Steps taken to fix economy promising so far
Published On August 30, 2021 » 1051 Views» By Times Reporter » Opinion
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THE vibes coming from Plot One in the first few days of the United Party for National Development (UPND) being in office sound positive.
The direction of the vote two weeks ago was driven by the battering the Zambian economy had taken, a situation which was not helped by the default on interest payment on the Eurobond the country has thrown itself into.
The Eurobond was not the only loan Zambia was defaulting on as then Finance Minister Bwalya Ng’andu had said servicing the Eurobond would have elicited complaints from other debtors also claiming their money.
So with the UPND coming into office, everyone will have eyes fixed on the economy and especially the prices of commodities on the shelves.
Anything President Hakainde Hichilema says is something the critical mind both locally and across the borders is paying deep attention to.
Of course the analysis would be strongly tilted towards economic reforms that should make the lives on the millions of Zambian better.
And so far, a few steps have been taken and the promise from President Hichilema is giving the citizens, the international community and debtors what they would like to see and hear from a country whose economy is on its reeling.
A large chunk of Zambia’s earning has been going into foreign debt servicing and the capital flight has not helped the Kwacha’s performance against major foreign convertible currencies.
But in business, perception is everything.
Investors plough their monies into economies purely based on perception and sometimes a track record helps in decision making about investment.
One of the first things expected is to increase Zambia earning especially from the mining companies, most of whom enjoy some tax holidays while others are not.
There has been a promise to review the tax regime to make a win-win situation for both the country’s economy as well as for the mining companies, some of whom feel they are overtaxed.
Mines would have to increase output in order to increase government tax earning but that should not see them stop paying taxes as minerals in Zambia are meant to benefit the Zambians more than anyone else.
The decision to name the Finance Minister first in his Cabinet shows how much attention the economy would take in the UPND’s reign.
Fiscal expenditure and especially discipline is another area of grave concern and it has been good to hear measures to cut expenditure with first class and business class flying would be brought to a minimum.
It is common knowledge the reserves took a big knock over the years and it was no surprise there was a debt default but assurances from the president like “even with this empty treasury, we expect to drive this budget to send a message to the people of Zambia that there is a new way of doing business” is pleasing.
It is such vibes that improve investor and donor perception and get them back to pouring their money in an economy which would in turn ease pressure on Kwacha fight against other currencies.

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