Africa-Press – Zambia. Contrary to the false positive narrative that the economy is on the mend, the reality shows that the economy lies in peril as there is very little economic activity in the country, Hon Given Lubinda has said.
The Patriotic Front (PF) Acting President said the much needed and talked about taxes from the mining sector have been allowed to be transferred to foreign countries by President Hakainde Hichilema’s policies of reducing taxation on the mines.
He explained that mineral royalty tax was foregone by Zambia because of the Head of State’s reckless decision to make mineral royalty tax deductible. Hon Lubinda wondered what use is it to produce 3m tonnes of copper when Zambians can’t benefit from the current production levels.
He said this today when he addressed the press in Lusaka during the party’s end of year briefing. “This is to happen again in 2023. He is claiming that by Zambia foregoing such huge taxes he is attracting foreign investors to produce more than 3m tonnes of copper in the next ten years,” he said.
“If we can not benefit from the current production of around 800,000 tonnes, of what use is it to produce 3m tonnes. Our mineral reources are a national endowment which should benefit Zambians now and in the future.” Hon Lubinda says Zambia is better off closing mines if citizens can’t benefit from them.
“Who is it who puts his farm on a cost-free lease for the sake of it being even more exploited without any benefit to his family? If Zambians are not to benefit from these mines here and now, we are better of closing them until such a time that more patriotic Zambians take charge of the running of the country,” he said.
“By the way, the justification given for dividend-royalty agreement entered into in respect of Kansanshi Mine through which ZCCM-IH shares have been swapped for royalty is not convincing. It is a product of ignorance on why Zambia has not been accruing reasonable revenue from the mining companies.”
Hon Lubinda said while allowing the tax exemptions to foreigners, President Hichilema is making Zambia enter into more debt than he found in 2021. He said this is against his campiagn promises that he will not borrow and that he will quickly restructre debt to sustainable levels.
“During the year 2022 he lamentably failed to achieve this goal. As official statistics show Zambia’s external debt arrears grew by 42% from $2.6bn last June to $3.8bn by September 2022. This is an extremely disappointing performance by a man who claimed to know how to fix the economy and a team that celebrated the IMF bail out package,” he said.
“We are aware of the fact that World Bank this year alone released a loan amount of $740. Added to the US$ 1.4bn from the IMF entered into at the end of 2021, the total external borrowing in 2 years only has been a walloping US$ 2.1bn. The 2023 national budget has nearly US$1bn external financing. At this rate how much will these people have borrowed by end of 2025?”
Hon Lubinda added that what is more worrying is that even after borrowing more than US$ 2.1bn from external sources and having domestic debt of K79bn, there is not a single major infrastructure development project that has been initiated.
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