Stop marginalising local suppliers and contractors

THE Zambian government, like many other governments in Africa and other developing countries, faces serious challenges in addressing issues of accountability, transparency and tax compliance, especially in the mining sector.

In Zambia’s case, the issue of tax avoidance has been high on the agenda after revelations that some mining houses were avoiding paying taxes, exaggerating costs and claiming losses for several years.
It is not just this but the same mining houses have been claiming tax refunds from the same treasury to which they are barely paying any taxes at all.
This is why there has been such a huge outcry from some non-governmental organisations including some foreign ones, that Zambia and other African countries are not benefitting from their natural resources.
Whilst this issue has been raging, another issue creeping back into the limelight is that of not awarding contracts to local mine suppliers and contractors.
According to the Zambia Congress of Trade Unions (ZCTU), it is important that genuine local mining suppliers are given contracts to enhance job creation.
We agree with ZCTU that there is need to take stock of foreign companies operating under the pretext of local mining contractors who are getting contracts at the expense of local suppliers.
This is a worrying trend because it means that local mine suppliers are getting a raw deal and not helping in job creation because foreign suppliers are getting most contracts and bring their own labour in some cases.
ZCTU deputy president Nkola Chishimba says the Mine Suppliers Association of Zambia should seek audience with the Patents and Companies Registration Agency (PACRA) to resolve the issue of marginalisation in the awarding of contracts.
ZCTU has expressed disappointment that some foreign firms had registered as local companies and were getting awarded contracts while local ones were being sidelined.
This is a serious irregularity that must be stopped.
It is serious because it means local contractors and suppliers are not getting a fair deal in contracts.
This means they are not operating at their optimum levels and this has an adverse impact on maximising job creation.
It also means Zambia is losing out on revenue that should have been earned by local suppliers and contractors.
This eventually translates into a double loss for the country because other than losing billions of Kwacha through tax avoidance and evasion, money that should stay in local circulation through local suppliers is being externalised via foreign suppliers masquerading as local ones.
The Zambia Revenue Authority, the Ministry of Mines and even the Citizens Economic Empowerment Commission must probe this reported irregularity so that it is curbed.
Zambia is so liberalised that people who should not be doing certain businesses here have heydays doing all sorts of business which our own local firms are prohibited in their foreign countries.
We are not being xenophobic but merely saying that local firms should not be marginalised when contracts are being awarded, especially in businesses for which they should have preference.
The concerns by ZCTU and Mine Suppliers Association of Zambia should be taken seriously because this has potential to undermine local empowerment and job creation.
We are urging multinational mining firms to avoid marginalising local suppliers and contractors so that business is conducted fairly and local firms get a fair share of contracts.