PARTY for National Unity and Progress (PNUP) leader Highvie Hamududu says the effects of UPND policies will only be felt mid 2022, after which job creation will begin to pick up.
In an interview, Monday, Hamududu likened an economy to a sick person who could not be healed immediately after taking medication.
“No, it’s too early to judge that. Economists don’t work like that, there is a timeline. These colleagues must put the right policies in place now, the effect of their policies will only be felt mid-year, next year. Implementation of policies through the budget will begin on the first of January, 2022. That’s when the policies to reboot the economy will be much clearer. If the policies will be correct, growth-oriented, jobs will begin to pick up mid-year as the industry responds to policies and puts mechanisms to respond to the policies. That’s how economies work,” he said.
“Economy is like a human body, you can’t be healed immediately you take medicine, it takes time for the body to accept the medicine and have an effect on healing. There is a time lag between the time you are given the medicine to the time the medicine will have an effect, if the medicine is the correct one. So just like the economy, if the policies are correct you will not have the results now, there is a time lag. Give it for example six months for things to start picking up, an economy does not grow through abracadabra.”
The opposition leader agreed with government that jobs could only be created once the economy stabilised and begun to grow.
“Economic development requires sequencing. First of all, jobs will take a little time, that’s a fact. The country must attain macroeconomic stability, that’s how it works. The economy first must be stabilized and begin to grow. Jobs are a production of growth. So the President was right. He might have used strong language, it was not necessary, but he was right. Jobs are a creation of growth, the main logical assignment of this government is to attain macroeconomic stability. We need to reduce the cost of production. For example, the price of fertilizer won’t come down until the exchange rate comes down because we import fertilizer, including inputs for manufacturing fertilizer. Therefore, this requires a favorable exchange rate and that can only happen at this time with some extra support and that’s why IMF becomes necessary because of the urgency of the matter to attain macroeconomic stability,” he said.
Hamududu said an IMF bailout package was necessary as the country tries to attain macroeconomic stability.
“You can see that we need to stabilize the currency, begin to reduce the budget deficit because that is what is causing all this instability. Begin to address issues of the debt so that we can have enough forex in the country. And that is why we need the IMF at this stage. The IMF is actually to fill the gap because forex won’t be earned overnight. This equilibrium we have between the supply and demand for forex needs an intervention and that’s why the IMF comes in as a stabilizer,” said Hamududu.
“IMF becomes necessary because of the urgency of the matter to attain macroeconomic stability. Even if we reboot the mining sector by putting in the right fiscal regime, an increase in production won’t happen overnight. There is always a time between the right policy and the results. We are into the rainy season now and mining slows down because of the rain. Most of these mines are open pits and when it rains, it will take time to pick up production. So we need that fiscal regime and even if there are high prices for copper, the response will only come after some months because people have to rearrange production. So in the meantime, we need this IMF to give us quicker stabilization because people need recovery as quickly as possible.”