THE Zambia Daily Mail yesterday carried a story in which copper prices are said to have skyrocketed to US$6,325 per tonne for the
first time in two years.
This is indeed good news, especially that copper is Zambia’s major foreign exchange earner.
According to the London Metal Exchange, prices of copper leaped to US$6,325 at the end of July.
This is indeed inspiring considering that in the past two years, copper has been trading below US$6,000 per tonne on the international market hitting the lowest mark of US$4,500.
The plunging of copper prices over the past two years was largely triggered by a slowdown in the Chinese economy and reduced demand.
Now that the copper prices have gone up again, the country stands to benefit through increased taxes remitted to Government by mining companies.
It is also expected that if high copper prices can be sustained by demand, mines will increase production and create more jobs.
With increased revenue for mining companies, we also expect more suppliers of services and goods to be engaged.
It is indisputable that the increased copper prices on the international market will contribute to the strength of our currency and growth of the economy.
However, this should not distract us from pursuing the path of diversification as a way of ensuring sustainable economic growth.
While the increased copper prices may look lucrative, we cannot totally depend on copper as the major source of foreign exchange considering our past traumatic experiences.
Our memories are still very fresh of how helpless we were as a country when miners were shoved out of jobs at the time copper prices hit their lowest.
Most mines had no option but to reduce on production and workforce to sustain operations.
We still remember how our currency was weakened against other convertibles, reaching K14 against US$1.
These are memories that should not get us overexcited about increased copper prices considering that demand and pricing is not within our control.
This is why we should not be swayed from the path taken by the PF government to diversify the economy.
Economists submit that a strong economy is one that is as widely diversified as possible to be able to absorb shocks when one sector is under pressure from different factors that may arise from time to time.
As a country, we need to ensure that we harness the potential that lies in the agriculture, tourism, manufacturing and energy sectors, among others, if we are to sustain our economic development.
If all these sectors contribute a fair share of foreign exchange to the government treasury, even in instances where one under- performs, economic growth may be affected but not to a crippling state.
As a country, we should also ensure that we continue accelerating efforts of making agriculture our economic mainstay. This will ensure that even in instances where copper prices plummet to lowest levels, the economy will still be sustained.
The recently held Luapula Expo has also shown that Zambia has huge unexploited potential in the tourism sector.
As we celebrate the increased copper prices, let us bear in mind that our goal is a diversified economy. Nothing should distract us.