Musokotwane, Kalyalya, a Failed Pair
Amb. Emmanuel Mwamba wrote;
The Monetary Policy Rate (MPR), also known as the Bank Rate, is the interest rate set by the Central Bank Central banks raise rates to fight inflation, and lower rates to encourage economic growth.
Despite implementing a tight monetary policy stance by constantly raising the Monetary Policy Rate and increasing the statutory reserve ratio there is NO dent made on inflation target and stable foreign exchange supply on the market.
In all three major functions, the use of the MPR has failed to fight inflation and spur economic growth.
Recently the Bank of Zambia failed to effectively implement the Export Proceeds Tracking Mechanism, an electronic system designed to monitor and record all export earnings generated by Zambian companies, primarily focusing on the mining sector, ensuring that these funds are repatriated back into the country and properly accounted for within the Zambian financial system.
This failure has adverse effect on foreign exchange supply from the mining sector, and the the depreciation of the Kwacha against the US dollar has continued significantly and between December 2023(K24) and todate the Kwacha standing at K28.
This is partly because, on the fiscal side, Minister of Finance, Dr. Situmbeko Musokotwane, will not allow it.
He gives all sorts of tax and other incentives to the mines including encouraging the mine houses to avoid adhering to the export proceeds tracking mechanism.
●He abolished windfall tax.
●He abolished non-deductible mineral royalty tax that was earning Zambia $1.1billion every year since 2019.
●He has abolished export duty on precious stones and other metals ( Musokotwane must publidh the list of metals excluded from export duty).
● he has relied in racking up more loans, extensive borrowings to run the economy, racking up the foreign debt from $11.9 billion as at August 2021 to $14.9 billion and domestic debt from K78 billion to K236billion in December 2024.
This pair has taken the economy to its doldrums, failing to curb high cost of living, grow the economy, curb unemployment, alleviate poverty, and curb the rising social,political and civil tensions that have continued to rise.
This pair is only taking President Hakainde Hichilema to one destination- out of power.