Sharing the Proceeds of Mining, 6th Edition

From Zambian Economist Fri Nov 9 2012, 14:00:00

Mathias Mphande on the perennial question of mining revenues :

How to benefit from the mining sector depends on choices you make as a country and mining is capital intensive and requires sufficient investments which can take the entire government funding if nationalisation is put in place. So since mining capital is mainly foreign, the only linkage the mines have on the local economies is through taxes....So government should find ways of maximising revenue collection from the mines. But even when taxes are captured effectively, governments and its civil servants spend these monies in a greedy manner such that the social welfare of the people is not improved. What can Zambia show for the huge taxes the government gets when patients are still sleeping on the floor at UTH and university students are still squatting and learning with few teaching aids, yet advocates of better taxes are called 'lunatics' by government officials....Kenya, which predominantly doesn't produce minerals, has better economic indicators than Zambia, and Peru, which is rich in minerals, is poor compared to Brazil, a non-mining country, while Ivory Coast doesn't have minerals, but its economy is better than oil-producing Nigeria...

Part of the answer according to Mphande is for Zambia to create a mineral resource stabilisation fund that can be used to develop other economic sectors. I think a stabilisation fund is a much weak idea compared to competing alternatives. Isn't part of real answer already in legislation - mineral revenue sharing with local areas? 5% of mineral revenues is meant to go to mining areas. Which the last administration failed to implement. The PF championed it, but they have gone quiet now they are in government. Perhaps they are working to increase that local contribution? At 5% the local contribution is certainly very low! 30% or thereabout would be ideal. But the key is enforcement as no actual ...

[view whole blog post ]
 See More    |     Report Abuse


You might also be interested in the following news stories:

Nigeria:   Four Days Inside Boko Haram's Bloody 'Caliphate' (news)
Daily Trust
21 September 2014

It is Saturday afternoon and the time is five minutes past two. At Government Secondary School, Uba in Borno State, a boy, about seven years old, seats on a table behind empty classrooms. Holding a ... [read more]

Africa:   Social Media Sees Meteoric Growth (news)
Balancing Act
19 September 2014

In 2013 Balancing Act carried out a detailed market research study in seven Sub-Saharan countries in the vanguard of adopting the Internet and social media. The study has four parts - which are ... [read more]

Nigeria:   Stop the War On Books (editorial)
Vanguard
22 September 2014

AS schools are officially scheduled to resume nationwide today, we hasten to draw attention to an obnoxious policy that, if not immediately addressed, could do irreparable harm not only to the ... [read more]



blogAfrica is allAfrica.com's platform to help you keep an ear on the African blogosphere. We draw diverse voices from around the world who post regularly and insightfully about African issues. Bloggers, submit your blog's rss-feed!