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Pressure for Chikwanda to resign continue: Magande says he must explain his role as a supplier to mines

Filed under: Business,Latest News |


FINANCE minister Alexander Chikwanda should come clean and explain to the Zambian public his role as a supplier to the mines, says former finance Ng’andu Magande.

And the Southern Africa Resource Watch says Chikwanda must step aside and pave way for investigations into allegations that he is a supplier to the mines.

During his reign as finance minister, Chikwanda had pushed key legislation such as Statutory Instrument Number 89 which waived 10 per cent export duty on copper concentrates effective October 2013. But SI 89 was revoked by President Michael Sata, who said the decision was not made in the country’s best interest.

First Quantum Mineral and Lubambe Copper Mines wanted the government to allow them process copper ores outside Zambia after differing with Vedanta Resources-owned Konkola Copper Mines over toll fees for using KCM’s smelter.

Chikwanda is currently pushing Treasury to release US$600 million Value Added Tax (VAT) reclaims by mining companies. ZRA had withheld the US$600 million after mining companies failed to provide relevant documents to justify their claims for VAT refunds.

Over the years, VAT refunds exceed what the miners contribute in mineral royalty and corporate tax to Zambia. This results in miners making a negative contribution to the Zambian Treasury.

Mineral economist Dr Mathias Mpande recently said Chikwanda was too cosy with the mining companies to make a decision that protected the country’s interest.

“Chikwanda is not a nationalist; he has no nationalistic inclination,” he said. “He does not take into consideration the interest of Zambia. He is more interested in the interests of investors and to me, that is very bizarre for the Minister of Finance. I find it very bizarre for the Minister of Finance to be biased in favour of the foreign investors, instead of Zambia as a country. He should be interested in Treasury returns. But who can ask Chikwanda what has been his previous interests in the mining companies that have invested in Zambia? You find that he has been chairman and is possibly still chairman of some of these mining companies that are investing in Zambia. So, he is working in their interest so that he can get commission or return or something. The mining companies should pay and they should not be refunded. It is not in the interest of fairness or tax equity to allow them to claim VAT.”

Kitwe Anglican priest Richard Luonde has challenged Chikwanda to explain his role in Sigma Enterprises, a company that supplies to the mines.

He said Zambians were living dangerously by having a finance minister whose interests are to protect mining companies.

And Magande said there was need for Chikwanda to clearly state his position on his dealings with mining companies.

“Since this man [Chikwanda] has replied to your writing and obeyed what the public are saying and explained his role in Africa Rainbow Minerals [a 40 per cent owner of Lubambe Copper Mines], but there are other stories which are there and we would also like him to come out clean like being a supplier,” he said. “This issue is no more for debate. It is for the minister to reply.”

Magande said it was up to Chikwanda to protect his integrity as Minister of Finance.

“This is what we still want to know. As a member of the public, I would want to know. Is it true that he has these connections?” he asked. “You can’t define integrity for people because it is a personal thing. So, it’s like someone comes to you and says; ‘how do you assess yourself as a journalist?’ Would you judge yourself? So, it becomes a difficult question and that is why that question of integrity is only perhaps by other actions….”

Magande cited his information to president Levy Mwanawasa that he was building a house at the time of his appointment.

And SARW says it will soon present evidence to President Michael Sata of ministers that have contracts and are actively involved in the supplying business with the mines.

SARW country coordinator Edward Lange said allegations that Chikwanda was involved in business with the mines through a company called Sigma Enterprises were serious and required thorough investigations, hence the need for him to step aside.

Lange said while every citizen had a right to do business of their choice, it was unacceptable and morally wrong for a person holding a senior Cabinet position, with great influence on the management of national resources, to be involved in a business with the mines that he regulates on behalf of Zambians.

“These are very serious issues and that’s why many Zambians have questioned Chikwanda’s motive behind attempts to pay a disputed US$600 million as tax repayments to the mines. Chikwanda must step aside so that these allegations could be logically investigated because there is no way one can be a supplier to the mines and a Minister of Finance at the same time. The situation then becomes extremely unfair to poor Zambians that want to see benefits of their mineral resources the country is endowed with,” he said.

Lange said Chikwanda’s recent reaction to the accusations that he was involved with the mines through his private business left much to be desired as he had politicised the matter rather than address the issues that were raised.

He said communities had been left in a vulnerable situation because of the strong relationship that had continued to exist between politicians and foreign investors running the mines.

“These ministers can’t even play the oversight role expected of them as leaders. These are public servants and they are paid and on the other hand, they are highly involved with the mines. We need guidelines that will limit those holding public offices like ministers doing business with the mines. There should be a limit,” Lange said.

And Lange said SARW had evidence showing that many ministers had contracts with the mines.
He said the evidence would be presented to President Sata’s office soon after the conclusion of the report.

“Most of these Cabinet ministers are businessmen. Others are running transport companies contracted by the mines; others have got their labour in the mines while others are supplying equipment. That is appreciated, but there is a conflict of interest. How can such ministers protect Zambia’s interests in the mines when they are going to bed with these investors through their private businesses? We had situations where contractors and suppliers in mines were not paid for some time but companies of some ministers were getting their money. It’s not fair to majority Zambians,” stated Lange. (The Post)


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