A white collar crime scene

By Nkonkomalimba Kafunda

As the year comes to an end it creates an opportunity to reflect on various issues affecting our country and maybe chart a way forward for 2025. Paramount among these is the failure of the UPnD government to provide citizens with ability to pay for the lives and livelihoods they believe they deserve, while cohorts of the regime are seen to become increasingly affluent , arrogant ad contemptuous towards the common man.

During it’s audaciously successful 2021 election campaign, the party, then in opposition, sold itself as a fervent believer in the rule of law, an uncompromising enemy of autocracy, the nemesis, tormentor of corruption and implacable foe of the corrupt. Alas, the unexampled levels of exemplary corruption, intolerance of dissent and discombobulation of the opposition seen since the change of government has, literally, turned the country into a white collar crime scene. Theirs’s was an election won under false pretenses.

The latest Financial Intelligence Centre (FIC) report has highlighted jaw dropping illicit transactions involving millions of dollars. When this was pointed out in parliament, Finance Mister Situmeko Musokotwane on December 6, paradoxically and counterintuitively, replied that this was a sign of good governance as such a report would never have seen the light of day in the previous government as there would have been incalculable consequences for the board and management of the FIC.

According to Academic and politician Dr. Mbita Chitala, the Finance Minister has been actively working to the detriment of the country. In a recent article Chitala states that on 29 October 2021, “Musokotwane presented his 2022 Budget to the National Assembly. He not only reduced the mineral royalty tax from 10% to 3.1% but also announced that mineral royalty will be deductible for corporate income tax purposes. In other words, it would be considered as a cost in the accounts of mining companies. This was a departure from best practices as a royalty is simply a right to use land and should never be part of costs. This measure effectively reduced royalty payments on base metals in Zambia as the mining companies were able to report reduced sales particularly as they also enjoyed rights to carry on losses according to their development agreements. Many people criticized this move with the Governor of the Bank of Zambia Dr. Denny Kalyalya commenting that “our economy has shrunk and stagnated.” The Zambia Revenue Authority also continued to fail to reach the 22% of GDP collection demanded of them by the Minister and in fact regressed to 17% of GDP. This made its Chairman Dr. Caleb Fundanga who is a close friend of mine very concerned as he is not used to failing.

“Musokototwane further continued on the borrowing path as he did earlier under President Banda to the extent that Zambia’s external debt in 2022 was reported to stand at $18.6 billion. This external debt included debt-service arrears of which the Eurobond arrears were reported to be $821million as at December 2020. The Total Local debt also rose from K198 billion as at December 2021 to K236 billion as at September 2023 with the adverse effect of the government borrowing overcrowding private sector borrowing”.

That’s not all. Musokotwane also announced that “ZCCM-IH, that held 20% shareholding in Kansanshi Copper and Gold Mine had agreed to convert its dividend rights in Kansanshi Mine into a life of mineral royalty payment. He announced that the first payment that FQM would pay ZCCM-IH would be sourced from the outstanding Value-Added Tax refunds from Zambia Revenue Authority due as at 30 June 20222. The aggregated amount of the VAT refund was US$ 442 million and ZMW 433 million. This measure would not only adversely affect the rights and power of ZCCM-IH as shareholders and its Directors would be removed from Kansahshi Board of Directors. It would also adversely affect the country’s right to use its forex income to support the Kwacha.

“Further, in some very surprising move, Government directed that the Director of Public Prosecutions (DPP) drop criminal charges against Kansanshi Copper Mine Directors, as part of the conditions precedent for FQM to declare a dividend in the sum of the amount that the government had been claiming from the mining giant majority-owned by First Quantum Minerals (FQM) – to a 3.1% revenue royalty. In this case an audit had revealed that FQM Directors had illegally repatriated $2.5billion from Kansasnhi Copper Mines to develop Cobre Panamá Mine, a new and large-scale open-pit copper mine in Panama without ZCCM-IH consent. This was simply theft. No details was disclosed how the Zambian Government would recover these colossal sums. In fact, ZCCM-IH had in fact won the case in the London Court and awarded US$1.4 billion in damages.” Chitala reveals

Still in the all important mining sector questions still linger on how Vadenta Resources, an Indian conglomerate with questionable balance sheet was handed back Konkola Copper Mines when it was clear that they did not have the capacity to revive the mining operation’s fortunes. In what is undoubtedly a mendacious smoke and mirrors routine, some pledges have been fulfilled others not. The Copperbelt Energy Corporation was recently grated a court order ordering KCM to pay US10million of a long overdue US30millio within 10 days. In what most saw as a face saving egg, wiping exercise, KCM hurriedly announced the relaunch of its Konkola business Unit pledging a US$500m injection into the Konkola Deep Mine project. This asset, however, is believed to have been used as collateral for a US$700 million loan from Standard bank of South Africa before the 2019 liquidation, money which was never invested in the mine.

The ‘non sale’ of Mopani Copper Mines (MCM) seems to be doing a bit better. About 2000 miners have been employed fulltime rather than through contractors. Local government authorities have been paid land rates and suppliers seem to be back in business.

Controversially, however, the transaction did not have parliamentary approval and oversight as required under article 210 of the constitution which deals with the disposal of state assets. Mines Minister Paul Kabuswe, with unbridled arrogance, tried unsuccessfully on two occasions, to convince the house that the transaction was not a sale but an allotment of shares. No ne the less the asset has changed hands and IRH through Delta Mining are majority share holders. Semantics or substance over form as the accountants would put it. The Bellicose Kabuswe left more questions than answers after two ministerial statements on the transaction. Speculation as to the beneficial owners of the SPV Delta mining actually are, are also rife fueled by allegations that Delta was not even among the shortlisted bidders for the Mopani transaction and won the deal through surreptitious political maneuvering.

On the political scene the upnd nefariously employed skullduggery to annihilate the largest opposition party, the Patriotic Front, sponsoring a faction ad bankrolling a dubious convention that anointed Matero member of Parliament Miles Sampa as President on October 24, 2023.

With the aid of presiding officers of tilted neutrality, Sampa appointed cp-conspirator Mafinga MP Robert Chabinga as leader of opposition in parliament and expelled 9 PF members of parliament a move meant to significantly reduce PF MPs in parliament, effectively disemboweling the PF. The matter is before the courts and the MPs continue to represent their constitutes. Intriguingly, Chabinga has since turned on Sampa declaring himself acting PF President ad expelling Sampa and bona fide PF President Edgar Lungu, despite a court order restraining him and his agents from masquerading as PF officials.

Out of keeping with democratic tenets and traditions, various critics and opponents have been arrested and charged for sedition or under ambiguous hate ad cyber crime laws in essence making the repeal of defamation of the president law farcical.

The much touted fight against corruption is largely seen as skewed against members of the past regime and their associates.

A drought of almost biblical proportions has slowed down economic recovery and diversification to a snail’s pace. Despite significant strides in debt restructuring, the drought induced power deficit has left upwards of 20 hours of load shedding daily. The cost of living continues to spiral out of control forcing families to have one or no meal a day. Government interventions such as social cash transfers, cash for work, loans and grants under CDF are helping but remain insufficient and inadequate.

Inflation at 15% is way above the targeted and of 6-8%. The Exchange rate against the dollar keeps oscillating between K26-K28. Fuel prices gyrate monthly leaving businesses little room to plan . Mealie meal, the staple, hovers in the K230-350 range for a 26kg bag depending on the source. The JCTR puts the monthly needs basket for a family of five, at over K10,000, is well beyond the reach of the majority. Poverty, according to government statistics office, stands at over 60% in urban areas and 84% in the countryside.

Amidst all this widespread misery, poverty, pauperism and resulting largescale, almost, universal popular resentment, the ruling party has attained a false sense of invincibility after winning almost all local government bye elections since 2021. With their boundless ego, self praise, self aggrandizement and relentless backslapping, the upnd are seen as indifferent to the plight of the people. The people having seen the sleight of hand they were dealt in 2021, have retreated, realizing that in the vicinity of every silver lining lurks a cloud, to fight their battle in August 20026.

Edgar Lungu may not be on the ballot in 2026, but the cost of living proffers an even more formidable adversary.