If someone jets into Zambia, one would be surprised to learn that few people are rich while the many Zambians are poor. Such a picture can make one conclude that those who are poor are lazy; and that successive governments haven’t been doing much to improve on their living conditions. But such a conclusion might be partly right; and, to a large extent, also wrong because many factors contribute to why majority Zambians are wallowing in high poverty levels.
Despite Zambia having many rich natural resources such as minerals, large fertile land, wildlife and favourable climate among others, it is reported that only about 1 million people are in formal employment while about 6 million people are in informal sector. Such a situation leads to about 62 per cent of the Zambian population of about 14 million people being poor; with about 80 per cent of the rural population living in abject poverty.
While it might be true that some Zambians are lazy; and that some successive governments haven’t done much to improve on the living standards of many Zambians, many factors contribute to such negative socio-economic conditions.
Take an example of rural small-scale farmers who produce about 75 per cent of the stable food consumed in Zambia. While such farmers work hard to produce maize bumper harvest for many consecutive years, maize producer prices have been low for decades.
Such low farm producer prices contribute to such rural farmers remaining poor for many years while in farming business.
Additionally, low access to loans is among the major factors contributing to many Zambians being poor. Often, banks look at one’s colour, position and financial capacity before they approve a request for a loan. And when one accesses a loan, in most cases, interest rates are too high for small-scale business persons.
Moreover, many small-scale business persons are subjected to high taxes; even when they are still in their infancy of business development. As a result, most small-scale businesses Zambian-owned earn little or no profit at all.
Surprisingly, many big firms operating in this country, for whatever reasons, pay little taxes; and some evade tax obligations altogether. For instance, some Zambians of foreign origin wholesalers and retailers can order six trucks and their trailers of groceries. But for whatever reasons, some of such businesses might pay customs duty for only one truck and its trailer while the rest of trucks and their trailers of groceries enter Zambia without paying customs duty or whatever tax before entering Zambia.
As a result, most Zambians owning small-scale businesses struggle to sell their products at a profit because of many taxes while some big firms sell their products at a cheap price because they don’t pay tax.
Because of selective and weak enforcement of tax laws, most big businesses pay little or no tax while small businesses are suffocated with various taxes.
Such unfair application of tax obligation makes most small-scale businesses owned by Zambians earn little or no profit at all as many customers go to businesses of those owned by Zambians of foreign origin who sell at a reduced price because they didn’t pay customs duty and other taxes.
Business investment incentives favour more foreign investors than local ones. Such facilitate most big firms to earn huge profits within a short time of the year while workers and government have low incomes and revenues.
Consequently, it’s reported that 75 per cent of firms doing well in Zambia are foreign owned. One might argue that size of capital investment, training in business and management skills among many local entrepreneurs are low.
While, to some extent, this is true, the above stated factors and many more worsen poverty levels among many Zambians.
Because farming and businesses don’t help majority Zambians to improve on their living standards, most Zambians resort to formal employment for survival. Privatisation of many parastatal firms; including the mines in Zambia eroded the countries industrialisation process; and worsened Zambia’s ability to employ and offer economic wages and monthly salaries to Zambians. Low industrial base deprives farmers of ready market of farm produce.
Therefore, due to low industrial base, we have many job seekers and few employers in the country. Competition is high on the labour market!
Henceforth, most local and foreign investors in Zambia offer low monthly salaries and poor conditions of services; making many Zambian workers grow poorer every month; especially when prices of essential commodities skyrocket.
Astonishingly, no or few employers nowadays offer study loans to workers. Most employers don’t sponsor their workers for further studies to improve on their academic and professional achievements to earn more per month; and in the process, improve on their living standards.
To one’s shock, majority big firms earning huge profits are the ones who are reluctant to offer economic monthly salaries and good conditions of service to workers. Some of such firms also delay paying workers and tax or evade tax obligations to government.
Some local and foreign businesses even pay such low monthly salaries late; sometimes three or six months in arrears.
Another factor as to why most Zambians are poor is little or no access to land ownership. Because most Zambians of foreign origin have more money from their flourishing and highly profitable businesses, such nationals have great access to land ownership; especially in prime areas of most towns and cities.
Left in such situations, majority Zambians are more peasant farmers or workers with slave conditions of service. Such a situation creates wide gap between the rich and the poor. From such analysis, it’s true that capitalism can led to an uneven sharing of national wealth.
This implies that capitalism is high in Zambia. Each businessperson and employer wants high profit maximisation. High profit maximisation in most firms has contributed to making most Zambian workers sustainably poor.
But paying appropriate amount of tax and on time facilitates successive governments having sound government revenue for socio-economic infrastructure development and provision of socio-economic services to enhance equal distribution of national wealth.
If all Zambian firms paid tax as expected, Zambia’s socio-economic infrastructure would have been increased and improved for the benefit of all Zambians. Such a situation would have helped to create more genuine jobs for many Zambians and promote even distribution of national wealth.
Increased and improved road network throughout the country facilitates increased economic activities among many citizens both in urban and rural areas.
Therefore, one expected a socialist party’s member to promote paying tax on time so that many citizens can benefit from such government revenue for equal national wealth distribution
Therefore, it’s surprising that Rainbow Party deputy secretary general, Cosmas Musumali defends firms which don’t pay taxes for several months; if not for years to the government (Post: 17/6/2016; p.8).
If it was United Party for National Development (UPND)’s leader, Hakainde Hichilema (HH) supporting some organisations for not paying tax, one wouldn’t be shocked because Zambians have a record of the UPND’s leader spending months; if not years on his scientific calculator before making any payment to workers or some other groups of people where payment is due.
From this background, thanks to Patriotic Front (PF) government and President Edgar Lungu for facilitating infrastructure development throughout the country. One also commends PF government and President Lungu for putting in place economic empowerment programmes such as youth and women economic empowerment programmes and presidential initiative fund to cushion some youths, women, marketeers and some vulnerable groups.
It’s also gratifying that President Lungu has increased maize producer price from K75 per 50kg bag of maize to K85 per the same bag of maize.
From what the PF government under President Lungu is doing, one expects such high unemployment and high poverty levels to reduce in few years to come as addressing each of the above stated factors would contribute to improving on the living standards of many Zambians.
From this analysis, one wonders why most of the political campaigns for the August 11, 2016 presidential and general elections aren’t inspiring because one expects each political party to articulate how such socio-economic challenges would be addressed from the available natural, material, human and financial resources.
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