Mine Suppliers and Contractors Association of Zambia (MSCAZ) has noted with concern the continued sidelining of local suppliers and contractors in the mining sector as foreign firms have continued getting the biggest share leaving local businesses with minimal involvement in high-value contracts.
This comes amid concerns about low local participation in high-value contracts after the revamping of Mopani Copper Mines – MCM.
Speaking in an exclusive interview with the Zambian Business Times – ZBT, Mine Suppliers and Contractors Association of Zambia (MSCAZ) president Costa Mwaba said the lack of a law compelling mining companies to prioritize local participation has led to a situation where foreign firms are reaping the majority of the benefits.
Mwaba argued that while some contracts at Mopani are awarded to Zambian companies, these businesses are often foreign-owned in composition, resulting in the majority of the money flowing out of the country.
“The percentage of local participation is minimal, if you look at the whole supply chain talk about equipment there are local companies registered but they are foreign composition.”
“So these are the things we are talking about where the money goes to those foreign institutions as they are the ones who getting a lot of money and that challenge will continue not until we find a permanent solution.”
“What is confusing is that when they give contracts they are local companies that operate in Zambia and they will tell you we spending 80% of the Jobs to Zambians they are Zambian companies but they are foreign components whenever they are given those orders they escape the flight the money goes out.”
Local suppliers and contractors have since advocated for legislation to promote their increased participation in the country’s mining sector. The call for legislation to address this imbalance stems from the desire to empower local suppliers and contractors, ultimately leading to sustainable development and economic growth within Zambia.
Mwaba has also stressed the importance of long-term investment and capacity building to ensure that local businesses can compete on an equal footing with multinational firms.
He emphasized the need for deliberate action to support the empowerment of Zambian suppliers and contractors, citing examples from other countries where similar measures have led to significant progress in local content and ownership within the mining sector.
government and mining companies have also been challenged to prioritize the development and implementation of laws that support local participation, emphasizing that while foreign investment is valuable, it should complement, rather than overshadow, the growth and empowerment of Zambian businesses.
“Because they will tell you we are giving business to the Zambian Companies and it’s true they are giving business to Zambian companies but they are foreign in composition. We do get jobs but not at a rate we would want to get jobs we don’t want just jobs for drainages or things that are not highly technical, how will we get up in the ladder for us to participate in serious issues.”
Mwaba said the long-term effect has been that the country has been talking about Zambians not having the capacity to carry out bigger projects because they are coming from a place where Zambians have been sidelined from participating in major projects adding that it will take courage to reverse this situation.
“Congo was far behind us in every area of local content in terms of production and so many they have surpassed us in every area because in Congo 51% shareholding is for a Congolese they have moved to those levels because they dare to do those things.”
“That is what we need to do if we want long-term effects on the Zambian citizens is to ensure that as we are engaging these investors we must be deliberate to ensure that Zambian suppliers and contractors are empowered to that extent by passing a law that supports employment it’s not just by talking but by supporting a law that empowers citizens.”
“There are issues of capacity that have always been talked about, capacity is always built today If I want to develop someone will take that person to school and ensure that you meets the standards that are needed then will train you on the job to capacitate you to their levels now you can only do that if your investment is long terms and we know that these mining firms there have been here for over 20 years now most of them so it’s been long terms and those are some of the things that we need to address to say where would you want to see us if you are talking about 3 million tons per annum by 2031 where do you want to see the local companies in that period do you see them being shareholders? He questioned.
“Zambia belongs to all of us and if we want to see Zambia develop it can only be developed by Zambians. whilst investment is good, we need to attract investment that allows the supporting of local suppliers and contractors.” He remarked.
