FINANCE Minister Bwalya Ng’andu says the coronavirus pandemic is as deadly to human life as it is on the economy and if no proper plan is drawn to save businesses, the economy can completely shut down.
Speaking when he addressed journalists at a press briefing held at the Ministry of Health offices today, Dr Ng’andu observed that almost all sectors of the economy in Zambia were contracting due to coronavirus.
“His Excellency the President touched on a number of issues yesterday and what comes out of his speech is that while the pandemic is primarily a health problem, but there is also a huge economic challenge for all of us. The biggest impact is that our economy is contracting because of this pandemic. Almost every sector of this economy is in a state of contraction; some more than others. But if you look at the tourism industry or the hospitality industry in general, you would find that there is not very economic activity taking place there. So that is one of the industries that is in danger. Similarly the transport sector also has been affected, in particular the air transport sector. If you look at all these sectors, you will find that all of them are in a state of contraction,” Dr Ng’andu said.
“Now the effect of that contraction directly to government means that the revenue that’s coming through to government is equally affected, whether its VAT that you are looking at, whether it’s customs, whether its mineral tax that you are looking at, there seems to be massive reduction that’s coming from these sectors. Now, if this continues, there are two things that are going to happen; one is that certain business will be destroyed completely beyond repair. So it begs the question; what is our response? Do we just allow businesses to fall apart or do we do something? Ideally, the position that we should be taking is that during this very difficult time, we should take measures that will help business to continue running so that when the fight is over, businesses will continue. The second problem obviously relates to government’s revenue and its ability to perform its functions as a government.”
Dr Ng’andu further admitted that government would not be able to perform the duty for which it was elected for if there was a massive reduction in every area of revenue.
“The President did ask a number of key questions yesterday; these were not rhetoric questions, these were practical questions that require practical answers as we face the challenge of this moment. The President asked yesterday, where will we find money to pay retirees? What about the Farm Input Support Programme (FISP) which is so important for our ability to feed ourselves, what happens to it if the reduction in revenue continues? The President also asks, what happens to Social Cash Transfer? And here we are talking about, what do we do about the most vulnerable members of our society. If our capacity to collect revenue that can help them survive, what then happens to them? The President asked many other questions and the reason why he’s asking these questions is to make us begin to think moderately and more seriously about finding ways in which we can live with this disease. We don’t know when it will go away; if it was an illness that could only last two weeks, it is possible for us to dig in and bury ourselves in our bankers and wait for the two weeks to be over, when the two weeks is over, we all come out. But we don’t know; this could last until the end of the year,” Dr Ng’andu said.
“What happens during this period? That is the key question that President was asking yesterday. Now, we all know that one of the major characteristics that the Almighty God has given is the ability to adapt, so what this is saying to us is that now is the time for us to reflect and think on how we can carry out certain businesses that will sustain the economy while we are going through this period in a safe way. How can we do it so that we don’t create an environment in which the disease multiplies at the rate we don’t want it to multiply but we do it safely?”
Dr Ng’andu encouraged players in the economic sector to become create enough and initiate non-physical interactive ways of going about their activities to continue running the economy without exposing themselves to coronavirus.
And Dr Ng’andu emphasized the need for all business operators to seek the guidance of the Ministry of Health on what measures they should put in place before opening up their businesses.
“If you look at the financial services sector, what we are seeing is a gradual but very consistent migration of people onto the digital platform. A lot of the financial transactions are now taking place on the internet, on the mobile phone. That is an example of that transition that we are making. So his Excellency the President is asking us to do that for each and every sector, let us reexamine whether it’s possible for us to reorganise the way we work but allow it to continue in a safe way. The President was very emphatic about the fact that we will be guided in this process by our friends from the Ministry of Health. The Ministry of Health in fact, will certify that the measures that you have put in place are safe for you to carry out business; whether it’s a saloon or restaurant, what is important is that as we open that business, we don’t do it in a reckless way. We should do it in well-organised manner with direct guidance from the Ministry of Health,” said Dr, Ng’andu.
“This disease is not only capable of ambushing human beings, but it is capable of ambushing the entire economy and our response to the situation will determine whether or not we emerge with the capacity to continue running the economy. So even the measures that we’ve been announcing relating to waiver on tax penalties and interests, all these assume that business continue to run because if business is not running then who are you going to give this support to? But what is important is that as business is running, full attention is paid to the fact that life is of primary importance. Safety is key, that is why the President has asked the Ministry of Health to give us guidance. So I would like to urge my colleagues in the industry, the Chamber of Commerce, the Chamber of Mines and others to begin to think seriously on how we can reorganise work in different sectors so that we can help to sustain and ensure that businesses in the various sectors are able to survive this attack that we are currently experiencing.”