SEAN Tembo says Zambia has ample capable men and women who can diligently and competently discharge the functions of the office of Minister of Finance, unlike the current holder, Margaret Mwanakatwe. Tembo, who is Patriots for Economic Progress (PeP) president, outlined a number of “failures” which have accumulated on Mwanakatwe’s head. He accused Mwanakatwe of recklessness and incompetence in the discharge of functions of her office.
Tembo asked Mwanakatwe to consider resigning as finance minister on moral and professional grounds.
“Should the Honourable minister not see it fit or appropriate to resign her position as a Minister of Finance, then we wish to appeal to the Republican President His Excellency Mr Edgar Chagwa Lungu to consider transferring Hon Mwanakatwe to an inconsequential ministry where her incompetence can be quarantined so as not to have a retrogressive impact on the rest of the economy,” Tembo stated in a press statement yesterday.
“As Patriots for Economic Progress, it is our sincere submission that this country has ample capable men and women who can diligently and competently discharge the functions of the office of Minister of Finance and help the country to successfully navigate its current economic hardships towards prosperity.”
He stated that the battle for Zambia’s economic success must not be fought with partisan interests at heart but that it must be pursued on the basis of patriotism. Tembo stated that the PeP had noted with regret that Mwanakatwe’s performance had been “littered with failure after failure, ever since she took up the office about a year ago.”
“In our view, this dismal performance is not by accident but is motivated by a total lack of seriousness in the manner that the Honourable Minister of Finance has been discharging her duties,” Tembo stated.
“It is worth mentioning that it is during her tenure that this country has experienced the largest fiscal deficit that has averaged seven per cent. This means that the minister is unable to properly match government expenditure to government revenue, which is a basic purpose and function of the job of [a] Minister of Finance.”
Tembo stated that it was Mwanakatwe who proposed “the most ridiculous and radical reforms regarding indirect taxes, by announcing the removal of Value Added Tax (VAT) and replacing it with Goods and Service Tax (GST), without any form of consultation whatsoever, from industry or practice.”
He stated that Mwanakatwe had been adamant to listen to voices of reason urging her to rethink her tax reforms but insisted that the GST would take effect on 1st April 2019, 18 days from today.
“However, up until now, no Bill has been presented to Parliament to repeal the VAT Act and to introduce GST. Similarly, no practice notes have been issued by the Zambia Revenue Authority to provide guidance regarding how GST will be implemented. Similarly, industry players have not been advised on the rates that will apply for GST nor what the taxable supplies and suppliers will be, so that they can amend their computerised accounting systems accordingly, and print the necessary stationary for written invoices,” Tembo stated.
“Given that only 18 days now remains before the Honorable Minister’s implementation date of 1st April 2019, it is clear that the Minister has again failed to do that which she promised and insisted she would do, while keeping the business community on edge all this time. At this point, it is fair to state that the Honorable Minister is clueless and has no idea about what she is doing.”
Tembo also stated that during Mwanakatwe’s tenure, the government had failed to meet its basic recurrent expenditure obligations such as paying civil servants and parastatal employees on time.
“As we speak right now, civil servants only received their February salaries a few days ago, while parastatal bodies including ZICTA, PACRA, RTSA, ZAMPOST etc., are more than 2 months in arrears now. Given the fact that paying salaries is the most basic responsibility of government towards its employees, the failure by the Honorable Minister to discharge this basic function equates to a failure by the Minister to do her job,” Tembo stated.
Tembo also stated that it was during Mwanakatwe’s time in office that the country’s domestic arrears had risen to an all time high of about K15 billion or approximately US$1.2 billion for various goods and services supplied to government and its agencies.
He stated that given the limited size of the Zambian economy, when government owes such huge amounts to the private sector, it immediately translates into reduced economic activity as the companies end up defaulting on their loan obligations to banks and other financial institutions, as well as laying off their employees.
“The overall adverse economic impact of these huge domestic arrears are too ghastly to contemplate further,” he stated.
“It is during the tenure of the Honorable Minister of Finance that this country has attained a huge external debt balance of US$10.5 billion, again the largest in the history of this Republic since birth on 24th October 1964. The Honorable Minister has been contracting additional external debt without any regard to the country’s ability to repay these loans, and without Parliamentary approval as required by the Republican Constitution. To say that Honorable Mwanakatwe has been reckless in her discharge of the functions of the office of Minister of Finance is an understatement.”
Tembo stated that during the tenure of the Honorable Minister of Finance that Zambia attained a huge domestic debt balance of about K56 billion or approximately US$5 billion.
“This has been done, again, without any regard for the ability of the country to repay these debts, or indeed, without contemplating what the consequences on the nation will be in the event of debt default, as almost happened in September 2018. Again, it is beyond any argument that the Honorable Minister has been discharging her mandate in a reckless manner in this regard,” stated Tembo.