How to spend and monitor mine revenues?

There have been a number of ideas aired about how the increased revenue from mine taxes should be distributed. Should they simply go into national government coffers as with all other revenue, for the state to spend strategically on the development of the whole nation? Should a certain percentage be set aside for local authorities, perhaps even traditional authorities (a position advocated by the influential campaigner Peter Sinkamba at Citizens for a Better Environment? Should a certain percentage be spent on government facilities in mine areas (a position put forward by some of the companies, presumably hopeful of securing 'social peace' in a tense region?)

The Daily Mail reports comments from Mines Minister Kalombo Mwansa that Government has requested the World Bank to carry out a scoping study on whether Zambia should join and implement the Extractive Industries Transparency Initiative (EITI). “The EITI commits a country to publish all payments made to Government by extractive companies,” Dr Mwansa said. There is a paper here from the Director of Budgets at the Ministry of Finance and National Planning on this subject. And the background to a conference on the subject held in December and organised by Southern Africa Resource Watch here, here and here.

Meanwhile, The Post report that Nkana PF member of parliament Mwenya Musenge has said the government should immediately establish a mining communities development fund to benefit residents of mine areas.

In an interview in Lusaka on Friday, Musenge said people who lived in mining communities were seeing the benefits that investors in the mining companies were getting but that little or nothing accrued to them.

He said this in reference to the Zambia Revenue Authority (ZRA) having collected K29.7 billion mineral royalties from the major players in the mining sector.

Musenge warned that should government fail to establish the fund, people living in mining communities would have no option but to start agitating for it.

“Many countries in the world have a development fund that benefits communities that live in mine areas. If we do not establish this fund in Zambia, even the mine developments that we are talking about like in North Western Province and Southern Province will not amount to anything,” he said.

“There’s so much excitement for North Western Province but many years down the line, once the investors have made their profits and when there is no more mining to talk about, we’ll just be lamenting like we are doing for the Copperbelt.”

Musenge proposed that the government should retain at least 40 per cent of the profits from the mines to benefit mining communities and cities.

“This money could be shared between the local authority for that particular town and communities surrounding the mine,” said Musenge.