Mwansa Chalwe Snr
The first quarter (3 months) of the New Dawn 2022 Budget has just elapsed. If it was in the private sector, we would be assessing the organisation’s performance as part of monitoring and evaluation of the first quarter. The exercise is done with a view to determining variances, finding out the reasons why and taking corrective action. It is hoped that the State House and Cabinet office, will carry out a similar exercise given that President HH was elected on a platform of his private sector management skills.
The New Dawn administration has been criticized by a number of economic players for lacking a plan for economic recovery in general, and a comprehensive and well thought out Youth Job Creation road map, in particular. One of the critics has been former Commerce Minister Bob Sichinga. He was quoted by the News diggers Newspaper in an interview, stating that government has no clear plan on how it is going to create jobs for the youths. This assertion is not entirely true or accurate.
In the first place, the UPND has a Manifesto on which they campaigned to win the 2021 election. The Manifesto is a plan in its own right. Secondly, all over the world, any incoming administration takes over a bureaucracy with plans from previous administrations in order to make further improvements. It is only a fool who will throw away all the previous plans of their predecessors. New administrations do not make wholesome changes to the plans and policies of the previous administration. The Patriotic Front government, for example, built on the plans of the Movement for Multiparty Democracy (MMD). The road infrastructure programme and the Eurobonds loans were not their plans or initiatives. They were initiated by the MMD. They just continued with them.
Apart from the Manifesto, the UPND has access to vision 2030 done by the MMD – which is a long term plan. The ruling party also has the draft 8th National Development Plan which is being finalized. Towards the end of 2021, the 2022 budget was prepared and that is a 12-month plan. The Minister of Finance, Dr. Situmbeko Musokotwane stated that he had used the draft 8th NDP to prepare the 2022 budget, because it is a requirement of the law that the budget should be anchored on a National Development Plan. The question is what plans are critics talking about?
The UPND Alliance should not be criticized for the lack of plans but rather for its failure to design new innovative Programmes and Projects, implement the existing ones vigorously, and communicate the same to the Zambian public so that they know what is going on. Zambian Economist Alexander Nkosi did make a correct observation that Zambia and the UPND Alliance does not need new plans but rather an improvement in policy implementation and monitoring and evaluation.
“Our economic challenges cannot be blamed on lack of plans, we have produced very good plans, spelling out how to address our challenges. These are excellent documents produced by competent experts. These plans are developed by technocrats with wide consultation from both internal stakeholders and external experts”, He wrote in his Op-Ed in an online publication Zambian Watchdog.
It follows that the debate that we should be having is about policies, programmes, projects and their implementation. The UPND administration through the Civil service has to translate the UPND policies and President HH’s vision, as outlined in his numerous speeches, into programmes and projects, and implement the same. In almost all the African countries that I have lived in, my experience has been that they all have drafted brilliant plans and policies in glossy dossiers. But, what they lack is the design of practical programmes and projects and putting those policies into practice.
The practical reality is that drafting policies and having a vision is the easiest thing to do in the economic management value chain. Plans could even be cut and pasted from another country’s documents. The difficult bit is to interpret those policies into actionable and practical activities by designing Programmes and Projects. This is where you require thinkers, innovators, and experienced and exposed people. And the practical design skills are mostly found outside the bureaucracy- in the private sector. This is the reason that the African Development Bank Study has recommended that African governments ought to work more with the private sector in programme design and implementation. The UPND should therefore not be criticized for the lack of plans because they do exist, but at the moment most seem to be paper plans. Needless to say that it is early bells but it’s the trajectory that is important.
The two major issues the UPND administration should criticize, in terms of the planning value chain. Firstly, there is an apparent lack of designed Programmes and Projects with a view to implementing the policies and communicating the same to the public. Secondly, the UPND Alliance appear to be seemingly adopting a one-dimensional approach to economic recovery. The New Dawn administration has overemphasized and placed too much reliance on the IMF Programme and the increase in Copper production as the panacea to Zambia’s economic recovery. The Finance Minister, Dr . Situmbeko Musokotwane has repeatedly talked about this strategy. And recently, in an interview with the News Diggers Newspaper, he made it crystal clear that the UPND administration’s core strategy is to increase Copper production in order to create jobs and for the economy to recover through the trickle-down effects.
“The very first thing in the economic plan is to resolve the issues of excessive debt, you deal with it by going through an IMF programme. Secondly, we need to take steps to produce more goods and services because that is what creates jobs that so many of our people are looking for. Now in increasing economic growth, we have said that we want to push mining outputs to reach 3 million tonnes in the next 10 years”, He told News Diggers in an interview.
There is no dispute that the implementation of the debt restructuring strategy and improving the performance of the mining sector is important, but it is no magic wand; although it is a necessity and priority.
It is the overreliance on this strategy that most informed and patriotic Zambians are questioning. This strategy of pumping up copper production will not produce the required results of reducing youth unemployment in their millions based on past experience. In Zambia, the Copper driven growth was averaging 7% in the past but did not create jobs or reduce poverty. The reality in Zambia is that there are insufficient benefits that trickle down into the economy and ordinary Zambians from copper. The copper price has been above $8,000 in recent years. On 25 March 2022, the Copper price on the London Stock exchange was $10,278.85, but despite Copper being the main foreign exchange earner, the Kwacha has continued depreciating when Copper prices have been high. The Opposition leader, PeP President Shaun Tembo, was on firm ground for bemoaning the lack of benefits from high copper prices in his recent social medial posting.
“This time around copper prices on the world market are not just high, but they are the highest ever, at more than US$11,000 per metric tonne. But the nation does not appear to be benefiting in any way. There is no significant appreciation in the Kwacha against the dollar. The cost of living is extremely high. Economic growth is stagnant. Our foreign reserves are depleting at a very fast rate as BOZ tries to support the Kwacha,” He wrote.
In neighbouring Botswana and Namibia, their diamond driven economies were at one time in the 90s and early 2000s, growing around 7-10%, but they were not generating sufficient jobs. They still experienced high Youth unemployment, and research by African Capacity Building Foundation (ACBF) in 2017 proved this.
“Assessing the growth versus unemployment performance achievements of the four countries and other African regions demonstrates that although African growth has been impressive over the last decade, the positive growth achievements have not translated into high employment generation rates. Growth rates do not guarantee productive employment for the increasing population and labour force. Among the four Sub-Saharan case study countries, Botswana and Namibia,” Wrote the African Capacity Building Foundation (ACBF) in its study of Youth unemployment in a few SADC Countries.
On the basis of the above analysis, it is illusory, naïve, theoretical and simplistic, to think that the promotion of foreign direct investment and pumping up copper production, will create the millions of youth jobs required. The facts, figures and experience in Zambia for the past 30 years, do not support this assertion. Yes, they will create a few thousand but they will dent the unemployment rate.
The type of growth generated by foreign direct investment (FDI) and the mining industry, in particular, have been criticized by many experts, including two prominent Pan Africans and Opinion leaders: Africa Development Bank President Dr Akinwumi Adesina and Kenyan Professor Patrick Loch Otieno (PLO) Lumumba for failure to produce inclusive growth.
The African Development Bank (AfDB) President Dr. Akinwumi Adesina, while presenting the 2020 African Economic Outlook (AEO) report, stated that people cannot eat Gross Domestic Product (GDP) and African countries’ growth figures were not trickling down to the ordinary people as poverty levels were still very high in Africa.
“Growth must be visible. Growth must be equitable. Growth must be felt in the lives of people,” The President of the African Development Bank argued, in his 2020 African Economic Outlook report.
Kenyan Professor Patrick Loch Otieno (PLO) Lumumba did agree with the AfDB Chief while addressing the Mining Forum in Tanzania in 2021. He advised African countries to stop relying on lucrative Gross Domestic Product (GDP) figures in defining the mining sector’s contribution to the African economies but rather assess the sector’s contribution on the basis of how it is impacting people’s lives.
“GDP and per Capita income means nothing if you have no money in your pocket. Nobody eats GDP because it is not edible at all and what matters is the money in people’s pockets,” Professor Lumumba observed.
There is, therefore, overwhelming evidence that the current core strategy by the New Dawn administration which seems to be anchored on the promotional of foreign direct investment and boosting Copper production, is highly flawed because it has miserably failed to create sufficient youth jobs and reduce poverty in the past. The strategies that can produce inclusive growth are those based on programs involving local entrepreneurs and those that address the issue of the informal sector. It is this vein, that the newly created Ministry of SMEs is critical. And one hopes that it is headed by a knowledgeable and experienced Chief Executive officer in form of a Permanent Secretary, backed by a good team of experienced experts in the MSME ecosystem.
The advice to the Finance Minister, therefore, is that he should pay equal, if not more attention, to the promotion of local Zambian investors through supporting Micro, Small and Medium businesses by ensuring that incentives available to foreign direct investors be extended to Zambian entrepreneurs. That is how you achieve inclusive growth and create millions of jobs that are required.
The implementation of policies, programmes and projects, and monitoring the same, should be the number one issue that President HH should laser focus on. He needs to ensure the Civil service’s mindset is changed and it starts performing if he wants his vision to be achieved. The role of Permanent Secretaries is crucial in this process. He should put the current ones on probation for 9-12 months so that after that period, non-performers should be replaced. He also needs to ensure that he looks outside the inner circle for talent and ideas.
The template for the fast-tracking economic transformation of an African economy was laid down by the late Tanzanian President Joseph Pompe Magufuli. Although he may have had some weaknesses, especially in democratic governance, he was a transformational leader who changed Tanzania in a very short period of time. He transformed the Civil Service, minimized corruption, mobilized domestic revenue mobilisation, minimized borrowing, managed to ensure Multinational companies were contributing to the treasury and complying with the law of the land and he was independent of both the West and China. And his main strengths were that he was humble and never believed in waste and luxury using public funds. The was incorruptible and he walked the talk by matching his speeches with action. As a result, everybody – Civil Servants, Multinational Enterprises (Investors), China, the West and the population – knew that you don’t dare mess with JPM. It is unfortunate that his blunder of being a Covid-19 denialist resulted in him paying the ultimate price and shortening his life. Nevertheless, he is worthy to be selectively emulated, if an African leaders want to transform his country quickly.
The writer is a Chartered Accountant and Author. He is a retired international MSMEs Consultant and an independent financial commentator. He is also an Op-Ed Contributor to the Hong Kong based, Alibaba owned, and South China Morning Post (SCMP). Contact: [email protected], www.youthemplymentcreation.com