Zambia’s main opposition UPND leader Hakainde Hichilema has taken a more advisory approach to his rival, President Edgar Lungu by urging him to revert back to the Zambia plus economic program that was launched by former Finance Minister, Felix Mutati.
Concerns have been raised on the government fiscal management under the new Finance Minister, Magerate Mwanakatwe and her ability to address concerns by the market on actions the government is taking to stem liquidity and debt concerns.
Hichilema stated that “as a concerned party, the UPND would like to advise the PF Government to consider the following as practical solutions for stopping the fiscal haemorrhage and addressing the economic malaise. Hichilema stated that Lungu should consider the following:
Go back to the Zambia Plus programme and implement it in earnest. At the same time, review the implementation of the plan with the view of developing a new medium-term fiscal framework, which represents a more ambitious fiscal consolidation effort.
Hichilema advised that President Lungu and his PF Government that they should find the political will to genuinely listen to others and learn from them, particularly the intelligentsia, both within the Government and outside it. The arrogant, know-it-all attitude of the decision-makers in the PF Government is hurting the Zambian economy. Technically inept ministers in ministries like Housing and Infrastructure should not be the ones negotiating for loans from China. The PF should find the political will to stop this dysfunction.
Re-commit to the austerity measures that the Minister of Finance announced in June 2018. The PF Government should now go beyond policy pronouncement to actual execution by giving us how each of the measures will be implemented, how much savings will be realised from each of the measures and how the implementation will be monitored. This should include shutting down some of the Government departments with non-essential operations to save money for the core Government operations.
Seriously engage with the private sector to leverage their resources for economic growth. This will require important economic dialogue with the private sector. We propose an Economic Indaba with two main points of discussion, one to concentrate on fiscal policy and the other to deal with monetary policy. We propose two taskforces to be co-chaired by the Government and private sector, accordingly who will then be updating the nation on a regular basis.
Engage with the IMF and China with more seriousness and honesty, based on a firm and inclusive national consultation through the above-proposed indabas. Engaging the IMF should not be only about securing a financial bailout package but also to signal Government’s commitment to good governance, transparency and fiscal prudence as the basis on which economic actors can begin to respond to the Government policy intentions.
Re-engage Cooperating Partners, especially those that have traditionally supported social sectors – Education, Health, poverty alleviation (Social Cash transfer), Water and Sanitation, etc. – for help with resources and technical assistance to implement effective social programmes and a robust safety net, to lessen the impact of the stabilisation measures on the most vulnerable.
Rationalise infrastructure expenditure by being more rigorous and consistent with independent project appraisals, feasibility studies, environmental impact assessment and so on. These should always be done prior to the approval of any public-funded infrastructure project, without exception.
Hichilema further stated that government should halt any further borrowing and engage creditors for possible re-profiling of the current debt.
President Lungu and main opposition leader Hichilema have had a torrid relationship after going through bruising elections which President Lungu has won narrowly in the last two elections, about with an increasing but still low margins.
Their reported off the radar meeting away from third parties has however seemed to have opened some communications line though their support base seem to have retained their deeply held mistrust and rivalry. It remains to be seen how the 2021 elections will pan out.
