New stabilisation mining fund proposed

Mon, 28 Nov 2016 20:10:12 +0000

GOVERNMENT should consider establishing a stabilisation fund account which will keep 10 percent of all revenue generated from the mining sector, Zambia Extractive Initiative Industry (ZEII) secretariat head Siforiano Banda has suggested.

Mr Banda said the account was important as it would assist Zambia’s economy in periods when copper prices were low.

He explained that such a fund had assisted countries like Chile, one of the major copper producers in the world, in periods when the metal prices were low on the London Metal Exchange (LME).

Mr Banda explained that the fund once created would equally assist Zambia’s economy during periods when the copper prices were fluctuating on the market.

“When times are bad, that is when the prices are low, they use this fund to stabalise the economy.

“Once created, it stabilises the economy as a whole; you will not feel the impact of the fluctuating prices. Even the inflation rate will be stabilised because there is enough supply of foreign exchange and resources,” he said.

Mr Banda said countries which had created that account by depositing 10 percent of the revenue generated from the mining sector through taxes.

“At the same time, Government will not have that need to increase the prices in the money sector when prices are low. This is very important.

“We do not have it here in Zambia; that is why when you have this problem of fluctuating prices, you tend to change the tax regime and all,” he said.

He said his suggestion should be taken seriously as the account receives money especially when copper prices were performing well on the LME.