(By Tuesday Bwalya)
I have seen how our economy has been slowing down and soon or later it will come to a ground halt.
In 2011, our economy under the Movement for Multiparty Democracy (MMD) leadership was growing at 6 per cent. All the economic indicators were good. Major international credit ranking institutions such as Moody’s and Fitch ranked our economy B or B+ and predicated a positive outlook. The economy was expanding thus providing numerous opportunities to people. Jobs were reasonably available; the private sector and public sector were hiring people. This made the International Monetary Fund (IMF) and the World Bank to declare Zambia a middle-income country.
Today, our economy is reported to be growing at 2 per cent. The IMF in its 2019 Economic Outlook Report for Zambia released in August 2018 predicted that the Zambian economy would grow at 2 per cent and that the economy would continue to shrink way through to 2021. It further pointed out that inflation would reach 10 per cent.
More importantly, the IMF revealed that the total debt stock for Zambia stood at USD 18 billion (both internal and external) against a GDP of USD 26 billion. We are also informed by the IMF that Zambia has only 1.9 months of reserves at the Central Bank for import cover; this is radically low compared to 5 months import cover we had during the MMD leadership.
International credit ranking institutions on the other hand have downgraded Zambia’s credit worthiness and predicted a negative outlook. For example, Moody’s, in May 2019, downgraded the Zambian economy from Caa1 to Caa2. This means that there is substantial risk in the economy; the country may fail to pay its debt.
I may not be an economist by training but with the little knowledge I have, I can quickly infer that all these indicators paint a bad picture; the economy is performing badly. It has been reserving for some time now. The economy is out of the rails; it will eventually crash, making it extremely difficult to put it back on the rails of growth.
Being a lecturer at the University of Zambia and a citizen of this country, I have experienced first-hand the impact of an economy that is shrinking. To start with, many of my students after graduation cannot find work or any other opportunities in the economy; they still come back to me and ask if there is something I can give them to do. I have never seen this before. It annoys me to see many brilliant graduates failing to find something to do because the economy is performing badly.
Further, I have seen my salary losing value to major convertible currencies such as the US dollar and the South African Rand by almost 60 per cent. Due to the poor performance of our economy, many of my relatives are struggling to feed their families; they end up offloading their problems on to me.
As a Zambian citizen, I am extremely concerned and I have a simple question to ask the PF leadership. Where have you taken the 4 per cent growth of our economy? Reasons for the loss of the positive growth of the economy are well known. The strong growth of our economy has been lost due to among other reasons corruption, inconsistent economic policies, excessive expenditures (trips by politicians etc) and over borrowing.
The PF leadership does not seem to understand how the economy works. To make matters worse even leaders of institutions such as the Economics Association of Zambia (EAZ) are busy bootlicking the PF leadership instead of advising it on how to resuscitate the dying economy.
The PF leadership this year pronounced austerity measures to try and revamp the declining economy. Alas, the leadership is not implementing any of these measures; it is paying lip service to solving the problems affecting the economy. For instance, the PF leadership is still traveling within and outside the country as if the economy is doing well. President Lungu is rarely at State House. He is always out in provinces purporting to be inspecting developmental projects (when in fact he is campaigning) or outside the country. The trips of the President are costly; many cabinet ministers, permanent secretaries (PSs) and other senior government officials follow the President on these trips resulting in excessive expenditure.
Implementation of austerity measures should start with President Lungu himself; he should cut his trips and everyone will follow suit. Unfortunately, the PF leadership seems not to know even how to control expenditure; it spends without considering the income side. This has resulted in overborrowing in order to quench its expenditure appetite.
We need a leadership that understands how the economy works. Leaders who understand how the economy works control expenditure. Take for instance President John Magufuli of Tanzania, he rarely moves out of the country. He does that to limit expenditure and channel the money to productive sectors of the economy. The economy in Tanzania is reported to grow at 7 per cent this year.
Let us all aspire to work for a better economy but we need a leadership that understands how the economy works to leads us.
The author is a lecturer at the University of Zambia department of Library and Information Science