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Stealing Africa: Why Poverty? How Copper Industry Leaves Zambia in Poverty
Wylbur Simuusa speaks about the mining industry in Zambia in the BBC documentary Stealing Africa (BBC)
Zambia has relied on the mining industry since the 1930s and it is the country’s economic backbone.
But privatisation of the mining industry in 2001 has denied much of the profit from the country’s vast reserves of natural resources to the people, according to a report.
Wylbur Simuusa, minister of mines, tells BBC 4 documentary Stealing Africa: “As a country, as a nation, God has blessed us with such an abundant natural resource. The paradox is that Zambia ranks among the 20 poorest countries.
“We are wealthy yet we are poor.”
In the film, which forms part of the Why Poverty? season, filmmaker Christoffer Guldbrandsen looks at how Zambia has coped since mining was fully privatised over 10 years ago.
Guldbrandsen looks at the way the tax system works so that multinationals escape paying tax to Zambia.
In the documentary, the filmmakers note that if Zambia received the same price that Swizerland got for its copper exports, the African country’s GDP would almost double.
In Rushchlikon, a village in Switzerland, there is a low tax rate and a number of extremely wealthy residents – thanks largely to the contribution from Ivan Glasenberg, the chief executive of Glencore, which owns the Mopani Copper Mines.
Last year, Glencore became the focus of media attention over allegations it was dodging taxes in Zambia.
Below poverty line
While two-thirds of people in Zambia live below the poverty line, mining companies make huge profits. A leaked Grant Thorton audit report on Glencore’s Mopani mine accused the company of selling copper to Swizerland at below market prices.
The auditors also found the operational costs had increased substantially. These artificial inflation costs, combined with undervaluing the copper, allowed Glencore to report overall losses, therefore avoid paying corporation taxes in Zambia.
Savior Mwambwa, executive director of the Centre for Trade Policy and Development, Zambia, is calling for his government to reclaim the $200m in outstanding tax from the mining companies.
Guldbrandsen asks how, with having the third largest copper reserves in the world, can 60 percent of the people in Zambia live on less than $1 per day, while 80 percent remain unemployed.
In an interview with the Guardian, he said: “Zambia desperately needed foreign investment to develop their copper mines, but privatising the mines and selling them indiscriminately, with such a lack of regulation, was not the best way to go. It is almost ironic that they sold the Mopani copper mine, which I feature in the film, to a consortium led by Glencore, whose founder had to flee the US in what was at the time the biggest ever tax-evasion case in US history.
“Those are the guys they’re selling their family silver to. It questions the validity of the idea that the free hand of the market will sort it out, because it’s not always free and it’s not always playing by the book.”
Ibtimes.co.uk
Posted by
chishimba
November 28, 2012 at 7:47 am
it is very sad indeed. these so called investors are stealing in our own eyes, worse still doing so with the consent and the help of our leaders at the expense of the poor zambian. I am in chingola KCM and i am a witness to this fact, that we ought not to be poor at all considering the amount of copper we are producing per day. These so called investors must be made to pay wind fall tax, it is the only fare way to ensure justice. I say so because their will be no agreement made with these mines which will be considered to have been made in good faith to the zambians if it continues to make its own people slaves: such contract is a breach on the part of zambians and it has to be changed at all cost
MBOVU J
November 28, 2012 at 9:11 am
CRY my beloved country
godfrey
November 28, 2012 at 9:15 am
CHISHIMBA,
i do agree with you but i have always felt that our condition has always been our fault. no amount of windfall tax collected will yield anything positive as long as we still fail to manage what we have. it has always come down to mismanagement.our leaders in Africa CHOOSE to be poor. no amount of money can develop Zambia.
Mwenya k
November 28, 2012 at 9:16 am
Very true this is gruesome stealing or depriving us off ous silver broad day light. U our leaders, what is realy the matter that u have failed to address this issue agressively? Are u also doing the same to your own pipo or what?
I Was Once A Shimaini
November 28, 2012 at 9:46 am
This is Zambia Bwana. I mean I never designed it. It was designed by God Almighty.
One Love.
chimps
November 28, 2012 at 10:03 am
COPPER ONLY LEAVES CRATORS ON THE COPPERBELT AND THE HUGE MACHINERY AND ORE TRANSPORTATION MAKE OUR ROADS HORRIBLE !POVERTY EVEN AMONG THE MINERS THEMSELVES IS HIGH. ZAMBIA OUR BELOVED COUNTRY !WHERE ARE OUR ACCOUNTANTS WHO 90% ARE TRAINED IN UK ?