• If the extractives sector is well managed, it can significantly contribute to the provision of quality employment for citizens.
• Mines to establish relationships with local suppliers.
• Zambia could lose up to US $500 million annually due to illicit transfers in the mining sector.

Consumer Unity and Trust Society (CUTS) has urged government to create a comprehensive mines development plan to clearly outline and trace the growth in the mining sector.

CUTS Research Assistant Lubuto Mundende said if the extractives sector is well managed, it can significantly contribute to the provision of quality employment for citizens and Zambia’s economic development through the generation of resources to finance sectors such as the health sector and education sector.

Ms. Mundende however noted despite Zambia’s extensive involvement in mineral extraction in the sector, benefits have not been fully translated to national development and improved social welfare for citizens and contribute to the country’s Illicit Financial Flows (IFFs).

She recommended mines to establish relationships with local suppliers and enter into contracts with them provided the products and services are available and to ensure this, the government should create a national supplier development policy.

“It is of the essence that transparency in this sector exists to initiate public discussions, policy reforms, and public awareness which will allow Zambia to reap the benefits from this sector.” said Ms. Mundende.

Ms. Mundende stated that as of 2020, Zambia’s total IFFs were reported to amount to about K3 billion.

“According to a High-Level Panel report on IFFs in Africa, it was disclosed that continents’ IFFs were highest in the extractives industries and that Zambia accounted for 65 percent of the continents’ IFFs in copper,” She cited.

“Further, a study conducted by the Natural Resource Governance Institute recorded that Zambia could lose up to US $ 500 million annually due to illicit transfers in the mining sector.”

According to her the observed weaknesses that the sector faces can be attributed to the mystery enshrouding transparency and accountability, which have put a limit on the extent to which citizens can keep governing authorities accountable, most supply chains in the extractives sector are not localized due to the preference of international corporations to source products from foreign suppliers and existing frailty when it comes to governance of the sector.

“The weakness cuts across environmental and social impacts, issues associated with human rights, and ineffective development planning in the mining sector,” Lubuto Mundede explained.

She had since pointed out that Zambia is Africa’s second-largest producer and exporter of copper and, naturally, this is one of the domestic economy’s leading exports, contributing over 70% of its foreign export earnings adding that Zambia produces about 20% of the world’s emeralds and also mines cobalt, gold, and other mineral deposits.

The CUTS Research Assistant indicated that the mining sector is one of the country’s leading contributors to revenue and GDP which were estimated at over 20% and 9% respectively in 2019.