We are enriching foreigners by giving them access to our precious natural resources for free in the guise of Foreign Direct Investment when they inject absolutely nothing yet they are given tax holidays. How much more stupid can Zambia be?
Lusaka, Feb. 24 – It is disappointing to read that France has donated $1m to a poor Zambia and later to read that Kagem is auctioning emeralds for $44m. Why is Zambia not benefiting from its precious minerals? Truth be told, our leaders are corrupt, getting cuts from neo-colonialists who have come back to Zambia as investors!
The late Margaret Thatcher once said, “If you want something said, ask a man; if you want something done, ask a woman.” If you were to put the New Heritage Party president, Ms. Chishala Kateka, next to President Hakainde Hichilema on the KCM issue, Ms. Thatcher would be crowned a prophetess, posthumously.
We need to manage the emerald natural resource as a nation as there is nothing complex about emerald mining. To put it into context, the emerald that weighs 1.5 carats with an “exceptional” tone is priced at $10,000 to $18,000 per carat. 1.5 by $10,000 gives us $15,000 for low retail and $27,000 for high retail.
1kg is 5,000 carats. So mining a prized 1kg stone of the same grade would fetch $50m for low retail and $90m for high retail. So how much would 50kg fetch?
In my view, precious stones should only be managed by ZCCM-IH and Gold should be stock piled to be part of the national treasury reserve currency. Zambia, consequently, would develop in a period of 10 years with proper policies in place that prioritise economic development by Zambians.
As opposed to concentrating on the so much talked about need for regulators to improve our FDI supervisory roles, there’s an urgent need to change our laws to ensure a profitable minimum equity percentage in all extraction foreign owned companies because despite the mining industry making in excess of $5bn a year, firms rarely pay taxes.
KCM, for instance, that was valued at $600m was sold to Vedanta for a paltry promissory note of $25m and the owners used the mine to generate the $25m sale price and did not invest in the mine as earlier agreed, taking $500m a year without paying corporate tax because they always declared losses.
Vedanta even failed to fulfill its commitment to inject US$397m into KCM as a FDI venture. Instead, the company used all the funds it generated within KCM towards capital projects. This deprived the company of the necessary funds for operations, and maintenance.
Also Read: The decision to re-engage Vedanta reeks of corruption!
Put differently, we are enriching foreigners by giving them access to our precious natural resources for free in the guise of FDI when they inject absolutely nothing yet they are given tax holidays. How much more stupid can we be?
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