It is now clear for all to see that the PF have destroyed our economy. This is despite well-intentioned advice that we, along with various other responsible citizens, have been giving since they took office in 2011.
The negative impact of a series of inconsistent policies, arbitrary decisions and many other statutory instruments, chief among them SI33 and 55, were all cautioned against. Our warnings were rejected and met with insults and name-calling. Instead of returning to the drawing board and considering this advice, the PF chose to ignore the slide towards crisis, from the fall in water levels at our dams to the crumbling of business confidence as a result of Government interference and inconsistent fiscal policy.
As the PF continues to hide from the blame it is worth setting out exactly how the PF has destroyed the economy. Firstly, the PF have borrowed, and borrowed expensively. Cheaper options were not sought through bilateral and multilateral means, or even by generating funds locally. When we suggested measures such as broadening the tax base and diversifying the economy they labeled us lunatics. Yet if they had started on such interventions in 2011 our position would have been substantially better. As we have said before we truly mean well for this country and such economic degradation affects us all.
Secondly, the PF has mismanaged the money they have borrowed. They have now been in office for more than 4 years and have borrowed close to US$6 billion in this time. Yet because of their lack of vision and mismanagement, they have been slow to spend this money in priority areas such as electricity generation. We were amongst the first to raise the alarm on the impending power cuts due to poor maintenance at Kariba North Bank Power Station. They would not listen and we are now suffering as a result.
Thirdly on mining, the PF missed a great opportunity to take advantage of the high prices of base metals, to build up reserves that could be used later when prices are low. This is good practice in such a natural resource dependent economy as ours, while at the same time moves are made to diversify the economy. Had they acted we would by now have been cushioning the mining sector with incentives that help keep mines remain operational and maintain jobs when prices are low. We all know our colleagues in the PF kept changing policy on mining, one time introducing a royalty tax of 20% on mines, the next time reducing them, and then the very next day they wanted to restore the tax. The impact of this turmoil is what we are seeing today. Have we stopped to consider that Zambia will produce 400,000 metric tonnes of copper this year when the projection was close to 1 million? Yet Chile’s copper production figures have remained consistent at close to 6 million metric tonnes despite the changes in price on the world market. What is the difference between the two countries? The answer lies in the high cost of production and industry uncertainty as a result of poor and inconsistent policies by the PF Government while Chile remains stable.
The fourth point concerns the much talked about diversification. As we issue this statement, farmers are struggling to purchase inputs for this season using the e-voucher system. The reason is simple, the vouchers were issued in July when the dollar was at 7 kwacha. The dollar is now almost 15 kwacha meaning fertilizer prices have doubled. What are the consequences? There will be no food next year because farmers will not be able to produce. This is what PF will say: they will say there was a drought. As a farmer I know that maize can grow with only 450mm of rainfall, let us take this PF to task now before this country goes hungry.
The Way Forward
First on discipline and control, the PF Government must get its own house in order and cut out the waste. Let me be direct here. Can President Lungu park his aircraft and stop these wasteful expenditures such as the US$300,000 (K4 billion old currency) spent on chartering an aircraft to the U.S. recently that would have built a high school? Can President Lungu halt the endless expansion of Government by creating unnecessary ministries that end up employing his friends and favoured persons at the expense of funds that could be invested in our healthcare sector or used to support farmers and Zambian SMEs?
Second, although they may deny responsibility for causing the current situation the PF are responsible for addressing it regardless and must take action. For example, the idea of evading responsibility on load shedding and hiding behind the weather will not do any good. If the PF is telling us if we experience a drought we will have no power completely, then let us not accept this status quo but embark with vigor on promoting alternative energy production.
Thirdly, the PF must support our businesses to navigate the current economic difficulties in order to avoid job losses and to help us find our way back to strong economic growth. Funds may be low for investing in these companies but the Government can take low cost measures such as easing the regulatory burden, and pushing ZESCO to provide reliable load shedding schedules.
Fourthly, the PF Government must start investing in the Zambian people. Let them take all the money saved by halving international trips and cutting back the size of Cabinet and invest this money in skills training initiatives for youths, including, in target sectors, value addition and diversification, as well as in services such as healthcare, where training of community health workers can have multiple positive knock on effects. They must be willing and ready to learn from what Government’s have done elsewhere, notably investing in entrepreneurship schemes that can deliver as many as 10 new jobs for each one entrepreneur supported.
These are some of the measures that should be taken in order to get us moving in the right direction once again and to give our colleagues in the PF a dignified exit next year.