By Mac Nzombola
Zambia is a nation founded on copper. Its foundations are built such that they reach deep and rest in the earth on the sulfide and oxides ores that host the metal. When Zambia’s founding mythology is eventually written, copper will be its cornerstone. The country is so intertwined with copper that the amber color of the metal has equal standing on the national flag as black standing for the people of Zambia, and red standing for the fight for independence. Two times we find the mining of copper on the coat of arms: first, there beneath an unfurled African fish eagle is a pick-ax crossing a hoe, and there again at the foot of a common man in a safari shirt and shorts is a mine shaft and hoist house.
A copper crown tops the National Assembly building where Members of Parliament deliberate and make laws for the country. Perhaps more telling, when Elizabeth II of the United Kingdom visited Zambia in 1979, she rode in a copper clad Land Rover.
The metal seeps into the nationhood of Zambia in deeper ways than merely symbolic. Mined and worked in the Congo and Zambezi river basins for millennia, it was partly in pursuit of copper and other resources that the British came to Zambia (Northern Rhodesia at the time) in the late 1800s and early 1900s bringing with them high volume mining techniques and rapid European population growth. Copper production in Northern Rhodesia rose to second highest in Africa. Now, well into the 21st century, Zambia is still a high copper producer and still second only to the Democratic Republic of Congo in Africa.
The global price and the tons of copper mined in Zambia have particular implications for the country. As it happens, Zambia is not only a major producer, but is also heavily dependent on copper—copper accounts for 80% of the country’s exports. Measures of national income follow the cardiogram like ups and downs of global demand and copper prices.
These ups and downs reach into the lives of ordinary Zambians in a manner that often bewilders their efforts at well-lived lives. Among the most consequential result of these pendulum swings is the unremitting dispersal of the Kwacha’s buying power, and the attendant tendency for prices of essentials to rise but never to fall—stubbornly unresponsive to desperate efforts to arrest the increasing cost of living. The relentlessly declining Kwacha is one of a myriad of issues that chronically poison and sap the joy of life for ordinary Zambians who must fully dependent only on their own industry for survival.
What wealth the nation receives from its copper does not accrue equally to all citizens. By some means or other, some Zambians enjoy more of the largess than others. But this is an age-old question—how to fairly distribute a nation’s wealth among its citizens?
Kenneth Kaunda, the first President of Zambia thought the answer to this question could be found in humanism—his own adoption of socialism. It combined African values with western socialist and Christian values.
One important outcome of Humanism in Zambia is the rather, in end, unsuccessful 25-year experiment with government ownership and management of the mines. Taking over the mines in 1969, with copper production at its historical highest, the shift in focus for the mines to providing employment and using copper revenue to nurse other sectors of the economy sent copper production into a slow but steady downward spiral, bottoming out in about 2000 when production was similar to that in the mid-1940s.
The failure of the mining industry as a public enterprise and loss of revenue, and the subsequent essential commodity shortages played a part in the ouster of Kaunda by Zambians in 1991—ending his 27-year rule.
Fredrick T. J. Chiluba, elected as the second president of Zambia in October 1991 embraced with gusto the tenets of capitalism and a market driven economy. His government embarked on a wholesale program of privatizing state-owned enterprises with a special focus on the mines. It took 10 years for the mining industry to shake off the inefficiency hang-over of Kaunda’s rule. But around 2000, copper production began to rise again. The rise in production coincided with increased demand for copper, especially in China, and higher prices reaching an all-time high in 2011.
Something else besides positive copper market vibes happened in the mid-aughts that gave an optimistic tint to Zambia’s future—debt relief. Through the Kaunda years, and for various reasons, including support for Southern African liberation movements, dwindling copper revenue and high oil prices, Zambia accumulated a staggering debt of $7 Billion given the size of its economy. This debt, owed to western countries and the IMF and World Bank, was canceled around 2005. Zambians could start over. They had another shot at financial independence. Returns on copper sales could now be used to develop the country and not go to pay off debt.
Times were good. Zambians sensed the country’s wealth and theirs rise on a track commiserate to the promise at independence. The high demand for copper and soaring prices brought on private western banks and Chinese loans eager to rip returns from emerging markets. The loans bought new roads, bridges, and mega sports stadia. New shopping malls and consumer services keen to relieve Zambians of their new-found wealth popped up around towns at any open space that might have been a green space in some alternate planned cities.
Overnight, ordinary citizens were speculators, buying land and building homes—for some, the era of multiple home ownership and landlordship had arrived. It was a time when you had to have land and perhaps a structure on it to be somebody; every conversation, in due course, succumbed to the gravity pull of owning land and building. It all made sense. With the ever-evaporating value of the Kwacha, real estate was the one investment with any true promise to hold and even increase in value in the long term.
And it appeared after debt relief that Zambian governments had finally figured out how to pilot the country. Now, in the third decade of the third millennia, nearly 60 years after independence, it is apparent that the sensation of flight was an illusion. Zambia is still on the ground taxing uncertain of lift-off, or even of destination. With presidential elections in 2021, and the national debt at an all-time high, the next few years is when we must take to the air because here is where we run out of runaway. The population grows and resources deplete—think copper here. There is likely a gap at some point in this divergence that becomes impossible to bridge.
For some among my fellow Zambians, acknowledging the poor performance of the mines under government ownership and the now dismal outlook of the country in general, leaves a sense akin to a broad-brush accusation of incompetency leveled at the entire nation; suggesting the foul idea of failure to manage our own affairs. For the mines, part of the reason has to do with the removal of the profit motive and positive investment performance requirements as the ultimate end of enterprise and a shift to a mission emphasizing mass employment and social engineering. For the country as whole, it is the pervasive failure among leaders to value legacy and lack of follow-through on the patient work of building strong institutions serving all of society rather than individuals. There is an all-too common and apparent refrain that a little rot here and there does no harm when it benefits those working for the country.
So things carry on in Zambia—much talk of creating employment and accelerating development through infrastructure, manufacturing, agriculture, tourism and so on and so forth—all part of the ritual language of development economics and political campaigns with a rotating cast of characters, but in practice the answer to problem after problem for Zambia is always seen as copper and the mines. But how much copper do we have left, and is it enough of a bridge to get us to the next phase when agriculture, tourism, and manufacturing finally take over?
Indeed Zambia has been mining for 100 years now, what we should address is how to quickly stop the export of raw copper by value addition. Zambia is an importer of copper products and that isn’t good for the country. The market for copper products is huge within the region. I think that’s what your article should have concentrated on in order to ignite debate that leads to something positive.
Well presented.
I worked in the copper mines for 16 years, in 2 stints.
Copper will continue to be the backbone of the Zambian economy.
Together, we an rebuild the industry.
KK and UNIP did their level best to have Zambians benefit from their minerals. The MMD undid all that during their tenure where they could have fixed some of the parastatals and mines instead of just selling them. Yes, debt relief was achieved but at the expense of letting our wealth leave our borders-the taxes and royalties enjoyed in the Levy and RB era couldn’t sustain the country while Europe took the rest of the copper sales. We can’t develop without industries, a fair financial and banking system (not the current enterprise busting high interest banking system) and a revised education system. Study the Chilean or the Saudi model.
Indeed we are blessed with so many resources,why should Mother Zambia be poor?Cry my beloved Zambia.
This is the best article to be written in LT for a very long time. It is good reading and FACTUAL. Numbers do not lie. Notice how Zambia’s GDP is rising in tandem with copper prices UNTIL PF came into power. There is a discrepancy. UNIP run a socialist, full employment economy and the oil crisis in 1973, the closure of the Zambia-Zimbabwe border in 1970 and the liberation wars can account for the dismal performance of the economy. BUT PF have had everything and yet they messed up. Covid is not an excuse at all. There was no global financial crisis like under RB’s MMD. There was no famine like under FTJ’s MMD. Lungu has just failed.
Copper is a wasting asset. A wasting asset is a resource that has a limited life span and irreversibly declines in value over time. At least that is what every child learnt early at school. If you were taught something else, then that was by virtue of privilege for teachers to choose what to teach and how to teach it. Finishing assets also provide significant income for producers. However, time comes in foreseeable future when finishing assets get exhausted. The end of wasting assets brings challenges but timely planning could facilitate transition to other profitable income generating activities. Economic diversification away from copper mining to transport, telecommunication, multimedia, tourism, agriculture, manufacturing and other services such as ICT, education and health have proved…
A well written piece.
@Saint: I don’t know how you upnd donkeys manage to see things which other people can’t!! The chart is clear, from 2011, GDP is on the rise until the 2013/14 commodities bust which dragged down the GDP. But GDP in 2017/18 still rose despite low copper prices. Factor in the 2015 power crisis which brought the economy to its knees, PF have managed to keep the economy afloat. So, my Edgar Lungu hate filled friend, try and stick to facts and truths-IT WILL FREE YOUR MIND AND SET YOU FREE….
@Saint: I don’t know how you upnd donkeys manage to see things which other people can’t!! The chart is clear, from 2011, GDP is on the rise until the 2013/14 commodities bust which dragged down the GDP. But GDP in 2017/18 still rose despite low copper prices. Factor in the 2015 power crisis which brought the economy to its knees, PF have managed to keep the economy afloat. So, my friend, try and stick to facts and truths-IT WILL FREE YOUR MIND AND SET YOU FREE….
@Makasa Kasonde that was the story of long ago that copper is a wasting asset. Copper Mining has outlived our fathers, it’ll outlive us and possibly our children. For now let’s talk about how this so called wasting asset can benefit us and our children. We have been mining since 1920, before even KK was born! New mine with longer lifespans have been established. We still have more unexplored mines. So what are really mean by wasting asset?
The Zambian government did not have the money to continue running the mines.They we’re spending $1million per day and needed reinvestment in equipment and capital,hence privatization.What is often forgotten is that the mines were private before Mulungushi reforms which nationalized the mines.
The privatization of the 90s was simply going back to prevent 1969.