It’s time for Musokotwane to GO!
Editorial
First and foremost, we want to state here that consideration for the good health of the Zambian economy should supersede our loyalty to individuals, friends and relatives for the benefit of the majority of Zambians. This is why we have consistently called on merit based decision making.
It is from the above principle that an independent and unbiased analysis of the current performance of the Zambian economy is revealing that if nothing is done urgently, Zambia’s economy risk crash landing. The consequences of crash landing are more dire than if something is done now to stop the bleeding.
We understand that President Hakainde Hichilema (HH) has so much trust and confidence in Dr. Situmbeko Musokotwane, and therefore may be hesitant to face up to the harsh reality that Zambia’s economic wound is not healing but festering, deteriorating into a cesspool, getting worse and threatening to spread and infect to the whole body.
The rate at which the Kwacha is depreciating is scary even to those who have dollar income, what more those with Kwacha income?. The rate at which prices are being hiked, with fuel now at K34 per liter for Petrol and the domino effect to follow calls for immediate action.
Should we all act like zombies and pretend that the Finance Minister and his team are not being proactive by announcing any immediate policy measures to arrest this dangerous downward economic trend? Should we all act like we can’t see that there are no serious medium term plans which are giving hope for reversing the downward economic spiral?
It is therefore our considered view that it is our moral duty as Zambian Business Times – ZBT working together with our network of experts and experienced hands is to call a spade a spade and not a big spoon. To help the country face up to some of the suboptimal business and financial decisions that need review and correction.
We should never sacrifice the majority economic interests just to save the reputation of one or a few individuals. Simply put, Dr. Musokotwane and his team performance results show that they have failed to steer the economy out of the doldrums.
They clearly do not seem to have a compass, or a solid plan nor have they announced any sound policies that can give confidence to the markets and citizens that things are going to get any better. Adopting a do nothing strategy at this point when key economic variables are fast deteriorating is a big risk of progressing into a total economic melt down.
Below are some of the policy and economic decisions that Dr. Musokotwane has driven which have totally collapsed in the mind of most right thinking and independent Zambians:
1. The Finance Minister proclaimed that Zambia would increase copper production to 3 million tons from about 800k tons from 2021 to 2031. The last two years has instead delivered even lower than 800k annual copper production
2. Dr. Musokotwane announced a hefty tax incentive valued at about $1 billion for the first five years to copper mining companies in exchange for increased investment to counter the loss of tax revenue. Instead, all Zambia have witnessed is a massive drop in mining tax collections. He gave away about $1 billion in tax incentives without getting signed and legally binding investments commitments.
3. The Finance Minister sold the getting of the IMF extended credit – ECF facility as a silver bullet to Zambia economic woes against the historical lessons and our warnings. Today, Zambia is on an IMF program but the current rate of Kwacha depreciation is threatening the sustainability of even dollar income earners and destroying the purchasing power of ordinary Zambians.
4. Slow pace of resolution and recapitalization of the Mopani and KCM even by ZCCM-IH, prolonged decision making in getting of new investors and their resuming of production has further dampened the economy of the Copperbelt, Zambia’s mining and industrial hub and heart of the Zambian economy.
5. Discontinued the stockpile of gold reserves, seen as a viable alternative and factor within the Zambian economic control as opposed to US dollar reserves. Kasenseli gold mine remains closed today for two and a half years now. Zambia is back to having no alternative or plan B to US dollar reserves.
6. No money in circulation. The rate at which the statutory reserve ratio has been raised in the last two to three months has hallmarks of desperate measures to stem inflation and dropping tax revenues, at the expense of economic growth and more credit availability to the private sector. Payments to local suppliers still remain a big challenge.
7. As for debt restructuring, well it was announced to be at 98% complete in December 2023, but like what they say, markets don’t seem to share the same sentiment as macro economic indicators like the exchange rate are telling a different story. The final deal sign off is still awaited.
We could possibly put out even 20 additional key policy directives that the ministry of finance has so far failed to deliver. However, even without belabouring the point, what is clear is that the current leadership of Dr. Situmbeko Musokotwane and his team has lost the public confidence and needs to be re-orgamised before we risk the consequences of a crashed economy.
The UPND as a ruling party has alternative and experienced hands that they could bring in with fresh ideas and increase the pace of execution to avoid the impending crash if nothing is done.
Something has to change as letting this trajectory continue will only result in unbearable socio-economic pain and suffering for the majority of Zambia’s humble citizens. It is for this reason that we have stated that it’s perhaps time for Dr. Musokotwane to GO!