ZAMMSA AUDIT REPORT COULD SHAKE INVESTOR CONFIDENCE-ECONOMIST
By Sherry Chabala (News Digggers)
Economist Noah Kabwita says the ZAMMSA audit report might affect investor confidence.
He argues that some sensitive short-term investors may choose to withdraw their investments, while long-term investors will likely watch to see how government would address the scandals.
Reacting to the ZAMMSA forensic audit , which reveals various irregularities in drug procurement, including the buying of inflated and short-dated drugs, Kabwita said Zambia should be concerned that investors are watching and need to be respected when they are investing in the health sector.
“So when you say what will happen to the investor confidence amidst the ZAMMSA report ? Short term investors will run away and those who are long term will watch how government will correct this situation because a healthy population is a productive worker in those companies . So they would rather government handles the health sector well, but if the government and the ministry of Health are not that they get frustrated and disappointed because they will have a lot of their workers failing to go for work and there’re will be loss of investment , working time, which will disturb their profits by virtue of being mid or short term oriented,” he said.
“Long term investors come in with a mentality of knowing that they need to build their own health centers within their facilities of investment. But despite being long term investors they would rather the government puts its house in order because some of those investors are at the same time contributors to these funds, they are philanthropists, they donate huge funds to support the health sector in the country of operations and so they get concerned and not necessarily withdraw. Zambia should be concerned that investors are watching and need to be respected when they are pumping in money in the health sector , we need to value their efforts”.
Kabwita however said long term investors would not be shaken but would watch how the government handles the scandals.
“When you talk about investors confidence, yes it will be disturbed a bit, but this is a public matter . It has to do with the government with the government and how it is managing the health sector , especially the acquisition and distribution of medicines. This issue has been there even before this party which is in power today came into office. If we can recall during the MMD government these scandals were there, then we came into PF, also there was a scandal in the same ministry. We have come into UPNMD again because of the ZAMMSA scandal,” said Kabwita.
“This means donor funders, especially investors have a track record , they’ve been looking at how we have been performing in the health sector as far as managing medicines and distribution is concerned . Short term investors that are sensitive and wouldn’t want to work with countries that fail to run their ministry of health wings accordingly may decide to withdraw investment or may decide to sit on the fence and watch how Zambia handles the reports in the ZAMMSA audit.
But there are long term investors who look at their investment for a period of 15 years or more for them to start seeing serious results. So those who don’t get distracted easily, but those within the range of five years which fall under medium investment, will get scared. For example, look at MMD days, there was the Kapoko issue also to do with medicines, where the Auditor General brought out very serious issues and when agencies that deal with that took action and some people were fired,”