21 May 2012

Zambia: Breaking New Ground for Local Suppliers

ZAMBIAN suppliers have for a long time been marginalised in terms of getting a fair deal of business from the mines and this has brought anguish and frustration as they watch their foreign counterparts get a lion's share of the many opportunities abound.

This has been the trend by most if not all mining firms who have opted to continue sourcing their requirements such as spare parts and other consumables from foreign suppliers.

Local suppliers, who are supposed to have the advantage of operating within the mining industry, have watched helplessly as their foreign competitors amass wealth at will, year-in and year-out, the wealth that is supposed to remain in Zambia.

Various high level meetings involving mining firms and the Government have been held but nothing seems to work out for the benefit of the local suppliers.

The reason being advanced by the mining companies are that some local suppliers do not meet the standards set by mining companies and that the goods and services offered by most Zambian companies were far too inferior to those from foreign suppliers.

There is also another reason that, the local suppliers fail to meet their deadlines for the supply of prescribed goods and services.

While that had been the case in the past, it is not the same now as most local firms have undergone a lot of improvement and transformation and have managed to raise their businesses to acceptable standards.

But even when this has happened, the mining firms still opt to import, at the expense of local suppliers who have now raised an accusing finger at the Government for not doing anything to address the situation.

Where a few local suppliers have been given business, payments have not been forthcoming making operations of these firms more difficult.

The local suppliers who are now frustrated, want to take the matter in their own hands, including plans to stage demonstrations in protest against the alleged failure by the Government to look into their grievances.

While the Mine Suppliers and Contractors Association of Zambia (MSCAZ) president Fanwell Banda and his members have cause to complain, they should however, fully understand that their complaints have already been heard by the Government which is working round the clock to see how best the issue can be resolved.

The Government is fully aware of the prevailing situation regarding local suppliers and wants to ensure that Zambian businessmen and women fully benefit from the mining industry.

This is why the Government through the Ministry of Mines and Mineral Resources has resolved to come up with legislation which will ensure that local suppliers and contractors are given priority when it comes to awarding of contracts by mining firms.

According to Mines Deputy Minister Richard Musukwa, Government is seriously pondering the move which will break new ground for the local suppliers.

During a consultative meeting held between the Government and local suppliers in Kitwe last week, Mr Musukwa explained that the new charter will act as a score card as is the case in countries such as South Africa, where for example, authorities have a say on what mining firms ought to do in terms of giving business to the local business community.

The Government wants to come up with this measure because the mining firms have not adhered to requests of giving priority to local suppliers when awarding contracts.

It is envisaged that, once the piece of legislation is worked on and approved, it will greatly benefit the local suppliers who in turn will raise more capital for setting up manufacturing units to produce the kind of goods the mines require and cut down on imports.

This will also help in job creation for the locals unlike now where more employment has been created in countries where the local mining firms are importing from.

We believe that the introduction of such measures will be in the best interest of both the local suppliers and the nation as all are expected to benefit from the wealth being generated by the mining industry instead of letting foreign firms take a larger share of the cake.

What now remains is how quickly the Government will work out this piece of legislation which will restore sanity to the system of procuring goods and services by the mining companies.

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