The Centre for Trade Policy and Development has asked President Edgar Lungu to use his official opening of Parliament speech on Friday to clearly explain the road to economic recovery.
CTPD Executive Director Isaac Mwaipopo said the Presidential speech during the opening of Parliament is meant to set the tone on some of the key issues Parliamentarians will be focusing on during the sessions.
“As the Republican President officially opens the 4th Session of the 12th National Assembly. The Centre for Trade Policy and Development will be expecting the head of state to speak to the critical issues affecting the Zambian economy,” Mr Mwaipopo said.
“We understand that the speech by the President is meant to set the tone on some of the key issues the House of Representatives will be focusing on during the sessions. It is our considered view that the president’s speech should also clearly explain the roadmap towards economic recovery,” he said.
Mr Mwaipopo said the speech must address issues regarding how Zambia will be set on the path to economic recovery because economic growth has continued to reduce and is projected to reduce further to 2.9% in 2019 from 3.7% in 2018.
“The foreign reserves have fallen from $2.4 billion in 2016 to $2.1 billion in 2017 and to $1.57 billion at the end of 2018. These have compromised macroeconomic stability and resulted a higher cost of living. Zambia has contracted excessive debt, way over US$ 20 billion inclusive of public guaranteed debt and domestic arrears, and interest payments towards this debt has crowded out government spending towards the social sectors,” he said.
“It is our hope that the 2020 National Budget will not follow the trajectory of the 2019 budget which reduced allocations towards social protection and health due to increased spending on debt interest payments from about 20% of the budget to 27%,” he said.
Mr Mwaipopo said Government needs to consider restricting the current debt stock in order to increase spending on basic needs for Zambians.
“There is therefore need, through the speech, to assure the nation that the challenges facing the economy will be improved. The current electricity shortage presents yet another situation which needs urgent attention since it is constraining productivity and will negatively affect economic growth,” he observed.
He said Government should take urgent measures to address the power deficit in both the short-term and long-term.
“The President should also provide policy guidance on whether Zambia will still persist to implement a sales tax policy and relaunch Zambia Airways while grappling with fiscal constraints.”