Beyond President Sata’s Tantrums: My Passion For Zambia’s Economic Future
Munshya wa Munshya
When a leader lacks a clear vision of what he exactly wants to accomplish, he spends his energy chasing shadows. Without a clear articulated economic vision for Zambia, President Sata and his PF government will continue punching in the dark. In Zambia, our greatest problem is not KCM or companies like that. Our biggest problem, especially right now, is that a bunch that has no plans and certainly no vision for Zambian economic recovery is leading us. And when you have no vision, it shows. To say that this is a chimbwi no plan government is, in fact, an understatement. This is a government that rules through tantrums. To be more specific, Sata is ruling through frenzies and outbursts. Before the PF further destroys the economy of our country, we must provide some remedies in the hope that they will reform and quickly change their ways.
Finance Minister Chikwanda does not seem to know what he wants out of the Zambian economy. So he does not know what to do exactly to bring about the desired change. The only thing he seems to be doing better is to contract one kaloba after another. By the time the old man is done with us, our debt levels will be much higher than the pre-HIPC times. At this rate, we will be $10 Billion in debt by 2016. It seems that this lack of economic foresight does not even bother President Sata. It is daily becoming clearer that it is not economic competence that Sata is looking for, but rather a tribalistic consanguinity in his collaboration with this Minister of Finance. Chikwanda cannot compare to economic visionaries such as Magande or Musokotwane. I should agree with FDD, Chikwanda might do us good by peacefully resigning. One wonders though, what Chikwanda’s resignation could accomplish for us, knowing that the buck stops at His Excellency himself.
To put Zambia back to economic revival, we must first face the truth. The way we have been mining copper since 1964 is seriously problematic. It is unsustainable in the long run. Just a few days into office, it is Hon Chikwanda himself who lamented that the cost of production for copper is just too high for the mining companies. It seems that when he came into office, he suddenly realized just how expensive it was. However, instead of acting strategically about this, the PF government has taken no identifiable steps to cushion the impact that might ensue as a result of mechanization of the mining industry. KCM is arguing that it costs less to produce copper using machines than using people. Now this is the reality world-over. It is the reality that in our global economy, machines will begin overtaking humans in production efficiency. Instead of interacting with this inevitable reality, Sata has chosen to play the kind of populist demagoguery fit for Katondo Street and not Nkwazi House. A visionary government, therefore, should begin a process of retraining the workforce so that it could be ready for changes. But instead of being proactive, the PF government has resorted to being reactive. And certainly it is trying to patch where there is no wound.
An economy that completely depends upon copper is unsustainable in the long run. This is the trap that we face as a nation. It is time to move away from copper dependency to economic diversification. But how then can we diversify this economy? We should tap into the resources and opportunities provided by a global economy. We should open up our country to foreign investment in manufacturing and agriculture. And the greatest asset we should be leveraging is labour and the peace we enjoy. This also implies that we need a sane government that would not be just operating on impulse. It should be the duty of a president to be methodic and diplomatic when dealing with investment. There should be rules and some assurances that foreign investment will be protected in this country. A president should not just be waking-up one morning and begin threatening to grab ZANACO or KCM. A president should not use short-term political consideration to shortchange a broader and long-term economic vision. Zambia has only one product to sell, the product of consistency and peace. But if our way of resolving disputes were through tactics fit for the Stone Age then we would lag behind. China is where it is today, because in spite of its communism, you will never hear the Chinese government threatening to repossess American or European companies doing business in China. China has prospered because these foreign companies have found it economically stable to invest. If Zambia wants to emulate the Chinese growth then we must put a stop to this nabukila ku left governance.
The recent outbursts from President Sata concerning KCM are very concerning. Sata cannot make up through outbursts what he has failed to provide for through sound planning. If this government had a plan, KCM would be very easy to deal with and jobs would be protected. Sata is being paid all these huge salaries so that he can engage sanely with companies and find wise solutions to problems. Not through mountaintop ifishobo and imiponto.
This then should take us to the issue of economic priorities. The Sata government came up with a 10% charge on raw copper exports. This was absurd. When Chikwanda and his officials realized their mistake, they used SI-89 to reverse it. I think the reversal was in order. Since copper production is so expensive in Zambia, it is ridiculous to lump more charges on production. The idea that this was a good tax for Zambia makes populist sense but once evaluated closely, it has very little economic impact. The issue with mines in Zambia right now is not about how many pointless taxes you lump on these so-called raw materials. The problem is with how the final goods get sold and how you account for them. This government has no clue about how much copper production costs and equally has no clue about how much it is selling for in London. Unfortunately, the 10% tax would not resolve these problems.
May be the 10% was going to make sense if indeed we had the capacity to process all the copper in Zambia. Had President Sata been serious about raising the capacity to process copper in Zambia, he was going to be more intentional in promoting relevant infrastructure. Obviously, instead of building this strategic capacity, Sata is busy building expensive soccer stadia and the so-called universities all over the place. It shows the shallowness of his priorities.
If he wanted to process the copper here in Zambia, why didn’t he then invest in a copper processing plant? In fact, except for the Chinese owned Chambishi plant, all other smelters on the Copperbelt are so dysfunctional that they are more famous for transmitting respiratory pollution than anything else. From Butondo to Nchanga chemicals from these plants are daily rioting the nostrils of innocents. And Sata does not care for a moment as long as his retirement house is being built. There is some good news out of this, however. The year 2016 is fast approaching. And in that year, we could at least start afresh and retire this so called A-Team, in national interest!