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PREPARING FOR PPP

GOVERNMENT’S decision to suspend customs and excise duties on imported construction materials being used under the Public Private Partnership projects (PPPs) is a step in the right direction.

We believe it will be of benefit to Zambians in the long run as it will reduce the costs of the envisaged projects which will trickle down to the citizens.

This is because they will be cheaper to construct.  They might not have to pay through the nose in the long run as the investors try to recoup their finances through stiff tariffs.

The move will also encourage the private sector – local and foreign – to come on board and bid for projects under the PPP knowing that there are incentives as the construction materials will be cheaper to bring in.

The new dawn administration has anchored its infrastructure development programme on the PPP model and removing customs and excise duties on imported materials will help speed up its actualisation.

The suspension was announced in Lusaka on Wednesday by Mr Makozo Chikote, the acting minister of Information and Media.  It followed the eighth cabinet meeting this year presided by President Hakainde Hichilema at State House.

Mr Chikote said Cabinet has approved the issuance of a Statutory Instrument (SI) to suspend customs and excise duties on imported construction materials.

The Customs and Excise (Suspension) (Construction Materials) (Public-Private Partnership) Regulations, 2023 is for importation of construction materials under the PPPs.

Mr Chikote said it was meant to attract more investment in PPP projects and reduce government expenditure on capital projects such as roads construction.

“The decision by Cabinet is in line with the provisions in the 2023 budget which has introduced tax incentives aimed at encouraging investment in PPP infrastructure projects.

“The tax incentives include reduced income tax rate; value added tax and customs duty exemption on plant, machinery and equipment,” he said.

The PPP model that has been adopted by the new dawn administration will see Government spend less on massive infrastructure projects which contributed greatly to the country’s foreign debt.

But to ensure that the PPP model is embraced by Zambians, Government must encourage the local private sector to be the major players in infrastructure projects.

It will mean there will be more employment opportunities for the locals, not forgetting that the money and other incomes from the projects will circulate internally.

We note that the Minister of Infrastructure, Housing and Urban Development Mr Charles Milupi was recently in Brazil on what he described as “benchmarking tour” to learn how that country is implementing PPP projects.

Mr Milupi, accompanied by a PPP team of experts, were informed on how the Public Private Partnership is being used as a main avenue to deliver not only infrastructure development, in form of roads, railway lines, bridges but also other projects.

This, coupled with the removal of customs charges should give Zambians confidence that the PPP model could work going by the background work being done.

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