Economist Oliver Saasa has observed that making it mandatory for foreign commercial banks operating in Zambia to list on the Lusaka Stock Exchange (LuSE) has the potential to scare away investors.
Professor Saasa said the country risks having few commercial banks if government decides to enact a law that will compel foreign commercial banks to list on the Lusaka Stock Exchange (LuSE).
He told ZANIS in an interview in Lusaka today that the decision for any company to list on the stock exchange market should be purely made by the Board of Directors and that government should never have a hand in it.
Prof. Saasa was commenting on a statement by Finance Minister Alexander Chikwanda who stated that government may be forced to enact a law that would propel foreign commercial banks operating in the country to list on the Lusaka Stock Exchange.
He said going ahead with such a move would cause nervousness in the banking sector and might result in foreign commercial banks withdrawing their investment from the country.
Prof. Saasa, who is also Mulungushi University Chancellor, said government should instead continuously remind and encourage corporate organisations in the country to list on LuSE.
He said there were a lot of benefits that come with companies listing on the stock market.
He said among the benefits was the solid cash which is readily available for investment as well as enhancing transparency and accountability in the market.
And Prof. Saasa has advised government to put in place mechanisms that will help it identify mining companies that were involved in wrong doing instead of making a broad statement which suggests that all mining companies operating in the country were involved in fraud.
He was also responding to Finance Minister Alexander Chikwanda, who recently stated that there were a lot of fraudulent practices and all kinds of tricks in the mining sector in Zambia.
He said it would not be fair on the part of mining companies that mean well for the country to be included in the bracket of firms that are involved in wrong dealings.
He cited First Quantum Minerals (FQM), who he said pays 90 percent of the corporate tax collected in the country and were responsible for the 30 percent of the national corporate social responsibility in the country as one mining company that seems to be doing well for the good of the country.
Prof. Saasa said it was therefore important for government to put in place measures and mechanisms that will establish who the culprits were in order for them to be brought to book.
He said just making a broad statement that all mining firms in the country were fraudulent might scare away investors.
Prof. Saasa further stated that it was important that government also monitors how much mines produce in order to know how much corporate tax each is supposed to pay, saying as it stands now, figures on production of different mines found on institutions such as Ministry of Finance and the Bank of Zambia were conflicting.