Editor's Comment

Actualise the potential

IT IS sweet music to the ears to hear the Ministry of Mines and Minerals Development projecting a positive outlook for the mining sector in the second half of this year.
This is particularly heartwarming because Zambia’s economic mainstay has evidently been under serious threat in light of the world’s economy being weighed down by effects of COVID-19.
This respite, however, should not be taken for granted or seen as a permanent solution. Mining is bound to continue being Zambia’s economic backbone, but the country should never relent in its efforts to diversify the economy.
Zambia is Africa’s secondlargest copper producer after the Democratic Republic of Congo (DRC). Besides copper, the country also has emeralds and other deposits.
This virtually guarantees good business, but some writings on the wall suggest the need to invest in other sectors.
Mining is still the goose that lays golden eggs for the country’s treasury as copper exports account for a lion’s share of Government revenue.
Mining activities in the Copperbelt and North-Western provinces employ thousands of citizens directly and indirectly.
Any turbulence in the sector is felt in the two major mining regions and beyond. Turbulences in the sector have social, economic and political consequences.
The outbreak of the coronavirus (COVID-19) has been the latest encumbrance in the mining sector and has contributed to revenue dropping nearly a third between February and April in 2020, according to the Zambia Chamber of Mines.
The drop was a result of the severe global restrictions on movement, which have caused havoc on the mining supply chain and hindered exports and sale of copper.
This was exacerbated by the collapse in copper prices experienced early this year as well as the threat
by Mopani Copper Mines (MCM) to put its operations under care and maintenance, the closure of the North shaft and the depletion of ore at Chibuluma mine.
All this gloom seems to be lifting off Zambia with the new projections that there are positive signs for the second half of this year.
Zambia’s copper production increased to 342,734 tonnes for the period January to May 2020 from 330,023.58 tonnes for the period January to May 2019.
This is very good news for the country coming at a time when the future of the sector looked bleak.
That the production of copper has increased means that the mines are viable and will continue earning the country the much needed foreign exchange.
This is a much needed respite for the Zambian economy. This can only translate into increase in foreign exchange reserves, stability in the Kwacha exchange rate and increased capacity to service the country’s foreign debts.
Other benefits include saving mining jobs, increased Government revenue and expenditure on public investments.
Mining companies can also pay suppliers and contractors, translating into injection of liquidity in the economy and poverty reduction period.
Added to this is the upward adjustment of copper prices on the London Metal Exchange, which is now fetching around US$6,339.30 per tonne.
If the price remains unchanged, it will have a bearing on the value of the local currency, the Kwacha, whose strength had been extremely compromised when the copper prices fell.
While the mining sector is on song, efforts to diversify the economy away from dependence on copper should continue.
Government should continue having its hand on deck by ensuring that sectors earmarked for economic diversification such as agriculture, manufacturing and tourism continue to receive the attention they deserve.
Agriculture, for instance, holds a lot of potential which should be actualised. It holds the best bet for post-COVID recovery. And so let the country move away from ‘potential’ to implementation.
A lot of countries will be in need of food such as grain, vegetables and fruits, which the country can leverage on by exporting.
Post-COVID, a lot of people will need to travel to shed off the stress and Zambia can position herself as a destination of choice for tourists.
The theme song in the recent past has been value addition to materials exported abroad in raw form.
Zambia should build capacity to begin to process raw materials and export finished products.
Let’s actualise the potential.

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