By Mercy Chewe
A consortium of Zambian suppliers in the Copperbelt and North Western Provinces has directed suppliers not to deal with a firm called Kalonga Logistics which is operating like an agent at Barrick Lumwana Mine.
Consortium Secretary Kazhila Samukonga charged that Kalonga’s operation at Barrick Lumwana Mine amounts to transfer pricing and monopoly, trends that disadvantage local suppliers.
Mr. Samukonga declared that suppliers cannot quote Kalonga when dealing with Lumwana Mine because the Government has not yet approved the happening at Lumwana Mine.
He pleaded with President Hakainde Hichilema to intervene in the matter and ensure that foreign middlemen in the supply chain at Lumwana are stopped to safeguard the interest of local suppliers.
“Is government favoring Kalonga Logistics over its own citizens? We are concerned to learn that Barrick Lumwana and Kalonga Logistics have proceeded to implement a strategy that negatively impacts suppliers and contractors in addition to the Zambian government. In actuality, the model is identical to transfer pricing. The price that one division of a firm charges another division for goods and services rendered is known as transfer pricing in accounting. Corporations may save taxes by using transfer pricing. The Zambian Treasury will, in other words, be undercharged. Not only would they transfer prices, but they will also operate as a monopoly, which will eventually hurt Zambian businesses as, once established, they will begin to favour their buddies in South Africa,” Mr. Samukonga stated.
He urged the Government to be tough against investors disadvantageous to local businesses.
“Kalonga Logistics has been sending out inquiries more quickly ever since Barrick Gold CEO Mark Bristow’s visit to the State House. Has the government given them permission to use their business model? Since Kalonga has sent inquiries to several local suppliers, we are requesting that those who have received inquiries refrain from sending offers while we wait for the government to provide its position. Kalonga Logistics must request approval from the Trade Ministry and the CCPC. Please, fellow Zambians, let’s stand together on this and resist the urge for investors to acquiesce. Even though this issue is gaining traction on the ground, we have witnessed all MPs and Ministers remain mute on it,” Mr. Samukonga added.
He concluded:”Politicians, both in the opposition and the government, ought to be leading the charge to speak out against such evil. In a real sense, allowing Kalonga and TradeCorp is nailing the last nail in the fading economies of the North Western Provinces and Copperbelt. While there was nothing wrong with doing business directly with Lumwana, why use middlemen? Is the government merely turning a blind eye to the problem, or is it actually complicit in such evil? We are appealing to President HH to look into this urgently. The late President of Tanzania (Magufuli) dealt with Barrick with an iron fist. We expect our HH to do the same.”
Last June, local contractor Mundia Lubinda wrote an open letter to President Hakainde Hichilema urging the Government to look at the issues surrounding TradeCorp, a South African company dominating supply of goods to Lumwana Mine.
In reaction, another local supplier Sitali Mweemba issued a media statement asking the government to ensure that local entities are not sidelined from business by foreigners at Lumwana Mine.
