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.
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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.”
http://www.bbc.co.uk/iplayer/episode/p010jx25/Why_Poverty_Stealing_Africa/
It is disheartening to know that despite being poor we Zambians are actually rich. What kills us most is that we have no capacity to invest in mining. However, we could have the capacity if our Government empowered us with ownership of the mines so that investors would invest in Zambian owned mines. The situation is completely different at the moment.
Western media is just so biased
I will be wary of reports from BBC.the BBC is criticised for leftist views right here in the UK.
This is a cheap ploy to mislead people by the BBC.
Our poverty of 60% didn’t exist at the time of independence .we all know what happened in zambia after nationalisation.
Production reduced to half of pre-indepence levels.And this man is recommending re-nationalisation!!
Please note the mines in Zambia employ Zambian accountants.And the independent auditors are all Zambian owned firms.It’s beyond me that zambian accountants can sit and watch their assets being plundered…..
This is not a BBC production. It’s a documentary from a movement called ‘Why Poverty’
I life in the Netherlands and it was also aired on TV here. I thought it was interesting! Not sure about the facts but something has to be done about how Zambia reap great rewards from its most valuable resource.
What is the true picture then Mr Jere, and what are the answers? Why are we so impoverished with so much copper and other minerals? I remember when Zambia was considered a rich country until about 1981 and we were proud. Surely the BBC and other people are bound to report what they observe as an injustice on the people of Zambia?
So since you are aware of this “Malpractice” as Minister Mr Simuusa, what is the next course of “action” ?
Everyone should be shown this documentary. It completely changes how one receives the news about yet another mining conglomerate in an developed country. These practices should be barred.