Hon. Kang’ombe has publicly invited anyone who can counter his arguments and propose alternative models to join the discourse he initiated with George Mtonga. I have prepared my counterarguments and alternative models, which I have detailed below.” Emmanuel Mwamba
Balancing National Interest with Economic Realities: A Pragmatic Approach to Zambia’s Gold Sector.
Christopher Kang’ombe’s arguments present a strong case for prioritizing Zambian ownership and benefit in the gold mining sector. His position is rooted in the idea of national self-determination and building a stronger economy through local control of valuable resources. However, while the sentiment is understandable and popular, a counter-argument would highlight potential economic pitfalls and offer alternative models that could achieve similar goals without the potential negative consequences. Find below my counter arguments to what Hon Christopher Kang’ombe is proposing.
Counter-Argument: A Global Perspective and Economic Realities
Exclusion of Foreign Investment: Kang’ombe’s position that “Gold Mining should be for Zambians only” is a powerful statement, but it risks isolating Zambia from the global capital and expertise needed to develop its mining sector. Gold mining, especially on a large scale, requires massive upfront capital, advanced technology, and specialized technical knowledge. While Kang’ombe correctly notes that large-scale mining companies have borrowed millions, this is a testament to the immense cost and risk involved. Excluding foreign companies could severely limit the ability to explore and develop new deposits, leaving valuable resources in the ground. This would be a missed opportunity for job creation, tax revenue, and economic growth.
The Role of the Zambia Gold Company (ZGC):
Kang’ombe’s proposal for the ZGC to be the sole buyer and to hold all gold at the Bank of Zambia (BoZ) has some merits but also significant flaws.
1. Market Inefficiency: A single-buyer model can lead to a monopoly where the ZGC could dictate prices to artisanal miners, potentially offering them less than the market value. This would discourage artisanal mining and could lead to an unregulated black market for gold, where miners seek better prices from illicit buyers.
1. Limited Gold Reserve Impact: While increasing gold reserves at the BoZ is a noble goal, the impact of 2.8 tonnes (or even more) on a national economy is often overstated. The value of a reserve is not just its size but its liquidity. A large gold reserve is an asset, but its true value is realized when it can be used to stabilize the currency, back international trade, or be sold in times of crisis. Simply holding it in a vault does not, by itself, generate economic activity. A more effective strategy might be to use a portion of the revenue from gold sales to invest in productive sectors of the economy, such as infrastructure, education, or healthcare, which have a more direct and tangible impact on the lives of Zambians.
The “Key Partners and Decision Makers”
Argument: Kang’ombe’s call for Zambians to be “key partners and decision makers” in new mining licenses is a solid principle, but the implementation is the key. Simply having a percentage of ownership does not guarantee effective control or benefit. Without the necessary technical and financial skills, local partners can be sidelined or outmaneuvered by foreign investors. The focus should be not just on ownership stakes but on building local capacity and ensuring technology transfer.
Alternative Options to Benefit Local Investors and Poor Zambians
Instead of an exclusionary model, a more inclusive and economically sustainable approach could combine foreign investment with policies designed to maximize local benefit. Here are some options:
1. Enforced Local Content Policies: Instead of outright ownership, the government can mandate that mining companies meet specific local content targets. This means they must:
* Procure a certain percentage of goods and services from Zambian-owned businesses (e.g., catering, transportation, security, engineering services).
* Employ a certain percentage of local staff at all levels, from entry-level to senior management.
* Invest in local skills development and training through scholarships, apprenticeships, and technical colleges. This ensures that the benefits of mining are distributed throughout the economy and that Zambians are equipped with the skills to be “key partners and decision makers” in the future.
2. Creating a State-Owned Mining Investment Fund: Instead of the BoZ holding all the gold, a portion of the revenue generated by the ZGC could be used to seed a state-owned fund. This fund could:
* Provide low-interest loans or grants to Zambian artisanal and small-scale miners to formalize their operations, purchase modern equipment, and improve safety standards.
* Take equity stakes in new mining projects alongside foreign partners, acting as a passive investor that shares in the profits but leaves the operational management to experienced professionals.
* Invest in geological exploration to de-risk new areas, making them more attractive to both local and foreign investors.
3. Encouraging Joint Ventures and Public-Private Partnerships: The government can actively facilitate joint ventures between Zambian investors and foreign companies. This could be done by:
* Creating a database of qualified Zambian investors and their areas of interest.
* Offering tax incentives or other benefits to foreign companies that partner with local firms.
* Establishing a regulatory framework that protects the interests of both parties and ensures transparency. This model allows Zambians to
benefit from the capital and expertise of foreign partners while still having a seat at the table.
4. Strengthening the Regulatory and Tax Framework: The most direct way for a country to benefit from mining is through a fair and transparent tax system. The government should focus on:
* Implementing a robust royalty and tax regime that ensures a fair share of the profits from mining flows back to the public treasury.
* Using this tax revenue to fund social programs that directly benefit poor Zambians, such as healthcare, education, and social safety nets. This ensures that the wealth from mining is not just concentrated in the hands of a few but is used to improve the lives of all citizens.
In conclusion, while Christopher Kang’ombe’s arguments are well-intentioned, an exclusionary approach could be detrimental to Zambia’s economic potential. A more balanced strategy that leverages foreign capital and expertise while simultaneously building local capacity, enforcing local content, and ensuring a fair share of the profits are reinvested in the economy is a more viable and sustainable path to a prosperous future for all Zambians.
The Struggle Continues
Sensio Banda
Former Member of Parliament
Kasenengwa Constituency
Eastern Province
Christopher Kang’ombe wrote:
I MAKE NO APOLOGY – GOLD MINING SHOULD BE FOR ZAMBIANS
George N Mtonga, a Zambian based in the United States of America does not agree with me on the role of government in the gold industry.
My view is that Gold Mining should be for Zambians only and I will not change that position.
The aggregator called the Zambia Gold Company ( ZGC ) is owned by the Zambian government and my submission is that it should continue buying Gold from all artisanal mining companies.
ZGC should not resale the gold to anyone else but take it to the central bank ( Bank of Zambia ) to ensure we have more reserves than the current 2.8 tonnes of gold currently only worth $300 million dollars.
Am i suggesting nationalisation of the mining sector ? Certainly not.
The current large scale mining companies have borrowed millions of dollars from where they are coming from and i would not propose we got the ownership of the mines where they have already invested.
I however hold the firm position that once the geological mapping is done by government, the ownership of Zambians in the companies that will get the new mining licenses must be at a level where they are key partners and decision makers.
So I repeat- let those in the financial space like george propose models that can be utilized to raise money for local investment in new mining companies before we start thinking of foreign companies running all new mines.
I believe in the abilities of Zambians
ideasfordevelopment
Christopher Kang’ombe
10.08.2025