I THOUGHT BIG HEADS HAVE MORE BRAIN MATTER FOR BETTER REASONING: RESERVES AND INFLATION
Perhaps one of the most economically dangerous statements from an empty headed politician since independence is, “You can’t eat foreign exchange reserves,” or “You can’t eat lower inflation.” That kind of rhetoric may sound appealing in moments of hardship, but it fundamentally misunderstands how economies work. I literally shed tears when I watched the video.
No nation has ever achieved lasting prosperity by dismissing the very foundations of economic stability. Foreign exchange reserves protect the currency, lower inflation preserves the purchasing power of wages, and both create the confidence that attracts investment, expands businesses and generates jobs.
The food on people’s tables, the salaries they earn and the opportunities available to their children do not emerge in spite of these indicators, they emerge because of them. To ridicule reserves and inflation is to ridicule the pillars upon which sustainable prosperity is built. It is a message that may win applause today, but if translated into policy, it would leave a nation poorer tomorrow.
Using Botswana as proof that foreign exchange reserves are unimportant is also misleading. Botswana has a population of only about 2.5 million people, while Zambia has approximately 21 million, more than eight times as many citizens to support. Zambia’s foreign exchange reserves are also higher, at about US$6.8 billion compared with Botswana’s roughly US$4.3 billion.
More importantly, Botswana’s economy has unique structural characteristics, including decades of diamond revenues and a much smaller population base. Comparing the two countries on reserves alone, without considering population, economic structure and historical context, is not sound economic analysis, it is a selective comparison tha byt misleads the public.
Zambia Forward, TOGETHER in UNITY!
Saviour Chishimba
President
United Progressive People (UPP)
UPND Alliance Partner