Numbers don’t lie: A challenge to the Economics Association of Zambia

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Due to the continue rosy picture being painted by PF and EAZ we would like them to explain the following southward statistics under the PF reign. Despite having access to money of at a rate of at least US$2billion per annum, through loans and grants, PF still cant show us the jobs, business growth and household income.

Summary MMD vs. PF
a. Unemployment under PF has increased from 9.9% to 7.79% despite increasing in GDP and GDP per capita.
b. Under PF, GDP growth has reduced by 40%
c. Prices have increased by 70% on average, meaning if under MMD you could save half of your salary, under PF you can only save less than a quarter.
d. The Kwacha has weakened by 100% under PF, meaning if you could but two cars under MMD, now you can only buy one.
e. Debt services which PF keep denying is a problem has increased by 7 times. Remember Peter wept just after denying Jesus three times.
f. Concessional debts have reduced due to PF fear of stringent rules and accountability. The IMF credit facility usage has also reduced under PF.
g. Relative increase in debt service against relative reduction in tax revenues only means one thing, debt distress. We now have underfunded health and education sectors and a high risk of tax increments.


2011 (MMD – RB)

a. Unemployment, total (% of total labor force) (modeled ILO estimate): 9.99%
b. GDP (current US$): US$ 23.5billion
c. GDP growth (annual %): 5.56%
d. GDP per capita (current US$): 1,644.62
e. Consumer price index (2010 = 100): 106.43
f. Exchange rate (Close): K4.86 per US$
g. Current account balance (% of GDP): 4.66%
h. Central government debt, total (% of GDP): 18.05%
i. Debt service on external debt, public and publicly guaranteed (PPG) (TDS, current US$): US$69million
j. Concessional debt (% of total external debt): 32.1%
k. Tax revenue (% of GDP): 17.12%
l. General government final consumption expenditure (% of GDP): 10.25%


In 2014 (PF – MCS)
a. Unemployment, total (% of total labor force) (modeled ILO estimate): 7.79% (for 2017)
b. GDP (current US$): US$ 27.2billion
c. GDP growth (annual %): 4.70%
d. GDP per capita (current US$): 1,738.09
e. Consumer price index (2010 = 100): 130.82
f. Exchange rate (Close): K6.39 per US$
g. Current account balance (% of GDP, negative indicate more imports than exports): – 1.43%
h. Central government debt, total (% of GDP): 44.40%
i. Debt service on external debt, public and publicly guaranteed (PPG) (TDS, current US$): US$173million
j. Concessional debt (% of total external debt): 26.07%
k. Tax revenue (% of GDP): 16.97%
l. General government final consumption expenditure (% of GDP): 14.52%

In 2018 (PF – ECL) As most 2018 stats are not available the latest have been used.
a. GDP (current US$): US$ 25.9billion (for 2017)
b. GDP growth (annual %): 3.40% (for 2017)
c. GDP per capita (current US$): 1,513.28 (for 2017)
d. Consumer price index (2010 = 100): 180.95 (for 2017)
e. Exchange rate (Close): K per 11.93US$
f. Current account balance (% of GDP): – 3.89% (for 2017)
g. Central government debt, total (% of GDP): 49.40% (for 2015)
h. Debt service on external debt, public and publicly guaranteed (PPG) (TDS, current US$): US$498million (for 2017)
i. Concessional debt (% of total external debt): 24.22%
j. Tax revenue (% of GDP): 14.94% (for 2016)
k. General government final consumption expenditure (% of GDP): 16.07% [for 2016]

Key notes
– Comparing the CPI for 2017 to that of 2011, the prices of goods and services have increased by an average of 70%. If we consider imported goods alone the increase in more than 100%.
– Exposure to debt distress was also increased under PF due to the reduced usage of concessional debt and appetite for expensive Eurobonds.
– It took only three years for PF to double the debt stock in terms of percentage of GDP, which has left a question begging – Why all this money injected in the economy has not translated to the expected growth?
– Despite increase in GDP per capital, employment has remained stagnant which makes a case for increase in income inequality
– Despite increase in copper production, imports have outweighed exports as indicated by the current account stats, a sign of the underperforming NTEs, especially local manufacturing.
– Whilst tax revenue has been increasing the government continued to increase consumption expenditure.

In a nutshell we have an economy whose external debts are increasing, tax revenue reducing, cost of living increasing, cost of importing increasing and government consumption spending increasing. A competent government could have at least put half of these variables under control. If PF want a solution, they should stop their wayward behavior and start by first accepting the problem.

Figures are based on World Bank official statistics

Richard W

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Start: 2019-07-01 End: 2019-07-31