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MINING COMPANIES CONTRIBUTE K25BN TO TREASURY

By BUUMBA CHIMBULUT

THE mining industry contributed K25 billion to the national treasury in 2020, according to the Zambia Extractive Industries Transparency Initiative (ZEITI) report released this month.

ZEITI’s thirteenth annual report looks at each and every kwacha which Zambia’s Government received from the mining industry between 1 January 2020 and 31 December 2020, and provides a company-by-company breakdown of financial contributions to the economy. 

The report indicates that almost one third (31.4 percent) of all Government revenues in 2020 came from the mining sector, amounting to K25 billion, including tax and non-tax payments received by Government agencies and dividends received by the Ministry of Finance. 

“A whopping 79.5 percent of the country’s exports came from mining, with the sector remaining Zambia’s major productive industry. 

“A total of 11.1 percent of Zambia’s Gross Domestic Product (GDP) came from mining, and two percent of the country’s national employment,” the report indicated.

The report states that five companies contributed approximately 69.4 percent to total payments, with First Quantum’s operations at Kansanshi, Sentinel and FQMO accounting for 48 percent of the country’s extractive receipts for the year.

The report’s scope extends to mineral production and export figures, supplied by agencies including the Zambia Revenue Authority (ZRA).

Combined with other publicly available and cross-referable data on mining tax payments, profits declared by mines and dividends paid to shareholders, ZEITI’s report offers a window into the inner workings of Zambia’s mining companies, and the role of Government and other stakeholders in the sector.

ZEITI’s reported data and its recommendations are furthering a vital goal of ensuring that transparency goes hand in hand with accountability, on the part of each and every stakeholder within the country’s mining industry.

The report also reconciles the revenue received by the Government to the amounts declared as paid by the mining companies in a collaborative process which is overseen by a Multi-Stakeholder Group, the Zambia EITI Council (ZEC).

It consists of 18 members from three sectors Government, industry, and civil society so its very structure ensures complete transparency by all parties.

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