Wednesday, March 11, 2009


Zambia is facing a major economic crisis and we are beginning to see people lining up to get mealie meal. Soon this trend will spread to other basic commodities if government does not come up with a concrete plan to shore up the economy.
This is an all too familiar picture from the Kaunda era and unfortunately, President Banda does not have any answers for the Zambian people. He is busy playing politics and trying resolve wrangles in his own party instead of instilling confidence in the Zambian people by charting a vision for economic recovery and development. He is also resorting to the same old economic philosophy of government take over mining companies that have been operating at a loss.
Zambia needs to diversify its economy and move away from relying on copper as major a revenue earner and if these mines are failing, let them fail. That's a basic business principle- you do not invest in a company making losses especially when profitability is not in the near future. The one thing MMD has failed to to do in the 17 years is create jobs in other sectors of the economy and our current president has no plan to do so.

Here is what others outside government are suggesting and if the president has no ideas then these might help. You and I dont have to agree with these opinions but we might want to think about them as solutions to our economic mess.

The Citizens Democratic party recently put out a statement on its site suggesting a few things that goverment can do immediately(Follow this link or paste it into your browser)

1.Re-negotiation of Zambia’s debt:
We cannot keep on servicing our debts while our people lose jobs and
die of hunger. This economic crisis offers us an opportunity to go to our creditors and ask that Zambia’s debts be renegotiated or cancelled. The government needs to be relentless in the pursuit of this goal otherwise we will not recover.

2.Contain and reduce costs:
There is no justification for some government and political positions and/or
programs. We simply have to eliminate some positions and divert the supporting funds to more critical areas of our economy, which include support for the mining and tourism industry.

3.Revise the current Tax bands:
In order to put more money in people’s pockets and help the private
sector economy, the Government needs to raise the PAYE threshold to K1.5m. Furthermore, taxes for the other bands as outlined in the 2009 budget should be adjusted as follows: 25%, 30% AND 35% respectively.

4.Create Jobs:
The CDP is of the opinion that government creates jobs by heavily investing in
infrastructure by working with local councils, the ministry of works and supply as well as government and donor agencies. Water and sanitation infrastructure, communication infrastructure, city roads and highways, clinics, as well as low cost housing are all examples of investments that can be made. This plan should be focused on creating jobs for the people in the 0% tax band because that money will flow quickly into the economy thereby, creating demand for goods and services and in the process supporting private
sector businesses.

My friend CHO in the UK at also has some great ideas:

Consult openly -
The government is notorious for not issuing Green and White Papers as is customary. These papers have now been replaced by "Cabinet Policy Papers" that ordinary Zambians never get to see. If we are lucky we sometimes get to hear the odd "Ministerial Statement". Consultation is the hallmark of effective government. Whether its ZAMTEL or bailing out Zambian Airways or reforms on FSP or dealing with the failed mines or borrowing more externally, Zambians need to have a say in these things. Things have become so bad that the State House website has been under permanent "under construction". Some government ministries simply have no websites and those that do hardly update them. Nearly all , ministers are basically unreachable via email or telephone. The situation is so poor that when Minister Musokotwane made available his email after the Budget 2009 we thought it was manna from heaven! Surely an e-mail address is the minimum we should expect from all ministers?

Allow criticism -
Divergence of opinion in government and outside is critical for creative and innovative solutions. It is critical that government recognises that no man knows everything. Rather than seeing people with divergent opinions as "enemies" it should see them as critical partners in ensuring that its policies are perfected. This is a serious point because things have become so bad that we are seeing running battles between Government and The Post. It is most sad when you read the President being insulted. My view is that such insults, however unwarranted, can be reduced if government was perceived to be more "listening". It would make it easier for those us that feel that the holder of the Office of the Presidency must be respected to come out and say so.

Bring all talents on board -
Zambia is blessed with many experts in many fields at home and abroad. A way must be found for putting together a brilliant group of these experts to provide government with the best advice in the core areas - finance, mining, transport, education and health. There should be room also for those in opposition to advice government. A government of national unity is perhaps beyond us given the entrenched nature of our politics and with 2011 on the horizon, but open and direct engagement with the leading opposition parties (Pf and UPND) would bode well for finding lasting solutions to our current problems.

Plan for the long term -
The danger of the current challenges we are facing is that we turn back the clock and implement dangerous policies that look like they are intended to save the day but imprison us in the long term. For example : we may start borrowing senselessly; or attract the wrong investors; or eliminate crucial taxes to please a certain group; or reduce certain taxes that do nothing for the average person; or enact bad media laws to deal with a particular newspaper; or maintain poor spending commitments just to control opponents (e.g. NCC); or handover our resources (and sovereignty) to outsiders. Desperate people do desperate things. This we must avoid at all costs. Yes we should strive for a better today, but equally we should be prepared to take the pain of today to secure a better future for our children. This calls for continuous updated long term planning that has the buy-in of all Zambians.

These and many other ideas can be tapped by our president to give Zambians hope in this crisis.

1 comment:

Anonymous said...

wow! wish someone in gov could read this, got good points...the gov needs to start realizing that this is not about MMD, UNIP, UNDP and all the parties, it is about real people, the common man, we need to do something about it.