Zambia is not getting anything from its resources, Bob Sichinga

1. The truth at last (sigh)………..

   Listen and learn something you GRZ officials… at least just this once.

2. Government should be hard on KCM in particular so that they start paying corporate income tax. They show accounting profits yet claim that they are making tax losses after providing for capital allowances. All their capital aqcuisitions, costs and revenues should be audited properly and their tricks exposed.

   As for the Chinese, let manufacturing take place in Zambia instead of just extracting raw materials.

3. Another voice of wisdom has been voiced out
   It remains to be seen what our big-nosed leaders are gonna say about it.

4. This country has churned out enough graduates in the mining discipline therefore it is about time they looked into;
   1. Re-nationalizing the mines with a re-modeled capitalistic management style so that we get maximum benefits from resources the we were left and bestowed to by the gods. Am told the copper deposits in the north west can be seen on the surface and all this wealth has been surrendered into external hands. The rate of profit externalization is scary but alright if one chooses to be oblivious to the crime that is being perpetrated right before your very eyes!
   2. Radically call for increased government stake in the running or profit sharing of mineral proceeds from the mines.
   3. The current Zambian TAX Regime is draconian and we should stop over taxing the poor masses with sta

5. …start up businesses in order to please appointing authorities so as to keep our jobs! This environment is highly unfriendly and kills off any ambitious Small and Medium Enterprises.
   4. Have greater interest as a government in other precious and semi-precious minerals/stones, if you choose to privatize this sector as well please have serious oversight interest in their management and operations.
   5. The agriculture industry should be focused on more, not just as a political slogan now turned cliché but practical state farms be formed if need be not ZNS and prison services jokes (although they are a start) and extending financial support to local farmers. The current scenario of blindly opening up your land to foreign farmers only have your land used for export crops is dangerous.
   6…

6. I would really appreciate and intelligent debate with analytical data than empty assumption. First and foremost Bob Sichinga is not a qualified economist I would expect to deliver an intelligent deduction though I respect his assumption. Truth be told that throughout history economists publicly disagree with each other so often that they are easy targets for standup comedians. Yet noneconomists may not realize that the disagreements are mostly over the details—the way in which the big picture is focused in the public domain they registered their personal failures. When it comes to broad economic theory, most economists agree a point Mr. Sichinga with an accounting and computer science background may not fit in.

7. I would really appreciate an intelligent debate with analytical data than empty assumption without point of analysis.

8. We may all have differing or shared perspective on value theory and distribution theory but smart debate is the one based on data which Mr. Sichinga need to argue in an open debate. Sometime the output of an economy is thought to be divided or distributed among the different social groups in accord with the costs borne by those groups in producing the output.

9. Mr sichinga has a point.I think there is need for the government to take these investments coming in Zambia very seriously more especially on mining investors, because those minerals been extracted are non reneweable and mining is the back bone of the zambian economy. I really think there is need to look beyond and think of the future generation and not just today.Its good that atleast people are concerned because every zambian must benefit.

10. There is no magic bullet to economic growth in Zambia other than opening the economy to both FDI and local SME. Government cannot just be there to provide billions to ever Zambian for capital intensive investments. Zambians themselves must pair up and partner with foreign firms to pick the man untapped opportunities in the country. Government can only level the playing field. Mr.Sichinga who got his education from Atlanta Georgia US and for years ran failed NCR in Zambia should know these realities.

11. Sichinga is 100% right,it’s not a matter of being Qualified but coomon sense.Yes our Economy is said to be stable but if not mistaken 75% of us zambians are poor ,is it becoz Politicians are busy enriching themselves? Which could be somehow true becoz midterm Gratuity is too much whereby an ordinary zambian who has worked for 25 yrs can not be paid such an amount.
    So my appeal to all Politicians is work for the poor zambians than enriching themselves.

12. We will never learn as a country because of this mentality of thinking that the only investment we have is chinese!

13. Iwe Senior Fimo Fimo you should at times stop and reflect or even research before pasting your nonsense. We on CB know that we are working for the Chines owned mines due to lack of alternative. You where ever you are you are eating cool money while wasting tax payers money blogging ifisushi fyakwa master obe. There is no gain for Zambia because these Indians and Chinese know from history that it is not sensible to keep their wealth here because nationalization can be affected any time.

14. To get to the basics, Mr Sichinga needs to understand the fact that Individuals make choices at the margin. He should understand relevant constraints in economic development and that there is no Government that wishes to be ruling a poor economically denied citizenry.. If not intelligent enough, our frustration may lead us to “bid up” the price of our resources, eliminating some potential buyers / market players and encouraging some marginal producers.

15. Senior Citizen
    You cannot have a shared perspective on value theory and distribution or any smart debate with bo Sichinga,he is a Business and Political consultant,you are a journalist by proffession who happens to work in a press office at an embassy,the only consultancy you can do is being master of ceremony at a function and blog,Bob Sichinga cant sink so low to debate with a cader,i doubt he even reads your postings…Mwanawasa sent you to US not RB,he doesnt even know you,he might have seen you reading 19hrs news on znbc,thats all,no matter how much you blog,you are going back next year,whether mmd wins or loses,you are better off using this time to do something meangful ba BK

16. Hope GRZ Listen..

17. Some great point from “Vision” (#2) and Barotse Patiot (#4); I agree that GRZ needs to have a greater stake in all (foreign) companies that want to exploit our minerals – this makes sense. Think 50 years from now; ALL our minerals will have run out, the misguided miss-informed politicians will have died out and we’ll have to live with a mineral-less country. We’ll be dirt poor because we lack foresight. Think 50 30 years ago when Nigeria discovered oil, they sold rights to this oil to the Americans for 50 years for a lump some payment. The lump some payment is gone and the US still draws oil from Nigeria; Africa’s largest oil producer. We have enough educated people, we can run the mines, if not, then let GRZ own 49% to 51% of each foreign controlled mining company.:-w

18. :)>-:)>- My brother Bob, they will not listen to you about the Chinese. Next, they will just brand you as PF and not as a professional adviser interested in the affairs of your country.:-w:-w:-w

19. Ba Senior Citizen or is it ‘Sneer citizen’ While analysis of the economic dynamics are necessary to adhere to and comply with, it is the current transpiring module of implementation of GRZ that we are all aluding to in pointing out that the manner in which the economy is run the Zed way is just unacceptable especially in a developing nation were the majority a infact living in poverty.

20. This is why i challenge those who think otherwise to engage right up here in an intelligent open debate on what the alternative is and explicate the mechanics of driving that difference. I beat you we will be seeing apathy to this thread if not usual insults and utopia of failed neo-marxist theories.Zambia cannot afford to close herself from the world and and getting her citizens active in entreprising initiatives.

21. Bob is right. Its only in Zambia where investors beats there workers and do all sorts of shit. Go to china and you will be treated like a dog or Ox. Time will catch with these people in MMD and majority will go into exile. Believe me

22. The Govt currently gives more priority to the so called investors. Look at the mines, they get all the tax exemptions while Zambian companies and citizens have to pay hefty taxes.
    The Chinese who come here are exploiting us and we are left with problems when they leave. The roads in the Copperbelt have been damaged by the Mines and yet the ordinary citizen has to pay enuf tax to have them fixed while the Mines externalise all the wealth. We need to wake up now

23. Politicians will always say this, there will be :
    1.belt tightening to be done
    2.economical reforms
    3.pain to be endured
    4.light at the end of the tunnel
    5.level playing field

24. Everyone agrees with me when I say Zambia is not a Limited Company (LTD Co.) Ba SC. Flexibility in applying certain principles when dealing with state matters should be exercised.Dont be rigid and deny yourself freedom of thought..mmh

25. Zambia cannot afford to close herself from the rest of the world and and “not” get her citizens active in entreprising initiatives.

    May be its time our UNZA helped the country’s street economic punditry have a set of implicit rules or understandings for constructing satisfactory economic theories useful in intelligent debates.

26. i agree with those sayng sichingas observations lack detail, Mr Sichinga should explain how many jobs these investors have created so far and later postulate how many similar Jobs would be created if the mines where nationalised. In the same way Mr sichinga should explain how much FDI has flown into the country in the past 1 year and later show us how much local investiment would be generated if we got away with the foreign investment. Only when Mr Sichinga has the impirical evidence of figures to prove his observations would i take him seriously. I dont believe that simply squeezing more money from the investers would change the lives of the people. Such an approach would actually kill the proverbial hen that laid the eggs.

27. Sichinga may or may not have the data analysis of his approach but to give it a benefit of doubt, I would say that he made the statements on the need to know basis owing to the fact that the detailed economic language would ellude a layman in Zed and therefore not meet its purpose, however having brought up the subject is enough to trigger debate such as this and those really interested can make contact with him to devulge more information. As for laymen this is enough to know that someone is actually airing their cries on their behalf.

28. Lets not be critical where we have no proof of Sichinga’s arguement. He knows what he is talking about. Unless pipo want us to believe he speaks from without (really doubt).:-?:-?

29. I think we seem to have a perennial problem in Zambia where we think there is a shortcut to prosperity, please listen there is none and there shall NEVER be one. The long journey begins with the first step. Dogo dogo ndiyo mwendo. Bob worked for ZCCM Finance at HQ in Lusaka when I was Superintendent Tailings Leach Plant in Chingola. I can say we both understand our various ends of the mining business very well. Bob can’t tell me Zambia gained more from mining after Nationalization than before Nationalization. Most mining infrastructure was built before nationalization and all that ZCCM came to do afterwards was to set up Football teams and begin building crazy projects as Mulungushi Investments that completely bankrupted the institution in the end we had no money to do any meaningful…

30. we had no money to do any meaningful Research work which had been the order of the day when we had Anglo and RST as owners. By the way mining without research and development in whatever form can be an expensive vocation. Anyway I guess it’s his none-technical opinion…

    Bob is also a Businessman as he says, why he just go up to the Ministry of Mines and get himself a mine to exploit and let’s see how soon he will have enough cash to reinvest in new operations like the Konkola Deep. It’s one thing to speak up about things you hardly understand very well and another to be objective about things especially if they fall in the domain you have very little knowledge about.

31. Engine,

    Believe you me Sichinga does not understand developmental economics other than playing these incoherent Groupthink rhetoric. Stage him on an open debate forum on his assumptions and elicit for a practical alternative to this approach, Mr. Sichinga will fall flat other than making enumerable hiccups.He is good at numbers but not a dependable rational economic analysis.People have rational preferences among outcomes. Here we can speak of theory of profits, or employment, or growth, or money. We can create classical production relationships between inputs and outputs, or classical theories of national social-economic challenges you realize that the panacea is not utopian economics but realistic approach that open up competitive entreprising economic by citizens’s SMEs and FDI.

32. Senior Citizen, Please get your facts right. Bob Sichinga has an graduate Economics degree from Harvard! He knows what he is saying and it is true. He has also run several businesses in Zambia to understand what wealth creation is. Just accept truth and spare us of your ‘BLIND FOLLOWING’

33. Nationalization is failed economic model to national development and efficient market system. It only chokes the the industries of capital needed, technology and efficiency. We have seen it fail us for over 27 years and failing wherever supernationalistic sentiments have prevailed.

34. How many Zambians have a Harvard education??? Bob Sichinga, Dambisa Moyo and a handful of others. These people understand the subject matter. Senior Citizen, go and get a Harvard degree if you want to be able to debate Mr. Sichinga

35. Ba Shichinga we know you. Too much theory. As if you are not an accountant you have to substantiate you reasoning with figures. You dont inrease your share from the investment portfolio by over taxing investers. the fact that locals have been employed as a result of attracting investers with moderate tax regime is evident enough as a mode of redistributing wealth. the locals have disposable income and are able to take children to school. surely you do not expect the government to be distributing an egg to every household as the mode of sharing wealth. leave this to the players in the economy to do the sharing on behalf of govt. the reason we have these investors around is due to good tax regime. be factual and give credit to the government for maintaining an attractive investment climate

36. Real Zambian,

    Don’t confuse yourself over the Sichinga family my dear.Its clear you don’t know Bob.Though irrelevant to this discourse, Bob has no Graduate school degree from Harvard and i repeat from Harvard. Public records are there for interested investigative journalists to prove that Bob was only at Harvard for less than a year for a lower level program.Today Harvard retains real time records of all its graduates which you can access.FYI in the USA education records can be accessed from an school on signed request or through G-2-G on interest. So be careful because you may regretably end up making yourself an i-d-i-o-t with lies a thing i have seen with many identity crisis chaps.They have never recovered from the self inflicted bruises.

37. What we have to understand is the fact that we are competing for FDI with the rest of the world. Being a landlocked, African country with a fairly small population such as Zambia makes it even harder for us to attract FDI. It would be great if we could get more money from mining taxes but if the investors decide that it is not profitable for them to stay in the country then what? The govt cant run the mines as we have already seen. Also we should be expanding this argument to other areas besides mining if we are to safeguard our long-term interests as a country.

38. Oh boy this Sichinga has emerged from the woodwork and now want to be an economic expert on FID, Oh please give us a break Loser. For those that have a short memory, Sichinga was an UPND MP and this is from the archive

    PND Vice President, Robert Sichinga pledges to revive Nitrogen Chemicals of Zambia (NCZ) and Kafue Textile of Zambia (KTZ) if elected Kafue MP He made this pledge in 2001, people listened voted for him and indeed he drew up the plan , including the budget to revive NCZ and presented it to the MMD Government and the late LPM approved it and money was released, alas, we are still talking about the same problems in Kafue. This is also the man who refuted claims during LPM’s era that the economy grew by 5%. Wonder why people still have time to listen to this LOSER

39. In reality the explosive problem of unemployment and deteriorating living standards cannot take nationalism as panacea. Yes out of desperation such are being prescribed but these options have in the past failed lbecause always Nationalism decisions are not based on the realities of the situation, and because proponents of nationalism don’t get down to the roots of backwardness – poverty, production capacity, disease, illiteracy and unemployment.

    Nationalism is not a winning Strategy For Economic And Social Development periot but more bureacracy and costly supernationalism tickets.

40. …I thanks god I left when I did…will you never learn

41. For the stupid Senior Citizen, you are just getting paid for farting in some foreign office and then you take our time with your stupid theories. For once, you need to be objective and not just take every MMD shit to be the best for this country. You stupid asshole.

42. Under RB’s MMD Zambia is her way to prosperity.RB has proved a very rational social democrat who is focused on unlocking our country from poverty.The trickle down effects are not instatenous but certainly gradual.No one denies that the nation has serious socila economic challenges whichh MMD is deconstructing with all engine cylinders stroking at full throttle. despair not at the lies of revisionists.

43. What Robert Sichinga is saying is obvious and common sense.

    In 2004, Zambia exported $4 billion ($4,000,000,000.-) in copper, cobalt and gemstones, of which $2.4 billion was pure profit for the now foreign owned mining companies. They paid the government $6 million in taxes. This year, they are projected to pay $50 million in taxes.

    Only an MMD defender could think that this is in any way acceptable.

    In that same year, the MMD taxed Zambian WORKERS $1.1 billion in income tax (PAYE).

    How about this: Instead of taxing workers $1.1 billion, we tax the mining companies $1.2 billion (i.e., still only 50% of their profits).

    We calculate it by watching their revenue (trucks of ore) and if they don’t pay, we confiscate them and call it a tax.

44. Under RB’s MMD Zambia is on her way to prosperity.

45. If they object, we yank their licenses.

    All the ‘development agreements have to be scrapped – they are daylight robbery and were created without open discussion, without being discussed in parliament or in the press.

    The MMD has been taking bribes to sell out the country’s (the people’s) resources for nothing. I would estimate that $100 million a year is finding it’s way to the MMD from the mines, to keep them from being taxed. Together, they are robbing the people of Zambia on so many levels.

    The mines should be taxed at least $1.2 billion a year. The workers should not be paying $1.1 billion in income tax. The mines are polluting without cleaning up their mess, and they are degrading the roads without paying a road tax. And the Zambian people are supposed to pay for that.

46. Nationalism creates an unbalanced, distorted type of “development that does not much with created capacity.failed corporations at retained at the expense of efficient entreprises. The result is progressive pauperization a situation every progressive Zambian in contemporar world economic order cannot subscribe to excerpt those in deep utopia.

47. Senior Citizen,

    Please, don’t even try.

    Barotse Patriot,

    Right on. ” 1. Re-nationalizing the mines with a re-modeled capitalistic management style so that we get maximum benefits from resources the we were left and bestowed to by the gods. ”

    There are ways to run parastatals in a successful way, and that is to keep them free of political interference through first acts of parliament and later through the constitution. Appointments should only be made on merit for both parastatals and the civil service, and there should be the right incentives for management to produce as much copper at as low a price as possible.

    The money should then be put into other productive economic sectors – agriculture, manufacturing and infrastructure.

48. people please use wisdom. First of all there no country anywhere in the world where there are no poor people. You cant say Zambia is gaining nothing from FDI. What we need are sensible ideas on tax policy and also in diversifying our economy away from copper dependence. Zambia has made significant strides economically and we need to ackowledge that and offer proper suggestions to GRZ instead of making outright hysterical statements like this one from sichinga who is NOT an economist but an accountant like and remember is a former politician

49. Also, 50% of national revenues should go directly to local government, so most or all of the local government charges and levies can be done away with (another way the Zambian citizen is being double taxed).

    Barotse Patriot: ” 5. The agriculture industry should be focused on more, not just as a political slogan now turned cliché but practical state farms be formed ”

    Farm blocs should be funded and modernized. There are a lot of great agricultural techniques today that are organic, sustainable, and use labour instead of expensive capital goods and chemical fertilizers and pesticides. Local food production is the way to go.

50. MrK,

    I know you are a Shona from Manicaland, Zimbabwe though welcome to debate with us on national issues. Please tell us if nationalism has developed Zimbabwe or not its vainly vainly spewing your ideologic fantasy ladden with insinuations and venom. Zambians are rational actors.

51. Good Afternoon

    Is this Mr. Sichinga who was once Secretary to the Cabinet? The man has laid down the point that a lot of bloggers here have been saying all along:

    “If investment is not being translated into the creation of the wealth, then it is not worth celebrating.”

    We must not be blinded by immediate benefits. We need investments with long term orientation that will consolidate Zambia’s economic position for the region in future.

52. MrK,

    In Zambia we are fixed on diverstifying from copper dependency to other potential economic sectors we see as cashcow to modern economies. If Rwanda without minerals and oil can abound itself, wh not Zambia?

53. MrK and his marxist theorists believe that What is needed is a strategy based on a Marxist-Leninist economic model, which is anti-free market economics, pro-democratic and pro-socialist in content and which includes the following:

    (1) Blind nationalization of all the commanding heights of the economy – foreign-owned and controlled mines, plantations, factories, banks, insurance and foreign trade;

    (2) Expansion of the public sector; and printing of mone for unsustainable social charitable expenditure. This is not practical under any dispensation.

54. Social democrates of RB administration believe rationally. Zambia’s future is in planned proportional development of the economy with simultaneous concentration on industry and agriculture. Other areas being viciously opposed by Sata and his concubine Ichilemais MMD’s spirited leadership on infra-structure; transformation of the economy from primary to integrated production.

55. I know this is outside this thread, but I think the President’s Press Confrerence in Kitwe targetted PF run councils was misplaced and he wasn’t adequately advised! He also sounded wee bit drunk! God forbid! One things he should have told was that labour costs take a huge chunk of any institution! The Central Govt inclusive. I guess it’s all politicking like Mulongoti had said on the now almost dead issue of Sata and his imprisonment!

56. Senior Citizen,

    No on all counts.

    Nine Chale,

    ” We must not be blinded by immediate benefits. ”

    Next year, the MMD will have been in power for 2 decades. What timeframe are you working with?

57. Rwanda went through hell and hit rock bottom, it could not do otherwise than rebound. Comparing Zambia to Rwanda is unrealistic because we have no excuse for not developing. Could it be that Zambia is mismanaged? Good question.:-?

58. #57 Rwanda is doing well economically but politically that is another question. Democracy is still not entrenched and there are some in the country who think that the current govt is using the genocide in order to quell individual freedoms.

59. For those that don’t know Bob, he was one of the 1st ACCA graduants Zambia produced and was the 1st Indegenous (black zambian ) FINANCE DIRECTOR of the mighty ZCCM.

60. Good evening Bloggers.
    Thank God, at last we can have something that is not politics but mentally exercising.
    I am not an economist but here is what I understand. The new owners of the mines bought them for a certain sum. They then invested heavily into equipment and other stuff in order to boost production. ZCCM under invested and was struggling to produce 300k tonnes per yr in 1990. Francis Kaunda said in 1985 that the mines had a 15 – 20 yr life span at the rate ZCCM was going. Before we talk about the so called ‘huge’ profits the new owners are reaping, find out first whether they have had their return of investment. They have only 20 years to do so.

61. THE PROBLEM WITH MMD IS THAT THEY think they are the clever ones and we the rest are JUST STUPID AND DUMB. I am currently working on a book on peoples impression of Zambia it leaves much to be desired.No one can see a country like this whose people have been so neglected by it’s government and leaders that they have lost all their sense of worth. Whenever someone speaks something it is FOOLISHNESS TO GOVERNMENTS EARS. You Go to Luapula even if we say that the province is filled with lazy people teti kube fye, that the place should be 85% on less than a dollar a day, shall we count the ones living on 2 dollars a day they will probably take up the next 13%. Anyway socialism and capitalism must co-exist or at least come to a mid-point in order for a country to develop, look at China,…

62. From 2002 to 2006 copper production in Zambia has increased year on year from 300k tonnes to 470k. Thiis may look a lot but Chile produces 4 to 5 million tonnes of the stuff every year. What we are producing is half of what Canada and China each produce. The big difference is that we export almost all of it while others have domestic markets. For us to really benefit from the copper we produce we need new domestic consumptive markets. We had ZAMEFA which was a good start. Copper prices are determined in London and taxing the mines heavily will not benefit anyone. Kaunda surreptitiously taxed ZCCM and drove it to the ground. ZCCM funded everything UNIP needed money for.

63. Chile is an interesting country to compare with Zambia. The areas of the two countries are similar. Chile’s population is c17 million and Zambia’s is c12 million. Chile produces 10 times more copper than Zambia. Its GDP at >$240b is 20 times more than that of Zambia but per capita it is also just 10 times more. This means that Zambians do get more from copper production than Chileans do. Going by the boost in housing construction on the copperbelt, once done by government and the mines now by ordinary folk, it is clear that Zambians ARE benefiting from the boost in copper production. Government may get less direct tax from the mines, but the supporting industries and services run by Zambians are also contributing to national coffers.

64. Well said Uncle Bob, unfortunately the political elites are interested in serving their pockets

65. Please mr Bob stop dreaming. Can you explain why under ZCCM production of copper dropped from 800, 000 metric ton per year under goverment managment in the 70s to 220, 000 metric tons per year in 1991 when chiluba took over power.Bob was one of the chaps who adviced chiluba to sell the mines.this was becos mines where losing 1 million us dollars per day.what where Zambia getting under such loses.Ask yourselves citizen chiefs why people like Bob are not investing in mines? close your eyes and take away the Chinese you so much despise ,what do you have? Anglo-american? Did aAnglo-american quit the Zambian economy when we badly needed it?Bob is surely educated but he learnt nothing at university. His analysis of the economic trends stinks of political prostitution in this matter.

66. Funny that when the Europeans were r.aping our country Bob was boot licking with his posh way of speaking because HE was benefiting. Now that we have the Chinese, everyone is up in arms agains foreign investors and wanting to tax them to the hilt. The Chinese are definitely the least of all foreign investor evils we have had since the days of the Cecil Rhodes BSA Co. Chitimukulu and Mpezeni opposed foreigners taking our wealth. Mpezeni lost his son (murdered by the British in 1898) because of that. They have never even apologised and Zambia has never recognised Nsingo as the First freedom fighter. Even after nationalisation we still had very little say in the mines until the late 80s, when they had almost collapsed.

67. The Saint,

    What matters is how much the Zambian people and economy benefit from the copper that is produced inside the country. Whatever goes for Chile is ok for Chile.

    Zambia is not taking $1.2 billion out of the mining industry. That is why the government is borrowing, and interest rates are over 20% for entrepreneurs and consumers. Because 50% of revenues are not going to local councils, everyone is paying all kinds of extra charges at the local government level. It is why the government depends on $600 million a year in ‘donor aid’.

    Of course there are other inefficiencies in government and the economy, but that is what it boils down to. That is why people always say ‘there is no money’.

    So heavily tax the mines, and a lot of problems are going to disappear.

68. MrK
    People in government are just like us, believe it or not. They too want as much money as they can from the mines to fund their programmes. But, their hands are tied. Magande taxed the mines to the hilt and what happened? Anglo pulled out, Luanshya was closed. These are not tuntemba companies that depend on one investment. Ther is give and take and government has to negotiate how much it can reasonably tax without jeopardising jobs. Right now in UK, Bankers are threatening to take their businesses out of UK if the conditions on bonuses are not favourable. We are a very snmall country and economy. Our GDP is just 2x over the profit Barclays Bank made! Bill Gates can buy us out and still live happily ever after. We should be careful. We need them, they need us.

69. Senior Citizen
    You are the only person who have seen that Under RB’s MMD Zambia is her way to prosperity.RB has proved a very rational social democrat who is focused on unlocking our country from poverty. Where in your house? It doesnt matter what Qualification Bob has. Mind Bob is Business and political consultant. Levy was a Lawyer and did better than one with economic History qualification. Ifyakale before na computor tabalapanga

70. Heavily taxing the mines or worst nationalization is not going to stop the copper dependence. In-fact it is going to fuel the copper dependence. Reason, they’ll be no incentive to diversify the economy. Imagine, a govt that would want to stay in power and has got heavy tax mines at their disposal will rather look at social service development rather than economic development. Isn’t that what UNIP did. They gave people all sorts of incentives from coupons to free this and free that.

    When the OPEC embargo’s hit and the price of copper plummeted, the freebies where unsustainable. There where forex shortages, no forex for buying raw materials for industries (that is how Cadbury, Dunlop and many others collapsed), no forex to fix the elevators at FINDECO, etc [tbc

71. cont…

    And what did the people do, they revolted against UNIP because they could not maintain the freebies. That is what you get when a govt refuses to cut the umbilical cord of govt dependence which is what was experienced under UNIP.

    We can take a look at Venezuela and how President Chavez is killing the middle class and how there is a lack of human development because of the freebies. President Chavez is concentrating more on providing social public goods at the expense of economic and industrial growth. Why, dependence on oil.

    Life works on incentives. If Zambia nationalizes the mines or taxes them heavily, all forms of diversification will disappear because any govt in power would rather provide social public goods rather than diversify in Zambia’s case. [tbc

72. cont.. from #71

    It is only in this era that we are hearing of Nasanga farming block which is supposed to be bigger than Nakambala, MFEZ, Tourism zones in Livingstone, reducing the cost of doing business, FDI, SME development, LUSE, one-stop border posts, free trade agreements and increased exports.

    Non-Traditional exports have grown by close to 100%, DRC by-passed South Africa as the major export market in SADC for Zambia and trade between Zambia and DRC amounted to $1 billion dollars last year by-passing South Africa. Investment pledges of close to $1 billion dollars in the first quarter recorded by ZDA and Pick and Pay investing close to $20 million dollars (all figures in US) giving business to Zambia manufacturers the same way Shoprite and Spar have. [tbc

73. cont…from #72

    In short, taxing the mines heavily or worst nationalizing them would be a very bad idea. It would remove all incentives to diversify the economy and not only that, it would kill jobs.

74. Interesting debate!

    To majority Zambians whose only knowledge about the jargon of “Economic Theories” is their Bellies, GDP, FDI, CATALISATION, etc, counts for very little indeed. If they can’t feed their families and send their children to school with relative easy, who cares what all the % this, % that, mean?!—they are hungry, period!!

    To a layperson struggling everyday selling ‘Nshaba’ by the roadside so they can afford just a “pinch of salt”, no amount of Chines investment, that does not trickle-down to them, will ever matter. We can pat ourselves on the back about how well the Zambian economy is doing at the moment, but for whose benefit? This is the question Mr. Sichinga is raising. Not whether we should re-nationalise our economy or not—am I missing something here?

75. Warning to level headed contributors: If you do not avoid engaging with some commentators on this forum your next post will look something like this:

    ***** capitalist and ******* senior ***** citizen ***** ****** ************ **** you ****** ********* ******. **** , ** and ************ ****** ************ ** ******* and *** mother ***** MMD ***** bootlicker **.

    Stay away from evil men.

76. Did Mr Sichinga make any suggestions then?

77. Bob Sichinga? Are these not the guys who run down ZCCM? Today he is a “Wise man from the East”!

78. MrK,
    Your Marxism has failed world over take your revisionist thinking somewhere else. renationalization is a no go option in Zambia. Appreciate the fact that MMD policies have plugged this country on the path to prosperity. The Country is headed for a Grandscale economic resurgence and real nation Development like never before. Appreciate the fact that the current economic order has eliminated the bureaucracy and culture of obsolete production capacity. Era of outdated machinery is over efficiency has come to move the country forward.The few industries in the country are witnessing a high-speed growth and economic Zones will soon be establishing some complete industrial supply chains, ranging from upstream material processing to the food procession.

79. #70 to 73 Mr Capitalist – very poor reasoning.
    Senior Citizen too, just stay on the sidelines and do not comment on matters you do not understand.

    I support #43 Mr K. Like I have said at #2 above, we are getting a raw deal from our tax revenue. These companies have put in less than $1 billion capital investment, of which 90% is from retained profits.

    It is time to expropriate KCM in particular and send a signal to other companies to be truthful in their tax returns.

    These are plain facts and I do not want any blind party loyalty response from Mr Capitalist, SC or any other retrogressive bootlicker.

80. All you cadres loudly trumpeting neo-Marxism here, you need to show understanding of some elements of economic success and examining factors on strategic basis. Zambia’s development strategy is very clear on economic policy; industrial capitalization and promotion both the local and foreign direct investments with aggressive incentives. MMD commitment is also in cultivating a young and educated work force. Far from being a miracle, soon Zambia’s success will turn into a model for economic development for other struggling African nations in a global economy.

81. On National note the Head of state His Excellency was on the copperbelt where he has met with citizens and made a press release on the following:

    -All flats at the Chinese complex in Ndola to be sold to seating tenants
    -Itawa flats complex are also to be sold also to seating tenants
    -UBZ workers to get the prices for their houses lowered to the original offer.
    -Ex miners association to be assisted in finance and industrial equipment so that they become enterprising
    -Some pits for mining to be considered for miners association.
    -Fertilizer distribution support, increase of allocation will be discussed

82. ‘He says why should he not Respect Chiluba? Chiluba was a president and RB is the president and he will need to be respected when leaves office. Accusing Chiluba is not his style, the police and the court will deal with it. Do not ask RB to join this madness.

    He says he looked so good in Mongu bamambala are just jealousy’

    RB says he likes the post reporters it’s the evil man in the office looking to twist facts.

    On Magande and Mpombo he says he will defeat them clean.

83. #80
    On the copper mines and extractive industries, current Government policy is not right. The externalisation of profits, the underpayment of taxes, importation of incompetent overpriced expatriates including CEO/CFO positions, salary disparities between local and expats, underinvestment in community etc. There is no way of justifying all this.

    Government may have other sound economic policies but on mining FDI, there is nothing to rejoice.

84. senior citizen,the us,uk just to name a few countries are actually renationalizing.i who is not educated understands the concept of privatisation more than u and your masters.first rule is you must never privatise a profitable business,the concept of privatisation is to make a profit from a failing business hence companies like zesco,the other telephone company recently should sold h

85. Zambians please unite on certain issues, the problem we have is just to talk and offer no solutions.The likes of Bob Sichinga are the local guys with money who should come up with ideas that will empower Zambians by creating a pool funds that can be used to purchase a small mine were the returns can be ploughed back.So as long as there is no Zambian to start up real investment , then lets close this debate , because those mines must operate and right now the operators are the Chinese.

86. mike,

    Its clear you don’t understand the spirit of American Capitalism and individualism. You take interventionist measures as renationalization? Who told you that Americans have settled for renationalization and socialized models? That is a big insult to the spirit of Benjamin Franklin and the US constitution.Come again on this one and debate me. I say renationalization is not American and its not coming home on them.Debate me.

87. A lot of ignorance about the former ZCCM and it’s operations on this blog .
    …..The copper mining industry will die again soon . And it will be back to square one again.

88. # 59 Digga.., a few weeks ago you shared your first hand experience at Lumwana mine with us here on LT.
    Would you please , on this thread , be so kind as to to recount your impressions of the quality / standard of some of this much vaunted F D I ..?

89. People have gotten too intoxicated by the high copper prices and it is sad that people who claim to be economist like Mr Capitalist and this LT ID prostitute (Keeps changing IDs) Senior Citizen can’t understand the basics of supply and demand in economics. There is huge Demand for our Copper and the prices says so. SO Investors will go anywhere to find it and meet that demand. It is in such environment that Govt should increase Taxes. These guys wont run away, that is just a threat. Economics clearly dictates that demand be mate , others will come in. In ZCCM era copper prices were depressed, even during Chiluba era copper prices was low and production was low despite the mines being in the hands of the might ANGLO American

90. The Idea that Investors will run away if we tax them more is hogwash. Anybody who can make 15% return on copper in Zambia would step in. These guys are making profits in excess of 50-60 %. This is unprecedented and heaven on earth. Check the financials on the publicly listed companies. Government need to work up, the copper industry is not in recession. You give incentives to an industry in recession and not a booming industry like copper with demand at all time high and pricess and all time high, you got to be crazy and certainly you have not done business in your life and I don’t care how many econmics degree you have if you can’t take advantage of the simple supply demand equation, which by the way is the basis of all economics

91. Also you MMD cadres can you tell us why your government has not compelled all Mining Companies to list on LuSE. At least ordinary Zambians can take party and share in the huge dividends they continue to pay to foreigners. I bet the MMD and its economics are still searchg for a chapter in their economics book on how to make a foreign company list on your local bourse

92. Asking for an intelligent debate on LT? Intelligent debate with little scared men like “Nine Chale” who is unable to write anything except “good morning or “good evening” or “Senior Citizen” who runs his mouth on issues he will never understand in his life time?. These are little Jack legs that have all the time to pour their ignorance on LT. To all bloggers be weary of time wasters!

93. I note that all the shooters just sit and wait for someone to make a contribution then they do what they know best, shoot. I have not seen any valuable counter suggestions from any one of them. Shame!

94. #89 True PF Cadre – Its fore cast that Copper prices will plumet down starting September 2010 and as such, I hope MMD will not use it as the reason for their failures. As Sichinga says there no benfits therefore when the bad day comes there will be nothing to show for these fat seven months.

95. HIGH levels of profit repatriation by mining companies is making the kwacha fail to appreciate against major international convertible currencies despite the country recording positive trade balance, key Renaissance Capital analyst Samir Gadio has observed.

    And Gadio has observed that in the immediate short term, the kwacha is not likely to appreciate against global currencies as foreigner portfolio investors try to exit Zambia after their local-currency fixed income positions mature.

    Despite recovery in copper prices, the kwacha has not recorded any significant appreciation as anticipated trading around the K4,650 and K4,670 for bid and offer.

    Copper prices currently are now at about US $8,000 per tonne, yet the kwacha has not appreciated significantly as in 2008.

96. Latest statistics from Central Statistical Office (CSO) indicate that the trade balance has been in positive balance since June 2009.

    Copper is Zambia’s chief export product accounting for over 63 per cent of the country’s foreign exchange earnings.

    “I think the issue is that the income balance is consistently in negative territory, probably partially reflecting the high level of profit repatriation in the mining sector, which has resulted in sluggish (aggregate) current account metrics,” Gadio said.

    The kwacha lost some ground against the US dollar in early 2010, after rallying from second quarter of 2009, but in reality the currency has not moved much compared to second half of 2009.
    The US dollar and kwacha exchange rate has been more volatile in the past.
    And Gadio…

97. You MMD bootlickers are sad people. There are no facts to back up government’s statement!

    “Last week, Finance and National Planning Minister Situmbeko Musokotwane said Chinese Investment in the country has helped the country attract other investors from bigger economies.”

    OK, where is the proof instead of making blanket statements and expecting people to just believe?

98. Senior Citizen

    You cant fail to read this……………

    MMD has been in power for approx 18 years.
    WHO PUT ZAMBIA IN THE POSITION IT IS IN?
    Who is trying to say they will make a change?
    It really cant be MMD making the change as it has been making the changes for 18 years and look where it has taken Zambia.

    ZAMBIANS DONT LET YOUR COUNTRY BE TAKEN FOR A LONGER RIDE BY THESE THIEVES.

    ACCOUNTABILITY AND RESPONSES TO THE A.G REPORTS WILL IMPROVE ZAMBIA.

    NEVER CAN MMD DO IT.

99. If these chinese inversters are made to build proper communities e.g houses schools, hospitals, roads etc for their workers then we could at least say people are gaining something rather than just uncertain jobs where if they leave after getting their copper the people are left with absolutely nothing. GRZ please think long term for the people and not long pockets for yourselves[-(

100. every time i see the names ,Senior Citizen,Patriot,MMD BOOTLICKER,THE SAINT,I feel like vomiting,nimbwa sana ababantu

101. 100, I am sure they also feel like vomitting when they see your comments.

102. 95 Smoothcriminal, ” HIGH levels of profit repatriation by mining companies is making the kwacha fail to appreciate ”

     Zambia is losing out on the record high copper prices because we are being robbed blind by the foreign mining companies. They don’t play fair, and neither should we. They have bribed the MMD to allow this, and that is why the government doesn’t want to tax the mines. They have no such inhibition against taxing workers of course. When it comes to the people’s rights, all of a sudden ‘moral hazard’ comes into play (see the NCC remarks on the right to shelter, food and healthcare).

     101 Katie Good ” pm100, I am sure they also feel like vomitting when they see your comments. ”

     Really? How so?

103. And another thing. Everyone in the country is paying for this state of affairs every time they buy an imported product (fuel included).

     Because Zambia is exporting over $2.5 billion in mining profits every year, the value of the Kwacha to the US dollar is now lower than it was before the boom. The Kwacha is now K6000/$, only a few years ago it was K4800/$.

     The foreing mining houses are stealing the people and the country blind, and the MMD is facilitating that theft, by refusing to tax them.

104. #101 you are have been eating poor people’s money and You have stopped reasoning! Wake up Katie be real! Whether you like it or not MMD is going. Bob thanx for the good analysis.

105. Dont even know whether RB understands what Sichinga is talking about.

106. #102 & 103.

     I couldn’t agree more. We need to get back the most viable mine, obviously KCM. Taxation alone with this kind of evasive investor will always be tricky. The investors should be paid back nothing because they have already recouped their investment, or at most some token sum related to the external capital they brought ($25m). I have studied numerous FDI cases and this would be a very fair deal. Elsewhere in the so called civilized west, investors have made losses when Western Governments have expropriated strategic assets. Expropriation in the West and elsewhere happens all the time. All this talk about scaring away other investors is misplaced. I believe the only reason expropriation is not being talked about is because the MMD leadership has been bribed.

107. 106 Vision, ” #102 & 103. I couldn’t agree more. We need to get back the most viable mine, obviously KCM. Taxation alone with this kind of evasive investor will always be tricky. ”

     There are ways to tax them that are pretty un-evadable – drop all taxes on the mines, except the royalty tax on turnover, and raise it from 3% to 20% (or higher).

     Turnover can be monitored, unlike ‘profits’. Transnational companies famously do not pay income tax. Just put one or two ZRA personnel at the entrance to the mine and monitor all the trucks leaving through the front gate. Put a satellite overhead if necessary (Google Earth even) and you can track how many trucks leave the mine with ore. And if they cheat on even a single truck, yank their license and nationalize the mine.

108. However, nationalisation should always be an option. The only problem I would have is that we need a separation between the state (civil service, parastatals) and the government (president, cabinet), as well as a separation between the government (president and cabinet) and the party in government (UNIP, MMD).

     That can be done through the constitution.

     Also, it would be great if the constitution guaranteed that 50% of national revenues were paid directly to local government. That way money would be spent where people can see it, and hold councillors accountable (councillors have more local ties than MPs, who can be imposed by the national party).

109. Mr K,

     Good points. Government should start with a turnover tax of say 20% or a progressive tax based on the market price of copper. The current 3% royalty on the soaring copper price is ridiculous.

     In the unlikely event that this fails to work properly, then we resort to expropriation.

110. The IMF, The World Bank and the International Trade Organisations are institutions set up by the wealthy and they totally negate the needs of the poor. Until the shackles and chains of these institutions are shrugged off like the colonial masters, and until the terms of aid are a lot fairer. developing nations will remain just that ‘Developing’ One Nation alone can not take these institutions on however a united continent could. With the Eurozone in crisis, that is having an effect upon the UK Sterling, which in turn is effecting the US $. These three events effect China, who is seeing a huge downturn in its economic growth, has also just hit inflation at 4.5%. I would like to believe that the balance of economic might and power is on the move. Just don’t let the banks get greedy

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