The prayer that an IMF programme and foreign direct investment will resolve our economic crisis and help develop our country is a tired, failed and beaten path.
By Amb. Emmanuel Mwamba.
Lusaka – The United States says China must reschedule and forgive Chad, Ethiopia and Zambia’s foreign debt.
China says the USA, multilateral financial institutions and affiliated commercial creditors own 70% of the debt for these countries.
China therefore has called on multilateral and western commercial creditors to lead the way in the debt reschedule and debt forgiveness program!
Clearly we have a deadlock running for the last 18 months… and its resolution is not in sight
We have repeatedly warned of the dangers of the reliance on the IMF and external factors to resolve our internal economic and development crisis.
The prayer that an IMF programme and foreign direct investment will resolve our economic crisis and help develop our country is a tired, failed and beaten path. It’s time to try something else.
Here is a snap-view of what we would do differently in the interim, short term and long term:
1. Abandon the IMF Programme requiring and compelling Zambia to engage in harsh austerity measures, that has made the country abandon fuel, electricity, food and farming subsidies.
The programme has also halted investment in public projects.
While promoting fiscal discipline, the shock removal of subsidies will be gradual and price of electricity tarrifs and the migration to cost-reflective tarrifs will be applied to commercial and industrial sectors as fair as to domestic customers.
There will be heightened investment in the agriculture sector to encourage mass crop production, building of storage and ware housing facilities, investment in feeder and access roads and bridges and crossing points.
2. Immediately engage China bilaterally and directly over the $6.3billion outstanding debt. We would seek both rescheduling and debt forgiveness of some loans.
Also Read: This is a wrong time to align Zambia to the US with a changing geopolitical landscape.
3. Engage a local financial advisor in partnership with an international one or any other to complete the work of rescheduling the debt with commercial creditors.
4. Engage multilateral institutions such as IMF, World Bank and AfDB on case by case levels.
5. Focus on immediate recapitalising and reviving full operations of KCM and Mopani to ensure that we benefit from the current and historical high copper and cobalt prices.
Also Read: They are failing and falling – but here is how we can succeed!
6. Revise mine and mining policy, ZCCM-IH to take centre stage in state participation in large-scale copper emerald and gold mines with 49-51% shareholding. Further, create a special-purpose vehicle to take control of the lucrative marketing and export of metals and gemstones.
7. Agriculture to take centre stage and Zambia to grow food for 400 million people and in five years, to grow food and grains for 1.3 billion people! If a small country like Ukraine did it, what about Zambia with much better farming environment and climate. Develop the established farming blocks for immediate commercial farming and out-grower schemes with SMEs.
Also Read: UPND manifesto on the agric sector – What we need to do!
8. Stop hemorrhaging loss of revenue from current illegal gold and gemstone mining being done using exploration licences or no licences at all.
ZCCM-IH to take centre stage in the mining, refining and processing and marketing of metals and gemstones. Re-open Kasenseli Gold Mine and invest and begin commercial mining immediately.
9. Invest in turning indeni Refinery from a fuel cracker to a fully-fledged refinery to process crude from Angola, Nigeria, Russia, Ukraine, Saudi Arabia and Iran. This resolves the issue of availability of cheap fuel in the country and the need for heavy fuels for the mines and export to the DRC.
10. Rehabilitate Nitrogen Chemicals of Zambia (NCZ) and restore its full capacity to produce fertilisers, Nitrogen, acids and other chemicals for the mining and industrial sectors.
11. Embark on meaningful infrasture development to open up the country to all nearest sea routes.
Build new port at Mpulungu Harbour and connect the port to TAZARA through Mpulungu-Nseluka for the yawning market to the Great Lakes region, and connect railway from Chingola – Solwezi – Mwinilunga – Jimbe – Caianda – Luacano to connect to Benguela Railway line.
12. Agree with the banking and finacial sectors to provide immediate access to finance for the informal sector, grow entrepreneurship, with special attention to micro, small and medium enterprises.
13. Immediately dismantle the local debt government owes running in billions of dollars. This is money for our people and our local companies, contractors and suppliers and any further delay harms the economy and hurts the business community.
14. Implement in the strict sense the provisions of the Zambia Public Procurement Act no 8 of 2020 and ensure that all procurements by public bodies and agencies favour citizen-owned companies.
15. Restore credibility of government business by paying all verified invoices and interim payment certificates within 30 days for SMEs and 45 days for large procurements. This will attract back the participation of the banking and financial sector in financing of contracts and invoice discounting.
16. ZESCO to complete energy generation and transmission investment projects to realize the vision of Zambia being a consistent net exporter of electricity to the region.
17. Focus on job creation and wealth creation activities.
18. All young people will be supported to be in employment, in entrepreneurship and innovations, in training, in school and acquiring skills…no lambwaza!
It can be done.
EM8: Transformational, pragmatic, experienced, and focused.
About The Author: Currently standing for the position of president of the Patriotic Front, Mr. Mwamba is former Ambassador to the African Union and former Permanent Representative to the United Nations Economic Commission for Africa. Previously, he served as High Commissioner to South Africa, Permanent Secretary and Spokesperson to Second President, Frederick Chiluba.
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