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“Author of Against all Odds senior diplomat Anthony Mukwita with Zambia’s Minister of Finance Mr Felix Mutati in Stockholm in January 2017. “




Scratching the surface: Is copper a blessing or challenge for Zambia?

By Anthony Mukwita

 

Zambia is Africa’s top copper producer and it is in the midst of a spectacular boom. The scale of international investment – a reported $6bn – means Zambia will soon ‘overtake’ Australia and Indonesia to become the world’s fifth largest copper producer.

But the tax revenue to build schools, train and employ teachers, sink boreholes and buy medicine has simply not materialised. Wealth from Zambian copper has not trickled down – 64% of the population live on less than $2 per day according to the United Nations. Infant mortality is high – 69 per 1,000 births, life expectancy low – just 49.

(The paragraph above was at the time for publication even though the situation of health of Zambians has improved now according to statistics from the Ministry of Health and children mortality at birth has reduced to).

The country’s copper has for too long not brought the much needed financial resources. Weak tax laws mean little revenue is collected. And mining companies were given controversial license agreements under the former President Rupiah Banda’s administration according to a recent World Bank study.

 

Could this be about to change?


Zambia earned a meagre $50m from mining royalty revenues in 2009 from a combined revenue receipt bill of $5bn.

In a visit last week to London the new president Michael Sata, 75, laid down a gauntlet. Addressing a meeting of businessmen during the Commonwealth Economic Conference (CEC) at Mansion House, the former trade unionist said his countrymen were being short changed.

’We are not getting enough from our mineral resources,’ he told the packed conference as he sought what he called ‘good’ investors from London, Canada and Australia.

Profits go overseas
There is no question that this change is desperately needed. Zambia is a stable country and has been for decades. Its copper should be pulling the country’s people out of the grasps of poverty. But its performance on any measure is comparatively miserable.

The World Bank study expressed concerns that despite Zambia featuring in the ‘top quadrant’ of resource-dependent countries, it ‘still belongs to a group of economies with very low levels of capital accumulation.’

The Zambian Economist, a not for profit organisation describes the level of revenues collected from the mining companies under existing contracts as ‘pitiful’ and ‘unlikely to improve the lives of Zambians’, in its report Debunking the government’s case for low mining taxation in Zambia. The report emphasised the dichotomy under the recent Banda administration: Zambians remained stuck in a poverty rut, while mining companies grew hugely profitable and invested the money abroad.

Unlike other countries weak Zambian laws allow foreign investors to transfer all their profits abroad to overseas banks without any ceiling or restrictions.

This has had a significant impact on earned state revenues. Zambia earned a meagre $50m from mining royalty revenues in 2009 from a combined revenue receipt bill of $5bn. Even when non-mining taxation such as company taxes and PAYE are included the government only recovered $520m, according to the Extractive Industry Transparency Initiative 2009 Zambian report. This is less than 10%. This imbalance had been reached under the Banda government, which under heavy lobbying from foreign mining companies had reduced the taxes on mining including scrapping a windfall tax.

It has prompted local NGOs such as Civil Society for Poverty Reduction (CSPR) and donors such as the World Bank to urge the government to raise its game and pass laws that would benefit the country, not just the mining companies.

Transforming economies
Contrast Zambia with Botswana which, according to the Zambian Economist’s report has profited nicely from its diamond fields.

World Bank figures show that the country, which is mostly desert, transformed itself from one of the poorest southern African countries to a middle-income country with a per capita GDP of $16,300 in 2011. In Zambia it is just $985.

Likewise, Angola, after years of bitter civil war, is now surpassing Zambia in revenue earnings from its oil and diamond reserves. This is down to new ‘pro-poor’ laws claims the World Bank study.


World Bank figures show that the country, which is mostly desert, transformed itself from one of the poorest southern African countries to a middle-income country with a per capita GDP of $16,300 in 2011. In Zambia it is just $985.

These laws require mining firms in Angola to employ a large number of Angolans both at exploration and completion stage to deliberately reduce unemployment. Again not the case in Zambia.

Angola also ensures the country gains a sizeable share of its mining resources. Extractive firms in Angola have to fund 100% of any venture despite ultimately owning only a 40% stake in the mineral project (diamonds or oil) – the larger stake remains in the hands of Endiama, the Angolan state enterprise.

Admittedly, mine firms in Angola pay a lower tax rate until their capital expenditure outlay is recovered, but even this can amount to only 80% of initial revenues because of stringent profit sharing agreements laid down by the Angolan state.

It is hardly surprising then that the World Bank observes that, ‘Angola is growing at a faster pace than Zambia’. For the people of Angola it means massive infrastructure development as a result of these revenues.

The roads, the schools, the medical clinics being built all remain a pipedream in Zambia. 

The World Bank study recommends that in order to reverse the trend ‘Zambia needs to capture a larger share of the resource rents (money from mines) and invest the money in the nation’s productivity.’

The previous Banda administration always defended the mining giants in the face of calls for higher taxes during boom times. The response was that it would be ‘irresponsible for (the Banda) government to collect a few dollars from the companies and kill the goose that lays the golden egg’.

We boast of a free market economy with very little prohibitive industry regulation and we have virtually no exchange controls. You can repatriate a hundred percent of your dividends from Zambia as a business and our labour costs are low.
Miles Sampa, Zambia’s Deputy Finance Minister

Banda’s support for the mining companies and condemnation for local critics in fact compelled the opposition to suggest that he seemingly cared for big Chinese business – one of the big investors in the country – more than he did for his own people.

Chola Mukanga, founder of the Zambian Economist, described Banda’s policy of low taxes as a way of encouraging investors as ‘demonstrably intellectually bankrupt.’

 

Challenged to act

 

And now the new government has been challenged by the supporters of higher mining taxes, who maintain that there is no reason to keep taxes low to attract investment.

Economists, such as Professor Oliver Saasa, a Zambian Professor of International Economics, suggest that the government should not only introduce a better tax regime but also ensure mining companies do not engage in profit transfers.

President Sata’s young administration has tried to take a number of radical measures to turn the tide in favour of the state.

For instance, Sata has toyed with suspending issuing mining licenses until laws are passed to help Zambia capture more money from mines in future.

He has also ruled that all copper exports be receipted through the Central Bank of Zambia so the government knows exactly how much mining companies earn and so build a fair profit sharing scheme.

There are still giant hurdles to get over. Today, Zambia’s internal revenue authority, the ZRA clearly lacks the ability to determine how much a mining company has earned in profits. And under agreements made by the Banda government companies have an incentive to increase their costs and limit their official profits as then they can avoid paying any taxes to the government. And there is little Zambians can do about it.

And not all in the government seem to agree that taxes should be increased. Zambia’s Deputy Finance Minister Miles Sampa stated this week that the reasons investors in mining and other sectors should favour Zambia is because: ‘We boast of a free market economy with very little prohibitive industry regulation and we have virtually no exchange controls. You can repatriate a hundred percent of your dividends from Zambia as a business and our labour costs are low.’

There is some good news. The sector is the largest employers outside the public service creating 40,000 jobs, 20,000 of which have been created since 2009. And there is more investment on the horizon.

Canada’s First Quantum has said it may spend US$1.9bn on its Trident and Kansanshi mines in Zambia after losing the Kolwezi copper project in Congo in a 2009 rights battle with the government.

Vale’s joint venture with African Rainbow Minerals Ltd. will invest $1bn in Zambia’s Konkola North project, while Vedanta’s Konkola Copper Mines Unit plans to spend approximately US$1bn over the next two years.

London-listed Glencore International has also announced plans to invest $500m in its Zambian Mopani operation.

 

Where did the money go? Privatising Zambia’s mines

 

Zambia’s copper mines were privatised at the insistence of the International Monetary Fund and World Bank in 2000.

The sale contracts, which ran to over 20 bulky volumes, were never presented to parliament. At the time, Zambia was run by Frederick Chiluba, its second president. Before his death last year, Chiluba faced a large number of corruption charges but was acquitted of most of them. A London High Court found Chiluba guilty of stealing $46m of taxpayers money.

There were many other allegations of corruption around the privatisation vote.

 

Lifting a child out of poverty

 

This large scale investment means Zambia is now on track to export about two million tons of copper annually by 2015. Mining revenues are expected to top $8.4bn this year. But the question is: will this intense activity make any tangible difference to the many Zambian families barely managing to feed their children. To find cash to invest in building schools, sinking bore holes or supplying drugs to hospitals, Zambia requires radical action.

 

The process has started.

 

When presenting the budget in Lusaka last November, Alexander Chikwanda, the finance minister, announced that mineral royalties had been revised upwards to 6%. This is double what had been previously predicted and is now approaching the regional average.

There has been talk about ‘going the Angolan way’. This would mean the Zambian government increasing state shareholding to at least 35% in the mining companies up from the 20% it currently holds through the state-owned ZCCM-IH.

There is a long way to go before Zambia’s resource wealth benefits the poor more than the rich foreign owners. It is now up to the new government. The question is: will Sata’s administration be able to impose a new settlement that goes some way to improving life for ordinary Zambians?

 

SOURCE: Bureau of Investigative Journalism June 2012. Anthony Mukwita was attached to the BIJ by the World bank as part of Best Investigative Journalism Award.

 

 

Award winning author Anthony Mukwita explaining a point to a colleague Christian Bengtsson in his Stockholm office recently.

 

LITERATURE: Edgar Lungu book Google books

 

The fast paced political thriller discussing the rough journey Zambia’s sixth President Edgar Lungu traversed twice in 20 months has found another home—this time it is Google Books that has added the thriller to its optimised searches.

Award winning writer Anthony Mukwita whose writing has been described by critics and supporters alike as colourful said, “the news of Google Boks hosting Edgar Lungu is thrilling to me as an author because of how easy it becomes for more people to search and find the book. It is an exciting book about an exciting President and I want it to reach as many people as possible.”

See news report in the Times of Zambia below.

 

 


With Zambia’s High Commissioner to the UK HE Muyeba Chikonde who accompanied author Anthony Mukwita to the prestigious London International Book Fair.

Award winning author, Anthony Mukwita during the LONDON BOOK FAIR held in Olympia Exhibition Center Hammersmith Rd, London W14 8UX, United Kingdom


Edgar Lungu story zooms through London fair   

 

By Anthony Mulowa

Senior diplomat and author Anthony Mukwita’s book featuring President Edgar Lungu’s tough political journey has gained global literature momentum making a debut in the London International Book Fair.

“Against all Odds,” the book chronicling President Edgar Lungu’s journey to State House hit another first when it was exhibited at the London International Book Fair (LIBF) in Hammersmith last week.

The Edgar Lungu title was among some 20,000 international titles exhibited at the prestigious literature event that featured some 220 countries around the world.

Mr Mukwita, the author was entered in the fair by the publishers Partridge Africa and described the entry as “enthralling” and a step in the right literature direction that could help unlock more talent from Zambia and cast them on the global spot light.

The non-fiction political hand book set in the backdrop of the death of President Michael Sata in a West London hospital on 14th October 2014 has gained a notoriously respective internationally as a ‘must political read’ that is teetering on verge of becoming an Amazon bestseller book.

It is a story about Lungu, a man the opposition made a huge mistake to disregard as a tyro according to author Mukwita.

The Zambia author said breaking into the LIBF creates yet another niche for Zambia to increase its diplomacy via literature and continue show casing the southern African country and it’s a leadership through Mr Lungu as a resolute leader and Zambia as a budding democracy.

Against all Odds-President Edgar Lungu’s rough Journey to State House has already shattered various international literature boundaries and is showing no signs of slowing down as the demand rises for a wider global readership according to Partridge Africa.

The LIBF ran from March 14 to 16 and features the best titles published every year globally.

It has been a centre piece of global literature for 46 years now and Mr Mukwita said, “It is an honour to have my President and my country exhibited to the world. To see the book on the shelf in London with President Lungu staring right back at me was something else.”

Mr Muyeba Chikonde, Zambia’s High Commission to United Kingdom said, “Anthony needs to be encouraged and I hope his work will inspire others to write about Zambia on various fronts.”

The Zambian High Commission said in the past it was said if you wanted to hide something away from an African, you put it in a book, “but we now have our very own Zambian writer and diplomat penning something of international acclaim. Mr Mukwita needs our support and he shall get it.”

The publishers, Partridge say that against all Odds could be exhibited in the forthcoming Frankfurt Book Fair in Germany, New York Pitch Festival as well as the Beijing Book Festival by the end of the year.

It’s a great international title Partridge say that could be an African best seller buoyed by the fact that it features a serving head of state that has won elections convincingly twice in 20 months.

It is a book about an African democracy uniquely Zambian and a man of humble beginnings Edgar Lungu who became President Against all Odds, Mr Mukwita said.

The book is performing well at Bookworld in Zambia were it sold a historic 200 copies in two days over a weekend period according to Book world.

SOURCE: Times of Zambia by Anthony Mulowa. Mulowa is the News Editor of the national daily newspaper. He has a degree in communications from the University of Zambia.

Zambia’s President Edgar Lungu raises country’s diplomatic bar: an analysis by Anthony Mukwita in Stockholm, Sweden.
3rd April 2017.

The lyrics from a chart busting Bob Marley song, “until the basic human rights are equally guaranteed to all without regards to race…” inspired by a 1963 speech to the UN by Emperor Haile Selassie of Ethiopia still ring true to this day in the ears of many.
The song remains enchanting today as it was then due to the deep message it carries that cuts across gender, religious and racial divides, but then you may ask, why start a story with His Majesty Haile Selassie’s wisdom?
In 1965, the great Emperor stepped onto Zambian soil on a three day State Visit hosted by President Kenneth Kaunda just a year after independence from Britain.
Emperor Selassie opened the door to many eminent guests that would grace Zambian back in the day.
Relations between the two nations—Ethiopia and Zambia—remained warm bolstered by their leaders continental commitment to liberation and their collective affinity to equal rights for all.
Conversely, Dr Kaunda was accorded a State Visit to Addis Ababa, Ethiopia in 1970.
Since then, visits between heads of states of the two great African countries became dear.
Forty seven years after Dr Kaunda’s State Visit to Ethiopia, however, what seemed like a diplomatic relationship long forgotten has been rekindled by President Edgar Lungu.
President Lungu becomes the first post-independence Zambian leader to host an Ethiopian head of state in the name of Mr. Hailemariam Desalergn after Dr Kaunda.
The state visit highly anticipated by media locally and abroad was set and executed between March 28 and March 31, dates that shall clearly remain etched on many Zambians minds and recorded as ‘significant’ when the history of Zambia’s diplomacy under President Lungu is written.
This is not because President Lungu broke a ‘47 year old relationship jinx’ by hosting his Excellency the Prime Minister of Ethiopia Mr Desalergn. It is important because it shows Zambia as a global player.
It’s in my view because Prime Minister Desalergn’s visit is one of the many that is becoming a common positive occurrence in Zambia.
If your perception is average, you take these visits for granted.
Critics forget that after the exit of Dr Kaunda, Zambia’s diplomacy dipped down to levels were the country was perhaps referred to mostly when there was crisis, a shortage of bathing soap or cooking oil.
Today, Africa’s second largest copper producer (Zambia) under President Lungu, a lawyer turned politician, has become a focal continental point of reference.
Steady democracy and violent-free elections top the agenda of international discussions when Zambia is referred to, even though no nation is perfect.
Zambia according to the IMF is a preferred international investment destination for many global business leaders.
It is associated to political stability, which begets investment, a budding democracy, a country and President (Edgar Lungu) that respects the rule of law. Very crucial ingredients for a greater investments drive.
President Lungu himself, emerging out of two sound election victories in 2015 and 2016, is also seen by colleagues and critics alike, as a modern time African leader that deserves their time and attention according to pundits.
As global leaders flood the Edgar Lungu Presidential Court, the international media spot-light has in turn harshly increased onto Zambia in a remarkably positive way.
Pundits are asking, where Zambia is? Who Edgar Lungu is? Including what does it take to do business with Zambia?
Prime Minister Desalergn is used here merely as a positive example of a greater good picture of what is happening in Zambia’s Economic Diplomacy under President Lungu, but examples abound.
In February 2016, we saw President Lungu score another first yet again when he became the first Zambian leader to be invited to the Vatican by the Holy Father Pope Francis.
His pilgrimage with wife Esther Nyawa Lungu, both devout Christians was described as a “major diplomatic religious coup” for Zambia.
Pundits believe the seemingly simple gesture went leaps and bounds in as far as uniting Zambians under the umbrella of Christianity and boosting unity is concerned.
This is largely because the Pope is the ‘Rock Star’ of Christianity, the religion of more than four million Zambians, and definitely a media icon (the Pope) of unquantified proportions—what he touches the, world sees forever.
President Lungu’s Holy See visit was followed by yet another invitation to France by President Francois Hollande, a ground-breaker that enhanced France-Zambia relations after a long dry spell.
These visits are symbolically and diplomatically crucial to Zambia as President Lungu personally pushes Zambia up the proverbial food chain of the global diplomatic map in my view.
At the time I did the ‘Holly See-Zambia’ or indeed ‘Edgar Lungu-Pope Francis’ analysis, only six Catholic Popes on record had held meetings with only twelve US Presidents since 1919.
H.E Lungu on the other hand became the first Zambian President, by invitation to break bread and wine with the Pope in 50 years of Zambia-Vatican relations.
In Paris, President Lungu became the second Zambian leader to enjoy an Official Visit at the Élysées Palace after President Frederick Chiluba in 1992.
As I have said in the past and I say again, for us as diplomats, every visit by President Lungu abroad, and that of other heads of states visiting Zambia is a diplomatic coup.
These visits only positively re-enforce Zambia’s image abroad and that of President Lungu.
Is it not the great thinker Vince Lombardi who told us, “the price of success is hard work, dedication to the job at hand, and the determination that whether we win or lose, we have applied the best of ourselves to the task at hand?” Is that what President Lungu is doing as the Chief Diplomat?
Investors, multi-lateral and bi-lateral, put their money on what they can see and measure. Zambia and President Lungu are visible and measurable.
Of course critics abound and argue that it is expensive to host and travel, but not doing so in my view is worse. It’s better to have a sketchy plan than no plan at all.
Tanzanians today have Zambia etched in their memories because, President John Pombe Magufuli made out his first invitation card as head of state, in Edgar Lungu’s name.
The same is the case with South Africa, Botswana, Ghana, Swaziland, Kenya, Mozambique, Angola, Egypt, Togo etc., whose leaders have either hosted President Lungu and Zambia or ever been hosted by President Lungu and Zambia. The que today is long.
The fact that Presidents are willing to spend more than one night in Zambia also signifies that the country has passed the global security test as a peaceful country with no terror red flags. The economic diplomacy die, in this case has been well cast.
The next step is to translate the economic diplomacy seed into real GDP that must help slash poverty, as per Edgar Lungu pledge.
As chief diplomat, President Lungu has set the tone, walked the walk and talked the talk.
It is up to the technocrats to translate the diplomacy good-will into money, for a good seed dies if not well nurtured.
Prime Minister Desarlegn may leave Zambia with great memories and in his judgement there may be no partiality to borrow Emperor Selassie words but the truth is Zambia’s economic diplomacy could only rise now.
In the United States, we saw BO or the man known as Barak Obama travel to an estimated 58 countries during his two terms in order to push for economic diplomacy while David Cameron closed his miles at 42 countries.
Zambia and Ethiopia signed trade agreements during this visit which is a great start.
In the future the two friendly countries might even discuss the need or no need for VISA requirements into the AU HQ because presently believe all African countries need to apply for VISA’s to enter Ethiopia, save for Kenya.
Free movement of goods and services could be the tete a tete between President Lungu and Prime Minister Desarlegn.
Perhaps a great way to end this missive is through an Emperor Haile Selassie inspired Bob Marley lyric that says, “that until that day, the dream of lasting peace, world citizenship, rule of international morality Will remain but a fleeting illusion to be pursued, but never attained …”
Economic diplomacy strides are limitless between these two countries and indeed several others President Lungu intends to visit in future, as he reshapes Zambia politics and diplomacy during his first full five year term.
This analysis was authored by Mr Anthony Mukwita, the Charge d’ Affaires at the embassy of Zambia in, Stockholm, Sweden. Mr Mukwita is the former Managing Director of Zambia Daily Mail, Zambia’s largest selling daily newspaper, a first prize winner of the World Bank ‘Best Investigative Journalism award’ and author of the best-selling book ‘Against all Odds-President Edgar Lungu’s Rough Journey to State House.’ He’s an alumni of ECU, IVLP and the London based BIJ. Mr Mukwita holds a Master’s Degree in Professional Communications with distinctions and has written widely locally and internationally.




 

 

 

 

LITERATURE: Buzz Against all Odds gets on BookBuzz USA

Award winning diplomat and writer Anthony Mukwita’s book Against all Odds, Zambia’s President Edgar Chagwa Lungu Rough Journey to State House continued to break international marketing boundaries when it got listed on the top five books being promoted by the widely followed US based BookBuzz this week.
This listing means the book will reach more international book enthusiasts that are interested in contemporary African literature, given the prominence of the main character in the novella, President Lungu.

Against all Odds is the only book by an African writer on the top ten list of international titles being show cased on the book marketing tool that also gives the book a berth in Netgalley, booklife and LT or LibraryThing.

The book couched around Zambia’s sixth President Edgar Chagwa Lungu’s challenging journey to State House has received stellar reviews locally and abroad as well as enjoyed good sales too both locally and mostly internationally according to pundits.

A Lusaka businessman, Saviour Kayula over the weekend snatched a copy of the latest Zambian political thriller at a cost of US$1000 equivalent during an auction after the book was signed by President Edgar Lungu, making it the most valuable piece of literature in the history of Zambia. Book store sales in Zambia is 150 kwacha per copy.
http://bookbuzz.net/blog/
http://bookbuzz.net/blog/biographical-against-all-odds/



Author Anthony Mukwita weighs in on Zambia China more than 50 year old tried and tested diplomatic relations in the analysis below.


About 1 million Tutsi’s and moderate Hutu’s were killed mostly using machete’s in Rwanda in 1994, the worst genocide in Africa’s history perpetuated by Hutu extremists. In the article below, author Anthony Mukwita analyses how a state of peace could easily turn into a bath of blood.