The UPND has welcomed Government’s realisation that Zambia has fallen on very tough times that require urgent policy actions and strong political will.
Party President Hakainde Hichilema however says the measures being proposed in the statement issued by Finance Minister Margaret Mwanakatwe are the same ones from former Finance Minister Felix Mutati’s Economic Stabilization and Growth Programme.
“Why the Government departed from Zambia Plus in the first place remains a wonder. We can only pray that these Cabinet decisions are not too little too late given the current economic deterioration and that this time around, the Zambia Plus measures will be actioned with seriousness”, Mr. Hichilema observed.
Below is a full statement…
Our advice to PF over the Special Cabinet Meeting of Monday, 27th May, 2019 on the current state of economy
By Hakainde Hichilema
UPND President and Economist
On 28th May 2019, the Minister of Finance released a statement on the Outcome of the 11th (Special) Cabinet Meeting on the State of the Economy, Held at State House on Monday, 27th May, 2019.
We welcome the Government’s realisation that Zambia has fallen on very tough times that require urgent policy actions and strong political will. The measures being proposed in the statement are the same ones from former Finance Minister Felix Mutati’s Economic Stabilization and Growth Programme (Zambia Plus), which we even alluded to a few days ago in our advisory on fiscal consolidation. Why the Government departed from Zambia Plus in the first place remains a wonder. We can only pray that these Cabinet decisions are not too little too late given the current economic deterioration and that this time around, the Zambia Plus measures will be actioned with seriousness.
A few things are worrying regarding the text of the Statement. For one, in part, it reads: “Cabinet deliberated on the growth prospects… in 2019 and over the medium term… Cabinet noted the negative impact of climate change that has affected agriculture and electricity production and the tight liquidity conditions… [and] the impact of the trade war and uncertainty around BREXIT…”.
We strongly believe that critical self-reflection and honesty are key for solving economic problems. The Minister’s statement is however far short on both self-reflection and honesty. If climate change related agriculture and electricity production are the core problems, why did Cabinet fail to propose structural reforms such as investments in climate-smart agriculture (e.g., solar-power groundwater irrigation projects instead of urban roads projects) and energy projects (solar, biofuels, etc. projects instead of expansion of rain-dependent hydro power installations)? More so the tariff structure for independent power producers has not attracted investment in this sector, because Government has not been willing to negotiate a cost reflective tariff.
Why did Cabinet fail to acknowledge that the adverse liquidity conditions are a result of poor fiscal management, specifically the high borrowing without spending plans and the resultant poor quality of public investment, especially infrastructure spending? Why is Cabinet failing to commit to curbing the excessive infrastructure project spending with the same strictness imposed on Ministries, Provinces and Spending Agents? The claim that “projects that are of an economic nature will not be cancelled… [to spur a] resumption of growth” is a sham. Analysis shows that despite the Government’s excessive spending since 2012, Zambia’s Incremental Capital-Output Ratio has deteriorated continuously, showing increased inefficiencies or poor investment quality during the PF era. The PF Government simply needs political will to stop its obsessive and gluttonous infrastructure spending habit and to stop the high levels of corruption never seen before in the history of our country.
Bank of Zambia (BOZ) has recently analysed Zambia’s potential output and has found potential real GDP growth has fallen from 7-8% per year in 2008-2010 to about 4% per year currently, meaning that the economy can no longer grow at more than 4% per year. Also noteworthy is that the IMF has recently revised the growth rate estimate to 3.1%. The quality of spending, which focuses only on infrastructure and neglects private sector development is the main reason for this productivity and output decline. But rather than undertaking reforms to support private sector re-energization and development, PF is fixated on roads.
While we would hope that the Zambia Plus policy measures that Cabinet has reiterated will now be implemented with seriousness and commitment, we cannot help but worry about the low levels of political will in the PF administration. Austerity was repeatedly announced in 2016, 2017 and 2018, but with no serious intent to change policy behaviour. Here we are again with the Cabinet making the same old announcements.
But we are not the only ones who are worried about the PF’s lack of seriousness. Last week, International credit rating agency Moody’s downgraded Zambia’s credit rating and revised its outlook to negative. In parallel, the International Monetary Fund (IMF) issued a statement saying: “However, the latest borrowing plans provided by the authorities [Zambian] continue to compromise the country’s debt sustainability and risk undermining its macroeconomic stability and, ultimately, living standards of its people.” The IMF said this, going on record that the PF Government is undermining the living standards of its people!!! Most likely, the PF will soon say: “unpatriotic HH has told Moody’s and the IMF lies, now they are saying these bad things against the PF Government and spreading fake news”.
One true hallmark of great leadership is the ability to admit mistakes instead of always trying to find scapegoats. Another is genuinely listening to advice. In this regard, we would like to offer three pieces of advice to the PF Government again:
a) Own up to your past mistake so you can genuinely learn from them, and maybe we can then all move past them toward sincere and serious problem solving together;
b) Take our advice in good faith as it is offered in good faith; institute the well-rounded set of corrective policy and structural reform measures we have been advocating for so long now. Draw on our expertise, strategic thinking and advice; it will help this country and our people.
c) The need to stop the rampant theft of people’s resources by fighting corruption meaningfully/ significantly and not the
current symbolic/half hearted way which smacks of complicity by those in authority.
We are not doing this for political mileage but out of genuine care for this country’s citizens, now and in the future. We stand ready for the economic Indaba we proposed previously.
Can we stop beating around the bush. Edgar Lungu and Mwanakatwe have no capacity to deal with the Zambian economy.
“Houston, we have a problem”
You can advise a horse to go to the well but you can’t force it to drink.
Watch and see what happens next. Faecal matter is headed for the fan. [“Dununa reverse” playing in the backgroud]
@Obatala you are very right about that. But there is a reason why President Lungu’s handlers have always shielded him from facing questions on his Gov’t’s economic policies. In the run up to 2015 Presidential By-election, he was asked what his policy on Education was. His answer was “I will have a minister of Education, he will answer that”. There and then I knew Zambia as a country was headed for a collapse.
UPND criticize but dont offer anything in return.
There is no one better than Lungu unless you give me a name right now.
Thanks
BB2004,2016
Lungu announced austerity measures, and immediately proceeded to buy a VVVVIP Jet.
Leaders should lead by example.
Nuff said.
Every time Hakainde give complement to Ba Edgar, it’s not well received.
Every time I tell my lady that you look good, she goes back and change instead of just saying “thanks”.
So Ba Edgar just call HH and say ‘… Mwaiche HH, you said something good, thank you. Do you have time we can meet at RB’s presidential house, we discuss more on economy. Bushe nanomba taunwa?”
A total ban on Lungu movements. He is the biggest drain on national resources. Second drain is cabinet, third is MPs and the fourth is useless unecessary army and the last but not the least is PF appointed Permanent secretaries. Stop these expenses and every single zambian will have three course meal every day
That is right.
Ah imwe ba Chaos theory! A horse cant be advised to go to a well. You can only take it there. But advice awe mukwai
An honest compliment from HH to PF. PF is always focused on the negative part of HH, but I am sure he is showing his human side of him.
Its a second in a roll of his contributions that are straight and balanced, and I see PF is now finding it hard to spill poison on HH.
To you HH, this is what many have been expecting from you, constructive criticism which is balanced and well thought of. Keep it up and slowly you will win the hearts of your hardcore critic here – the skull !! And many others will slowly, but surely, start losing erec.tion.
Bring Mutati back. His measures are not cut and paste like Mwanakatwe has done.
Yes they are the same ones but guess what when Mutati proposed the they dull cadres thought he was deceiving them and wanted to decamp PF with this unpalatable medicine. This sums up the Lazy Lungu administration of ill leadership and short term vision…most of these measures are impotent as there is no funds or loans in the pipeline to administer…why UPND fooools are swift to welcome it is beyond me.
But this Mwanakatwe management is it either copy and paste or plagiarize? If not both!
My loan repayments last time was increased by 10 months. Again it will be increased. Looks it’s just us the workers carrying the burden of taxes and these Austerity measures. The Mps, Ministers and everyone who is involved in mismanagement , waste and corruption are spared. They are still getting their pays and hefty ministerial allowances ranging from free talk time to free fuel, expensive vehicles and all their children taken care of by public resources. They need to sacrifice too.
You people who get loans do you even know how to calculate them? Do you know the credit charge and the APR…I always scratch my head when I am reading your comments I mean how does someone who was going to finish of paying a loan in two months end up paying longer than that by 8 months. Banks in Zambia make money because of our docility and ignorance!!
This Zambian mentality of getting loans anyhow is not good.
Learn to live within your means citizens.
All together now…”LOANS ARE NOT GOOD FOR YOU”.
IndigoTyrol – Its wrong to say loans are not good because there are two types of loans: bad loans and good loans…good loans are the ones you use for tangible investments like in businesses, build houses to rent or sale at profit and the bad ones are those used for buying luxury cars.
Zambians lack Financial education like AM there I bet you he has never read the small print of his loan agreement he does know whether its fixed or flexible APR…he just signed. Banks in developing world make more money from poor people and weak Central Bank policies I mean how can a BOZ Governor simply state that extend or renegotiate with your banks.
Jay it’s LT which has welcomed these measures not UPND.
UPND has only acknowledged that the PF statement has accepted that things are tough.
Austerity is alian to these gullibles. The only language they understand is kapoya langues of GBM and Kaizer Zulu. Now the reality hash hit you where it pains most. Kuyabebele come 2021 bapompwe imwe.
Things are so bad that even the usual PF political spinners here can’t figure what drivel to say, Not even the usual “let’s roll”
The price of money has gone up.
The exchange rate has gone up.
The price of mealie meal has gone up.
The price of fuel will go up.
The price of electricity will go up.
Then the price of money will go up.
Then exchange rate will go up.
Then price of mealie meal go up.
Then the price of electricity will go up.
Where is the money in your pockets now?
Its actually more money in their pockets and no money in your pockets!
Disaster!!!!
The price of keeping Corrupt Mugs, & Swindlers, like Chitotela, & Chimpyongo in Government, has gone up, as the taxpayer, & citizen will feel the fires of poverty licking their b@cksides, whilst they writhe in extreme hunger pangs, dancing to Sontapo, & Dununa reverse!
PA ZED ENJOY!!!
Lopola2021.com
Trib.al Hacks: 1 “We stand ready for the economic Indaba we proposed previously”.
He is ready to attend the National Dialogue Forum this time around? Mayo wandi emipamba iyi! But nevertheless this change of heart is welcome.
2. “The measures being proposed in the statement issued by Finance Minister Margaret Mwanakatwe are the same ones from former Finance Minister Felix Mutati’s Economic Stabilization and Growth Programme”.
But Trib.al Hacks, you opposed those measures just because Hon Mutati was in PF government. Badaala, be consistent. Anyway if you are becoming mature, and now you want to be part of Zambia, then refer to my comment above.
This country would have been so much better if it wasn’t for you opposing anything good or bad. This has made you Zambia’s enemy no. 1…
Dude you don’t make sense here, these conversations are way beyond your comprehension.
I definitely do not remember HH opposing Mutati’s solutions. Please stop drinking expired Katata you !d!ot.
IndigoTyrol – But uli chikopo iwe. Loans obtained for investment are very important. You can’t invest using your salary if you are employed. If you want to build for example you can’t use your salary. I got a loan to buy a tractor but which to me is good investment because I have a big farm. In turn I will employ someone to drive it and some other farm workers. This is how you create jobs. What is wrong with that. Unfortunately my loan has been increased by four months.
Upnd cadre. why don’t you put your statistics across if you know so much. Whether hh criticized it in first place it gives us the inner side of understanding economic levels in our country of which not all of us will understand economic industry. He’s talking about learning from the past which maybe himself is willing to learn from. Carry on with your life style of putting all your eggs in one basket. This is real life going on.
But we having telling these PF stooges.
Lungu is just something else.
Anyways , some of us are happy we have been vindicated……we told you so , lungu is busy brutallising the opposition, while the economy rots
RB was 100 times better than lungu.
The mark of a brutal incompetent corrupt despot is…….they plung the country into debt….they bring up imaginary imperialists wanting to steal the countries minerals ……..the contract the democratic space, opposition and NGOs are banned from holding rallies or demonstrations ….
Do you notice any of those with lungu ??
These Austerity measures were announced a long time ago but the only Austerity measure that has been achieved so far is the purchase of the Presidential jet!!!!
Don’t play with Play Boys!
Waiting for Austerities Part 2 … Kikikiki
As always in zambia we are good at only building castles in the air. Nothing tagible or meaningful ever comes forth from what seem to be good plans. Kuyamba tiyamba bwino but poor finishing as always. We cause problems ourselves and begin running to western countries to come and rescue us. Its time we changed for the better brethren, we have only one life to live and live right. There is nothing more painful and time wasting as regret. We brought ourselves into this mess so its up to us to take us out of it. That dependency syndrome inherent in the african mind should cease. May God deliver us africans from our inefficiencies and inefectiveness.
Things are so bad that even the usual PF political spinners here can’t figure what drivel to say, Not even the usual “let’s roll”
All pf supporters eat some rat poison and eff off
Tomorrow HH will refute his statements,sit down please
Even if they say Zambians like changing Governments like under wears, its OK guys. We have tried PF, can we try HH in 2021…………………. if he is useless we kick him out after 5 years trial!!!!!!!!!!!!!
Anyone who bears even the slightest semblance to a reasonable length of memory will quickly realise that the same measures being proposed by minister Mwanakatwe today are the same ones former Finance Minister Felix Mutati espoused in his Economic Stabilization & Growth Programme not long before his sucking. Why did Lungu not heed his timely advice?
Lungu once ignorantly boasted that, & quote. “I will continue borrowing to develop Zambia”. Many economic pundits warned him that while the economic growth rate is likely to have a linear negative impact on the public debt-to-gdp ratio, his government’s reckless & misguided high levels of public debt were, once a certain threshold has been breached, likely going to be deleterious for Zambia’s growth . That’s where we are today, as was clearly…
… foreseen Zambia’s overall long-term fiscal sustainability has deteriorated markedly & the effects thereof will without doubt linger on medium & longer term. Whence our stand at crossroads of high risk with regard to fiscal sustainability i.e. large fiscal deficits, high debt levels, an outlook of possibly subdued gdp growth, as well as the projected fiscal implications of a high population growth rate. It’s a bad place to be.
Albeit belated, with the damage already done, I’m somewhat pleased even the likes of Margaret have started to get it in their thick skulls that “debt sustainability should get a very prominent & explicit role in the surveillance procedures” under the Zambia Plus program. Buying jets are inducing stupid by elections just damages our economy further, please for…
… once in your lives wake up and start being patriotic. Bushe niba koswe mulelya saana ubushiku nakasuba endowering you with such an unacceptance gift of ubunangwa mutulukobo twenu!