Privatization Of Copper Mines Was A Bad Move For Zambia

Privatization Of Copper Mines Was A Bad Move For Zambia.

The mines were once the pride of Southern Africa. At their peak they produced 12% of the world’s copper; by the mid-1970s 700 000 tonnes were being dug out in northern Zambia every year. Copper wealth helped to make Zambia one of Africa’s most urbanized countries. Although copper’s contribution to the economy has declined, it remains uniquely valuable for the foreign exchange it earns. In 2000, copper was still Zambia’s main export, despite the mines’ long drawn out decline. But already by then the production had fallen below a third of its peak.

Donors then insisted that aid to Zambia, worth $1 billion a year in the mid-1990s, be made conditional on the government’s privatizing the mines, which it had owned and run since 1970. In 2000, a debt relief package of $3.8 billion was promised to ease the sale, making Zambia among the biggest recipients of official aid in sub-Saharan Africa.

Fast forward to 2015, it has become evident that the privatization process did not help Zambia and it’s economy in anyway. The World Bank and the International Monetary Fund misled the Zambian government when the two institutions propagated the privatization process until Zambian government implemented it. It has been observed that several years after the privatization process, most industries have been closed therefore reducing the income generation avenues for government, leaving it to depend mainly on the public service workers and the remaining mining industry.

The companies that are operating under ownership of foreign investors are not siphoning enough profits in the local economy, especially in the mining industry, and are benefitting foreign investors and their countries more than Zambia and its people.

The mass loss of employment in Zambia is as a result of privatization hence the increase in poverty levels. The privatization process has led to the closure of many companies on the Copperbelt Province, leaving thousands jobless, especially in Ndola, which was a major industrial town.