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Alba Iulia
Thursday, August 6, 2020

Zambia: Let’s work more than we talk to help the President develop the economy

Economy Zambia: Let's work more than we talk to help the President develop...

How can we boast about GDP growth of 4.3% when we had 10% not too far away?

Past performance is often easily forgotten. So, it is easy to tell the public, “I remain confident that given the developments in the first half of 2017, the projected growth rate of 4.3% for 2017 remains feasible,” as the Honorable Minister of Finance, Mr. Felix Mutati recently proclaimed.

Usually, the minds of the people are focused on the present, rarely in the past, so some will see the 4.3% figure and think the economy is surging forward and therefore applaud the minister’s statement. Some public statements by leaders have a tendency to burnish the speakers’ celebrity and carry with them erosion of the real problem. If I were to explain the country’s economic performance, I would not focus on the present or future alone because the past plays an important role on both.

Compared to 2010 for example, when Zambia’s GDP growth rate was 10% and since then eroded and continued to follow a spiral downturn to 3.0% in 2016, I would feel nervous to ignore reference to it and speak at length about 4.3% (Figure 1) only. The arrival at 10% shows that it is possible to grow the economy massively. If the 10% level had been maintained, the country would have made exceptional economic advancement. The question is, “Why is it always copper, the decline in world prices that is the explanation?”

It is also extremely essential for public officers to be factual and present balanced information about the economy instead of focusing on the mask that always grins cheerfully when behind it there are miserable images of children who cannot eat even one meal a day. Or, as if we did not have growth of 10%.

There’s another point. After so many foreign trips to the World Bank and IMF, and I do include the last four or five decades, and national newspapers always showing the finance ministers talking about these organizations, it gives me an impression of loss of the country’s own economic soul. It feels as if the ministry of finance might as well be renamed something similar to these organizations. In other words, what has remained of our own Zambian identity of the economic activities other than talking about debts from these organizations? What else are we doing about the economy other than reference to borrowing and using this money on development projects?

What else are we doing about the economy other than reference to borrowing and using this money on development projects

Botswana and Namibia are also rentier states but I am not sure that their ministers of finance are always implementing programs of the World Bank. I’m sure they have a large part of their economic activities based on indigenous and not borrowed money. So, we must we also rebrand our economic activities and prevent debt from eroding the national economic identity. As a central economic activity, we must have something that is Zambian with outside help as a minor complementary component if at all. So also, we must speak more about this Zambian identity than the World Bank. The World Bank itself will be prouder to be associated with this thing called indigenous Zambian economy with them playing a minor role.

 

We must compare our performance with others

A child eats his food cooked by his mother, cleans his mouth and says, “She is the best cook.” But the next day after eating from his friend’s home, he says, “I have to tell my mother to do better.” What he said later matters more than the first. And that is the way this country must run. Whenever the Zambian economy grows, we proclaim ‘excellency.’ Yet, there are others near us that are doing better, and from whom we should learn but we prefer to ignore. Comparisons breed competitiveness which is essential for survival and success. When we do better, others envy. When we do badly, we learn to do better and compete effectively.

Table 1 below shows a ranking of higher performers among SADC countries to which Zambia belongs. In 2012 for example, SADC’s GDP growth rates were dominated by Zimbabwe with 11% growth and Zambia ranking number 3 with 8% growth. In 2013, Zambia’s growth plummeted to number 7 after recording growth of 5%. Here, Zambia must ask itself what happened and how to fix it. Again, the explantion is largely copper. In 2014, Zambia’s growth remained flat at 5% and also the ranking of number 7. 2015 was a disaster with the ranking going down to 10 with growth of 3% that continued in 2016 althouhg the ranking went up to number 6. Why did we not maintain the 2012 growth?

How did Singapore develop more than Zambia?

One of the comments made by a reader on the article I wrote about Zambia being a rentier state but refusing to use money from copper to diversify the economy was that he wanted to know how Singapore developed more than Zambia. It is difficult to exactly copy and paste one country’s development model but models do provide basic lessons. Some of them from Singapore were the following.

• Moving and delivering goods or logistics is an important prerequisite for economic development. Singapore ranks number 5 among the top countries in the World Bank’s Logistics Performance Index. Efficient logistics and connectivity of international supply chains has a very high potential, to reduce trade costs and boost integration in regional and global value chains (World Bank.) Effective public-private sector cooperation which is often lacking in Zambia was key in Singapore.

• According to Prime Minister Lee Hsien Loong, Singapore adopted the multiracial society principle which Zambia too has but whether this has worked to contribute effectively to national development is another matter.
• He also says that the culture of self-reliance and mutual support was fundamental. Self-reliance means the ability to do things and make decisions by yourself. We can judge whether our country is self-reliant or not from the many statements in the newspapers about the World Bank’s involvement in our economic activities and by looking at the sources of finance for the national budget. Even at family or individual level, to what extent are we Zambians self-reliant?

• Mr. Loong also highlights the importance of the faith maintained between the Government and its people. You will judge how this is in our country.

• Mr. Emanuele Schibotto cites several factors, including higher level education, huge saving rates and the crucial role played by the United States as regional security provider and a huge market for exporting goods. But he argues, “What really distinguished the Asian economic path from the rest of developing countries was leadership. Bright-minded entrepreneurs and forward-looking politicians worked not only to seek personal profit; rather they were committed to create an economic renaissance for their nations.”

• Changing the mind-set has also been cited as an important factor to development and I think Zambia needs this perhaps much more than actual economic factors.

(a) For example, why can’t the minister of finance just work quietly without making public announcements that inflation is low, the economy will grow by 4.3%, fundamentals have improved, etc? Why can’t the minister of health simply work quietly only to be recognized through the number of sick people that receive better health care, the number of health people walking the streets, the quantity of medicines on the shelf, etc? In developed countries, you only see the number of buses and trams and their frequency to know that the minister of transport works. Public property is maintained and respected by citizens. People work for their countries not countries or Governments working for them. Nshima cannot be the only food for every family. Just as the country has struggled to diversify its economy so have its people to diversify from nshima.

(b) Forty years ago, Zambians were renowned for humility and honesty. Are we still honest to each other, to the country, to the family and to our work places? About 50% of what my relatives tell me is based on false information, wanting to outdo the other, gain unscrupulously, or let the other suffer while we smile. How do you plan for the right thing when half of the information that you are given is deceitful? It is partly their humility and honesty that is taking foreign investment to Asia. We fail to fulfil contracts or we do shoddy work in return for hefty pay checks. If we pretend like an ostrich which buries its head in sand pretending that its enemy will not see it, and don’t talk about these things publicly, we only dig our own grave. The finger cannot always be pointing at Government. We too have soiled fingers that we must clean. If we show Government that we are a model, Government will follow.

By Economic Governance

16 COMMENTS

  1. Mr. Economic Governance Sir,

    You want us to work ourselves to the bone while those in power just steal and borrow?

    These politicians of ours must be laughing so hard at us.

    • I cannot agree with you more especially when I look at the massive Bungalows civil servants are building in Meanwood, Roma Park, etc. They just laugh. We are working ourselves to the bone while all they do is laugh at us scratching a small two bedroomed unfinished house with a half roof for 5 hard years. It’s not fair.

    • Bwana Economic Governance,
      Your level of analysis is tainted by one major stumbling block namely your hungry stomach which in turn is chained to your appointing officer, NOT THE PEOPLE OF ZAMBIA.
      I explain you briefly. The 10% GDP was heavily boosted by one external force which neither you nor us have no control over, namely very good copper prices on the LME. The simple reason it has nosed dived is because of a fall of the same and an epic failure of our leadership to diversify the economy away from this single factor when the going was good. The leadership at the time did not think to benefit the common man / woman and they only do so now because they fear to loose the next election, not because of any genuine concern for suffering Zambians.

      So go and tell your appointing officer…

    • ……………to screw himself and your fat round “one pack” belly to prepare for hard times.

  2. Lungu does not need any help. Lungu has failed, he is a disgrace and he must go. He is a crook who stole an election and is willing to kill to keep the power. The economy is in tatters. Lungu has stolen enough.

  3. Well, well, well as one Makulu would say, I’d rather it was “Lets work more for the country to develop than aligning support with a leadership full of dishonesty, self enrichment and boisterous rhetoric! Once a leadership commits itself to benefitting the common man than self aggrandizement and letting honesty for love of country prevails things will automatically fall in place as realization that the accruing benefits to the country will be felt all around! As at now Zambians mostly at the end of the spectrum toil their lives out while those that are supposed to bring relief to woes are growing pot bellies and living exclusive lives!

  4. It’s apparent that you have put in quite some effort in constructing this treatise. Such a shame though that you squandered all this with such an inept title!
    What do you mean by help the president develop our economy? Is it the president who develops economies?
    This is a fundamental cognitive impairment we need to overcome in Zambia before we can even start talking about development. Does everything have to begin and end with the president? Our supreme leader? The one and only person who would know that the country needs development because he is the only one endowed with such knowledge!. What happened to institutions?
    In normal circumstances, human growth and development is more like a human instinct. A drive which is there regardless, with or without a president. Unfortunately…

  5. Well, z leadership u put in place reflects z type of pipo. Honestly leaders must inspire z good, z honest and the zeal to work oneself to z borne for mother country. Do we have such leaders? Leaders that first and last only think of amassing wealth at ligtening speed, criminalize opposing voices, sadistic in all their actions, tribal etc. What is left for z average citizen to be inspired?

  6. “The institute has predicted that copper production due to First Quantum (FQM’s) Sentinel-Kalumbila project in the North-Western Province will push up production from 710,560 mt/y to 746,000 mt/y. Official copper tonnage has been put at 1.5 million metric tons. It further anticipates copper prices to rise steadily over the next few years.

    All the same the fall in copper prices on the London Metal Exchange (LME) from the near all-time high of US$10,000 per tonne in 2011 to less than $5,000 this year has had an adverse effect on the general operations of the foreign-owned mining companies in that country resulting in reduced production of the metal”. This fits in with GDP graph. Research when you write aricles.

  7. In addition even if the 2011 price of copper had remained at $10,000 per tonne the GDP would have gone down because the population has increased. Simple economics coming from an engineer not a self proclaimed economist.

  8. A governmdnt is elected to LEAD not to follow. If it is the pipo who are the model to lead the president then why do we need a president. If a government cannot lead its pipo then it is inept irrespective as to hiw you want to “spin” your paper. Read world bank and imf predictions for zambian economy for 2017 GDP at maximum of 3.6% .As you say why do we have to have minister for finance telling us figures that are “rubbery”.
    Live on the street not in a hypothetical reality. Zambia is screwed economically….. Does, UK USA, GERMANY AUSTRALIA go begging to IMF and world bank for loans. Our biggest problem is DONOR DEPENDENCY.

  9. Yesterday we are reading about the government waiting for the finishing of health posts funded by a “line of credit”
    From India and having the audacity to infer that India was slow in providing the money…. line of credit = LOAN

  10. Read your own article, you say lets work more thsn we talk blah blah. Then you gone on about needless announcement by government. My friend that is where the talk is coming from the government.
    Is not a government, of the people, for the people and by the people. Not political prostitutes that party hop to further their own finances. This philosophy of ” now its my time to chew” doesnt help the country just a greedy individual

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