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Wednesday, August 10, 2022

The Zambian Economy is affected by external and domestic constraints-Musokotwane

Headlines The Zambian Economy is affected by external and domestic constraints-Musokotwane

Minister of Finance Situmbeko Musokotwane says the government places high priority in supporting the growth of all economic sectors in the country.

Dr Musokotwane hsa cited the manufacturing sector as one of the areas that the government has supported due to its ability to supplement government efforts in creating job opportunities and stirring economic diversification.

The Minister said this in a speech read for him by Accountant General Kennedy Musonda during the pre-budget breakfast meeting.

“Government places high priority on the growth of all sectors including manufacturing due to its ability to supplement government’s efforts towards, employment creation, economic diversification and economic growth as outlined in various government documents such as the vision 2030 and the subsequent national development plans.”

Dr Musokotwane lamented that the growth of the country’s economy has continued being affected by both external and domestic constraints such as the effects of the coronavirus pandemic, the depreciation of the kwacha, high debt repayments, and the high cost of doing business among others.

Dr Musokotwane however says the government has put in place a number of remedial measures to mitigate challenges affecting the growth of the country’s manufacturing sector.

He pointed out the wavering of duty on raw materials under statutory instrument 110 of 2020 for local companies operating in Zambia is one of the measures implemented by the government to protect the manufacturing sector against cheaply imported goods.

Dr Musokotwane explained that the move taken by the government was meant to reduce the high cost of production which made local companies uncompetitive against cheaply imported goods..

The Minister further indicated that over 40 companies have been exempted from paying duty in accordance with statutory instrument number 110 of 2020.

“However, as a government, we have put in place a number of measures to mitigate these challenges. For instance, last year even before the budget could be announced we waivered duty on raw materials for manufacturing companies operating in the country under statutory instrument number 110 of 2020.

“To mitigate the high cost of production experienced by our local companies, which makes them uncompetitive against imports usually produced cheaply. As of today, we have approved over 40 companies which have been granted and are operating under the statutory instrument.”

The Minister of Finance added that the government is working hard to ensure that more companies receive the waiver based on the understanding that a reduction in the cost of production will facilitate increased production.

He reiterated the government’s commitment in supporting the further growth of the manufacturing sector.

“we are working hard day and night to ensure that we have more companies receive the waiver based on the understanding that a reduction in the cost of production will facilitate increased production.

“Most importantly, this is in line with our commitment to support private sector growth.”

And speaking earlier , Zambia Association of Manufacturers (ZAM) President Ashu Sagar stated that the purpose of the pre-budget breakfast meeting was to present proposed recommendations to the Ministry of Finance for consideration in the 2023 national budget .

Mr Sagar said implentening of the proposed recommendations will greatly assist in the smooth operations of the manufacturing sector.

Mr Sagar indicated that a conducive environment will only be created if challenges facing the manufacturing sector are addressed by the government as proposed by the manufacturers.

“According to the Zambia statistics agency, the manufacturing sector grew by 4 percent in 2021. This growth indicated the progress that the manufacturing sector has made, from recording growth rates of 1.0 percent and 2.4 percent in 2020 and 2019 respectively. Similarly, the sector’s contribution to real GDP growth increased from 7.1 percent in 2020 to 8.8 percent in 2021. This shows the positive relationship that exists between growth of the manufacturing sector and real GDP growth.

11 COMMENTS

  1. In this year budget can you reduce duty on brand new motor vehicles and increase duty on second hand cars we dying in numbers most of those cars and not fit to be on the roads…we polluting the air making the environment a future cost to repair….as the local dealers have a monolpoly we should allow purchase direct from source this will unlock and prop up the service sector

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  2. Which economy isn’t? Instead of buying crude feedstock to last 3 to 6 months to have a price that can only be reviewed after that duration, you opted to close Indeni and began to import finished petroleum products thereby igniting an unprecedented price instability. Can you blame that on outside shocks? You seem to be helpless now that you’re in charge. What happened to all those ideas you propounded when you were in opposition?

  3. Ba Musokotwane, you are not telling the truth about inflation. What are the factors that driving inflation down? How come in the whole world only Zambia is experiencing low inflation while other countries are having high inflation? If we going single digit….why then are food prices not coming down? It does not make economic sense.

    • Black Mountain; economics never makes sense. The one who knows how to lie and convince people into spending towards what he wants becomes a succesful economist. In the US since Biden took over sanity has come to US finances but inflation has decided this is the time to surface. Its like someone perhaps in whashington central bank is playing a game and all of us are just pawns.

  4. But which economy isn’t? Perhaps the one on Mars. Just give us your plan instead of trying to regurgitate EC 101 on an uninterested audience

  5. Black Mountain; economics never makes sense. The one who knows how to lie and convince people into spending towards what he wants becomes a succesful economist. In the US since Biden took over sanity has come to US finances but inflation has decided this is the time to surface. Its like someone perhaps in whashington central bank is playing a game and all of us are just pawns.

  6. He pointed out the wavering of duty on raw materials under statutory instrument 110 of 2020 for local companies operating in Zambia is one of the measures implemented by the government to protect the manufacturing sector against cheaply imported goods.

  7. Well said Bwana Muskotwane ,unlike the lying Lungu administration which drove our economy into the ditches for 10yrs.

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  8. Can’t wait to see Hakainde put panados in Clinics build my by Lungu, it is good that he has at least promised to employ teachers, nurses and Doctors to work in structures built by his colleagues. National development is incremental. Hakainde develop Zambia from where you found it.prosecute everyone who has done wrong irrespective of their political affiliation.

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