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Vol 51 No 9

Published 30th April 2010


Zambia

Tax and spend

The IMF advises the government to raise taxes to finance public investment; the mining companies beg to differ

The big mining houses are predictably grumbling about the Zambian government’s plans for a 25% windfall tax on copper and cobalt production. President Rupiah Banda is standing firm, with unexpected allies: the International Monetary Fund and the World Bank back his revenue-raising schemes. As mining profits soar, the Fund and Bank have released research about poor contractual terms on projects in Congo-Kinshasa and Ghana. Too many projects, they say, fail to generate significant numbers of jobs and state revenues are low compared to those in Asia and Latin America. The mining houses reply that African projects require much more investment in infrastructure and involve more political risk.

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