…He Can’t Manage A Turn-Around In 1 Year
Here is what is wrong with his economic team
President Hakainde Hichilema today met leaders of banks and financial institutions.
He should not blame anyone.
Banks have no business lending to the private sector and SMEs if they can reap super profits from a government relying on excessive borrowings from the market.
The banks are reaping super profits by sinking their money in government and Treasury bonds.
He has a Minister of Finance and Bank of Zambia Governor that work like they are residents or representatives of the International Monetary Fund (IMF).
The duo have restricted money supply by significantly raised statutory reserve ratio and Monetary Policy Rate policies that have made loans and overdrafts extremely expensive.
All these stiff measures have been done to control inflation.
Yet their attempts to bring the inflation rate to a single digit number has consistently failed, 3 years in a roll.
Musokotwane has refused to dismantle the local debt in excess of K235billion ($8.3billion).
This was going to be fuel for growth amd heightened economic activities to the local economy.
They lied that the debt to suppliers, contractors and providers of goods and service was “air”.
They hired the best auditors in town who have confirmed the debt to be true…yet they won’t pay!
Musokotwane has focused on foreign debt instead, a reschedule exercise they have bungled immeasurably.
Then there is a volatile exchange rate market that has seen the Kwacha become one of the worst currencies in the world.
Musokotwane will not implement the Bank of Zambia Export Proceeds Tracking Mechanism that compelled all importers especially the mines who account for 70% of our exports, to ensure that export proceeds reported to a local account.
This would have wiped out the current persistent shortages of foreign currency on the market.
He would rather believe the mines that are threatening legal action as the secretive mining agreements would be breached.
Musokotwane abolished the non-deductible mineral royalty tax that was earning the country $1billion a year since 2019.
He has further provided more tax and other incentives to the mine houses.
He has continued to resort to archaic methods like suddenly changing the currency to new notes.
Many people believed President Hichilema to be an economic manager as corporate leader, farmer and economist.
He has disappointed farmers, economists and more businesses have closed under him than any other President before him.
According to the Jesuit Centre for Theological Reflection (JCTR), the Basic Needs and Nutrition Basket (BNB) for February 2025 in Zambia stands at ZMW 11,599.12.
Whatever the rhetoric, this economy has tanked! And President Hichilema only has one national budget before elections.
It’s not possible that he can manage a turn-around.
Emmanuel Mwamba, 6th March 2025