FINANCE and National Planning Minister Dr Situmbeko Musokotwane says the IMF programme which is likely to materialise in June will ensure stability in the exchange rate.
And Dr Musokotwane says integrating environmental responsibility into business is essential to growing the country’s economy.
Speaking when he opened the Lusaka business expo, Thursday, he said with the IMF programme in place, the days of the kwacha moving up and down like water waves would be history.
“The government is very happy and proud that we are now very confident that by the middle of the year, we would have gotten into the IMF programme. Remember, we are now on the staff level agreement which has no financing and no formality behind it. But I think now we are confident that come the middle of the year, we would have been reaching the proper IMF agreements. And with that, we are more than confident that the stability in the exchange rate is now anchored. The days of the exchange rate of the kwacha moving up and down like waves of water, that is now history,” Dr Musokotwane said.
“I can say that the recent trip to Washington was very successful because now we are absolutely certain that the train is in motion to get us to the IMF programme in the middle of the year. Hand in hand with that, as we go beyond stabilising the economy, of course we are also aware of the fact that the economy needs to grow. It is that growth of the economy that will create more business opportunities for the SMEs. And to that end, government, led by the Minister of Mines but supported by the entire government system, we are all working very hard so that we create an environment for the mining sector to expand.”
He said government’s 3 million copper production projection could only be realised through a stabilised business environment.
“Remember, we have said as a government [that] our goal is to get to a production level of 3 million tonnes in the next 10 years. 3 million tonnes will push the growth of the economy not just in mining itself but also in related sectors. You can imagine what that does to transportation, you can imagine what that does to banking; imagine what that does to services in the mechanical and engineering sectors. So it is going to be a game changer for the nation of Zambia. So we are pushing very hard so that this dream of getting to 3 million tonnes is achieved in the next 10 years,” Dr Musokotwane said.
“To do that, we have to realise that we are in competition with other destinations for investment. Therefore, we must create an environment that is conducive, an environment that is stable. We cannot afford to change taxes every year, then we confuse those who want to come and invest into long term investments such as mining. So we must have stability in taxation, we must have a conducive environment. Whether the licenses, whether issues to do with the environment, all those enablers of investment must be done efficiently by the government so that we attract those investments to get to 3 million tonnes which is going to be of benefit to you people.”
He said if all things remained equal, Zambia was headed for a single digit inflation rate by December.
“Of course you can also observe yourselves that the inflation rate has been on a downward trend. In August last year, it was almost 24 percent and at the last measurement which was in April we are down to 11.5. So we are more than sure, unless another catastrophe happens somewhere, we are more than sure that come the end of the year, we shall be well within the single digit rate of inflation which I think is something that is useful for the SMEs because you will be able to plan properly in an environment where the exchange rate is stable, inflation is coming down,” Dr Musokotwane said.
He said a stable micro economic environment was key for the growth of the SME sector.
“For SMEs to thrive, obviously the micro economic environment must be stable. I think we are all aware that in the last number of years, the micro economic environment has not been stable largely so because of the debt overhang. That debt overhang led to instability in the exchange rate. We all remember where the exchange rate was 10 years ago and we know where it is today. Obviously, it has moved a lot. And we are also aware about the dynamics of inflation where inflation used to be single digit and it went all the way up to more than 20 percent. That kind of environment is not conducive for the growth of SMEs,” Dr Musokotwane said.
And Dr Musokotwane said integrating environmental responsibility into business was essential to growing the country’s economy.
“Integrating environmental responsibility into businesses is essential to grow our economy and create limitless opportunities for achieving profitability in a fast-emerging low carbon global economy characterised by climate change. In this regard, massive investments in low-carbon programmes will be required. It is apparent that as we move towards greener, smarter ways of doing things, businesses will need access to resources and skills that will carry them into the new frontier of doing business. This is particularly true for female led businesses which make up the majority of SMEs in the country and must be supported to grow,” he said.
“It is gratifying to see that the expo has prioritised this agenda coupled with the need to support development of the SME sector which supports the country’s economic development. It is imperative that we develop home-grown solutions to the challenges faced by the business community of which the government will offer their support to the private sector in achieving this end.”
He said Zambia’s geographical position made it an asset which allowed the nation to position itself as a trade corridor and investment destination.
“Our country is endowed with massive natural resources, we are a haven of peace and stability and our geographical location within the African continent is an asset which allows us to position ourselves as a trade corridor and investment destination within the sub region and beyond. I am glad that the expo platform is able to translate this positional asset into capital by recording trade and investment agreements among the various participants thereby enhancing the value of this noble initiative. The gathering here of over 300 local and international exhibitors from within and across Africa demonstrates a shared recognition of the diverse opportunities available within the continent,” said Dr Musokotwane.
“It is through such progressive collaborations between government and the private sector that we will be able to unlock new opportunities that drive both social and economic growth in Zambia and beyond.”