Economy

Chikwanda: Govt will not kill the mining sector

The Zambian Government will continue to maximise collection of revenue from the mining sector without killing the “goose that lays the golden egg”, says finance minister Alexander Chikwanda.

Chikwanda said Zambia aims to achieve a growth rate of at least eight per cent per annum and annual inflation rate of five per cent over the next five years to make a dent on high poverty levels in the country.  Many market observers and mining investors had voiced concerns in recent months in response to a number of pronouncements concerning changes to the mining tax code and bans on certain exports.

Chikwanda said the government recognized the need to ensure Zambia was able to generate increased tax revenues from exploitation of the country’s mineral resources, “but in a manner that does not stifle investment and innovation”.

Chikwanda said Zambia’s strong economic growth in the last few years had been driven by the commodity boom and improved performance of the country’s mining sector.

“In this regard, the government has already taken measures to increase the tax take from the mining sector by raising the mineral royalty tax,” he said during the launch of the International Monetary Fund (IMF)’s regional economic outlook for sub-Saharan Africa. “The government is also strengthening the mechanisms of compliance and the capacity to adequately supervise the sector by the various agencies such as Zambia Revenue Authority and the ministry of mines. In this exercise, I remain very mindful of the need to ensure that we do not kill the goose that lays the golden egg.”

Chikwanda said the country’s economic growth rate, averaging 6.5 percent per annum over the last five years was not enough to make a dent on high poverty levels in the country.

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