Party of National Unity (PNU) president Highvie Hamududu says government should undertake a mid-year 2019 budget review to find remedial measures on the missed macro-economic targets.
And Hamududu says the free fall in the exchange rate of the Kwacha must quickly be arrested before it creates serious inflation pressures.
In a statement to News Diggers, Hamududu said Zambia would only qualify for the IMF package if its economic recovery path was credible.
“It is now very evident that the 2019 national budget is off the rails and the right thing to do is to undertake a holistic mid-year budget review that can conclusively inform comprehensive remedial measures. As all can see, the macro economic targets set out in the 2019 budget are clearly already missed, which must compel government to go back to the drawing board and re-work the macro economic framework. The 2019 budget is clearly off the rail on economic growth rate, inflation rate, international reserves, fiscal deficit, exchange rate, fiscal arrears, debt sustainability targets envisioned in the 2019 budget,” Hamududu stated.
He stated that budget review would help government stop the current unsustainable fire fighting approach of resolving economic difficulties.
“The mid-year budget review has to put the budget back on the rail. The mid-year 2019 budget review will help government stop the current unsustainable fire fighting approach to resolving the current economic difficulties the country is going through. Simply put, government needs a methodical approach to resolve this economic downturn before it is too late. If needs, holistic refinancing debt arrangement to correct the situation, let [it] be done as a matter of urgency,” he stated.
“This free fall in the exchange of our Kwacha must quickly be arrested before it creates serious inflation pressures in the economy that will become very difficult to deal with. The tax policy needs review to incentivise investment, create jobs boost production, and promote exports. Mining taxes need a mid-year review to deliberately create competitiveness in the sector, for increased investment, production, jobs and exports.”
And Hamududu stated that Zambia would only qualify for the IMF package if its economic recovery path was credible.
“Chinese option to dealing with the refinancing option is evidently more viable. China is our major trading partner and therefore, logically holds more hope for partnership in our economic recovery journey, while engagement with International Monetary Fund (IMF) continues. But it must clearly be understood that we can only qualify for the IMF package once our economic recovery path becomes credible, hence the importance of the mid-year budget review to re-gain the required budget credibility. Additionally, the Economic stabilisation and growth recovery plan (ESGP) 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 is facing,” stated Hamududu.