Hamududu urges budget review in view of the declining economy
By Staff Reporter
Party of National Unity president Highvie Hamududu has urged government to undertake a holistic mid-year budget review that can conclusively inform comprehensive remedial measures following the declining economic fortunes.
Hamududu said the macro economic targets set out in the 2019 National Budget were clearly already missed, which must compel government to go back to the drawing board and re-work the macro economic framework.
He said the 2019 budget was clearly off the rail on economic growth rate, inflation rate, international reserves, fiscal deficit, exchange rate, fiscal arrears, and debt sustainability targets envisioned in the 2019 budget.
“The mid-year budget review has to put the budget back on the rail and will help government stop the current unsustainable firefighting approach to resolving the current economic difficulties the country is going through,” he said.
He said the government needs a methodical approach to resolve this economic downturn before it is too late.
Hamududu noted that if this needs holistic refinancing debt arrangement to correct the situation, it must be done as a matter of urgency.
“This free fall in the exchange of the Kwacha must quickly be arrested before it creates serious inflation pressures in the economy that will become very difficult to deal with,” he said.
Hamududu said that the tax policy needs review to incentivize investment, create jobs, boost production and promote exports.
He added that mining taxes need a mid-year review to deliberately create competitiveness in the sector for increased investment, production, jobs and exports.
Hamududu said Chinese option to dealing with the refinancing option is evidently more viable as it was Zambia’s major trading partner and therefore, logically holds more hope for partnership in the country’s economic recovery journey, while engagement with International Monetary Fund continued.
He however, clarified that Zambia could only qualify for the IMF package once the economic recovery path became credible, hence the importance of the mid-year budget review to re-gain the required budget credibility.
Hamududu added that the Economic stabilization and growth recovery plan dubbed the ‘Zambia Plus’ needs review and re-crafting to speak to a more robust economic reform agenda commensurate to the real magnitude of the economic problems the country was facing.