By Sean Tembo – PeP President
We have noted the various haphazard and uncoordinated efforts being pursued by the UPND Government in the quest to try and turnaround the Zambian economy and as a progressive-minded opposition political party, PeP has decided to offer some possible solutions as outlined below:
1. Strengthen Collection of Non Tax Revenue: According to our estimates, less than 30% of all non-tax revenue such as fees and fines, ends up in the treasury due to pilferage. This is largely due to the manual receipting system and lack of internal controls. A common scam among revenue collectors is to write a receipt for say K5,000 without using carbon paper underneath or in the case of self-carbonated receipt books, by inserting a firm cardboard, and after the customer goes, to then insert the carbon paper and write a lower amount such as K150. When officers from the Auditor General come to inspect these receipt books, they look perfectly in order. The only way to reduce pilferage in revenue collection is to computerize the receipting system with a centralized server.
2. Strengthen Collection of Tax Revenue: every time one goes to buy items in a shop, it is sickening when you’re told that “the fridge is K3200 but if you don’t need a tax invoice, l can give it to you at K2800”. People treat VAT as something optional which they can charge or not charge, and yet when it comes to claiming, they claim in full. There are three ways to strengthen the collection of tax revenue. The first is to increase the number of ZRA officers and offices across the country so that we have more ZRA offices than Police Stations and Police Posts combined. Secondly, to ensure prosecution of deliberate tax offenders so that it serves as a deterrent to future offenders. Third, ZRA officers need to be given the best remuneration and conditions of service among all the parastatals, after all they’re the ones that make the money for Govt. Their current conditions of service are deplorable especially the part where they work on contract basis with the perpetual fear of having their contract not renewed if they do not do the bidding of their bosses. ZRA officers are too critical to the nation for them to be treated with such contempt.
3. Retain at least 50% partial control of all Copper Mines that were sold by ZCCM: Copper is supposed to play three main roles in our economy being (a)source of much-needed forex (b) source of direct and indirect tax revenue and (c) source of employment. Among these 3 key roles that copper is supposed to play in our economy, it is the role as a source of forex that is critical to the sustainable management of the economy because there is no significant amount of forex that comes from Non Traditional Exports (NTEs). For as long as current owners of mines keep externalizing the forex proceeds from copper sales and only remit back the nominal amount needed to pay salaries and other bills, we are doomed as a country! The temporary solution to this is to enforce exchange controls so that all proceeds from copper sales must be remitted back to the country intact. The long-term solution is to acquire at least 50% shareholding in all copper mines that were sold by ZCCM. There is a fallacy that we failed to run the mines hence it was necessary to sale them. That is simply a fallacy. What happened is that the price of copper fell on the world markets, which was a temporary event as has been happening in the past couple of years. However, we rushed to make a long-term decision of selling the mines based on a short-term event. Since we don’t have the money to buy the 50% stake, we can get it by enforcing ridiculous regulatory measures to force the current owners out after which we would identify new partners with whom we would have the 50% stake. The Mineral Royalty Tax was a good example of one of the measures that we can implement to force the current mine owners to accept our terms as a country.
4. Reform Key Government Institutions: The “big man syndrome” in the management of government agencies and parastatal bodies must come to an end. This can only be achieved if people are recruited on merit following rigorous interviews. To this end, each and every job in the public sector as well as government institutions would be advertised and independent recruitment agencies appointed to handle all recruitment of Permanent Secretaries, Parastatal CEOs, Bank Governor etc so that competence is the only consideration and not the size of their tongue and its ability to lick people’s shoes or indeed whether their surnames are associated with pre-independence freedom fighters or members of President Kaunda’s first cabinet. Institutions like BOZ cannot be allowed to lamentably fail in their primary mandate and people are still allowed to keep their jobs. Other reforms would include for institutions such as Central Statistics Office and the approach used to calculate year-to-date inflation as it is fundamentally flawed and exposes the economy to huge fluctuations.
5. Strengthen the Criminal Justice System: Our criminal justice system only works for crimes against other persons such as murder, assault, rape etc. It is non existent for commercial crimes like theft, especially theft by servant. This has resulted in pilferage being the largest cost to businesses in Zambia because people know that if they are caught stealing, the most that will happen to them is to loose their job and maybe spend a few days in police cells and not jail time. Everytime one goes to buy something in a shop in town, you get sickened by employees who approach you so that they can steal from the owner of the shop when buying items. They keep saying “am going to write 3 on the invoice but when issuing from stores l’ll issue 7”. This is so rampant that it’s sickening and its all because we have a very weak criminal justice system. If all offenders were sent to prison, even for a few months, pilferage would go down as people would be afraid of doing jail time and the economy could grow.
6. Transform the Marketing Side of the Agricultural Sector: Successive governments have been making the same mistake of focusing so much on the production side of agriculture and forsaking the marketing side of it. Provided there is a good market for a given produce, people will find a way to produce it using their own means, they won’t need FISP or any other assistance. Provided the market is there for a given agricultural produce and the price is good and stable year after year, production will shoot up. The country should be allowed to freely export agricultural produce and not having to do it illegally in the middle of the night while there is a claim that we have a bumper harvest.
7. Reduce the size of Government: The size of Government should be reduced by among other things scraping off positions of Provincial Minister, District Commissioners and cutting down the number of line Ministries to not more than 12. There’s need to utilize the local government system at the local level. Its a duplication to have the presence of both the central government and the local government at grass root level. There’s also no point in having a Ministry which only has one department such as the Ministry of Religious Affairs or the Ministry of Gender.
8. Exit from Regional Trade Blocks Such as SADC and COMESA: While several countries in the region are members of integrated regional trade blocks like SADC, each country is also busy pursuing nationalist policies. Almost each and every member country of SADC has a citizen economic empowerment law which gives preference in terms of trade to its own citizen owned enterprises over foreign owned enterprises. Instead of wasting resources pulling and pushing at the same time, PeP would withdraw from these regional talk shops and concentrate on other approaches to economic growth. The decision by the British to exit the EU and the election of President Donald Trump are clear signs that globalization is finally coming to an end and nationalism is the future.
9. Open the Borders to anyone who wants to come and Invest, Work or Live in Zambia: A country is built by people with dreams. Those people with dreams do not necessarily need to be citizens of that country. Provided they pay their taxes in full and comply with the laws of the land, it is not the business of govt if such people enjoy eating dogs or cats.
10. Enforce Fiscal Discipline: Develop a budget, fund the budget and spend according to the budget. Do not spend on items that are not in the budget such as free soccer tickets or chartering private jets for the Republican President, when items that are in the budget have not been funded.
If we were to consistently pursue these ten points as a country, within 5 to 10 years, we would be a regional economic power house even ahead of South Africa.