Political squabbles can reverse economic gains
Published On December 17, 2014 » 1460 Views» By Davies M.M Chanda » Opinion
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ZAMBIA’S high rating as a favourable investment destination is at a critical juncture in view of the current political transition ahead of next month’s presidential election.
With investment in key economic sectors increasing over the past years, it is absolutely necessary to maintain investor confidence at all costs.
Faith in Government’s handling of national affairs, as well as major private institutions, need not be shattered as economic repercussions may be grave.
Investor confidence in the economy can help support the starting of new and expansion of existing businesses.
Gross Domestic Product (GDP) growth, as is common knowledge, does not originate from Government-led initiatives, but from businesses creating new innovations and technological advancement, which in turn grow economies and raise productivity levels.
Re-assurances to the investor community during this transition period should, therefore, be a priority, as this instills confidence in the existing and would-be investors, especially at a time like this when the country is preparing to usher in a new leader after the January 20, 2015 presidential election.
Political happenings cannot escape the eyes of investors, as they seek to put their money where the economy is nurtured in a peaceful environment and guarantees protection of their investment.
Over the past months, assurances have been made by several Cabinet ministers, crowned by Acting President Guy Scott, at various high-level meetings with different representatives of the donor community.
This is a healthy way to go despite the fact that solace can be drawn from past experiences where the country had managed to maintain a positive record of a power hand-over after general elections.
Dr Scott has said that undergoing five Government transitions in a peaceful atmosphere was testimony enough for investors to have confidence in the country.
During a period such as this one, political feuds are a common feature in young democracies, but these happenings should not be a source of concern, as these happenings are avoidable.
What has been happening in some parties, including the ruling Patriotic Front (PF), is a source of concern and leaders in these parties should rise above political interests and guard against any threats to economic gain.
Feuds of this magnitude can cause a scare to investments. What is cardinal is for the parties to address their differences in an amicable way so as not to erode investor confidence. Erosion of investor confidence may have long-term adverse effects.
Although some investors may suspend their spending, for fear of the unknown, they need assurance that their investment is protected by various statutes as indicated by Commerce Trade and Industry Minister Bob Sichinga.
As the minister says, investment agreements are entered into that guarantee protection of their interests even when there is a change of Government. This protection is further derived from the Zambia Development Act of 2006 and, as such, they are well-covered by law.
As the country undergoes a transition, political players, especially those in the ruling party, should pay particular attention to minimising squabbles that may threaten the very future we are trying to build as a nation.
Much as political leaders try to win the forthcoming election, it is worth noting that stability is crucial in securing the investment that has partly been responsible for the reduction in inflation levels, as well as admirable GDP growth rates and job creation.

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