HH reservedly supports new economic measures
By Staff Reporter
UPND president Hakainde Hichilema has welcomed the government’s realisation that Zambia has fallen on very tough times that require urgent policy actions and strong political will.
He has, however, said the Patriotic Front and government must take advice of other stakeholders on what needs to be done to improve the economy.
Finance minister Margaret Mwanakatwe yesterday issued a statement detailing Cabinet’s decision to improve the country’s economy.
Among the decisions made, according to Mwanakatwe, include a stop to new non-concessional borrowing and cancellation of signed but undisbursed loans, among other austerity measures.
This is the second time the government is announcing austerity measures, but Hichilema feels nothing much was done after the previous decisions to curtail economic meltdown.
“The measures being proposed in the statement are the same ones from former Finance Minister Felix Mutati’s Economic Stabilization and Growth Programme (Zambia Plus), which we even alluded to a few days ago in our advisory on fiscal consolidation. Why the Government departed from Zambia Plus in the first place remains a wonder. We can only pray that these Cabinet decisions are not too little too late given the current economic deterioration and that this time around, the Zambia Plus measures will be actioned with seriousness,” Hichilema observed.
“We strongly believe that critical self-reflection and honesty are key for solving economic problems. The Minister’s statement is however far short on both self-reflection and honesty. If climate change related agriculture and electricity production are the core problems, why did Cabinet fail to propose structural reforms such as investments in climate-smart agriculture (e.g., solar-power groundwater irrigation projects instead of urban roads projects) and energy projects (solar, biofuels, etc. projects instead of expansion of rain-dependent hydro power installations)?…”
He, however, expressed worry about what he called low levels of political will in the PF administration.
“Austerity was repeatedly announced in 2016, 2017 and 2018, but with no serious intent to change policy behaviour. Here we are again with the Cabinet making the same old announcements. But we are not the only ones who are worried about the PF’s lack of seriousness,” Hichilema stated.
He has stated that the PF government must take his advice in good faith “as it is offered in good faith” and said they must “institute the well-rounded set of corrective policy and structural reform measures we have been advocating for so long now. Draw on our expertise, strategic thinking and advice; it will help this country and our people…”
“We are not doing this for political mileage but out of genuine care for this country’s citizens, now and in the future. We stand ready for the economic Indaba we proposed previously,” Hichilema stated.
Meanwhile, Hichilema stated that the Cabinet meeting also failed to address the adverse liquidity conditions which he alleged were a result of poor fiscal management, specifically the high borrowing without spending plans and the resultant poor quality of public investment, especially infrastructure spending.
He advised the government to curb excessive infrastructure project spending with the same strictness imposed on ministries, provinces and spending agents.
“The claim that ‘projects that are of an economic nature will not be cancelled. [To spur a] resumption of growth’ is a sham. Analysis shows that despite the Government’s excessive spending since 2012, Zambia’s Incremental Capital-Output Ratio has deteriorated continuously, showing increased inefficiencies or poor investment quality during the PF era. The PF Government simply needs political will to stop its obsessive and gluttonous infrastructure spending habit and to stop the high levels of corruption never seen before in the history of our country,” stated Hichilema.