World Bank Group Country Director for Zambia, Malawi and Zimbabwe has said that the World bank is happy to note that the Government has taken action to revoke SI33 and SI55. In a statement released to the media today, Dr. Kundhavi Kadiresan said that the revokaction signaled that the Government values consultation with the private sector on important policy changes.
Dr Kadiresan said that the Zambian economy had recently gotten into a difficult situation with a large budget overrun in 2013 and increasing uncertainty about economic policies and direction, adding that this difficult situation was partly reflected in the rapid depreciation of the Kwacha and accompanying sense of panic in the markets.
“The recent action will enhance public confidence in policy-making. The Government has also re-iterated its commitment to stay within the 2014 budget and move towards lower fiscal deficits in the coming years. This is going to be hard, considering the large wage award from 2013, the still uncertain direction of the wage bill trajectory, and the ambitious capital investment program,” read the statement.
Dr Kadiresan concluded by saying that the PF Government has made politically hard but economically sound decisions in the past such as those related to reduction of fuel and maize subsidies and hoped that the Government will build upon these positive actions.
And he Chamber of Mines of Zambia has to expressed its appreciation on the pronouncements contained in the address by the Minister of Finance, Honourable Alexander Chikwanda.
In a statement released to the media, the Chambers president Emmanuel Mutati said that the Industry welcomed the revocation of Statutory Instrument (SI) Number 33 of
2012 and Statutory Instrument (SI) Number 55 of 2013 and government’s willingness, as is already the case, to continue consultations with the private sector to develop a regulatory environment that is supportive of government’s agenda and conducive to increased Foreign Direct Investment.
Mr Mutati concluded by saying that the Chamber and its members looke forward to working with Government to enable the mining sector contribute to increasing employment and economic opportunity in the country.
Earlier today, Finance Minister Alexander Chikwanda revoked Statutory Instruments numbers 33 and 55 of 2012 and 2013 respectively, to allow for further consultations amidst the free fall of the Kwacha which had depreciated by up to 13 percent since last quarter of 2013.
Mr Chikwanda has since described the free fall of the Kwacha as temporal saying the factors that were affecting the current exchange rate were domestic and external.
Mr Chikwanda said Government had decided to revoke the two SIs, which were meant to support the implementation of monetary policy to allow for further consultations.
He said Government, in consultation with other stakeholders will look at other veritable options to protect and safeguard public interests.
He said Zambia’s economy had remained strong and stable with a real GDP growth preliminary out turn at 6.4 percent and the economy had grown at an annual average rate of 6.9 percent since 2011 when the Patriotic Front Government assumed office.
Mr Chikwanda called for intensified efforts aimed at enhancing Zambians’ participation in the economy.
He said the current depreciation of the currency did not necessarily imply a weakening of Zambia’s economic fundamentals and Government would not use the foreign reserves to redeem it.
“The weakening in the Kwacha parity is temporary and Government will not be tempted into interventions that may just end up affecting our reserves as doing so will only artificially stabilize our exchange rate and make us more vulnerable in case of continued volatility,” he said.
He said Government would in the long term increase the country’s resilience to shocks by accelerating the diversification of the economy away from Copper to ensure resilience to global financial shocks.
He called for the expansion of the productive capacity by investing in infrastructure development.
“Our transport network and energy supply need to expand to support private sector growth and lower the cost of doing business. We also need to invest in our education and health infrastructure and staff so that we build the people,” Mr Chikwanda said.
He admitted that 2013 was a challenging year which resulted in the fiscal deficit increasing from the planned 4.3 percent of GDP to a preliminary outturn of 6.7 percent.
He said Government would from henceforth diversify from Copper into manufacturing, education and agriculture.
Government would also aim at reducing the wage bill in the public sector by harmonizing salaries to ensure there is equal pay for equal work.
“Government will also maintain debt sustainability to safeguard macroeconomic stability,” Mr Chikwanda said.
The SI 33 of 2012 recognises the Kwacha as legal tender in Zambia and prohibits dollarization, which is the use of any other currency to quote for prices or to demand payment of any services or goods.
Bank of Zambia (BoZ) Statutory Instrument (SI) No. 55 of 2013, empowers the Bank of Zambia (BOZ) to put in place measures for monitoring all transactions that involve the sending and or receiving of funds. The main objective is to monitor balance of payments in a transparent and accountable manner.
anything that makes the world bank and the chamber of mines happy means that it is bad for the country-this revocation of SI33 and 55 is like putting the fox incharge of the hen house-the vested interest have won and Zambia has lost-without excusing the ineptness of chikwanda -these vested interests manipulated the kwacha to achieve their ends
I pity ba chikwanda somehow,,,, i can be very difficult to impossible to work with Sata as the boss,,,, Sata tells his ministers to use wrong formulae when they use the correct formulae instead he calls them useless,, when they said´´ its the presdent who told me to do this´´ when things are wrong Sata fires them like masebo…. if they resigns Sata sends ACC, DEC and the police after them to takeover their bussiness
@ al
It is evident that you are clueless as to reasons, scope and procedures of SI 55.
142 since the nurses have let you play on the keyboard why don’t you educate me on the advantages of using the dollar instead of the kwacha inside Zambia-educate me on what is wrong in reporting all transactions over $40000 -especially for the mines
Its called business strategy….
I am also a little mistrustful as to why World Bank should be happy when they’ve always had us under their financial stranglehold of economic oppression.
We had to do away with it because it was not benefiting for the Zambian economy, not because we wanted to impress western institutions.
@Ndobo, my weekend is kind of spoiled by these Chikwanda… however let me defend him from you.
Sata calls/ed MPs as useless. And ministers he calls them “Ifipuba”. There is big difference by being useless, and ichipuba. Maybe its easier for some of you to compare Ichipuba to rotten groundnuts. Rotten groundnuts are not USELESS, they can germinate.
Chikwanda said …..Government would also aim at reducing the wage bill in the public sector by harmonizing salaries to ensure there is equal pay for equal work.
So Mr. Minister of Finance, does that mean you will now cancel Satas salary increases and get a refund of the unconstitutional payments made to his wife?
Or even withdraw his salary completely, as he is doing 0 work, therefore get 0 salary?
@ al (1.3)
1. Because those transactions have been already reported either by the Banks or ZRA.
2. If the reason of SI 55 was to monitor mines, it was easier and cheaper to issue specific SI for that specific purpose.
3. Do you really think that BoZ has enough capacity to process and police all the declarations? And if so, why until yesterday there was no single prosecution.
4. As to SI 33 (excluding the mines), just imagine that you want to pay visa fee through Western Union. The fee is USD 50 and you have cash. Now you need to exchange that money to Kwacha (and you get Kwacha as per “buy” rate) but unfortunately the amount received is not equivalent to theirs “sell” rate and you loose 2-4%. Great for Western Union, but not for people.
5. I do not have keyboard. Using tablet.
142-thats in an ideal world but unfortunately we don’t live an an ideal world-like general mcrystal says we live in a world as it is not as we would want it-and in this world as it is we needed SI55 to keep an eye on the mines to know what is going on because what they usually report is not as it is
HH has been vindicated again. This Tonga bull is very intelligent no wonder he is so successful in his businesses. I will join UPND when I am next in Zambia so that I can bring a wealth of advice to that party in my expertise. I recommend the incumbent government for listening to HH and implementing this change. The effects of the two SI revocation will take long to be felt as the damage done has been intense. The dollar rules the world whilst the pound nurtures it and that’s just the way it easy. You do away with the dollar at your on peril. Do you remember what Saddam Hussein called the Americans? Infidels and good for nothing. Alas! he was found hiding in a manhole, pistol in one hand and a briefcase in the other with $1million in it of whose money? The infidels! In God we trust!
Chikwanda is a wrong minister. The young Miles sampa predicted failure of the these statutory instruments and he was hounded out of the ministry. ABC brought the debt trap now he is at it 50 years on, 10 yrs after debt amnesty.
no no no .. you are being harsh on minister chikwanda,,,, you have never worked with Sata to understand how impossible it is to work under him…… one plus one equals two,,, Sata tells you “iwe lemba 3“…. “but boss“…,,, “iwe ni nebo president write 3 or you are fired“,,,,, then we things are exposed to be wrong… then Sata comes back, “i have changed my mind cancel that 3 write 2… i was not wrong i have just changed my mind to see how 2 fits in“
@ndobo, LOL. Well spoken.
Brain upload, you are wrong its miles sampa who personally draft si55. And they differed with the ps. In short he bullied everyone and thats same reason he was removed. Go to zwd and search, u will find the exchange of words between miles and people at the ministry who were against this si55
Chikwanda and his nephew, Sata preside over the weakest Kwacha ever, what a history to make by the shameless old men.
We are Dead in Zambia. The World bank is an Instrument of oppression for any poor developing nation, & when they tell us they are happy, just know the Rich will be rejoicing @ the expense of the poor masses.
Membership of the World Bank is voluntary. Walk away if you wish.
Weakening of the Kwacha is not only as a result of the so called SI 33 & 55. Its a myriad of factors centered on the incompetence of PF and dictatorial attributes of Sata. Sata and his group had a very simplistic view of running an economy. I am glad they have met reality!
Chikwanda is the worst Finance Minister Zambia has ever had. The man is clueless! Whatever he says hardly make sense ,and he doesn`t seem to understand what he talks about, either.
@ Blago
To put it bluntly, the business community of Zambia did loose confidence in the directionless fiscal policy based on uncoordinated infrastructure development financed by huge external and internal borrowing which resulted in budget deficit.
There are no cartels.
Just plain incompetence, nepotism, disregard to the rule of law and grand corruption at every level of the Government.
The World bank got what they wanted. Now they are happy. They are Africa’s enemy
No body is asking you to be member. Just walk away. Then you will be free from the WB. Idi0t
@142 you are really very very very dull. Which nation do you think will run away from the New World Order? You are not a member and then your nation is in pain. You think you can escape these imperialists. You make me laugh.
The same WB that Malaysia,Chile and Singapore does business with? Why are these nations successfully dealing with WB and becoming a success while Zambia goes from poor to poor?
So what if Malaysia, Chile and Singapore are in bed with World Bank? Africans need to do away with such western-dominated institutions and trust in their own to effectively manage their economies. If Namibia and Botswana can develop their economies successfully without borrowing from the IMF and World Bank, why can’t we?
let our president practice one Zambia one nation.we are one. He should invite a qualified person to minister finance in Zambia. Mr Chikwanda has really failed.he follows anything that mr sata says. Mr sata is not an accountant or economist and he can not rule the country without consulting other people.
You hardly understand how govt operates.
Ba mwankole,
The kwacha appreciated by 2% after the announcement. By tomorrow, it will leave the 6 kwacha mark. It will be interesting to see comments from the haters. Wanzelu has abandoned his fossil laptop he uses to insult the hardworking govt already.
then after one month it will be at 7.50 kwacha mark… it will be interestings to see comments from the whorshipers
We will continue worshiping as long as our country is being restored infrastructure wise.
If the govt was not so inept it would not have reached that level in the first place you mu.ppet. Going below $6 is nothing. We want it at the same level that RB left it or better.
March 22, 2014 at 11:17 am | Permalink
HH has been vindicated again. This Tonga bull is very intelligent no wonder he is so successful in his businesses. I will join UPND when I am next in Zambia so that I can bring a wealth of advice to that party in my expertise. I recommend the incumbent government for listening to HH and implementing this change. The effects of the two SI revocation will take long to be felt as the damage done has been intense. The dollar rules the world whilst the pound nurtures it and that’s just the way it easy. You do away with the dollar at your on peril. Do you remember what Saddam Hussein called the Americans? Infidels and good for nothing. Alas! he was found hiding in a manhole, pistol in one hand and a briefcase in the other with $1million in it of whose…
….money? The infidels! In God we trust. God bless United States of America and Zambia.
Always trying to reinvent the wheel and useless experimentations! Mr. Chikwanda, you need to have a clear and well defined policy; not these trial and error methods you have been employing.
This job should be a no brainer to you, because you did it before. It’s like repeating grade VII three times and still fail to qualify for grade VIII. You must not be one of the ‘useless ministers’ your boss is talking about. Please redeem yourself and your party. Otherwise, the legacy you are about to leave behind is disgusting.
Why do we always blame the west or IMF & WB for our self made economic woes? Zambia exports the same copper Chile exports and we deal with the same WB that Malaysia deals with.So if its the WB to blame then why are Chile and Malaysia successful and we’re not?
Zambia kweli ni nchi ya wajinga.
Chile and Malaysia are successful because they are not blacks (Africans). We are at the tail end of the food chain.
1) Europeans
2) Asians ( e.g. Chinese, Japanese, Koreans, Indians )
3) Latinos
4) Arabs
5) lastly and the least, AFRICANS
If you don’t believe me, then tell me which country in Africa that has succeeded without a lot of white influence.
@ Chabwera
No one from PF took responsibility over the fall of the Kwacha. It was blamed on stance taken by the US Federal Reserve. We were being told this was a global phenomenon which had affected the entire African continent, and that govt had no control over it. Now that the Kwacha has started to appreciate (which is good news), I hope the PF will not take credit of having turned it around. Moral of the story: good leadership entails taking responsibility over both the negative and positive results.
spot on, excellent observation
Multiple effect syndrome. Look it up.
Sadly that doesn’t apply to these lot as there is no leadership. …in Sata’s book leadership is about being a boss.
@Chabwera; on multiple effect syndrome. Don’t you think statistically the chances that the reversal of SI33 and SI55 and the world effects on the Kwacha looking up all occurring at about the same time is statistically improbable? The erosion of the Kwacha was more to our inept government. The earlier we accept this the easier it will be to remedy the ill.
O God! and that is the land of my fathers?
Now also consult on Indeco. Please ba SATA learn to appreciate others. You are not God who knows everything
And scrap the stupid idea of our own Airline. That will just waste millions.
Concentrate on the REAL task which is getting all government spending PROPERLY ACCOUNTED FOR, and reducing unbudgeted spending!
We need a financially disciplined administration, not this haphazard nonsense we have had since 2011!
pf chief bootlicker and ben. Indeco is exactly what we need. You can not have all important industries in foreign hands because they make you dance to their tune like we have just gone through over the SI’s. The national airline though necessary to promote tourism can wait under the circumstances. Our main thrust should be industrial development with emphasis on manufacturing. We have the man power, all that is needed is to mobilise and give them tasks and targets.
This is what happens when you have no long term strategic plan to guide you….you can’t be a capitalist today and then be a quasi socialist tomorrow.
As for the chamber of mines and World Bank vampires we all know who they represent and its not is.
Africans(black people) are their worst enemies! When government introduced the SI’s and became under pressure from certain sections , some notable guys like Prof. saasa either conveniently kept quite or also joined the chorus. Now that the government has reversed the same SI’s, they are saying the measures were not bad, its only the implementation which was wrong even when they condemned it right from the start.
‘Africans (blacks) are their own worst enemies!’
To be honest alot of people voiced there displeasure but as usual uncle Fossil Chikwanda ignored them.
*their
Jay Jay. What I mean is that the SI’s where opposed not because they where good or bad but just for the sake of opposing. They were bad to those involved in money laundering and illegal externalisation of funds whether obtained legally or fraudulently.
Dollar is mighty tool used by the rich to keep their status and enslave the poor in the chains of poverty. That’s why when the dollar gains, the poor morn, bt when it falls the rich gnash their teeth like angry dogs. The dollar is also an instrument usd to keep the poor nations under the york of western powers. In this way they can access all the raw materials they need to grow their economies
One step forward, two steps backward. Nurses, Chiefs, si33, si55, ZAWA, Ambulances, govt wage bill, constitution, costly bye elections, nonstop rapid appointing/firing ministers, too many ministers, …….., ouch, too many unfinished business, the way we get by, wrongly. To many own inflicted wrongs. We need to do better, for sure and the writing is on the wall. Compete well in this political and economic games.
Ask chumbu he will tell you that HH has connived with world bank. Or will he now understand from world bank instead of HH. CHUMBU SWALLOW your pride economics have changed. Old ideologies do not work that is why progressive countries do not go back to what has failed.