The government has ruled out exempting foreign mining companies from paying higher taxes in return for doing more to train local workers.
Zambia gave foreign firms that bought copper mines starting from 2000 tax breaks as part of development agreements so they could keep up output at a time of low prices.
With prices now sharply higher on the back of strong global demand, especially from China, the government recently told 10 foreign copper and cobalt miners that it wanted to renegotiate these pacts.
Finance Minister Ng`andu Magande said he would explain to the mining companies that the development agreements were about more than tax breaks; they also obliged the mining firms to train local contractors if they lacked the necessary skills.
“Now, when we go into these negotiations, we want to know whether the mines have been able to do that. If they haven`t, what is the problem and how can we work together to create this capacity?” Magande told reporters on the sidelines of the annual meeting of the African Development Bank.
Asked whether there could be a trade-off, Magande said: “No. What we feel is that if we let each one of them say, `I have a social responsibility, I will do this` it will be very difficult to supervise.”
Foreign mining firms operating in Zambia include London-listed Vedanta Resources plc, Canada`s First Quantum Minerals and Swiss firm Glencore International AG.
If social development were left to the mining firms, inequality and social problems would result, Magande said.
“So what we have said is that, if they do agree, we think taxation is logical.”
Some of the firms argue that the development agreements incorporating the tax breaks are legally binding.
Magande said the government, in embarking on the negotiations, had discovered some “technicalities” were involved and said some multilateral financial institutions and bilateral donors had offered to help Zambia prepare for the talks.
The government had held preliminary meetings with the mines and hoped to have something in writing by the end of the month, the minister said.
( Reuters)
About time, to start with most countries don’t allow foreign investment at 100% and royalty taxes are higher. If we did maybe 60:40 investment we would ensure that part of the profits stayed in Zambia but as it were all profits go to benifit the countries where the investors are from.
If the money is not staying in the country, there is a definite need for more taxes to ensure that zambians benefit from their resources.
Rudy #1,Zambian’s or citizens of any nation benefit only through the tax the govt collects. If an investor made 1000% profit,thats their business,the govt’s duty is to tax that profit,and thats their share.Where businesses divert the money is not govt’s business.We have corporate,vat and many taxes in Zambia through which the govt benefits. The problem is the govt blames other people for their wrong doing’s.
Its appalling to read the Magande’s reasoning to justify increase in taxes to these mining firms.That is what happens when you implement policies you do not understand.Profit maximisation is the key objective for any businessman.You can not be tied by silly explanation of social responsibility its not the core business of an investor, its the duty of govt to provide social requisties to the citizens through adequate taxation.Zambia lacks well functioning legal and economic institutions that promote , monitor and render transparent market operations and these investors capitalised on such a weakness.Of course we needed to provide incentives to woe them but we should have realised that all the assets were on the zambian soil and you should have been prudent enough to put in a compelling clauses to adequately address taxes after business stabilised with a developed market structure.one such tax could have been ‘windfall taxes’.But again IFI’s were part of the drawing guidelines being
architects of the policy, why did they ignore such an important issue? Its time we started developing our own policies which will be able to understand in our own intelligence and held accountable these selfish donors.Recently world bank was quick to echo that Zambia must renegotiate the contracts and yet they were part and parcel of the whole transaction and policy write up.When shall Africa learn? Magande involve world bank to renegotiate with these selfish chaps or pass the double enrty on their debts to recover the lost taxes.
Dr Creditor World bank
Cr Current account bank of zambia
with the right lost tax figure.Hold them accountable.Tony Blair assured your Africans to hold the donors accountable should they become wanting, so what are you waiting for?
On capacity building, that is why you should not have sold these mines for a song, its your duty to retrain from the savings gained from the transaction of the sale.How much do you have in ZPT fund?
My message to Magande is ‘”increase the tax”.If they refuse do a Hugo Chavez,Increase Government interest in the mines.In Botswana 2/3 of profits from mines is retained by Govt as tax.So we will not be doing something out of the ordinary.
Magande for all his qualifications & impressive CV, leaves much to be desired! He tries to run the economy textbook style, without realising that textbooks are about 10yrs out of date by the time they are published, then add on all those yrs that have passed since he read them, “boy aren’t we in a fine mess!!”
IT is time we re-negotiated, there is no way these guys will abandon their investments, we should however do this within legal frameworks, becoz we can end up being screwed with both our assets and market outlets. Using NGO’s such as Oxfam, Anti-Vulture,& End Poverty lobby groups we can muster enough international support to get these companies to re-negotiate.
First of magande shoudnt be negotiating with mining companies on taxes. The Ministry of mines provides oversite to the mining industry. The know if the taxes being propossed are sustainable or not if they dont know fire them. What is wrong with Mr Magande’s approach is look at the profit margine the mines are making. That is a wrong index to look at. because some one can make 1000% profit to day and make a loos of 1000% tomorrow. He has to look at sustainability of the taxes without killing the mining industry. To date Zambia is one of the most expensive country to do business in the world. For those of us involved in exporting goods to Zambia its really discouraging when you look at how much you pay in duty and VAT.
Chilumba,i’ll agree with you on all the points you have raised,except for the issue of World Bank been part of the policy write-up,i disagree on that,because the World Bank are brought in as part of the financier’s of the budget hence they must have a say on what strategy to implement,and the world bank is there to offer advice and not to give instruction’s,which the govt can either take or not.And if things do not go according to plan,because of changes in the environment,a rewrite and new plan could be necessary, but the wb should not be to blame.
P #5,i dont agree with you on your views on Chavez,first he is a military and believes in coup’s hence he wants to take over everything in Venezuela by force.Again,he believes in Socialism,which is harmful for any economy in this world,because socialist believe everything is for free,when infact it isn’t.Chavez is just talkative and arrogant for nothing and we in zambia believe in negotiating unlike Chavez.
Kayata, our mines had alot of complications that is why they ring fenced from the rest of the Tranches.It was a question of selling them as a single unit or unbundled and this is where World bank came in and particpated fully to the complete sale.AAC offered to buy it a single unit and the price was found to be ridiculous and the politics went on until the value of the mines comprising ZCCM wnet down because of huge losses incurred in these sale process, so World bank is partly liable for its ineptitude and inconsistencies.
In my view,the govt is not solving the problem at hand.High Unemployment.It has run out of funds,but this is not the best way out.The Govt’s expenditure is high and it’s revenue low.It’s trying to tax the people in informal sector,and practically that is unachievable.
SAGE,this Magande is behaving like a business man who failed to run his business,then sold it off,and upon seeing what the new buyer is able to achieve now wants to rip off the new buyer.
Chilumba,i forgot to mention that i dont support “windfall taxes” especially in growing economies like Zambia,but as you already mentioned that after the businesses stabilised,which is not certain,but as SAGE has pointed out too,that you can make huge profit this year and make huge losses the next and next years to come.
Kayata , that is why I still feel we need a commission of enquiry in sale of the parastatals.You can not sale 262 companies and come up with nothing surely?Which prudence concept did they apply?Starting from Late Penza, Valentine Chitalu,Hakainde Hichilema etc all these chaps must be held accountable for their participation on and during the sale of certain companies.Corruption was grossly at play with our good friend comfortably sleeping in abyss.That is why FTJ must not be screwed alone in this $46m and his $9m some of these monies must have come in as commissions for sale of certain entity.Can Smith post a full judgement document so that we see other 19 chaps in the saga?Ramcoz $35m has not been traced.
I am not an economics but i have taken economics classes before, Govt has realsed the need for ZAMBIA to benefit more from the #1 forex earner of Zambia. There are many companies who have closed their operations in Zambia after the end of the tax free yr.Anglo American did the same thing.It time ratins the profits so that more money can be used to develop agriculture, education,health,and infrastructure that Zambia badly needs. Magande should not just talk to the Mining firms but pass a resolution to do so.
Kayata,Ref#10 you see I included windfall taxes purely becoz the market had not developed in opposition to complete tax holiday for ages.Metal marketing is a dice business but we needed to be prudent than just making assumptions.Tax breaks are counter productive especially for our country whose main lifeline was copper.Irrespective of the prevailing conditions ‘windfall taxes’ should have been partly been policed as a more prudent measure.Believe you me these investors have agendas after they made what they want they will relocate and go on shopping sprees elsewhere using the profits derived from your land.Its more of a safety measure to apply windfall taxes than non at all.UK still enforce such a policy and they still manouvre.
Abena Chilumba Francis Ngosa (long name but never mind) you are absolutely right in your comments. Magande and company are all to often fond of copying other peoples ideas without fully grasping the essentials and having a plan on implementation.
Just reading Magande’s coments one doesn’t get a sense of confidence in what he is saying. The price of copper has moved from over $2000 per tonne to well over $7000 per tonne.
Chilumba,Ref#13,Henry Paulson,US Treasury Secretary appealed on Bloomberg TV appealing for foreign investment’s.Every investor looks for an opportunity where money can be made,and if those opportunities disappear,so will they.The agenda of an investor is to make money,on that you’ll agree with me,who knew that one day New York would lose the financial status as leader,and it moving to london and hong kong. Do you think we have real or genuine investors in Zambia?
Comment No. 11,Francis dear,you aksed for a list of defendants in the FJT London case. Here it is: (1) Meer Care & Desai (a firm), (2) Cave Malik & Co. (a firm), (3) Dr. Frederick Jacob Titus Chiluba, (4) Xavier Chungu, (5) Atan Shansonga, (6) Stella Mumba Chibanda, (7) Aaron Chungu, (8) Bilmal Thaker, (9) Faustin Kabwe, (10) Ireen Kabwe, (11) Francis Kaunda, (12) Boutique Basile, (13) Nebraska Services Ltd, (14) M.I.S.S.L Associates Ltd (15) Hearnville Estates Ltd, (16) Jarban S.A, (17) Raphael Soriano (aka Katebe Katoto, aka Emmanuel Katto), (18) Belsquare Residence N.V. (19) Roland Cracco, (20) Robert Standaert.
The claimant was the Attorney General on behalf of the Republic of Zambia.
Francis, you can verify this by visiting http://www.dlapiper.com. or even our own people’s paper, the post newspaper at http://www.postzambia.com, if you have subscribed and your subscription is uptodate.
Daka, many thanks,You see when a story becomes less exciting you even forget where you were started from.
Kayata,#15 foreign direct investment(FDI)is a more stable way for capitalisation than other types of capital flows but its the side effects it comes with which all developing nations have widely discredited.In the long term they tend to influence policy when they become greater participants in the economy and despite liberalisations and privatisation most countries have not received this FDI.At one point ZIC raised this issue with Magande but since he has no capacity or policy to monitor this it became a laughing off matter.That is why Luanshya people resorted to using hand tools to mine copper during the Ramcoz era.At the end of the day it boils down to one thing not having far sighted economic managers.
Digging Into Big Miners
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Antofagasta
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CHILE
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RIO TINTO
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Kazakhmys Plc
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Market Comment
[ May 17, 2007 ]
By Kevin Godbold
In my last article I said I wouldn’t bet the farm on the future occurrence of a commodity super-cycle, but I do think big mining looks attractive as part of a diversified long-term portfolio.
Since I am looking for investments to tuck away in my SIPP, it seems like a good idea to consider the 8 FTSE 100 (news) miners as potential investments.
How they compare
This table lists them in order of market capitalisation and considers the valuation measures of historic and forward price to earnings ratios:
Mkt
Cap £m Share
price £ Historic
PER Forward
PER 07 Forward
PER 08
Anglo American Mining (LSE: AAL) 42,521 28.74 16 13 15
Rio Tinto (Stuttgart: 855018 – news) (LSE: RIO) 35,364 35.77 12.7 12.4 12.3
BHP Billiton (LSE: BLT.L – news) (LSE: BLT) 27,845 11.99 14 10.4 10.3
Xstrata (LSE: XTA.L – news) (LSE: XTA) 26,400 27.17 12.4 9.5 12
Lonmin (LSE: LMI.L – news) (LSE: LMI) 5868 37.90 24 18 16.2
Kazakhmys (LSE: KAZ.L – news) (LSE: KAZ) 5441 11.64 7.7 8 8.6
Antofagasta (LSE: ANTO.L – news) (LSE: ANTO) 5289 5.36 7.7 9.4 11
Vedanta Resources (LSE: VED.L – news) (LSE: VED) 3930 13.67 21 8 7.7
The first thing I notice is that they neatly divide into a relatively big four (AAL, RIO, BLT and XTA) and a relatively small four (LMI, KAZ, ANTO and VED) in terms of their market capitalisation.
A quick skim over the most recent results of each company, confirms that each seems to be generating robust cash flow, and debt seems under control in most cases. However, none of these companies is paying a high dividend yield so investors will be looking for capital growth. The price to earnings ratio figures provide a reasonable starting point for further research.
What each company gives us
As we are coming at this from a desire to invest in commodities, it is important to know what each company deals with. Unsurprisingly the big four companies are the most diversified, covering most metals and industrial minerals between them. There are subtle differences between them, but copper, iron ore coal and nickel contributes heavily in all of their profits. BHP Billiton stands out slightly with nearly 18% of its profits derived from oil and gas, but overall there isn’t much between them in my view, so selection comes down to valuation.
With the small four, it is different: Lonmin is mainly a play on platinum group metals; Kazakhmys is mainly copper with some zinc, gold and silver; Antofagasta is copper and Vedanta is the most diversified producing mainly aluminium, copper and zinc with some lead and gold too.
Where they operate
Political risk is worth considering, as some ‘holes in the ground’ can be located in far-flung places. However, the big four have minimal geographic risk because of diversification. They all have operations covering most continents although none is digging in Antarctica as far as I am aware!
With the small four, it is again different: Lonmin operates in South Africa; Kazakhmys operates in Kazakhstan; Antofagasta is based in Chile (CHILE.SN – news) , and Vedanta mainly operates in India.
In Conclusion
Judging by the consensus forward price to earnings ratios, analysts are not forecasting these companies profits to shoot the lights out over the next year or two. In fact the shares have nearly all had a good run over the last few weeks. Nevertheless, over a long-term horizon I think that there is a place for a couple of them in my SIPP portfolio.
My strategy is to go for one of the big four in order to benefit from its diversification and for one of the small four in the hope that it will grow up to be one of the big companies! I have ruled out Lonmin, Kazakhmys and Antofagasta because I do not want to put all my eggs into one country or one commodity.
Of all of the companies, I have selected BHP Billiton and Vedanta Resources as my two candidates for further research.
Copyright © 2006 The Motley Fool UK. All rights reserved. Republication or redissemination of the contents of this screen are expressly prohibited without the written consent of The Motley Fool UK.
For independent financial news and comparison, go to Fool.co.uk!
Kayata my bro,see#17, look at these mining results and read the conclusion and surely in our own destiny we so it completely fit to give Vendata tax breaks ishipwa iyamuyaya kwati ni KK.Its a scandal we just need to collect the taxes.
Chilumba,my brother,i will agree that we lack far sighted economic manager’s,even our leaders lack the economic vision,and because of lack of stability in the developing countries,do we find that there are no policies which influence the economy.I did not imply that by bringing foreign investors,should we give them tax break.How else will the govt earn their revenue.I think the Govt should analyse the performance of these companies before they sit on that discussion table.It is impossible to give any company in this world a tax break,if a person can not be given one.Why give Anglo and Vendatta,even if our companies operated inefficiently a tax break,when analysts focust future demand for their resources,or better still empower the local financial enterprenuer’s who would take over the running these firms.i think if Citibank,Stanbic,Finance,Goldman,Barclays & ZSIC formed an investment company,we’d have seen positive change.
Thaks Ms Daka, my suprise is that Katele Kalumba is not one of the crooks.
Mr Kayata and Chilumba i agree with you on question of the government not having a vision not only for the economy but the country. Investors be it local or foreign need incentives for them to put the money in the local economy. Tax breaks or credit is one of the incentives. But above that government need to create a secure enviroment where investors can feel safe to invest their money. earlier i mentioned that Zambia is one of the most expensive place to do business. Investors are business men and woman what drives them is the posibility to make money at a minimum risk.(Business 101) The only reason any person or organization would invest their money in Zambia is the posibility of them making a profit. Like Kayata said developing countries are a high risk. The hire the risk the hire the profit margin. If you want mopani to be making 30% profit , they can easily make that in the US or UK with minimum risk. Guys Sata or HH can be president tomorrow and do a Chavez on Mopani and KCM.
Mr SAGE,you wont believe that Katele Kalumba was once one of them.He went into hiding when they were searching for him on the cases since he was one of the suspects,but when he emerged out of hiding,not only did they change him from suspect to witness,but he also became a member of MMD NEC with one of the positions.I think if the Guiness world book of records where present to witness how he was caught,he would entered into their books.
I agree with you on investing in Zambia,i too would rather invested my little US$1 with a return of 0.1% than invest it in Zambia with a return of 250% which may not be guaranteed. And mostly i do not blame huge foreign investors when they leave zambia.Because the govt is not doing anything to sustain the other industries to keep each other moving.Shoprite,Pep, Smartcentre,Supreme etc have diverted to Nigeria,but another thing killing the economy is the culture in the people of not saving money in the banks.
Mr.SAGE and Hon.Chilumba,my brother’s,here are again 2 quotes for the debate,
1. “Good judgement comes from experience. Experience comes from bad judgement.â€
2. “Democracy is a process by which the people are free to choose the man who will get the blame.â€
Ba Francis, thankyou for a deatiled report of how the companies that are performing on the world market. With sicu huge profits, why should they demand tax incentives from a poor country like Zambia? I know the MOF people and LPM thought they were attracting them to invest in Zambia but they ended up selling the country for exploitation.
Finally Mr Finance Minister you are waking up. Please go a step further and incorporate Zambians in the running of these mines. Zambians should not just be managers they need to be shareholders also
I agree with Chimwemwe JHB, Zambians need to have a say in the running of the mines as share holders.Mr Minister in your negotiations include partnerships with local Zambian companies.Every multi national company must have a Zambian partner and or reserve shares for sale to ordinary Locals.
Economic empowerment is needed for the Local pipo.foreign investors need to float shares in every huge investment they make in Zed to the locals.On top of that the investors need to train our pipo and they should also fulfill their social responsibilities. We dont want a situation where if the foreign companies decide to pull out the Government is held at ransom and end up selling the company for nothing
coupled with lower taxation on the profits of the mines is the question of capital allowances on huge capital assets that the mines have continued acquiring. As you may already know, capital allowances reduce profits further before deriving taxable profits. Consequently, our government has been getting either peanuts or nothing out of these huge mine profits. What a lucrative development deal for any would-be investor….
Govt standing firm to increase mineral royalty and corporate taxes from 0.1 to 3% and 25 to 30% respectively, seems a good move on Magende side who’s basing is point of augmentation on higher global demand of minerals. If we can call a spade a spade, this chap Mugande would again reduce taxes once demand goes down. Surely, minerals are not perishable commodities that can not put investors in a fixed of getting rid of them in a quickest possible time and if anything the proposed mineral tax percentages are too low, of which I think 10% mineral royalty and 45% corporate taxes would do. These investors are here not only to provide employment, but to make abnormal profits and give peanuts to employees. Mugande,don’t only focus on the global demand of minerals, try to reconcile with banking system as well and map out a strategy of siphoning our money from these raiders.
Sometimes I wonder why people like Shamutete, who has vast experience in mining industry can’t be local investor?
#global investors are cartels with high intellectual abilities and they really know who their prey will be.Chinese market plus the wars in Middle east has fuelled the high demand for copper ore.Zambia was so desperate to privatise without putting in adequate control systems as the deregulated.so much was done to attract these investors i.liberalisation of forex exchange controls,abolishing quantitativecontrol of imports and exports except for petroleum oil,liberalisation of pricing and marketing of agricultural inputs and commodities etc, despite all these incentives these investors still want to continue to reap us off.That is why in the remaining infra structure firms let them come and build ,own and operate(BOO) and let them compete with other players in those sectors.
Govt should be seen to be in-charge in these matters. What we must realize is that when these investors come into our country, they have one major aim, and that is to make profits.
This is as expected because the reason for getting into business to gain a profit. Therefore these people are pre-occupied with making profits because that is what they are paid for. Govt, should therefore not leave everything to the mining companies. what i mean is that we should not live at their mercy. We must never depend on their ‘good will’. We must put systems in place which ensure that the country gets it share of the spoils.
This can only be done through proper structures and systems in place. It will never be achieved through disjointed political statements which are not followed by ACTION on the part of govt. And this is what seems to be happening.
#24,kayata,Iam in agreement with those two phrases and you should have gone further to say’ success is the result of good judgement inaddition to phrase no.1.but whatever the case ultimately its our decisions not the conditions of our lives that determine our destiny.
Why do we negotiate over our own affairs? Look, Zambians live in some of the countries the investors come from, and all that happens is a lwa will passed and we follow, as long as consultations are held and exhausted. Dont get me wrong here, investors are very strategic in our our economic growth, but Come on Zambia, wake up and stand up. You own the resources you set the terms and put them on the table to be presented just be realistic.
Its time Zambia developed that Health centre in Chadiza, and even that one in Lusaka is not doing well because not given a raw deal what capacity and experience have we portrayed in such talks in the past.
This is not an individual negotiating…It is a government…and should therefore flex its muscles!!!…If the companies do not want to renegotiate..buy them out…with the current demand for copper..there are ten other companies waiting to come in and take their place
I have exercised restraint in contribution on this subject due to my humble knowledge on this subject. I have learnt a lot from enlightened contributors such as Ba Francis Ngosa Ngosa.
However, I do now that it in the interest of these minig houses to accept an immediate increase in the the level of taxes they are currently paying.
If they become reluctant they will be making an appointment to rendezvous with nationalisation. The Zambian people will not continue standing idle for long while these Mining make super profits with no tangible benefits to our country and its’s citizens
#35&36,My suffer great heartthrobs when I look back to 1964 and where we are today.Last year April IMF was undergoing reforms but one wonders who those reforms were directed at.They convinced our leaders that Privatisation was the only panancea to our economic ailements,15 years after privatisation they return to us and say they are worried at the high levels of poverty and unemployement,its really not a very health thing to imagine,we are struggling with the same issues and concerns we have been engaged in over the last 3decades, struggling to achieve MDGs by 2015 so that our people can be freed from ignorance, disease,hunger etc,but where we are today is a point of no return why?The govt has no money to renationalise some of these firms,secondly they signed complicated contracts which the signatories never paid attention to detail and this can work negatively against us.We have to continue to dialogue so that a win win solution is achieved
Iam thrilled with the flow of data on this subject, welcome back SamK and Chilumba.It atkes alot of courage to contribute on such important intellectual coverage.
Ba Joze/Jude where are you?Please this is your area of specialisation.Come back we need your advice.
KUKU you added a light momement and could realise how some subject matters will leave individuals out of discussions.
Coming back its a step forward and the Government has data on the turn over in the mining,so the company should not say they are being over taxed.
But this should be extended to small businesses(in terms of tax registration) and individuls, just like in RSA their SARS is doing.But I should emphasise the positives should not be plundered.
Chilumba #37,i still disagree with you when you mention that IMF and WB are to blame because of their policies.I believe that the Govt have officials who are learned such as Musokotwane,Dyangambo(ex CSO Director,ST) and advisors who meet with these IMF and WB officials and discuss terms before the politicians append their signatures.What i foresee as been wrong is the policies and vision these politicians give to their govt representatives and they’ll discuss according to the terms outlined by their bosses.What the govt does nt tell people is that they need to work for the govt to run smoothly,but instead they preach foreigners have come to grab their belongs.IMF & WB policies are ok,whats wrong is how the govt implement the advice. Advice and Instructions are two things,but the govt has no plan on what to do with the results.
Chilumba #37,my bro,again when you look back in 1964 as you mention,if the govt continued with the same policy’s which were left behind by the coloniser’s of collecting taxes,would you tell me Zambia would be worse off today?
Copper and minerals were doing well on the world market then,so are they still doing today.Because the people were not happy in paying taxes,and the freedom fighters preached that they needed not to pay anything and standards after independence started to drop thereafter.Govt nationalised companies,then started to subsidise the nationalised companies which were making losses,and govt soon ran out of money and IMF & WB started to come in with the SAP’s.Govt should just tell the people the truth.
On China you mentioned,China has the money,Africa has the resources,but China’s money originates from our previous colonisers,it all comes back that the colonisers have returned but putting China in the forefront.God gave an African everything,and denied him innovation.
#40,well done,let me take you back a bit, when IMF/World Bank prescribed SAP to KK,was it trial and error?By that time thatcher was busy privatising her firms,I guess the patient always goes to the Dr and not the other way round,and there after there is always a medical review as to how the patient is fairing.Unless to the contrary IMF/World bank they have never come back to monitor how these policies are being implemented and provide remedial actions where things are going wrong, but they just let the patient die in piece before doing a review and this where people have not been confortable with their policies.Exchequer Gordon Brown is one such concerned person who believes Africa has unfairly been treated in these global market,he says IMF/World bank must first alter the nature and structure of representation and make fair resolutions by availing concerned nations a chance to explore probable policies that will reflect the interests of all humanity especially the poor.
Chilumba #42,i do not support SAP from IMF & WB,where i find the problem to be is that it demands poor nations lowers the standards of living of it’s people.A govt is there to improve the standards of living,and you find govt agreeing to terms all because of money.What these govt’s who go for loans fail to recognise is that they have the potential to rebuild their economies without the hefty loans from IMF&WB.If these two guys give a prescription to a patient and that patient knows is not to his benefit,it’s better to do away with that doctor,and find means sorting out his illness.
We are not a poor nation,we just make ourself one.
The govt needs to reduce its expenditure on things that are not necessary to the economy.
#43,Kayata,Mt7:7 is very concise ‘Ask and you will receive,seek and you will find, knock and it will be opened to you’,this must be the stepping stone for our leaders in the development of our country.Our leaders are not receiptive and dont want to engage the people of zambia in developmental issues.It would be interesting the business plans KK used to submit to these Imf/World bank inorder to grow debts to a tune of $7.2bn, interesting not so Bro Kayata,for economic reforms to be acceptable and meaningful to us, they really need to be fundamental-they need to amount to something near the creation of a new Zambia, otherwise they are just continuing with the deepening the current crisis of underdevelopment we face today.Gordon Brown knows what he is talking about
the struggle isnt an easy one ,its our duty to create
a much more just, fair and humane Zambia and time to do so is now.
By the way Kayata, read today’s post about World Bank telling Zambia to charge ‘WINDFALL TAXES’
Chilumba,#44,my brother,i’ve not subscribed to the Post Newspaper,as usually only the frontpage is news worth and the rest of the news is trash.Am not surprised on the WB advising Zambia on “windfall taxes”.
“On 29th March,World Bank senior advisor on anti-corruption Eva Jolly it was time for Zambia to re-look at the mining agreements for the country to accrue more revenue and for mining firms to demonstrate social responsibility”.
And this when the Minister wakes up and announces to the miners.Surely,do we need WB to be telling us of our next moves.This is all a result of the govt going back and asking for more loans,and WB is now saying why dont you do this and that.You see WB is happy to give loans because they know that’s how they will gain a profit for the shareholders(G8).
Brother Chilumba,i too would be happy to see what KK used to present,especially one that Chigaga presented and collapsed on arrival at the lusaka airport.
Gordon wants Africa to stand on it’s own.
Greetings
I find the aguements made quite intresting. My question to all Zambians is, Will we revise our taxation policies every time market conditions change, or should our goal be to create a stable enviroment in which investment will prosper? Unless someone in government has the gift of knowing the future which going by passed perfomance I strongly doubt, it is almost impossible to tell today what the profits will be next week.
Yes these companies are reaping huge profits now, that is thier reward for taking the risks they took. Business goes as such. However should this stop us from getting a fare share for the people to whom the resources belong? I say no. How then do we reconcile such a delima?
We should look at the way the deals were structured and enforce any measures available to create a more equitable senario. That after all is the whole reason for the principal of Emminent dormain. Resources should not be exploited at the expense of the people.
Loadist out
Kayata companies in developed countries pay taxes but are also socially responsible. Which means they make contributions to building schools and hospitals and give scholarships and so forth.
In as much as these investors pay taxes it is only fair that we should expect them to socially responsible.
how much motivation would that bring to employees if scholarships where offered to their children.
The debate on this issue, like on many other topics, is truly without real substance. More like people without much else to do whiling away their time on this blog with uninfomred,simplistic opinions. Check with MOFNP regarding the tax policy and mines privatisation. And read the WB’s stance on these issues before 1993.
… it is highly recommended that the necessary steps be taken to enhance revenues to the government treasury this way … thanks a trilliion
http://www.zambianchronicle.com
Rudy #47,as much i’ll agree with you that companies, in developed countries have a social responsibility to the community in which they operate,mainly it is that of building a goodwill,but again you’ll find that the govt’s in the same countries are in the forefront of such responsibilties.Mostly,a country is rated by how it treats it’s citizens.
#48 Francis you will do us well if you gave us facts or even websites that will enlighten us.Mind you, there are no fast or hard rules or modi operand on what to contribute, if you have info you feel can be of benefit to the uninformed please put it across.Its either you have an attitude yourself or simply you are one of those characters who never appreciate other people’s intelligence.Be man enough and lets see what substance make your grey matter.Imwe ba form3 bapa libala secondary why kunzinvela? We are waiting for your smart data otherwise we rule off side.
BaJoze kanshi where are you?We have an intruder who claims to be a super human.
There is no law stating that companies have a social resposibility to the community. In developed coutries corporate social responsibilty is often tied to the impact a type of business has on the community, mostly manufacturing companies have negative enviromental effects on communities in which they operate. In Zambia for instance there is the release of “centa” by the mines. if you have lived on the CB you know what i’m talking about. Since we deliberatelly ignore the effect ot the mines operating in communities and the danger they pose to the people. I think instead of the government only looking at taxes they should also look a policy that requires companies to offset some eviromental issues that they cause. for example sinse Mopani release “senta” every day at 2PM which is a health hazard. They should be required to sponser hospitals within the communities where they operate. The other thing is roads. in Kitwe most of the heavy duty traffic is for the mines. they should be ….
required to fix the roads they are damaging.
SAGE,not only is that “senta” in Kitwe,in Ndola it is doubled by Ndola Lime and Chilanga Cement,and when you wake up in the morning it is “pandemonium”
#52/53,I agree with you totally,but adequate social service provision squarely lies with govt(through taxes)there is no harm for companies to take up some social responsibility as away to give back to the community in appreciation of the labour provided like what we are seeing under’The Fair Trade’policy.Most of these developed countries have numerous tax bases,i.e council taxes,fuel tax,poll tax etc and these are legally backed and non negotiable.That is why our local authority must be allowed to operate with total autonomy, let them make adequate decisions on how they will cater for their citizens.As for environmental issues its either we blame ECZ or govt or both.Every company by law is supposed to submitt an Environmental Impact Assessment to govt/ECZ and this where pros and cons of that business are contained.If the citizens feel agrieved through abreach of one of the clause contained in the EIA they have the right to take up the matter with the court.But like CB cases these have
been there time in memorial and no one has paid attention to it,all they say its harmless, surely how can SO4 be harmless to a human body?These are some of the lapses we have had in the protection of citizens and where govt fears compensation the best they always do is keep quiet, so my brother SAGE its time we sensitised people about Centa,its every where and recently KCM polluted Kafue River beyond repair, but this has been going on for along time.So its impetus upon you people to show concern and correct these anomalies.Iam lucky Iam from Chililabombwe where there are no smelters but what will kill me is the polluted kafue water.
#48, we are appreciate your concern but one thing you must realise is,its not necessary to refer to a document meant for 1993 and before, things have changed immense, what could have looked feasible at that time today is stale news.In todays Post the same World bank has written stories concerning the changes in copper business and how Zambia can benefit from this boom.My dear Friend 15 years has passed since the policy was effected and we can only talk about today, tomorrow and many more years to come.The history you are talking about will only be a reference point but nothing to go by.The experience we have on the mines is what will help us make decisions that will benefit you and me not world bank ,like Magande and Co are trying to do, otherwise they would have stuck to the 1993 document if everything remained Status quo.
#48 kindly read through comment#18 and how do you reconcile your comment with this information.the analysis in this article should have helped you reason with your brain not with your heart or legs.This is what happens when you want to participate in a subject you have not clearly understood, reserve your naivity to yourself.
Anonymous#58,comment#18 and comment#48 are 2 different people.
#59,I do understand that the the two #18 and #48 are different persons but what #48 is talking about is out of order,that is why I wanted him to make adequate comparison to his so cherished 1993 document to the data contained in #18 for him to make an informed comment.To me #48 appears to be one of those who people who resist change and are adamant to realise the importance of doing so.Move on and always do adequate research for you to keep abreast with latest development,its very dangerous for #48 to exhibit your inadequancies at this time and age
Kayata,
… I would like to add your blog to http://www.zambianchronicle.com … please let me know if you are okay with that, I hope you would add The Chronicle to your links as well … thanks a trillion
I have since added your blog to http://www.zambianchronicle.com and it is third from the top just below CNN. As people visit us they will be able to be directed to Lusaka Times from there … thanks a trillion
is social responsibility about donations and gifts??
what we see fm these co. is absurd.
pls magande let us push these guys to more meaningful status quo of social resp.
capacity building is key. one day these guys will runaway.
common guys!!!!!!
All these intellectual theretical discussions and data are making my head spin……..
As an ordinary Zambian Citizens with common sense,I can tell that the price of copper on the London Metal Exchange is at it’s highest in over three decades. The demand also contnues to raise steadily in part due to incresed consumption by the expanding Chinese industry.
It is a fact that the major beneficiaries of this boom must be the Zambian Citizens, however this is not the case. We must change this scenario by this year. If we cant see any benefits at least lets see it through infrastructural developements. If we continue debating intelligently but do nothing, the only thing we shall remain with after a few years will be those gaping holes in the ground where our copper was mined.
Lets begin to find practical solutions to our predicament
I like the flow of this highly educative contribution. I have always thought that if our privatization had allowed more management buy outs (MBO), this could have seen ordinary Zambians have a stake in our resources hence making Zambians beneficiaries in a way. I realize that most Zambians would have lacked capital that the mines were in desperate need but here again partnership was going to be best way forward. We have had Zambian mining engineers and many technicians that have run these mines and if they had been transformed to be partial owners, responsibility and work attitude could have changed and a win-win situation would have ensured with government getting their dues as well. But giving away a wasting asset to other people completely is not a very good idea at all.
The current situation that should be investigated is the hiding of classified information from Zambians in the mines. Previously, our secretaries knew what was going on but now the managers do their work on computers and encourage shredding of every sensitive material and keeping it out of the natives. This shows that Zambia needed to retain highly specialized personnel so that they knew what was going on the ground as opposed to parading just one or two Zambians as company spokesmen to camouflage what really is going on. Employment of Zambians should also be encouraged in senior positions instead of getting outsiders who are getting salaries that even in there countries would never ever get. Zambia should wake up now or it will be late before we became gripped with reality. We are just too carefree. I believe in Botswana such kind of behavior could not be tolerated. I support enacting of new laws as opposed to renegotiating.