Financial Analyst Maambo Hamaundu has said the statement from the President-elect Hakainde Hichilema that he will uphold the rule of law will result in increased investor confidence in the country.
Hamaundu said global and local investors tend to have confidence in a country that upholds the rule of law as it affects economic activities and the business environment.
There has been some concerns that are being raised even during the transition period that some sections of supporters have taken advantage of the victory celebrations to engage in illegal activities which have resulted in some isolated incidences of damages to public and private property.
He told the Zambian Business Times – ZBT in an interview that with investor confidence, chances are that the country will likely go back on the path of economic recovery. The financial analyst stated that the expectations of the people of Zambia is that the country will get back on the path of economic recovery and begin to grow the economy at reasonably good levels.
“From what I heard from the President – elect in his acceptance speech, I think that he has a clear vision of what he needs to do. “One of the things that he mentioned is the aspect of ensuring the rule of law is maintained. If the rule of law is maintained, it will actually result in a lot of investor confidence and with investor confidence, chances are that we are likely to get back on the path of economic recovery because we have been struggling economically.
The expectations of the people is that we should get back on the path of economic recovery and begin to grow the economy at reasonably good levels,” he said. Hamaundu said the country’s debt situation remains on top as one of the biggest challenges the country is facing.
He said the new government should address this matter by engaging the bondholders and other creditors to see how the country can on a structured approach in terms of deferring or renegotiating for better interest rates or extending the repayment period.
“But of course the challenge of our level of debt still remains on top as one of the big challenges, so we expect that the new government will address this matter by engaging the bond holders and the other creditors and see how as a nation we can agree on a structured approach in terms of deferring or renegotiating or getting better interest rates.
“Perhaps even restructuring the repayment period so that we have a bit of relief as a country so that a bit of resource is freed in order to pump it into sectors which will help to spur economic development and with the confidence that most of people have because of the background of the president,” Hamaundu said.
He said the new government must commit to the pronouncements they make as they continue engaging the International Monetary Fund (IMF) for a possible IMF bailout package.
Hamaundu said, “I think the challenges that we had with the previously was that there was a perception that government was not disciplined fiscally and it was not prudent and that the levels of expenditure were actually higher than budgeted for.
He said because of that the IMF was probably seeing lack of commitment to the pronouncements that were made. “So I expect that the government this time around when they make a pronouncement they will commit because that actually entrenches confidence in people.
You probably saw what happened on the market on Monday on the forex market that just upon his victory being announced and giving one speech, the Kwacha did gain strength quite significantly though within a short period of time,” Hamaundu said.
He further stated that he would not be surprised if the Kwacha appreciation continues up until he is sworn in because it shows you how confidence can actually weigh-in in terms of improving the prospects of the country.
Hamaundu however, said beyond confidence, the country needs to ensure that it engages into productive activities because the confidence as much as it is good, it cannot be sustained for a protracted period of time in terms of the benefits that it comes with.
He said he expects the government to put in place serious programmes to work and be committed to delivering on the work.
“We must move away from rhetoric. Of course, there has been this talk where we begin to make political decisions overweighing economic decisions, we need to move to a level where we have a situation where the economy is given priority because the economy is about everyone’s life and therefore I am hoping that it will be given a lot of worth and premium. Politicking must be set aside,” Hamaundu added.
