Economist Dr Lubinda Haabazoka has warned that Zambia’s economy will collapse if the ruling Patriotic Front and opposition UPND continue fighting each other until 2021.
And Dr Haabazoka says wealth inequality across Zambia has slowed down economic growth over the years.
In an interview, Dr Haabazoka warned that the economy would collapse if the two parties continued fighting each other until 2021, adding that Zambia might not achieve the targeted Gross Domestic Product (GDP) growth of 3.5 to four per cent due to persistent political tension between the two parties.
“Unfortunately, the politics that we lead now in Zambia are based on tribal lines, and such is a hindrance to economic development. That’s why my call is for both parties to cease fire and start playing politics based on the issues at hand because if we continue moving like this, the economy will collapse. With internal political risks being high, where you see violence every time even in small ward by-elections, that can paint a negative picture to the outside world,” Dr Haabazoka warned.
“The fight between our two major political parties is not helping economic development at all, because the country has been divided into two. And unfortunately, the divide has been of tribal basis. This will definitely impact the GDP this year and as a country we might not even achieve the projected target. These fights might be taken lightly by the political parties, but they have huge consequences and missing out on your targeted GDP growth is one such thing that will happen in Zambia. So, despite, for example a person working hundred percent, giving in 100% of her work, but as long as they are perceived to belong to the other grouping, they will never be motivated to receive any accolades for work that has been done.”
He added that investor confidence is bound to be knocked in view of the persistent political clashes between the two major parties.
“Mind you, when an investor is about to invest in Zambia, first thing is that they take to Google, and whatever they get from Google, they take it as the Gospel truth because the Internet now is perceived to carry truthful information. So, these fights can cause the economy to collapse. As a country we should be sober and definitely go back and know the consequences and behave in a much more civilized manner,” Dr Haabazoka, the director at the Graduate School of Business at UNZA, advised.
And Haabazoka said wealth inequality across Zambia has slowed down economic growth over the years.
“We have a very huge gap between the middle class and the lower class. And despite having [a] pronounced middle class, you are going to find that the risks of a person who is in the middle class to convert into the lower class is very high, and that is mainly attributed to the job that they do. So, immediately somebody loses their job, they within a matter of months fall back into the lower class because our population of middleclass is not backed by assets. And if they had some assets it can be one or two apartments and those are quickly sold off because of the extended family system. Families find it very difficult for them to find a living,” observed Dr Haabazoka.
“Then of course the difference between the high class and the middle income is also very high to a level whereby you will need a number of years for people to catch up. And I think the reason why we have that is, you know just from independence, we have a system that was similar to a communist system where people where not supposed to own wealth. And that has had an impact on the development of Zambia. A lot of people were trenched into poverty and many fail to move out of that. But you know wealth inequality today is contributing greatly to poor economic growth.”