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Local economist calls for homegrown solutions for Zambia’s woes

Filed under: Business,Latest News,Special Comments |
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Former Deputy Minister of Finance and academic, Dr. Mbita Chitala has differed with the proposals from other fellow economists.

They propose that Zambia has to go back to an International Monetary Fund program and abandons all borrowing until the economy improves.

However, Dr. Chitala says the IMF program is neo-liberal in nature and is likely to be harmful to the economy, to the security of state assets, and may lead to numerous job losses as witnessed in the past IMF programs.

Former Ministers of Finance, Situmbeko Musokotwane, Ngandu Magande, Felix Mutati, and former Minister of Commerce and Trade, Dipak Patel and former Bank of Zambia Governor, Caleb Fundanga have signed an open letter to President Edgar Lungu and Minister of Finance Ngandu.

Magande noted that it was important for the country to clinch the IMF deal. However, Dr. Mbita proposed that Zambia still had an opportunity to go back to bilateral and international capital markets to contract long-term debt.

Dr. Chitala Wrote; Running the risk of offending some of you may I say this; the prescription suggested by those colleagues that our government adopts a humiliating IMF programme when we know that such a scheme would bring untold suffering, instability and worsen the poverty in our country is not smart at all.

“The neoliberal Washington Consensus is dead.

Such a humiliating program would mean surrendering our governance to Washington technocrats, reducing public investment in health and education, stopping deficit financing to tackle any recession,” he said.

He added that the move would place the trade unions at war with the state as it would reduce the wage bill, freeze wages and salaries, eliminate subsidies to our small farmers FISP, petroleum, electricity and education.

“Which will tend to increase poverty and cost of living, abandon most capital expenditure such as construction of roads, schools, clinics and public goods such as Kafue Lower Power etc, further selling off to foreigners of our strategic companies and institutions such as NAPSA and ZESCO.

“That will result in more unemployment and underemployment, reducing recurrent budget spending on goods and services that will mean weakening the state and making it vulnerable, devaluation of the Kwacha and increasing costs in our economy,” he said.

“All these negative social outcomes will lead to people rage as Africa and other developing countries witness in the 80 and 90s leading into state instability and downfall of governments.

“There is a solution to all this. We need to have our own developmental state as the Eastern Asian dragons and China have demonstrated,” he added.

He went on to explain. “We can still go to International capital markets or bilateral partners to contract long term debt. There is nothing wrong with this.

“More importantly we should have our own middle class on which our development will be anchored. We must have our own cobalt and copper mines owned by Zambians.

“We must rejuvenate our manufacturing and agro business. We must stop capital flight and introduce smart capital controls. We must create employment creating programmes such as the national service, small enterprise promotion, local banks etc.”

He maintained that the cuntry need t promote home grown solutions.

“We have largely not been successful so far because we failed to be patriotic, never provided incentives for our people to save, invest and innovate and so we are poor because our leaders so far have made this choice,” he said.

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