Mines records 30 p.c. drop in revenue
ZAMBIA has undoubtedly already started feeling the economic effect of Covid-19 with a drop of 30 percent in revenue, the Zambia Chamber of Mines has said.
The mining sector has been affected by Covid-19 between 50 and 65 percent with copper prices dropping to about 12 percent.
Additionally, there has also been a drop in royalties between January and August from 90 to about 65 million.
According to the chamber, the economic growth in the sub-Saharan Africa had declined from 2.4 percent in 2019 to between -2.1 and 5.1 compared to the three percent target for Zambia.
ZCM Research Policy Manager, Yewa
Kumwenda, said in Kitwe that the Treasury was having problems paying debts.
“You may be aware that the total debt is around K17.4 billion of which K11.2 billion is external while the internal debt is around K6.2 billion servicing payment of around 1.4 billion utilized an estimated 40 percent of annual tax revenue collected in 2019,” he said.
Mr Kumwenda said that copper production recorded a sharp drop in 2019 since 2016 and that this was due to the change tax policy.
He said that the strong mitigation measures that Zambia and its neighbouring countries had put in place to limit the spread of the virus had disrupted supply chains and production.
Mr Kumwenda said that this also reduced demand sharply across sectors.
He said that despite the improvement, Zambia was still faced with a lot of challenges at the borders which was holding up a vital trek with South Africa.
“The lockdown in South Africa affected copper mining in Zambia and our members were using alternative routes, a picture that indicated Zambia was facing a progressive worsening business environment and was despondent about the future,” Mr Kumwenda said.
He suggested that Government facilitate the post crisis and economic recovery which was vital for the economy to bounce back.
Mr Kumwenda however said that bouncing required a review of some taxes to make it easy for mining companies to continue operating amidst the pandemic.