FORMER Commerce Minister Bob Sichinga says all natural resources must be controlled by the state, as long as they are not stealing.
In an interview, Friday, Sichinga said Zambia should revert to majority ownership of the mines through ZCCM-IH, saying this will ensure that all the profits from the mines are domiciled in the country.
“My honest opinion is that all natural resources must be controlled by the state so long as they are not stealing. And by the way, I will need to qualify that, I have worked for the mines under ZCCM for 10 years and I was group financial controller. I want to tell you this, this issue of allowing all your natural resources to be controlled, then you have no way of earning from the benefit of higher prices, you don’t. Let us look at where we are coming from. Number one, under ZCCM where were the profits going because ZCCM owned more than 67%,” he said.
“The shareholder was owned by the government, where were the dividends going? If you have any profit they were domiciled in the country. What does that do to Bank of Zambia, balance of payment, it means that they are in charge, they have something in their hands they can say ‘this is ours’. So for as long as the company is run efficiently and profitably, sustainably for as far as I am concerned and I am saying this personally, I am not representing anybody, the government must own those mines.”
Sichinga said foreign companies that wanted to invest in the mines just wanted to take the money out of the country.
“As far as I am concerned, any institution that is coming and saying we are going to invest that is coming from overseas, they are doing it because they want to get the money out. So I am sorry I do not agree with many people who are talking about, that there should be overseas ownership. No! As far as I am concerned Zambians must own them. And if the Zambians do not have, like it happened in the past then you are better off just getting the government to do it. However, let me make this big qualification not based on who is my friend, not based on who is doing what, I am simply saying to you that it should be run properly and efficiently, professionally, profitably, sustainably,” he said.
Sichinga said local ownership also ensures total benefit in terms of social corporate responsibility.
“The dividend that was coming from ZCCM holding, at the time it was not ZCCM holding, it was ZCCM, whatever profit you made was used locally except for the things that you purchased from outside. And towards the end when the two companies were merged, we had a purchasing company in UK as well as Johannesburg who were responsible for purchasing goods for the mines so any profit they made in those countries benefited us. Of course the experience, the capacity of ZCCM also was shown in other ways, what were they? The Kalusha’s of this world came out of the ZCCM social cooperate programmes because of the football they encouraged,” he said.
“People like Kalusha Bwalya, Makwazi, these guys came from the system of social welfare in the mines. You have heard of Ronald Ross hospital in Mufulira, you have heard of Nkana hospital. These hospitals were run by ZCCM to provide social services to our people. What has happened now, no private person can access those. There were also clinics in the townships; Mufulira west, Kankoyo, Nchanga, clinics run by the mines for the employees and every employee on average had a family of about 8 people in it. So what I am saying to you is that apart from the income that came from selling the copper, there were also social benefits that accrued. Any private ownership is not going to do that.”
Meanwhile, Sichinga proposed that local institutions must be mobilised to run the mines to help arrest the fluctuation of the local currency.
“The issues of the foreign currency, the fluctuation is because all these reserves are held in bank accounts outside. So who benefits, the banks outside. And I am talking as an accountant. So, [what] I am just saying to you is that I don’t agree that these mines must be sold to people overseas. How about pension funds, NAPSA local pensions funds, the government owned public service pension fund, how about the mine unions? They have got money why not mobilise so those individuals they can buy the mines, we buy back what belongs to us. Without the mines, without the source of revenue, as a country you are done and I am talking to you as an accountant and somebody who worked for the mines for 10 years,” he said.
Sichinga wondered why foreign investors operating some mines in the country complain of making losses but still want to acquire more mines.
“Look at what has happened with Mopani, look at what has happened with Vedanta, they always declare losses. Why are they staying here? How are they able to sustain the companies if they are making losses? Why do they even want to fight for them if they are making [a] loss? You can check their accounts and you know what government gets? 6% is what they get in mineral royalty tax that’s all. And then they have to compensate them, they reimburse them for the revenue. Which revenue you are talking about – when you import items they claw back the VAT and so on and so forth paying back the mines, why? So the only benefit that the country gets is the employment that is offered,” said Sichinga.