Finance Minister Dr Bwalya Ng’andu has implored citizens who have issues regarding Zambia’s failing economy to engage government leaders in order to find amicable solutions rather than vent their anger in a frustrated manner.
And Dr Ng’andu says the growth of Zambia’s economy has been sluggish due to adverse weather conditions and load shedding, which has strained the Treasury.
Speaking when he addressed delegates at the ongoing Economics Association of Zambia (EAZ) 2019 National Economic Summit in Livingstone, Thursday, Dr Ng’andu stressed that there was no reason why people should always be in “shouting mode” when they could easily meet and talk.
“I am aware that these challenges are impacting on a range of countries on the continent. With the diversity of participants at this meeting, I am confident that the different experiences represented here will give us a diversity of solutions that can be replicated in other jurisdictions. Let me implore the summit participants to bring all issues that require to be addressed to the attention of government leaders. I know, sometimes, we tend to shout at each other over these challenges, maybe we should learn to talk to each other rather than shout at each other! There is no reason why we should be in the shouting mode always. We all have the same challenges; we all have the same desires to have the right solutions to challenges that we face. It is only when we have candid discussions that we can surmount the challenges before us. We must be resolute in order to succeed,” Dr Ng’andu said.
He said he was glad that the maiden EAZ Summit was being held at a time when the country’s economy was facing headwinds.
“[Zambia’s economic] growth has been sluggish, mainly at the back of adverse weather conditions that have had a dampening effect on the agricultural and energy sectors. I think you have heard the challenge we have with load shedding; this hasn’t worked well for us. We need to diversify our sources of energy, relying too much on hydro-generation is not helping us. I think I am right to say that drought will be more frequent as we go forward and if that were to be the case, we need to be ready by diversifying of our energy sources. As a result of these climate challenges, we have a drop in growth projection, initially, the growth projection for this year was supposed to grow by four per cent. But because of these challenges, our economy has only grown by 2.5 per cent. Liquidity conditions have been tight, adversely affecting businesses around the country and constraining economic activity,” Dr Ng’andu said.
“We have also encountered declining fiscal space for developmental projects as most of the resources have been utilized on debt service and other obligations that have a first call on the Treasury. Developments in the international economy have also not been supportive. Global growth remains sluggish while risks to the global economy are on the upside, adversely affecting commodity prices, including copper prices. These factors have culminated in negative market sentiments that in the second quarter of the year impacted negatively on the exchange rate of the kwacha against major convertible currencies.”
Dr Ng’andu noted that there was need to take appropriate measures to mitigate and reduce the risks associated with climate change to kick-start growth.
“We must also ensure that liquidity is improved. Reinvigorating the diversification drive is another area of priority. We have also announced a number of measures aimed at slowing down the pace of debt accumulation, such as postponement and cancellation of debt, subject to discussions with our creditors. The importance of front-loading fiscal adjustment, including the expansion of the revenue base is another important area. Addressing the challenge of domestic arrears, and enhancing external buffers, are other areas for which government has devised appropriate policy responses. The government is also aware of the importance of undertaking policy, legal and structural reforms in the energy sector, and our procurement systems. This is in order to increase investments in energy production, which has proven to be a constraint to growth in the recent past,” said Dr Ng’andu.