to date. The only differnce is that the same copper developed Britain, Zimbabwe, and even pay 4 social services in Zambia itself etc. This is cos it was wisely used. But, can you guess what happened after independence?
I have already stated that China would have it’s own stimulus package, and that it would include the laying of hundreds of thousands of miles of copper wire.
This is why the mining companies wanted to get rid of the windfall tax – because they knew the price of copper would rise again and soon. Another ripoff of the Zambian citizen, to pad corporate accounts in London, New York, Montreal, Sidney and Mumbai, instead of building roads and hospitals in Zambia.
And this finance minister is the lead collaborator – he referred to the windfall tax as ‘onerous’ on the mining companies. All these neoliberals are interested in is prostituting the Zambian economy for kickbacks.
Malabishi. The guy has no clue what he’s talking about
The UNIP light at the end of tunnel is back! Dr. Kaunda and UNIP were the only ‘people’ that saw the light, dim as it were, in the 27 years of his rule. Now, and suddenly it has reappeared to Banda and his clonies. Just hope the Zambian people, for a change, will begin to see the light too.
” “This is the reason why we are optimistic with reports that China’s State Reserve Bureau may this year raise purchases of copper to one million metric tonnes from 600,000 tonnes.
“Such a measure, if implemented, ‘would easily turn the projected global surplus of between 350,000 tonnes and 400,000 tonnes this year’ into a deficit. This is an encouraging signal for the Zambian mining industry,” he said. ”
Now we know why the mining companies wanted to get rid of the windfall tax, and why the finance minister went out of his way to describe it as ‘onerous’.
What a complete and utter shill. What a disgrace. If he had any honor and integrity, he would resign.
I think there is no light but fire at the end of the tunnel
Is there a tunnel in the first place?