Economist professor Oliver Saasa has urged President Edgar Lungu to shake up his Cabinet further to allow more re-organisation among ministers if he is to come up with a winning team.
Professor Saasa has also urged the president to ensure cohesive policy announcement and interpretation to avoid confusing the market.
Commenting on the dismissal of Finance Minister Margaret Mwanakatwe, Prof Saasa told News Diggers in an interview that he expected the Head of State to do more.
“If you ask me, I would have loved to see a few more re-organisations by the head of state to re-align and come up with a winning team. I am not so convinced that some of the people who are heading some of the ministries would help Bwalya to make a major difference. He cannot succeed without a supportive cabinet and a cabinet where you have strategically placed people that can make a difference. We know the views and position of a number of ministers and we don’t need to mention them but my plea is that the President sees this as an opportunity to re-orient his cabinet,” he said.
“I think one of the things in terms of re-orientation if I were to advice the President, is to merge the Ministry of Development Planning and the Ministry of Finance. These two main ministries, if you artificially try to separate them when you are trying to find a lasting solution to the current crisis as we are getting towards the economic crisis is not advisable. We need to have one man like Bwalya controlling both the planning part because actually, at the planning part is where we are likely to generate fiscal deficit because you come up with plans which are at no semblance with the resource envelope. I am quite excited that Bwalya has been appointed as Finance Minister. It brings some kind of fresh air looking at what he has stood for.”
Professor Saasa urged the president to ensure cohesive policy announcement to avoid confusing market players.
“So essentially what I am saying is the success of the Minister of Finance is dependent on the support that he gets from the presidency, he gets from his colleagues in cabinet but also he is given the opportunity to actually guide the nation when it comes to economic policy and he should be making those policies. Even if he wants to be making those policies on-behalf of the President, make him make it on behalf of the President and not the presidential spokesperson because we are likely to have a double vision where when you listen to one person from statehouse, purporting to represent the President, the message is different from the issues and how it is interpreted by the Ministry of Finance. Immediately you do that then you are confusing industry and the market, both local and international markets, and you start getting surprised when you have failed to manage yourself in a cohesive and a predictable manner,” he explained.
The Professor noted the need for increased policy consistency in the mining sector as the sector is currently stressed.
“My biggest problem is on the mining tax regime, yes we need to get money, yes we need to form our tax laws but let us make sure not to do this at a level where we ‘kill the goose that lays the golden egg’ as it is said. The mines right now are very stressed, they are very nervous regarding the stability of the fiscal regime, the policy regime and as a result, am aware that many of the major mining houses are holding on to their already approved expansions.We need to expand mining development, the policy inconsistencies in the last 14 years made major changes about 9 times in the fiscals within the mining sector, that can never be the way to go. If we look at resource nationalism, there is so much pressure that no ‘we want our mines, we want our minerals’ but at the end of the day we need money, we need finance. If you keep on fidgeting with the fiscal regime, with the tax regime, you are likely to kill a very strategic sector that needs to be taken care of,” he stated.
He further called for special focus on debt management and the growth of the agriculture sector as a source of foreign exchange.
“Now the focus should be on how we tame the growing debt. At the moment we are above US$10 billion external debt , domestic debt we are really talking about something over US$5 billion. So you are talking about a really big challenge. The contraction has to be reviewed, how much we contract, where we contract and under which conditions we contract debt. The Chinese definitely will still continue to play along but I see need to re-orient our appetite especially with respect to borrowing for infrastructure development. I know Bwalya will bring some level of confidence that will bring us back to discussions with the IMF because that program is so strategic for our recovery as a country,” said Prof Saasa.