May 9, 2021

Truth

Nothing but the truth

UPND STRATEGIES TO REBUILD THE ECONOMY.

By Joseph Lungu.    UPND Deputy Chair, Policy and Research.

Our economy is in a mess. All the pre-2011 developmental gains that the Zambian economy had registered under the MMD government have been completely wiped out by the PF. The majority of our people are suffering at levels which most of our younger population have never seen before. We are deep in debt, have defaulted, cannot meet our interest payments and now have the world’s second-worst sovereign credit rating. The interest payments alone, at 44 % of total government revenue, are the second-highest of any country in the world. At the same time, our budget cannot adequately finance the public wage bill and meet the much-needed social expenditures and the value of our once-rising kwacha is now severely eroded.

All in all, we are now saddled with loans that have delivered very little benefit to the Zambian people, but an awful lot of benefit to corrupt politicians and corrupt government officials. So, when they ask us to “Sonta” they are actually asking us to “Sonta” the few that have benefitted from the loans.

The PF administration has now come up with an Economic Recovery Plan. At least we can give them credit that they now acknowledge they have messed up our economy and need a plan to recover. But do we seriously believe that they can dig us out of this mess? Do we really buy into any of their plans when they have destroyed the economy in the first place through their own greed and incompetence? Do greed and incompetence just disappear overnight? Or do we believe they are doing anything to rid themselves of their greed and incompetency? No, we can only remove it through the polls later this year.

We would like to share our immediate (short term) actions to lift our economy to the pre-2011 levels:

  1. Our immediate task will be to engage our creditors to restructure our debt on terms mutually beneficial to our country and our creditors. At the same time, we will engage our multilateral partners to re-establish investor confidence in our economy.
  2. Develop and implement medium to long-term strategies to improve government revenues. This will be anchored on reforming both our tax policies and administration by reducing the number of taxes and focusing on a few but with enhanced capacities to generate higher revenues through improved compliance. In the short term, we will address the currently rampant wastage in government spending and promote accountability among government officials (politicians and civil servants) to ensure every ngwee counts for the benefit of the majority of our people.
  3. Resolve the deteriorating business environment in the mining sector and develop a policy framework anchored on stability for investment and local participation in the mining sector. Everything required to lift productivity in our mining sector is available and ready to go and all that is required is a government that is capable of creating a conducive business environment for investment in the sectors. Copper prices are at their highest annual average rate since 2012, and yet many of our mines are either under care and maintenance or operating at low levels of production. We will improve engagement with key players in the sectors in the formulation of policies.

There is an urgent need to leverage the mining sector to drive economic transformation for our country. Mining is by far Zambia’s largest industry, tax contributor, and employer (direct and indirect, formal and informal employer). It is critical to boosting its performance while at the same time looking to diversify the economy to reduce the country’s reliance on the success of the mining industry – which PF has failed on both counts in their time in government. Under PF, key policy shifts in connection with the.