Put excess copper cash into sinking fund, Govt told
By MAILESI BANDA GOVERNMENT should take advantage of the surging copper prices which has recently breached the $7,000 per metric tonne mark, and commit the funds raised from mineral royalties into the sinking fund, Zambia Institute for Policy Analysis and Research (ZIPAR), executive
director Pamela Kabaso has said.
Dr.Kabaso said the government had a projection of raising over K1 billion in 2018 which was being charged at six percent as per three tier mining tax regime.
Dr.Kabaso said copper price projection show that Government only anticipated the prices to hit $6, 000 per metric tonne in 2020, adding that the recent rise in the price of the commodity should be able to help the country save more money.
She noted that there was need for the extra funds from the sale of copper to be committed into the sinking fund account and help broaden the domestic resource mobilisation base.
“After the copper prices on the international market recently rocked the $7, 000 mark even after Government had projected it to be at $6, 000 and with mineral royalties being charged at 6 percent as per the three tier mining tax regime, Zambia can save a potential amount of K1 billion in 2018 into the sinking fund,” Dr.Kabaso said.
She also said Government should forgo the K1.8 million earmarked for unspecified road projects which it intends to borrow from donors, adding that the funds for the unspecified roads could be deposited into the sinking fund. Dr.Kabaso noted that though domestic borrowing reduces the foreign exchange risk, it crowds out private sector development and increase the cost of borrowing which she said would affect private sector development.
She however urged the Government to work towards the deepening of the local currency capital markets, adding that a local bond for small investors could be issued to widen domestic creditor sources.