How Land and Minerals Stimulate The Zambian Economy
Mining, Real Estate

In 1950, the People’s Republic of China published a land reform law on June 30th, 1950. Land expropriation and reallocation was a pivotal tool to fight the unequal distribution of wealth. Land was redistributed among all the classes of the people. This paved the way for China’s rise to a industrialized super power. The reform liberated productive forces especially in the agricultural sector. About 300 million Chinese people went to work to implement food security. The Government provided skills, farm implements and livestock which were closely monitored. With this came the introduction of Land taxes as a source of revenue for the state. One can only hope the same strategy will be adopted in South Africa.  Zimbabwe failed because people didn’t have the agricultural skills for land productivity. Zambians should take note.

Land is the most expensive resource. Always in the background and literally carrying everyone like baby’s sleeping on their bellies like a puppy. Underrated?  Yes, of course, compared to the likes of uranium, gold, copper and diamonds it’s sometimes thought of as having no value. With other asset classes like trees and carbon credits taking into consideration land is really the most precious thing on the planet. Land is the future and Africa has it all with benefiting attributes such as rain, trees and a resilient population. Food production is Africa’s advantage against the world. If utilized, Africa can be the world’s food basket.

Land as Capital

First the capital injection to all the people regardless of class or status will be land. Land will be a crucial factor for agricultural activity (crops and livestock). For land owners who do not wish to take part in agriculture, employment or rent, the alternative option available to them is to avail the land to investors.  In my opinion, this has to start with at least 35 x 40 meters per citizen or group with clear income goals, tax and investment strategy. It may seem like a small size but it has potential for creating income in the long term if the right investment strategy is deployed. Some may even argue that this could be the source of “fixed income”. Remember, land on the balance sheet is an asset and represents capital.

Mining as source of capital

In 2013, E&Y published an article that discussed the participation of private equity in the mining sector. The environment at the time indicated that there was constrained capital for junior and mid-tier companies while there existed unique opportunities for the investment grade producers.

With funding gaps being identified in the market during that period, E&Y identified a funding gap that risk taking private equity could easily take up. That is why it would be great to have an individual mining license (deregulation) and as government the main brokers to sell these minerals like precious stones and metals. This has been happening in the Democratic Republic of Congo with peasants mining for lively hood. This happened also in California as the gold rush started 1848 – 1855, almost anyone was allowed to search for their fortune in gold mining. Zambia should take note. Too much regulation and licensing is destroying inclusive growth among all classes of Zambians in the mining sector. I think it’s time mining should be taken seriously to combat the lingo of retrenchments at in the Zambian mining sector. This is radicle, I know, but sometimes emerging economies must assess their options. Land reform in line with agriculture and mining would be a great to tool for recapitalization and implementation of a new system.

 

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