Economist Chibamba Kanyama says President Edgar Lungu must announce an effective strategy that convincingly shows all investors that the economy is in good hands as he opens the 4th Session of the 12th National Assembly this Friday.
And Kanyama says Zambians expect President Lungu to demonstrate that social sector spending will continue to receive budgetary allocations in the 2020 national budget in a timely and transparent manner in a bid to quell speculation that debt servicing will not choke social sector expenditure.
Meanwhile, Kanyama has asked President Edgar Lungu to give Zambians hope that his government was dealing with high unemployment levels among the youth.
Responding to a press query from News Diggers!, Kanyama noted that President Lungu would be addressing the nation against a backdrop of huge national expectations and anxieties, adding that it would be important for him to give a thorough review of government’s performance in the past one year.
“President Lungu will be opening the 4th Session of the 12th National Assembly against a backdrop of huge national expectations and anxieties arising from the ongoing Constitutional Amendments, worst drought in the 2018/19 season the country ever experienced in many years with the resulting rise in the price of mealie meal countrywide and energy load-shedding; uncertainty on the future of the mining giant, Konkola Copper Mines (KCM) following the liquidation process; the International Monetary Fund (IMF) downgrading economic growth projections to an all-time low of 2.2 per cent in 2019; the launch of the highly-contended National Health Insurance Management Authority; under-subscriptions with regard to auctioned government securities; the continued rise in the external and domestic debts; inflation rising towards double-digit figures and general challenges regarding national governance with sections of society still feeling we are not doing enough to combat corruption and practices of tribalism,” Kanyama stated.
“The first expectation is a thorough review on the performance of government in the past one year. The 2018 address was an ambitious announcement of government’s strides towards meeting the 2030 National Vision. There have been observable strides in this area, particularly with regards to infrastructural developments, such as construction of roads in urban areas, Lusaka in particular, as well the construction of health centres in some parts of the country. However, we expect a detailed account of milestones achieved across all sectors that build towards the attainment of this vision. Another achievement has been the successes of the provincial Investment Expos that, despite having no tangible results yet, somehow point to effective diversification in future.”
And Kanyama urged President Lungu to demonstrate that social sector spending would not be affected by debt repayments.
“The President also observed in 2018 that there were those who felt excluded by virtue of living on the margins of society with limited access to education, health and other social amenities. He made a commitment that government would not leave anyone behind. What the nation expects on Friday is a demonstration that social sector spending will continue to receive budgetary allocations in the 2019 budget in a timely and transparent manner. There are fears by some sections of society, including donors, that in an effort to keep servicing external debts, the government has chocked spending to the social sector. The President will further need to announce measures to protect the most vulnerable from starvation should we experience another bad season, God forbid,” he added.
Kanyama further urged the Head of State to give a clear roadmap on debt restructuring and government’s plans on the possible engagement of the IMF for a financial package.
“In the previous address, the President placed a lot of emphasis on the macroeconomic situation; economic diversification and job creation; poverty and vulnerability reduction; reducing developmental inequalities; enhancing human development and creating a conducive governance environment for a diversified and inclusive economy. We should admit the macroeconomic situation has not been stable with international rating agencies consistently putting us at the margins of debt distress. Just recently, the Bank of Zambia expressed worry about economic governance, that we needed to do more to effect austerity measures. We, therefore, expect the President to announce an effective strategy that convincingly shows all investors that the economy is in good hands, Gross Domestic Product (GDP) to rebound in 2020 to over three per cent; inflation to recede to budgeted levels and more importantly, a clear message about the external debt situation: how are we going to service the Eurobond as the first tranche falls due in 2022?” Kanyama wondered.
“Investors will be expecting pointers from the President about a clear road map on debt restructuring if that is the path Zambia is taking, engagement of the IMF for a financial package and also a clear message from the Head of State with regards to acquisition of new debt, particularly to support infrastructural investment. In short, what is Zambia’s position about the IMF programme and what is our clear position about the continued investments in infrastructure, somehow seen to (be) the main source of the rise in external debts? I am saying this because in his 2018 speech, the President assured the country, through Parliament, that government was committed to ensuring a speedy return to low risk of debt distress and maintaining the debt within sustainable levels.”
He also urged President Lungu to give the nation some hope on the high unemployment levels currently prevailing.
“This is where we have the most challenge as a country as unemployment levels are soaring by the day, with many graduates looming the streets without hope of ever finding a job. I would not mind the President dedicating half the speech laying out a clear-cut strategy on how this country can respond to the problem of unemployment. The industrialization strategy alone has not offered the much-desired response to the question of unemployment; we need practical, robust, market-driven solutions with government offering policies that are non-conflicting,” stated Kanyama.