FORMER Bank of Zambia (BoZ) governor Dr Caleb Fundanga says government should disclose its plans for Konkola Copper Mines and Mopani Copper Mines.
In an interview, Dr Fundanga warned that if the UPND government decided to maintain PF’s plans to takeover the mines, they would increase Zambia’s indebtedness by about $1.5 billion.
“It is not only KCM but Mopani, I think we are all waiting to hear what the position of the new government is. As you know, for KCM, the previous government announced that they had taken it over, they even appointed somebody to run it. The hope is that government will not want to own the mine, so they must find a solution between the company that was running it and whatever they want, they need to tell the nation. Concerning Mopani, the previous government made a decision to buy it and they did not have the money so they agreed to pay overtime. Those two are major mining houses in Zambia, we are all hoping that the new government can tell us the position on Mopani, do they go with that deal? What it implies is that they have increased the level of indebtedness of Zambia to the extent of 1.5 billion in an attempt to gain control over the Glencore asset of Mopani,” Dr Fundanga said.
“Some of our concerns are that international debt in Zambia started when they acquired the mines in Zambia during KK’s time because initially, we did not have money so it was a Mopani kind of agreement. Later on when they found out that they could not get control over the mines, the government of the day that time went and borrowed money internationally in order to pay off the previous owner and that was in my own record a beginning of Zambia’s external debt when we borrowed big in order to take control of the mine.”
Dr Fundanga noted that everyone was eager to learn government’s plans for the mines.
“I see a similar situation when we again agreed to take over without money, then we pay over a long period of time, I can see a situation where if we fail to gain control, it might require borrowing some more. So that promise to pay has put us in indebtedness. So, all of us are waiting to see how the government is going to handle that. It was not seen as a very good decision at that time, Mopani was working well. Both mines now seem to be in government’s hands which is not a favorable thing to do. I am hoping that something positive will come out. I am sure the government is addressing these issues. I am sure they are very cautious to bring sanity to the mining sector. They have not pronounced themselves on that, so it is good to wait, hear and they will tell us what they are going to do,” Dr Fundanga said.
He also noted people had a lot of confidence in the new government’s ability to turn around the economy.
“The one thing which is currently working in favor of us to revive the economy is the perception. The new government has brought a high level of economic opportunism where everybody thinks the new government will put in place good policies that will not be spending public money unnecessarily, these are good signals to the business community. So if there is a pledge that the new government will not be spending money unnecessarily, it means that those limited resources can go towards financing private sector activities,” he said.
Meanwhile, Dr Fundanga urged members of the public to join in the fight against corruption.
“It is in our collective interest to ensure that government doesn’t push the cost of borrowing by having an instantiable appetite to borrow. But we are talking of a government which has been in place for less than six months, so give them a chance but so far, they have not started borrowing left and right. They are busy trying to fight the other leakages of corruption which also contributed to a lot of borrowing. You borrow money and then somebody steals it, how are you going to pay it back? So these are the things that the government is currently fighting. And I think the fight against corruption is very much appreciated by everybody. One can only urge that we work hard towards supporting the fight. If you see somebody siphoning money from the system, report them to the relevant authorities so that we can close that leakage,” said Dr Fundanga.