Dr. M’membe calls for non-partisan approach to resolve Zambia’s economic crisis
By Staff Reporter
OPPOSITION Socialist Party 2021 presidential candidate Dr Fred M’membe has called for non-partisan approach in resolving Zambia’s economic crisis.
Addressing a joint media briefing this morning with Socialist Party General Secretary Dr Cosmas Musumali at his office in Garden compound, Dr M’membe said it was evident the Patriotic Front had failed to inspire the people while the economy was undergoing a disastrous period.
“We further stated (previous press briefing) that the PF Government must also acknowledge their policies and actions to-date have greatly contributed to the difficult situation the economy finds itself in,” he said.
“In trying to find solutions a non-partisan approach was urgently needed. All Zambian stakeholders, including workers’ representatives, peasant associations, academia, political parties and movements representing the masses of our people have to be engaged in building consensus on the options for saving the economy from total collapse”.
Dr M’membe advised the PF government to own up that the economy was in great danger and the livelihoods of millions of Zambians were at stake.
He said the economic crisis had remained a national disaster of high magnitude since the Socialist Party sounded the warning seven months ago.
“About 7 months down the road, this advice has been ignored with severe consequences for the entire economy and the Zambian people. Time is running out,” Dr M’membe said.
He said what Zambia was going through was part of a globalized capitalist crisis but a typical menu of capitalist solutions would not deliver as they were a contributing factor to the deteriorating situation.
“We realize that the opposition political parties in Zambia are largely advocating for more austerity and more external assistance. They are equally misdirected. The sheer incompetence and desire to maintain political power at all costs by the PF administration is worsening the situation in Zambia,” Dr M’membe said.
Dr M’membe said there was need to win back the trust of the Zambians and international finance markets.
He warned that the recommendation of the National Dialogue Forum (NDF) to reintroduce deputy cabinet ministers was heading in the wrong direction.
“The PF government should start drastically cutting the allowances of the top leadership by 50%, reducing the costs of international travel by 60%, reversing the increases in salaries of all constitutional position holders, cutting the cost of running the government fleet by at least 40%, cutting the bill for workshops and conferencing by 70%, undertaking concrete governance measures that would point to a zero tolerance approach towards corruption,” advised Dr M’membe.
He said the Socialist Party still recommend that external debt contraction and sustainability be a constitutional responsibility under close parliamentary scrutiny.
“There is need to embark on developing a legal framework that would constrain a sitting government from incurring unsustainable debt levels that have potential to destroy the entire economy,” said Dr M’membe.
And Dr. Musuumali said the ruling party had failed to manage the economy due to the leaders’ selfishness and failure to listen to advise.
“Unfortunately, the developments validate our earlier – rather negative and pessimistic analysis of the economic trajectory. The dire situation we find ourselves in may not yet be apparent to all,” said Dr Musumali.
“There are several analyses from multilateral organisations, financial institutions, research and consulting groups as well as from Zambian government departments that are helping us to sketch the magnitude and depth of the crisis. The kwacha is continuing to depreciate – at K14 to a dollar it is at its lowest since November 2015,” said Dr Musumali.
Dr Musumali said high international and domestic debt and servicing levels – with the ratio to GDP estimated to reach 90% given a depreciating Kwacha.
He said reductions in export earnings, foreign direct investments (FDI), portfolio investments, development assistance and other external sources during 2017 and 2018 as well as the first quarter of 2019 was also hurting the economy.
“ During the same period imports have not significantly reduced and balance of payments have continue to remain wide – above 4.5%. To finance the current account, the authorities resorted largely to drawing down on foreign currency reserves. The move brought down reserves to US$1.6 billion – just sufficient for 2 months import cover! This development contributed to exerting huge pressure on the Kwacha,” said Dr Musumali.
He said the relatively poor agricultural performance due to insufficient rainfall in the southern half of the country had compounded the disastrous performance of the economy.
“A government that seems clueless, detached and quite often unwilling to take remedial action that is perceived to hurt its re-election prospects. This is an extremely precarious situation. At this point we may quickly look at developments in the global economy and explore if developments in the global economy that could help to moderate the situation,” said Dr Musumali.
He said Zambia’s projected growth for 2019 was initially pegged at 4.2%, but with the world economy slowing down more than initially expected, the projections were revised downwards to 3.1%.
“In our last press briefing, we advised the government that the first thing is to own up that the economy is in great danger and the livelihoods of millions of Zambians are at stake. We described the economic crisis as a national disaster of high magnitude. This description remains true today”.
He said about seven months ago the Socialist Party warned and advised government of severe consequences for the entire economy and yet time was ticking away without the ruling party taking heed.
Dr Musumali warned that the cumulative impact of increasing debt servicing, declining exports, low currency reserves and climbing price pressures was toxic.
“Overall private consumption will be negatively impacted, macro-economic stability will be hard to sustain and economic growth prospects for 2019 and beyond will be compromised,” he said.
“For the Zambian working masses, the poor, unemployed, students and all Zambians already facing economic hardships, their situation will continue to worsen. Prices of essential commodities will escalate, earned income in kwacha will lose its purchasing power, taxation levels and user charges will increase and poverty levels will not reduce”.
