The Archbishop of Lusaka, Alick Banda says the problem of junkies is a ticking time bomb that will wreck the country’s development gains if left unchecked.

“Everything we are working for, building will be in vain if we do not seriously and urgently address the issue of junkies” Dr Banda is quoted by the media as saying.

He further observes that there is an urgent need for Christians to step up and find solutions in order to address the challenge affecting the country’s young population.

We may not always agree with the Archbishop, but he has definitely hit the bull’s eye on this one! As readers may recall, late 2021 we undertook a 365 marathon walk from Kitwe to Lusaka to petition the New Dawn Administration to call for National Indaba to interrogate the problem of street kids and identify practical solutions. We emphasised that in the fullness of time, those we are referring to as street kids will ‘graduate’ into notorious gangsters who will come and terrorise our communities.

What’s the order of the day? Since they are now hardened and tempered, these misfits have gone into overdrive engaging in petty thefts and if you happen to stand in their way, you risk having your teeth knocked-out, eyes gorged-out or your stomach ripped open!

When the so-called junkies can no longer find anything of value in the shanties or townships, they will look for the proverbial greener pastures in posh neighborhoods where the ministers and all the apamwambas (the affluent) live! They will obviously use unimaginable force to dispossess them of their earthly possessions! Is this when those in authority will be compelled to act…… when the ‘apamwambas’ have been hit below the belt?

Rounding them up and throwing them in prison once in a while isn’t a solution, of course! We are perfectly aware government can’t tackle this problem alone. We need to start building consensus around this issue. As the Archbishop has suggested, the Church needs to come on board and open-up their doors to street kids; corporate entities have to take a stand by exercising good corporate responsibility; political parties must not just focus on criticising government but provide solutions while the NGOs should stop just holding workshops in plush hotels and move into the shanties to tackle this problem head on.

We didn’t just burn calories walking to Lusaka for nothing; we expect government to set the tone by leading the way.

Prince Bill M. Kaping’a
Political/Social Analyst

By Chris Haambote SNR

President Hakainde Hichilema’s three-day working tour of the North Western Province was an inspiring and perhaps unprecedented event since the days when the United Party for National Development (UPND) was in opposition. This region, which is rapidly becoming Zambia’s New Copperbelt faces its own internal challenges among diverse groups. Yet, President Hichilema has emerged as a unifying force, transcending these divisions and seamlessly connecting the diverse communities of the province.

Outpouring of Love and Emotion

North Westerners are known for their heartfelt expressions of love and affection, which they offered unsparingly throughout President Hichilema’s tour. From Solwezi to Chavuma, Zambezi, Kasempa, and Mufumbwe, thousands of people gathered—chanting, ululating, singing, and dancing in the streets, markers and stadium. This was not an orchestrated display, but a genuine, spontaneous outpouring of emotion, love and respect.

Historical Context and Support

The people of North Western Province have consistently shown their support for the UPND and President Hichilema. If there’s a region that truly owns the President and the UPND, it’s this Province. This loyalty is rooted in the province’s history of marginalization, abuse, and ostracization by successive governments, which labeled them as “backwards” and “unworthy.” Some leaders had even dismissed them contemptuously; notably, one past President derogatively referred to them as “buttocks.”

Insight from the Market: A Youth’s Analogy on Leadership and Recovery

A random question was posed to a young person in a market, regarding his passionate support for President Hakainde Hichilema despite the rising cost of living. His response was both intriguing and revealing.

“President Hakainde Hichilema is like a mechanic fixing a wrecked vehicle that was involved in a severe traffic accident. This car had been stolen. How can a vehicle, with its twisted metal, look good while still under repair? How can the very thieves who stole and crashed it praise the repair work? The PF was an accident that occurred and they are also the robbers who stole the car. Our country was stolen and wrecked. Let’s allow Hakainde to repair it. It may look ugly now, but it will be alright soon, as a matter of fact, there are signs of recovery”.

Shared Struggles and Development Promises

Development in the province has historically lagged, mirroring the struggles President Hichilema himself faced, including false accusations and a 127-day unjust imprisonment on charges of treason stemming from an alleged traffic offense by his driver. His experiences of abuse and persecution resonate deeply with the people of this province.

Since declaring his political ambitions, President Hichilema has faced relentless abuse and false accusations. The people of North Western Province, understanding the pain of disrespect and marginalization, see a kindred spirit in him
In response, he has pledged to prioritize employment opportunities for locals in the province’s mining and investment sectors. On Labour Day in Solwezi, he directed mining companies and other investors to prioritize hiring locals. This directive aims to ensure that the people of the North Western Province, who view him as their own son, benefit directly from the region’s endowment and opportunities.

Commitment to Regional Empowerment

The people of North Western Province deserve development and empowerment. President Hichilema is committed to delivering this, just as he is to other parts of Zambia. His connection with the province runs deep, and his dedication to not letting them down is very clear.

By Mwansa Chalwe Snr

The Energy Regulations Board ( ERB ) recently increased petrol to K35.56 per litre, K29.60 for diesel, and Zesco increased tariffs on 1 May,2024 by 10%, while the Kwacha went north to almost K27.These combined escalations  are expected to filter through the economy in the coming months, and possibly have negative impact on ordinary Zambians and businesses. These changes are part of the implementation of IMF austerity conditions for Zambia’s 38Month $1.3billion Extended Credit Facility ( ECF). According to the IMF, its supervised program aims to create a more stable economic foundation for long-term growth.

“The authorities’ program, supported by the ECF-arrangement, will advance the authorities’ home-grown reform plan to restore debt sustainability, create fiscal space for much-needed social spending, and strengthen economic governance,” The IMF claimed in a statement announcing the bailout approval.

The International Monetary Fund (IMF) has long been criticized for its one-size-fits-all approach to economic policies, which in most instances makes things worse rather than alleviating economic hardships. Zambia’s current experience under an IMF program is a clear example of how IMF policies can worsen economic conditions instead of improving them, at least based on the evidence of the last 20 months of the program.

Monetary Policies slowing down economic growth and killing jobs

One of the key IMF policies that they have imposed on Zambia – the claim that the Program is based on grown economic recovery plan is hollow and a mirage – is inflation targeting. And one of the measures is the squeezing of liquidity from the economy.The Bank of Zambia has increased the Statutory Reserve Ratio to 26.5% and mopped up almost all government funds from Commercial banks.This policy is aimed at controlling inflation and to stabilize the kwacha exchange rate by reducing the amount of money circulating in the economy.

This policy might control inflation in a formal economy, but in Zambia, where over 90% of businesses and households operate informally, and where access to credit is already limited, squeezing liquidity can have devastating consequences for households and businesses, like they are currently doing now. The failure of this policy was indirectly confirmed by Bank of Zambia Governor Denny Kalyalya during the launch of the Bank’s Strategic Plan 2024-27.

“We will undertake, for this purpose, a household and business survey to better assess the impact of monetary policy on the economy for more informed policy decision making. So, we will be doing all these surveys to really get a sense of what is going on. And that will give us pointers as to what we need to adjust. When money is under the pillow, it doesn’t come back into the banking system and monetary policy has no effect on that. This informal sector that we have. So, this is what we want to address,” he said.
The tight liquidity environment is restricting businesses’ ability to expand and grow. With reduced liquidity, businesses struggle to access the capital needed to operate and expand, leading to stagnation and closures, ultimately exacerbating unemployment and poverty. And this negative impact of the IMF policies has been empirically proven by the Stanbic monthly Purchasing Managers Index (PMI) survey, which has shown poor performance of the Private Sector through the reduction in output.Business activity has been falling in most months throughout 2023, and has continued to do so in the first quarter of 2024 with PMI readings all below the 50.0.0 threshhold, ranging from 47.3 to 48.8. This serious reduction in production.

” The private sector health in Zambia declined. Business conditions continued to see a deterioration as a result of reduction in money supply and the depreciation of the kwacha, which have negatively impacted demand. Money shortages crippled new orders and forced cutbacks in output, employment and purchasing activity.” The Head of Sales at Stanbic Bank, Musenge Komeki said
Another detrimental IMF policy in Zambia is the accelerated removal of subsidies on essential commodities such as energy and agriculture. While subsidy removal is often advocated as a means to reduce government expenditure and promote efficiency, in Zambia’s case, it has resulted in a significant increase in the cost of living and doing business. The cost of living in particular has risen sharply, making it increasingly difficult for ordinary Zambians to make ends meet.
The removal of energy subsidies, for example,translates to higher prices for basic necessities, squeezing household budgets and dampening consumer spending. Increased fuel costs have raised transportation expenses, impacting the entire supply chain.This, in turn, discourages investment and slows economic growth – the very outcome the IMF seeks to prevent.

The IMF and World Bank Subsidy hypocrisy

While the International Monetary Fund (IMF) and World Bank have often pushed developing countries like Zambia to reduce or eliminate subsidies, many Western countries, including the US, EU, and UK, do provide subsidies to various sectors.

Critics also argue that all Western countries provided all sorts of subsidies when they were at the same level of development that Zambia is at the moment. It is subsidies that facilitated their industries to flourish and facilitate development. And to support their arguments, they point to the empirical evidence of Western countries’ current subsidies to the agriculture, energy, industry sectors while the insist Zambian government should remove subsidies completely.

In the Agriculture sector, the US Department of Agriculture provides subsidies to farmers through programs like the Farm Bill, which includes crop insurance, price supports, and direct payments. The EU, on the other hand has the Common Agricultural Policy (CAP) which provides significant subsidies to European farmers, accounting for around 40% of the EU’s budget, while the UK’s Agriculture and Horticulture Development Board provides funding for farmers and the agricultural industry.

When one looks at the energy sector, Western countries do provide immense subsidies.
The US provides tax credits and grants for renewable energy production, such as wind and solar power while the EU has set a target of at least 32% of its energy coming from renewable sources by 2030, and provides funding for renewable energy projects and the UK offers subsidies for offshore wind farms and other renewable energy projects.

As far as industry is concerned, the US provides subsidies for various industries, such as: the Defense Production Act, which provides funding for the production of defense-related materials.The USA also have the Advanced Technology Vehicles Manufacturing Loan Program, which provides loans for the development of fuel-efficient vehicles. The EU, on the other hand, provides funding for research and development through programs like Horizon Europe. The UK offers funding for various industries, such as aerospace, automotive, and life sciences, through organizations like the Aerospace Technology Institute and the Automotive Council.

What is the Way forward for the IMF Program

It is generally agreed that the IMF is highly effective during a financial crisis like Zambia has been in.The Institution has built its global reputation of providing sound policy advice and technical assistance thus helping member countries to overcome financial crises, but it has failed to meet its goals of fostering higher, more resilient, and more inclusive growth and promoting jobs.This is because of its one size fits all approach to turning around around economies.

The writer does not deny that the Zambian economy needed reforms after ten years of gross mismanagement by the previous administration, which he openly criticised and was banished for. There is, therefore,certainly merit in some of the IMF reforms. Zambia’s excessive debt levels were unsustainable, and needed to be fixed. The unchecked government spending also resulted in unsustainable government deficits which exacerbated inflation, required attention.

The IMF’s program, therefore, has been a necessary evil, meant to create a more stable macro economic foundation for long-term growth, but it is the approach, the rate and scale at which the reforms are being conducted that has created the problems. The sages have always adviced against extremism and recommended moderation.

And some of the measures that they are implementing are purely from text books, and transplanted from advanced economies. There are totally inapparopriate for our economy and therefore ineffective, and producing opposite results.

The key to solving Zambia’s economic problem lies in the Bretton Woods Institution – IMF and World Bank – acknowledging the unique challenges of Zambia’s economy and recognizing local experts who understand it better.There is a need for a more nuanced approach to designing solutions for Zambia,which combines common sense fiscal consolidation, while at the same time targeting the elephant in the Zambia’s economic room, which the IMF and World Bank experts have not yet identified. Zambian thinkers know what it is.

There is a need for the IMF and World Bank to cast their consultative net wider than to restrict themselves with the traditional formal stakeholders who they consult routinely, in their bi- annual review of the ECF program, the recent being last month in April,2024. Local independent and credible economic and political analysts /commentators are totally ignored in these consultations.

CONCLUSION

While the IMF’s intentions may be noble, its policies in Zambia in the short term since 2022,have had a detrimental impact on ordinary Zambians and businesses. And when one looks at the current metrics of the Zambian economy, since the IMF Programme was implemented, it seems some of the tools they insisted on government and Bank of Zambia to use, are not entirely effective, and are not achieving the desired outcomes and therefore, need revisiting. This is common sense.

Inflation is going up, interest rates are going up, kwacha is continuously depreciating, private sector activity is going down, cost of doing business is going up, economic growth is sluggish and low, and unemployment is going up. There is nobody who can buy the story of long term stability, as it has never happened in the past with same policies.

It is essential for the IMF to reconsider its approach and work more closely with the Zambian authorities to revisit, recalibrate strategies and policies that promote sustainable and inclusive economic growth by taking into account the practical variables that drive favourable outcomes in the Zambian economic ecosystem. Preconceived and predetermined prescriptions from Washington, ought to be consigned to the dustin, in place of practical realities.

There is need to find a balance between austerity measures and measures that facilitate growth of Micro and Small enterprises(MSEs), who are the source of economic growth and jobs. The long ignored local experts and thinkers ought to be engaged now, given that most of the IMF Program is not on the right trajectory, and is slowly losing credibility with Zambians, and bringing the nightmarish and horror memories of the late 1980s, 90s and an early 2000s of the Structural Adjustment Programmes (SAP).

The New Dawn Government should not make the same mistake that their precedessors made of ignoring Patriotic Zambian experts, who are outside the government bureaucracy in the Private sector, and who know how economic activities can be accelerated, and how jobs are created, and understand the economy from the practical perspective.

Zambia needs to immeditely craft real home grown initiatives. While the IMF program can continue,albeit in a moderated fashion, it should be complemented by real home grown solutions, which are not interfered with in order to mitigate the current political risk. The two – IMF program and Practical independent home grown initiatives and solutions – are not mutually exclusive.

Zambia has an economic monkey on its back. And unless it is identified and removed or substantially disabled, we can forget about development. All successful developed countries, including the Asian Tigers, ensured that the economic monkey was dealt with. Otherwise, all these IMF reforms will amount to  nothing,if it is not addreassed. I can provide empirical evidence to prove this assertion, if challenged.

The writer is a Chartered Accountant, Author and Economic commentator.He is the Founder of a research based virtual Knowledge and Strategy firm, Prosper Knowledge Solutions Limited. Contact : [email protected]