Zambia’s President Edgar Lungu on Friday told international mining companies to leave the copper-rich country if they opposed a new tax regime, as he ratched up a dispute over possible job losses.
Lungu has targeted the mining sector to generate revenue as the country struggles under growing debt, but businesses have warned that the tax proposals could trigger a mass withdrawal of investment and thousands of redundancies.
“Sales tax is here to stay… and those who don’t want it, will leave,” Lungu told cheering supporters in Ndola, around 300 kilometres (190 miles) north of the capital Lusaka, as he started a tour of Zambia’s mining belt.
Piling on criticism of mining giants operating in Zambia such as Vedanta and Glencore, he added: “I am saying this without fear or favour — they have externalised a lot of money.
“Enough is enough, people are tired and we are not scaring investors because others will come.”
Lungu said he would meet union officials and industry representatives in the Copperbelt province during his tour.
“Zambia is increasingly at risk of debt distress,” Nick Branson, an analyst at Verisk Maplecroft consultancy, said in the recent briefing paper.
“In a desperate attempt to balance the books, the finance ministry has aggressively targeted industrial mining companies.”
Zambian public debt is officially around USD 15 billion, 70 per cent of GDP, but some analysts have alleged that the government could be hiding some loans — as happened in neighbouring Mozambique.