Author: Missionaries of Africa - Southern Africa Province (SAP) Page 48 of 113

CLEAR POLICY DIRECTION AND IMPLEMENTATION NEEDED IN THE MINING INDUSTRY

As the year begins with the election of a new President and appointment of a new cabinet, it remains to be seen how the economy will be steered to the end of the year. A weakening Kwacha and a slump in copper prices on the local and international fronts respectively could be indicative of a bumpy year ahead of us. It therefore calls for level headed leadership to navigate these challenges. The leadership that has been exhibited on the impasse surrounding the new mining tax regime however does not inspire confidence and is a source of concern to the Jesuit Centre for Theological Reflection (JCTR). It is not clear if the new mining tax regime announced in the 2015 budget is subject to negotiation and who is charge of the negotiation.

This is of serious concern for the Centre due to its adverse impacts on the livelihoods of the mine workers as well as government revenues.  On one hand the jobs of many hang in the balance as the mining companies leverage them for a more favourable tax regime while on the other hand Government’s 2015 budget risks being unbalanced. There is therefore need for good leadership and consistent economic policy from the new Government even as they settle down. The conflicting statements from the President, the Minister of Finance and the Minister of Commerce on the new mining tax regime as to whether to subject it to revision do not reflect well on the Government and risk the stability of the economy and cost of living for the majority Zambians. It should be realised that lives of people are at stake and so care must be taken in handling the issue of mining tax.

The January 2015 Basic Needs Basket for Lusaka stood at K3, 793.59. This shows a significant decrease of K111.63 from the month of December 2014 which stood at K3, 905.22. This can be easily attributed to decreases in the cost of food items such as that of Kapenta which decreased by K67.65 from an average unit cost of K139.08 to K114.90 per kg, Dry fish which decreased by K34.10 from K124.81 to K78.22 per Kg and Beans which reduced by K16.03 from K32.89 to K25.51 per Kg.  Looking at the food items that have led to this significant decrease it can be said that these are due to seasonal changes which at any moment could vary again.

The JCTR therefore calls on government to come up with a clear direction for mining taxation as this could help ease the troubles currently being faced with the falling Kwacha and eminent rising interest rates that would further push up costs of various items on the Basic Needs Basket. Government should also be concise and comprehensive in reducing the cost of living, not just in the short term (e.g. during time of elections) but to find lasting solutions for these inconsistencies in the cost of living.