And the CTPD says President Lungu should also provide policy guidance on whether Zambia will still persist to implement the proposed Goods and Services Tax (GST) and re-launch Zambia Airways, while grappling with fiscal constraints.
In a statement, Thursday, CTPD executive director Isaac Mwaipopo advised the Head of State to give a clear road map of how Zambia would move towards economic recovery as he officially opened Parliament, Friday, because Zambia’s reduced economic growth remained a major source of concern that needed urgent attention.
“As the Republican President officially opens the 4th Session of the 12th National Assembly, the Centre for Trade Policy and Development will be expecting the Head of State to speak to the critical issues affecting the Zambian economy. We understand that the speech by the President is meant to set the tone on some of the key issues the House of Representatives will be focusing on during the sessions. It is our considered view that the President’s speech should also clearly explain the road map towards economic recovery. The speech must address issues regarding how Zambia will be set on the path to economic recovery because economic growth has continued to reduce and is projected to reduce further to 2.9 per cent in 2019 from 3.7 per cent in 2018. The foreign reserves (position) have fallen from $2.4 billion in 2016 to $2.1 billion in 2017 and 1.57 billion at the end of 2018,” Mwaipopo explained.
He noted that there was need to consider restricting the current debt stock in order to increase government spending on social sectors like health and social protection.
“These have compromised macroeconomic stability and resulted in a higher cost of living. Zambia has contracted excessive debt; way over US $20 billion inclusive of public guaranteed debt and domestic arrears, and interest payments towards this debt has crowded out government spending towards social sectors. It is our hope that the 2020 national budget will not follow the trajectory of the 2019 budget, which reduced allocations towards social protection and health due to increased spending on debt interest payments from about 20 per cent of the budget to 27 per cent. Government needs to consider restricting the current debt stock in order to increase spending on basic needs for Zambians,” he stated.
And Mwaipopo urged President Lungu to provide policy guidance on whether Zambia will still persist to implement the proposed GST and re-launch Zambia Airways, while grappling with fiscal constraints.
“There is, therefore, need, through the speech, to assure the nation that the challenges facing the economy will be improved. The current electricity shortage presents yet another situation, which needs urgent attention since it is constraining productivity and will negatively affect economic growth. Government should take urgent measures to address the power deficit in both the short-term and long-term. The President should also provide policy guidance on whether Zambia will still persist to implement a Sales Tax policy and relaunch Zambia Airways, while grappling with fiscal constraints,” urged Mwaipopo.