Some Former Finance Ministers and leading Economists in Zambia have penned an open letter to President Edgar Lungu advising him to take serious steps to rescuing the economy.
In a letter which was also published in the Tuesday edition of the News Diggers Newspaper, the group warns that Zambia’s economy is on the verge of collapse.
The letter was written by Fomer Finance Ministers Dr. Situmbeko Musokotwane, Ng’andu Magande, Felix Mutati and former Minister of Commerce Dipak Patel.
Others are Former Bank of Zambia Governor Dr Caleb Fundanga and Economic Advisor to late President Levy Mwanawasa Dr Moses Banda.
The group they are people who have held top economic management positions at various times since 1991 and have all been privileged to be part of the various leadership teams that achieved some of Zambia’s most significant economic successes.
“We hold different opinions on a range of issues affecting the nation, but we have informed and shared views on the present direction of the national economy. Zambia is currently living under very tough economic conditions,” they said.
They added, “The economy is on the verge of collapse. Growth is expected to be negative this year, which will cause unemployment and send thousands onto streets. Incomes will fall and business will fail.”
The group says the public budget is in disarray and it is failing to fund basic services.
“The Kwacha is rapidly losing value, driving rising inflation: this will quickly accelerate if the government pushes the Bank of Zambia to print money to compensate for lower tax revenues.”
They noted that it may be true that external factors such as climate change and Covid19 have damaged the Zambian economy but that the main cause is man-made policy mistakes.
“The most significant mistake is excessive borrowing by the government, as well as inefficient and/or low priority use of funds. The Government needs to act now.”
They have since called on government to rapidly conclude a programme with the International Monetary Fund (IMF).
“This matter has been on the table for more than five years, without reaching a deal. We urge the government to take this matter with the seriousness that it deserves, and to come to an agreement before the end of this year. We believe that the most important matter in our economy is the debt problem.”
“They said excessive debt drives many of the current problems-huge repayments already mean that Government cannot fund budgeted programmes, mounting arrears are accumulating on many government contracts, and the business climate is strangulated.”
They predicted that serious economic progress or significant job-creating investments are unlikely while huge debt overhang remains.
“Zambia is already struggling to pay its debts. Indeed, with the depreciation of the kwacha it is likely we will start defaulting on debt soon, creating economic chaos. If we do not have a solution in place before the first maturity of the Eurobond in 2022, the situation will be much, much worse. Despite this, our Government keeps on borrowing. An IMF deal is essential to resolve the debt problem.”
They stated that any other solution will require handover of significant sovereign assets, and must not be entertained.
“An IMF deal brings money to the country, but it also sends a signal to the outside world that the recipient country is taking measures that will take it out of trouble.”
They said, “A deal will encourage inwards investment – and we need huge quantities of investments to boost incomes, increase tax revenues and enable us to pay off our debts.”
“A deal requires Zambia to meet performance benchmarks on sound economic management. These may be tough, but they are necessary. When we meet these benchmarks, the institutions and countries that are owed money by Zambia will agree to reschedule debt, giving the economy some breathing space.”
They added, “Investors (Zambians and foreigners alike) will feel confident to spend money and create jobs in our country. This is what Zambia needs. This will cure many of our self-made economic problems. Reaching a deal with the IMF is not just about talking. We need to take measures to convince them that we are serious.”
They charged that this mean Government must stop borrowing immediately and halt unnecessary projects, stop wasteful expenditures, and fund only essential economic activities and basic services.
“There is a growing image of Zambia as the ‘wild west’, where the application of the law and work of statutory bodies is arbitrary, and political. This also makes recovery impossible. Who will invest in a country where assets can be seized, or contracts are irrelevant?”
They said Government must immediately allow the professional functioning of all statutory institutions, and respect the rule of law.
“We therefore urge the government to immediately focus on creating the conditions for fruitful engagement with the IMF, and ensure that a programme is agreed before the end of 2020,” they concluded.
Is Lusambo (the New Kaizer) and those thugs from ZP arrested yet for beating up people who are drinking? Whipping parents??? PF PF
Is economy more important than thuggery and torture?
NO :Economy discussion is not important.
Tomorrow it be those former Finance ministers to be whipped.
Chwe chwe chwe chwe!!!!
To expect schooled illiterate kachasu boy heading the kingdom of xombieland, ably supported by Sata’s illiterate thugs ably elected by illiterate Zombies on tribal lines to create jobs, bring sanity back to Zambia is like extracting wine from stone.
Zambia is doomed. Chikwanda shall be brought to face death squad to borrow and help steal millions by ministers, bureaucrats and of course by Chikwanda himself. Sata was a joker , a typical Idi Amin type uncouth masses leader and stupid ***** zombies voted for him. Result is before everybody. Come 2021 vote for Kambwili to finish off
Do you honestly think a dumbass alcoholic fool like Chagwa can take such timely warning? It’s a waste of time. Besides, it’s too late, the economy is in a free fall, Chagwa azagwa zesmanjemanje!
We are heading nowhere here with people believing and holding the view that someone who was in office before the second elections did not hold office. With a structure spending public funds by instituting government religious oversight. With groveling sycophants who behave like they are straight out of the movie Madagascar. With thin-skinned individuals who think it’s their way or the highway. Where do we begin to clear this swamp?
Magande, Musokotwane, Mutati, Fundanga and Moses Banda had better watch their backs now. Thugs are already lined up to harm them by now.
Only 17 million people with abundance of natural resources, more than 50% living in poverty. It is unbelievable. Most Zambians say our country is poor. It is a discredit to God who has given us abundance of natural resources. What else do we want? God has given us all we need. We have professionals. We have educated people and Natural resources. Zambia can only prosper if it turns away from corruption, greed, asking citizens the way forward and respect of jobs: ” I have a degree I cannot do labour job, I cannot become a cleaner, I cannot work in a shop as cashier or put items on shelves, I will just sit until I get a job in my field or capital comes to me to start a business: meanwhile such a person becomes a parasite to his family. The latter is the problem which any political party in…
Knowing PF they will probably advise my President Lungu that to listen to these “chaps” is weakness and goes against PF “pro poor” policy and yet it is the same poor people who are hardest hit by the same policies intended to put “more money in their pockets” and more jobs. Clearlt the pokicies have not worked and my President needs to change course now, or else he is giving away his presidency on a silver platter next year, to whom we dont know yet.
Trible HH is clearly not an obvious choice until he apologises for those Ackson Sejani remarks in 2006, fourteen years ago now.
Thanks to these 5 wise guys coz Zambia’s economic indicators have all been on a slow & steady decline.We’ve warned of growing debt,Kwacha losing value,inflation rising ,forex reserves at historic lows and economic growth at poverty inducing levels of just 2% p.a.
Bachakolwa tabafishiba efyo. Just wasting your time and energy advising these mongrels.
As long as you continue with that heading of warm and not warn i shall consider it fake news
When you took that totally useless widow cash embezzling, mbamba drinking visionless coot & put him in plot 1 & in charge of the treasury, DID YOU HONESTY EXPECT A GROWING EXPANDING ECONOMY???
Sure Zedians, sometimes your reasoning capacities boggle the mind. This visionless Goon J0n@ then took an illegal currency trader brute from Katondo & put him in charge of home affairs, & took an uncouth streetfighting lab tech from a V.D, clinic in Chelstone & made him advisor for politics, /Corruption.
YOU THEN EXPECT THE NATION TO DEVELOP & THRIVE??
Go away docile Zedians & enjoy Dununa Mwibala Mukula reloaded!!
I have been saying this for a long time only to be abused by the pf thieves. What do you expect when you have a lazy drunk as president. A spineless corrupt thick president and you think Zambia can be saved ? Good luck!
These should have been the people advising the President and not the mentally deficient Kaizar Zulu. I hope the President will heed this valuable advice.
It is too late for lungu to be guided by integrity , rule of law and sound governance……
IMF will not be giving lungu anything until after 2021.
Most of PF and lungu are now in survival mode to avoid jail….
Zambia is in grave danger of disintegration into mayhem , this is the only chance for lungu to show he cares for Zambia by letting the will of the people decide in 2021 or else I see nothing but strife.
To compound lungu makanies , the west are watching him closely come 2021.
If the gambling houses would put a bet on lungu ousted in 2021, I would stake $20,000
There is a reason they are ex finance ministers. If you were so good you would be holding that seat now. Don’t let jealousy and envy make you so bad hearted like those coons tarino and co in diaspora
Where is KZ ?
Are you in self imposed deliberate lockdown at Chita in kafue ?
Tarino is that you in that picture? Is that a white gentleman behind you. I am not homophobic but that looks suspect. I heard rumours that you are gay. I don’t judge. Only God knows. Take care
KZ
“…Don’t let jealousy and envy make you so bad hearted….”
What is there for them to be jealous and envious ?????
Honestly ???
Herein lies the problem, these economic and financial “elders” should have set up a meeting with ECL and urged him to convene a national economic indaba with solid and wholesome recommendations in hand. Advising a govt. through media shows how lacking these guys are and just confirms their political affiliation. That’s the reason this country is developing so slow-leadership is lacking and hinged on political and tribal affiliations.
Global economy is in recession, and Zambia is not unique. That’s why IMF and WB have called on all institutions and countries to halt debt repayments and are working on rescue packages for all countries for the covid-19 aftershocks.
Tarino….eeewweeey….no wonder you hate your country. Kukakwa no mululume umusungu wobe…kwekwekwekwekwe…or maybe you are the husband…. Kwekwekwekwekwe….
During the Mwanawasa days, our Economy had similar problems. The only difference is we had humble leaders that time who were wise to acknowledge they did not have the Monopoly of wisdom on the Economy. What did they do? They called for an Indaba on the Economy! Brilliant ideas were shared and faithfully implemented. That is how it is done. Together we stand and divided we are doomed! There is no wrong suggestion. Bring all options to the table.
Zambian Citizen
“….Global economy is in recession, and Zambia is not unique…..”
I told you , C19 is the best thing that could happen for PF. Everything now is the fault of this pandemic.
But we know the Zambia economy was in ITC surviving on a ventilator well before C19…..so you can’t dupe us.
KZ,SOBER UP IWE
Kainyo Zulu is deranged, honestly, what’s there to be envious about this economic abyss you fools have driven us into? No wonder, ever seen how Easterners brag about how well the Zambian economy is doing? It’s because there nearest comparable is Malawi, where there is no economy! These damn rat chewing dumbasses!
IF,ME I WERE KZ AND THE OTHER CLONS I WOULD SEAT AND REFLECT ON THE TRUTH HIGHLIGHTED AND TIMELY ADVISE TO THE PRESIDENT NOT JUST TALKING ON THINGS I DON’T UNDERSTAND CZ ALL OF THESE CHAPS BENE KZ,RED LIP,BOWMAN,KAMBA,SILIYA ETC ARE TINS WHICH MAKE ALOT OF UNNECESSARY NOISE. TALKING CHEAPLY AND THINKING ZAMBIANS WILL BUY THERE NONSENSE WORDS.. WISDOM, CAN BEGOTTEN FROM ANYTHING. Y,SHOULD THEY BE IN OFFICE FOREVER AND FOREVER?TIME COMES WHEN U RETIRE AND FOCUS ON OTHER THINGS. THEY BELIEVE THAT THEY IS LIFE BEYOND LEADERSHIP NOT U CHEAP FOOLS WHO DON’T HAVE ANYTHING TO DO. ALL YOUR TIME IS MAKING NOISE. AND THEY IS NO LIFE FOR U AFTER ECL. THEY IS ALOT TO DO. U ARE CHEAP FOOLS.
Dunderhead Kaizar Zulu and his Uncle wako ni wako fellow easterner Bandit President Lungu have damaged the Zambian economy
it is a good idea to listen to elders . it is never too late.
Further, we know Dr Musokotwane was approached to be Minister of Finance and he declined. Him & Magande were the best & statistical evidence is there to show! Margaret Chakolwa Mwanakatwe was the worst even by Chagwa’s standards, she is a whoring big nose ugly fool fired from Backlays Bank for promiscuity! Nyele kanyo!
Is this not a waste of time advising ECL on Macroeconomic issues? He doesn’t understand Bookish Economics. What he is good at is to use violence to gain or hold on to Political Power. ECL has mastered the art of rigging elections assisted by the likes of KZ,Mumbai Phiri, KBF etc. ECL has no respect for Constitutionalism,Rule of law, Good Governance and Human Rights. To get his Third Term ECL needs Bill 10 enacted into law badly to enable him rig 2021 Elections. The writing is on the Wall.
Ukutemwisha saana bakoswe, now they have driven the economy into a rat whole but foolishly want us to be envious! Ni kupusa kwa mtundu bwanchi uku sure mwebantu! Maybe Kainyo Zulu and Chagwa have Coronavirus special from the Chipata rat market!
Kaizer Zulu refuses to appear in court
By Agness Changala-Katongo (DAILY REVELATIONS)
The four Lusaka men who sued Kaizer Zulu in the Lusaka High Court for assault are seeking a judgement in default of appearance and defence against him and his co-defendants so that they get compensation for assault and false imprisonment.
In this case, Bernard Nshindo, Sengelwayo Jere, Saul Masikoti who are qualified surveyors and businessmen, and Mason Mweemba, a driver, have sued Zulu, the former political adviser to President Edgar Lungu and his friends Mpange Kachingwe, Raffiq Rashid, and Bella Mwanza a Director of Chita Lodge Limited, seeking among other claims damages for assault, false imprisonment and kidnapping, on the pretext that they were photographing his speed boat at Chita Lodge, in…
But we kicked IMF in the backside and vowed to continue borrowing!!! We should be ashamed of ourselves.
Mwine Mushi
For there to be an indaba PF wise men in Zambia, facts have to be put on the table , something PF would never do …….they would never present truths and facts incase the extent of their looting and damage is exposed
I like the point KZ has made. If they have good ideas, why are they called ex or former finance minister lol….. I still don’t understand why MMD was voted out. We where doing very well economically…. It will be difficulty for ECL to correct the mistakes Sata made
If the government had levied a windfall tax instead of not taxing the mines and borrowing Eurobonds at interest, they would now have a much larger reserve from which to react to this situation. Neoliberalism isn’t just a self serving ideology, it is a danger to life, and a danger to national security.
The people need a diversified economy which produces most of what is consumed locally. That is a matter of national security, and a matter of national interest. We need to focus on economic growth by district and province, in that order.
How about a copper based Kwacha?
If the objective is to learn lessons from this frankly manmade crisis, the lesson is that the neoliberal economy is the first to break down. Check out Mother Earth News. Preserving cash (gold) and home made is the…
These former Finance ministers are still fixing their hope on the IMF when others have already found solutions within their borders. The cards are being reshuffled and it will be a completely different situation after this. African countries better reposition themselves to a new reality and find their own common denominator if they wish to be treated as equal partners with the rest of the world.
Good point Nine Chale and your advise on the ‘African countries better reposition themselves …..’. ?????
Imwe is that tarino formerly known as Jay? So akonda banzungu bamuna uyu kikikikiki ah kikikikiki. Lusaka times chi website you are allowing this dirtiness. Kaya mwe
KAIZER ZULU awe mwe, ati that is the reason you are ex -finance ministers, doesnt he know that it is because of change of government that they are ex finance ministers? but any way Kaizer does not have the intelligence to understand economic PROBLEMS. Ba Kaizer please only comment on Cadre issues and harrasing citizens at Chicagos.
When you read the book “Economic Hit Men” you’d view the authors of that letter differently. Further, a larger percentage of Zambia’s debt is Chinese, IMF can’t avail funds to pay Chinese debt. How do you borrow to pay other debt? What kind of remedy is that? Bwalya Ng’andu must travel to China and engage the Chinese they’ll understand not what these old fuddy doodies are proposing
THERE IS A REASON WHY SATA (mhsrip) CHASED YOU FROM STATE HOUSE. EVEN ECL MUST HAVE DISCOVERED, THOUGH LATE, BUT HAD COURAGE TO RELEGATO THE MARGINS OF STATE HOUSE. SO TUCK YOUR TONGUE IN YOUR CHEEK OR MAKE SOUND CONTRIBUTIONS. HOW CAN YOU SAY, “There is a reason they are ex finance ministers. If you were so good you would be holding that seat now”. THIS IS UTTER MORONIC ISM.
Just because my partner is white does not mean I hate my country. Very backward and uncivilized thinking.
Why do you people respond to that brick head KZ. Why waste your precious time?
It appears there is overwhelming evidence that Mr Edgar Chagwa Lungu does not hail from Eastern province – simple test – hardly speaks any language from Eastern province. There are other plethora tests he fails lamentably to meet as one from the East. As the saying goes ‘Wise men from the East’ the trait totally absent in ECL . One credit though to ECL, the likes of Dolla Siliya, Vincent Mwale, Mr Banda, Raphael Nakachinda, Judge Esau Chulu etal believing ECL is from Eastern province back him through blindly on anything. Thode from Bemba speaking regions think ECL is part of them as the only local language ECL speaks is Bemba – they too, back him blindly – ECL the manipulator – laughs all the way, all the time and cares less.
They’re right, time to stop any spending even if it’s investmnets. Hopld to cash and reserves. Until there’s is a VACCINE OR THEAPEDIC medicine, the all Globe is in this together. The wold economy is completly affected, it’s hitting like a wave.
Lungu is not a smart cat anyway.
Look at how the Opposition cadres are celebrating a malicious report compiled by the very people who advised the govt on it’s policies! They criticise borrowing but recommend more IMF borrowing!!!! Did Fundanganga (or whatever) issue such a statement at the time of the borrowing? Did he make open attacks against the numerous Finance Ministers at the time he felt they were wrong? And when his niece Pamela made off with Barclays Bank bounty did he write in Diggers that his family raising policy had failed to raise an honest woman?
Finally are these learned men aware that the global economy has tanked due to Covid-19? A recession worse than 1920’s is projected ofcource Zambia is worse off.
I think change should not happen early & easily for everyone to experience individually what happens when u vote based on tribe(cos only u shd rule) & not on intellect, when your nation is being destroyed & u continue to be silent(docile Zambians), when u ve no urge to stand up to what yo once beautiful country once was known for(peace). This article took back to the time of KK thru Chiluba/Nevers/Mwanawasa to RB & half of Sata’ rule.Tribalism is something i didnt know on the nation level. Yes we wud fight in compounds as fools, but not more that. As dirty corrupt as Chiluba was,but still today i can say “i ve never seen corruption in my life as PF”. So, bane, let us suffer further thereof, maybe we ll become sober one day,as a nation.
This true you can just see whats trending at shopping malls in the past it used to be Jam parked. You have to drive around seaching for a parking slot but now it’s almost empty one can easly choose were he wants to park without any problem. Shoppers are also few
IMF assistance is tied to good governance and zero tolerance on corruption.
Under ECL and the PF this is impossible to attain.
FORGET ABOUT THE IMF BAILOUT UNDER ECL
This advice to clueless Lungu assumes that this ignorant guy is intelligent enough to understand what is being pointed out. He is not. Please understand that this guy doesn’t know what he’s doing or supposed to be doing in office. And the minions around him know that, but they prop him up just so they can benefit themselves from him. I don’t see him implementing any of the things you suggested. You might as well be talking to a brick wall. The only solution to salvage our economy is to urge PF to force him to resign like ANC did with Zuma, another clueless guy. And also begin to prepare to have someone well informed, and patriotic to take over the presidency next year. If this guy continues in office for another 5 years, Zambia will be flushed right down the sewer.
Stand your ground and say No to IMF! They are not our friends and the world order is changing. How do you advise for sound economic policies when you know every country is in the same situation? seriously how do you come up with such nonsense when you know every country on this planet is facing the same challenges? This is no time for your silly rhetoric, Saving lives should be number one priority. The economy can be saved another time. Please prioritize the health and safety of all Zambians. When this is over our resources will be in demand from countries looking to rebuild their economies. Some industries will die a natural death so let’s diversify into the new normal.
Take note all of them are ex mmd members, they are cryin loud yet they put us in our current situation,dipak and musokotwane are upnd can anythlng good come hakainde’s men ?no no no
The IMF myths and v truth and why Zambia needs bailout
By Mwamba Peni II
International economy has experienced the following monetary systems: classical gold standard, the golden standard, the interwar period and the current Bretton Woods system. Following the end of the World War II, the international monetary system was unstable, currencies were volatile and many economies on the verge of collapsing. This propelled the 1944 Bretton Woods conference to respond to the challenges affecting individual countries in particular and the global economy in general. Thus the formation of the International Monetary Fund (IMF) and International Bank for Reconstruction and Development (IBRD or World Bank).
The IMF’s primary purpose is simply to ensure the stability of the international monetary…