By Bright Chizonde Senior Researcher-CTPD
Zambia has been negatively hit by the global spread of the 2019 coronavirus through both external and domestic shocks attributed to falling copper prices, lower tourism earnings, and the implementation of local and regional preventive measures against the pandemic.
The Government has therefore outlined a number of initial economic measures aimed at mitigating the effects of the pandemic on the Zambia economy.
The Centre for Trade Policy and Development (CTPD), however, notes that the tight fiscal space has greatly constrained the Government’s ability to implement effective policies to safeguard macroeconomic stability and standards of living. The outlined economic measures reflect government’s focus on collecting tax revenue at the expense of the collapse of business enterprises.
In his recent address on the impact of the Coronavirus, the Honorable Minister of Finance, Dr. Bwalya Ng’andu MP, stated that as part of the measures taken to mitigate the impact of COVID-19, Government will release K2.5 billion toward reducing domestic arrears to suppliers, outstanding arrears to pensioners and third-party arrears, as well as an additional K140 million towards local contractors in the road sector. On the revenue side, Government will suspend excise duty on imported ethanol, and suspend import duties on the importation of concentrates in the mining sector, among others.
CTPD considers these and other measures taken to be insufficient to mitigate the economic impact of COVID-19. Firstly, it must be noted that the dismantling of domestic arrears towards suppliers and pensioners, though able to increase liquidly, is an obligation and not a stimulus or bailout.
Secondly, Government omitted the most important policy interventions since it failed to outline measures targeting loss in employment and reduced standards of living due to compromised macroeconomic stability. It is expected of Government to reduce selected corporate and personal taxes, and suspend selected withholding taxes, instead of targeting tax changes with the most minimal revenue loss implications.
It is better to lose some tax revenue now while keeping many businesses afloat during the pandemic as opposed to suffering permanent losses in tax revenue due to the widespread closure of businesses.
CTPD therefore encourages the Government to urgently engage the IMF, World Bank and other cooperating partners for support, in order to finance a meaningful economic bailout.
To hell you spreader of negative evil rubbish. You cannot acknowledge how well this government is dealing with this virus. We have 0 deaths so far and to us that is more important for now than some imaginable fiscal figure. Go and give that advice to Europe and America where thousand have died and their handing of this virus has led to a global down turn. You should be advising your imperial fathers how to correct this debacle they have created. Silly mangoose
@Kaizer Zulu.
The reason we’ve had no COVID-19 related death is because 99% of the cases are non-critical, patient’s conditions are to do their immune systems not GRZ. I’ll though acknowledge the fact that considering the circumstances GRZ has done well. Also GRZ should acknowledge that the job would’ve been excellent if they hadn’t let the virus in the first place.
Coming to this article, it’s exactly what I commented on MMD SGs article.
We know you Kaizer Zulu is not an expert on economic matters, you can do us a big favour if were you don’t understand you ask for clarifications and were you do we debate, that simple.
This thing of name calling should be left in the past.
World Bank and IMF are very busy trying to help out those countries who most hit by COVID-19, approaching them is more like teasing.Just look at what these two institution are involved in, let us do what we can as a nation and if one as ideas let him bring forth than disputing what ever the govt does.We have reached a very bad and dangerous time which needs concerted efforts from all Zambian loving citizens.
I don’t belive there have been zero deaths from covid 19 in Zambia,
Can you tell me if postmortems are carried out on all deaths in Zambia to a certain if none are infact covid 19 ??
In many cases people just get buried without a postmortem…..
From experience I can tell you not everyone dies of covid 19 or even catches covid 19 even after sharing a bed with a victim.
My wife has just recovered from covid 19 and no one else in my house showed any symptoms.
Zero deaths or not, do not count your chickens before they hatch baba.
Even the new normal post-COVID-19 might mean that African nations reliant on aid from the global north and some emerging economies find themselves on their own as wealthy nations struggle to reconstruct their battered economies.
It would help if the African governments, academics, businesses and civil society comprehended the fact that the world will not be same after the dust settles on the pandemic.
If a lot more people die in foreign lands and the pandemic is not contained quickly, it is something to worry about. The effects will be felt far and wide.