Finance Minister Dr. Bwalya N’gandu is tomorrow 25 September, 2020 at 14 hours expected to present the 2021 national budget. The national budget spells out how the treasury intends to apply the funds raised for the year 2021.
This budget speech is a special one as it will also reveal how the government forecasts to generate revenues through tax and non tax measures, as well as give policy directions and investment priorities for 2021.
The Finance Minister is expected to address the way forward on Konkola Copper Mines – KCM to bring some credible level of certainty on the future operations of the Chingola and Chililabombwe based Mines. The minister may also touch on the announced discussions between Glencore and ZCCM IH on the later increasing its shareholding.
As part of the built up to the presentation, the Zambian Business Times – ZBT has engaged the key associations and groups to just get a glimpse of what expectations they have so as to analyze whether the presented budget will live upto these expectations.
The cornerstone of the Zambian economy is mining, and this was definitely our first point of call. Copper exports make out over 70% of total exports from Zambia and mining remains the singlemost important industry to Zambia today.
And the Chamber of Mines Chief Executive Officer – CEO Sokwani Chilembo told Zambian Business Times-ZBT in an exclusive interview that the mining industry in the 2021 national budget is expecting the finance minister to announce the removal of non-deductability mineral royalty so that the mines can return to a situation were they can afford the cost of capital.
Chilembo further told ZBT that the Chamber of Mines are also expecting some leveled of considerations for its submission for the reduction in the mineral royalty rate itself and for the tax regime to move to the sliding scale similar to the one in the Pay as You Earn – PAYE.
The Chamber of Mines which boosts of membership of all the top copper mines such as First Quantum Minerals – FQM, Glencore’s Mopani Copper Mines, Konkola Copper Mines – KCM is further looking forward to a withdraw of all export duties on export of mineral concentrates.
With the strain in government revenues on the back of the impact of the coronavirus, it calls for an astute balancing act from Dr. N’gandu and his team at the ministry of Finance to deliver a budget that will be able to stimulate the economy and set the country back on a growth path that would see Gross Domestic Product – GDP growth rates rebound.
Mining analysts are further expecting the finance minister to give policy direction on gold mining, establishing of gold reserves and what level of reserves may accrue from this exercise. There are also other base metals like Manganese that offer areas of diversification within the mining industry.
One of Zambia’s biggest macro economic challenge has been the perpetual depreciation of the Kwacha. Analysts see the development of gold mining and establishment of gold reserves at Bank of Zambia – BOZ as a viable alternative and supplement to US dollar reserves, that could see the Kwacha begin to command resilience.
