Zambia; Doom or Gloom, or Optimistic  Prosperous?- Amb. Emmanuel Mwamba

Zambia; Doom or Gloom, or Optimistic and Prosperous?

By Amb. Emmanuel Mwamba

George N. Mtonga, a Zambian economist and financial management analyst based in Atlanta, United States, a keen supporter of both President Hakainde Hichilema and the UPND, has given an adverse verdict, a doom-and-gloom economy for now and its near future.

“We will suffer. Some more than others. And it will be pain of a plague-nature.” he wrote.

“Load-shedding won’t end, food shortages won’t end, you won’t wake up and find medicine in the hospitals.”

“NOTHING HH is doing will ever benefit you. HH will be 80 years when anything that he has done produces value…do you really think he is doing it for you and I… No!”

“He is the only man with the stamina to sacrifice a generation for a better future”,he says.

“We made our mistakes and we shall suffer for them until the day we die!! Many of us will be dead in the next 20 to 30 years. This is not about us”, He concludes.

WHAT MUST BE DONE DIFFERENTLY?

The damning and candid analysis George has given and the prognosis of pain and more pain for an entire generation he provides, could only true if we believe like both Hichilema and George believe- that solutions lie in giving unhindered policy space to; multi-nationals, foreign investments, the International Monetary Fund, deregulation, surrendering the entire economy to the private sector, with little or no state participation in the economy.

WHAT IS THE CRISIS?

Zambia, with a relatively small population of 20 million, is experiencing cost-of-living crisis, food insecurity, high unemployment rate, poverty, disease burden, rising inflation and rising debt, state corruption, low salaries, low economic growth and a small formal sector.

The cost of living crisis, has reached perilous levels, and the cost of essential foodstuffs such as mealie-meal,cooking oil, sugar, fuel, electricity are at a level that can easily spark social unrest.

The long hours of load-shedding and power cuts have severely and adversely affected economic production.

The leadership and economic team led by President Hakainde Hichilema and Dr. Situmbeko Musokotwane has shown clearly that it is not capable of resolving both the current and legacy crisis but will infact exacerbate it.

Hichilema believes in foreign solutions and accumulating debt and is relying heavily on external factors to resolve internal issues and crises.

He has also resorted to utter looting the Treasury and giving away state assets, emtying public pension funds to support private investment, dismantle and unbundle one of Aftuca’s largest utilities, ZESCO, give away borders and border management to private and dubious entities.

The key sectors of health, education and agriculture are collapsing while the nation is treated to repeated false assurances.

Hichilema believes that the  international charitable and benevolent actions of creditors, “friends,” and multilateral financing institutions will hand him resources in form of aid, loans and foreign investments to resolve the deep economic crisis and the resources needed to develop the country.

Sadly,like his predecessors, he is stuck in looking for foreign solutions and unashamedly, carrying a begging bowl.

WHAT WOULD I DO DIFFERENTLY?

It is possible to make Zambia have a healthy, educated, wealthy population. Zambia can become an industrialised and prosepeorus nation, an export hub of minerals, electricity, agricultural produce, finished products and skills.

How it can it be done.

1. Remove tax holidays and tax incentives unfairly provided to the mining sector. The mining sector must pay just taxes and fair mineral royalties.

2. Renegotiate unfair and corrupt Power Pruchase Agreements entered into by ZESCO and Independent  Power Producers that serve to milk ZESCO out of its revenue and investible resources and consigns the power utility to debt and inefficiencies.

3. Reform Zambia Revenue Authority (ZRA), seal loopholes, tax evasion, fraud and widen the tax-base to achieve tax revenues of above 35-40% of the Gross Domestic Product(GDP) in the short-term. Revise taxes such as Value Added Tax (VAT) that are frequently abused by large corporates and form part of tax-refund abuse and fraud.

Provide low individual tax rates for workers to increase disposable income throughout the economy, increasing consumer spending on goods and services.

3. Empower ZCCM-IH to immediately run KCM and Mopani Copper Mines, increase its shareholding in all large-scale mines and immediately place ZCCM-IH at the centre to implement a scheme to run gold, lithium, sugeliute and gemstone mines with the participation of artisanal and small-scale miners.

4. Increase ZCCM-IH shareholding in all large-scale mines to 51% or more. This means there will be an increase in revenue from royalties and an increase in state participation in dividends.

5. Many experts have stated that Zambia’s economy is far larger than the statistics of $20billion GDP and is in excess of $60billion….Together with IMF and AfDB conduct and honest, transparent and true measure of the value of the economy and its activities. This will help rebase Zambia’s GDP to its true value..This immediately dwarfs the so called debt crisis.

African countries enjoy under-stating the size of their economies in order to enjoy concessional loans and free poverty grants from multilateral institutions. This is the most lazy way of running government and serves to provide inherent relevance to these extortionist and predatory multilateral institutions that survive on the poverty and under-development of poor countries.

6. Plan and implement an immediate and robust programme to grow food and export to the 400 million people in the SADC region. Zambia must feed itself and feed Africa. Scale-up the participation of small-holder farmers in the FISP to 5 million. Immediately take power, roads and bridges, and storage sheds as part of the emergency plans to develop the farming blocks set up in each province. Integrate commercial and small-holder farmers in robust outgrower schemes.

7. Reform Law Enforcement Agencies to shift focus from the petty, narrow and political issues to fighting crimes, drug and illicit capital flight. According to the United Nations Trade and Development (UNCTAD), Every year, Zambia loses $3billion in illicit capital flight. An estimated $100 billion, equivalent to 3.7% of Africa’s GDP, leaves the continent as illicit capital flight.

Remove laws and regulations that criminalize wealth and wealth creation. The current approach encourages illicit financial flows and externalisation of resources. It is for this reason that the wealthy in Zambia led by President Hakainde Hichilema, keep their money in off-shore accounts and outside the country.

8. Fight corruption by reforming tender processes, remove politicians and public officials from the process and remove politically exposed persons from hijacking the procurement system.

9. All large government expenditure and large contracts including fertiliser, fuel and others to be awarded to citizen-owned companies. If the procurement requires specialization or international bidding promote mandatory joint ventures with citizen-owned companies.

10. Government service providers, contractors, suppliers, and consultants to be paid within 30 days after presenting verified invoices or verified interim payment certificates.

11. Promote technological advancement, boost levels of labour and capital, grow the economy, improve standards of living and eliminate extreme poverty.

12. Promote an aggressive industrialisation programme including establishing value added and value-chain industries per districts and an anchor industry per province.

13. Revert Zambia to Non-aligned foreign Policy, close USAFRICOM security offices and revert to multi-state diplomatic collaboration with the USA, Russia, China, India, Turkey, Saudi Arabia, UK and France. Immediately apply to be a member of the BRICS.

We can make our country a developed, prospeprous, wealthy country while enjoying its cherished peace and stability.