A Copperbelt University Lecturer says the country’s economic challenges can only be resolved by understanding what has caused the current economic crisis in the country..
Lubinda Habazoka who is the head of the economics department at CBU said there has been a number of inconstancies in the governance of the country which has contributed to the downfall of the country’s economy.
Mr Habazoka has since called for an anti economic crisis committee to be established so as to help deal with the economic crisis the country is going through.
Below is a statement issued to the media by Mr Habazoka.
It is quiet evident that the economic crisis in Zambia that has been building up in the past few years has reached a level where we need a national anti economic crisis committee. Effective commercial lending rates have reached 40% from 13% in 2012, inflation is at 22.5% from 6.4% in 2012, government foreign debt stock has increased from $1.2bn in 2011 to over $10bn in 2016.
The country has also experienced massive electricity load load shedding despite government investing over a billion dollars in the last four years in the sector.
The country is currently experiencing fuel and mealie shortages a trend common only in the 1980s. Zambia has also seen its currency loosing value by 300% in the last 5 years. Where in 2011 1USD = ZMW4.8 now 2016 a Dollar is fetching ZMW11.4.
Zambia has also seen a huge budget deficit that has led to delays in salary payments for government workers especially in quasi government institutions. For the first time after independence, government has decided a scrap off meal allowances for university students a serious blow to the country’s aim of fighting illiteracy.
The major consequences of the mentioned challenges in Zambia is the eradication of the important middle class which will lead to increased poverty. Energy problems will also shrink Zambia’s economy as companies will be unable to produce goods because of the high cost of doing business.
The recent eviction of stores in Zambia’s levy junction shopping mall is a clear testimony that citizens no longer have money because the evicted stores depend on shoppers for income. In order for us to find solutions to the many challenges we are facing, there is need for us to know the major causes of these problems and these are:
I. Global commodity prices
II. Careless government borrowing
III. Inconsistent Government economic polices like the mine tax regime, lending rate caps, ever changing import and export procedures etc,
IV. Corruption in government tendering system
V. Poor management because of infusing carders in sensitive jobs. Poor management is the greatest factor because it is unacceptable to put carders from permanent secretary going down as these have no regard for the system because of the influence they may have in the ruling party. There is need to appoint people based on their ability to perform. Nepotism is also rampant therefore Zambia is unable to use all the talent it has to develop the country.
VI. Misplaced infrastructure development. Infrastructure development in less priority areas can never develop the country. If that development was in form of roads to farm areas, electrification of farm areas, drilling Bole holes at each farm in Zambia, we would have seen Zambia even surpass South Africa in terms of agriculture sector development. But what did we see, township roads to woe votes and doing of roads like Kitwe Ndola that could have waited.
By Dr. Lubinda Habazoka
Copperbelt University Head of Economics.