PROFESSOR Gibson Mwewa says the challenges on the Copperbelt need an amicable, holistic and sustainable solution to avoid massive job losses and increase in poverty levels. He said the unfolding events in the mining sector could threaten the country’s economic growth. In a statement, Prof Mwewa, a forensic expert, said the challenges in the mines were not a battle for the politically powerful or economically able.
“I would like to take this opportunity to call upon the government, the Ministry of Mines, the mining houses and all well-meaning stakeholders to avoid casualisation and a haphazard approach in the manner the emerging challenges on the Copperbelt are being handled. There is an urgent need to seriously consider a sober, amicable, holistic and sustainable strategic solution to the unfolding events on the Copperbelt among the mining houses. The unfolding events in the mining sector if not handled carefully and strategically could result into a huge economic challenge which may end up putting further strain on the government and the Zambian community who are already starting to experience challenging social economic situations,” Prof Mwewa said.
“This is not a battle for the politically powerful or economically able…it is a battle for wise leadership and seasoned technocrats to reason on a win – win solution in the interest of all parties!
We must understand that the investors will continue with the same script inherited from the very first day they started investing in the mining industry in our country and may only change how the game is played over the years…. But their interests are permanent.”
Prof Mwewa said it was unfortunate for any well-meaning investor to start arm-twisting and blackmailing the government on account of changes in tax policy from VAT to Sales Tax and also some increases in mineral related taxes.
“It is sad to note that some multinational companies that have over the years made so much money, enjoyed every government incentive and the generosity of the Zambians people appear not to be interested in finding an amicable solution that will benefit the country and people that have continued to offer so much even when they get very little. The VAT system was riddled with fraudulent claims and at the same time government was getting burdened with continued accumulation of VAT refunds,” Prof Mwewa said.
He said the Sales Tax was meant help bring efficiency and transparency in the collection of taxes.
“The broadened tax collection based will in the end help the very mining houses as they stand to benefit from statutory service provisions such as security, justice, manpower development in addition to infrastructure development to mention a few. The Zambian government, like any other government in the world, has a duty for ensuring that the needs and aspirations of the Zambia people such as healthcare, education, security to mention a few, are attended to. The delivery of the government development agenda for its citizen is funded via taxes. The government is in the business of serving the interest of its citizens,” Prof Mwewa said.
“If the current the current plans by the mining houses to shut down some operations, make people redundant and also if the announcements that some other mining companies are looking at selling their business [interests] in Zambia go ahead – the local people will suffer huge social economic challenges. Job losses will badly affect families – poverty levels will increase. Local businesses will equally experience revenue/business losses, banks will start seeing reduced client activities and lending institution will see a rise in bad debts. Government will experience reduced taxes from PAYE and NAPSA contributions [and also sales tax may be affected if other businesses start to close down]. Income for local authorities and other agencies such as water service providers will also be affected. Landlords will suffer and evictions will rise and people will end on streets, leading to a rise in street kids. The health sector will experience a rise in health related problems. A lot of social economic challenges will start to unfold like it was in the past.”
Prof Mwewa said that in the end the government would have a bigger social economic challenge to deal with.
“The socio-economic effects of big mining houses shutting down operations or right-sizing resulting from a policy misunderstanding could badly hurt the national economic outlook if an amicable, holistic and strategic solution is not secured by all parties. It is important to be realistic and honest about the cost of running mines! Mining is a complex and costly venture as it requires huge cash injections. It is doubtful that government can easily takeover and run the mines effectively at short notice, as things stand. A holistic and strategic solution is needed. This is a business/economic issue requiring a structured business/economic solution and should not be confused as political stand-off or adventure by parties involved. It is, therefore, my sincere appeal to the government, the mining houses and all well-meaning stakeholders to urgently find an amicable, holistic and sustainable win – win solution in the interest of all parties,” stated Prof Mwewa.