Zambia is the world’s 8th largest producer of copper, and its mining sector accounts for 9% of Zambia’s Gross Domestic Product (GDP) and 30% of the government’s budget. After the privatisation of the Zambian copper industry in the late 1990s, companies became more profitable, but the mining sector’s contribution to the local economy actually declined as a proportion of output.
Using data from Extractive Industries Transparency Initiative (EITI) reports and district budgets, the Zambian chapter of Publish What You Pay (PWYP) found that mining payments to local communities were not always being used as intended.
In one case, ZMK 1.3 billion (about US $250,250) worth of funds assigned to the local Constituency Development Fund to serve the community were incorrectly being used to finance capital projects. Civil society monitoring of revenues and protests helped ensure that proper financing guidelines were adhered to and that mining revenues were spent on local development projects.
As a result, PWYP has verified that more revenues are being directed to social development projects such as garbage collection and the rehabilitation of roads. In addition, district authorities have altered their attitudes about mining revenue management and have accepted new transparency standards.
These developments mark important progress in the efforts of local communities to change district spending habits and move resources from administration and office maintenance to social development.
“It’s because of improved transparency that we have managed to provide some services and bring development in this area” says Mr. Ngulube, the Mayor of Mufulira Township.
- Both budget data analysis and local community engagement are needed to drive change in government spending budgets and governance.
- Good governance procedures must be in place to ringfence funding for local community projects within district/national budgets.
Photo credit: BlueSalo