We’ve done our part on the debt – Musokotwane

The cost of items is high but please remember the cost of most items
were already high when this government got in office, says finance minister Situmbeko Musokotwane.

Dr Musokotwane says the government is waiting upon the creditors’ verdicts of its plea for debt relief.

“We have done our part on whatever is needed that we agreed to deliver this debt service.

“What we are waiting for now are those who promised us that if we did this, they would deliver debt restructuring.

‘That is what we are waiting for. As for us, we have done our part, totally and on time,” Dr Musokotwane said during the town hall forum on the 2022 economic performance and 2023 budget execution yesterday.

He said the government was doing well as far it was concerned and that despite the high prices of goods the rate of increase has slowed down.

“I know the talk around is that cost of living is going up. Cost of things is up. Yes I do agree. The cost of items is high but please remember this, the cost of most items were already high when this government got in office.

” They were already high and the time, in spite of being high, they were continuing to rise even faster.

“This is what higher inflation meant, the higher inflation that we found at 23 per cent.

” The achievement that is there is that, yes there was high prices that we found but the change now is that the increase has slowed down from
15.1 per cent at the beginning of 2022 now to just under 10 per cent and going forward of course the objective is to lower the rate of
inflation even further. Meaning the speed at which prices are increasing,” he said.

Dr Musokotwane said the government was working to lower the rate of increase of prices
even further.

“We need lower those further from 9.9 per cent to the target set by the Bank of Zambia (BOZ) to between six and eight per cent.

I also need to say something here. The question that many people ask themselves is
inflation is coming down but the cost of living is still high, so how do we get to more affordable cost of living? The answer to that, contrary to many people’s expectations because people are always saying ‘prices must come down, prices have come down’,” he explained.

“Yes some prices will come down especially those which are related to the exchange rate because if the kwacha stabilises or becomes stronger, imported items of course they will come down but for the majority of the women, if you say prices of chicken must come down
basically you are telling the farmer ‘go and lower your prices of chickens’. You are telling the farmer ‘lower the prices of your
cabbage’. You are telling the manufacture ‘lower the price of your item’.

“It is certain fewer cases will happen but as a general
that will not happen because you tell the farmers lower your prices, you are basically saying to them ‘close shop’. How do they survive? That is not the way in which the cost of living is going to improve for most of us,” he said.

Dr Musokotwane said empowering the majority with income was what would improve the cost of living.

“The way the improvement will come is through improved incomes because if the cost of the items is like and is growing slowly but
your income levels are rising faster, your salaries or something like that are rising faster that of course means your affordability to
purchase these items is going to improve. So the expectation should be not be about general decline in the prices, then you make the situation worse by companies closing.

“Rather the improvement will come about through salaries, profits increasing. That of course takes a bit of time but it will happen because for the government workers as
long as we always give a salary increment that is slightly higher than inflation, it means the affordability of good is going to improve.

“Of course our desire is increase more and more but to do so this brings us to the issue of growth.

“We need to make sure that we encourage companies to produce more because salaries come from companies. We need to have new investments because even for that person, the individual who has no job, even a small increase of K5 for any item for them it becomes very hard, they have no money.

“They have no income but if that individual gets into a regular income, you are already improving their ability to afford items,” he said.

Dr Musokotwane said the government’s thrust was to ensure there was ease of doing business, reducing corruption and having licences issued on time.

“Creating incentives in the mining sector, creating incentives in the agriculture sector. creating incentives in the manufacturing sector so that that person out there who has no income now is going to have an
income.

“The issue therefore of saying how the cost of living is going to be
affordable, it comes about by improvement in salaries,” Dr Musokotwane said.

He said Zambia was still under debt because it was still waiting upon creditors to give its position on debt
restructuring.

“We are not servicing what we owe but it cannot be like that forever and ever. The people that we have borrowed money from expect us to pay,” he said.

Dr Musokotwane said the government had promised to tackle the problem by speaking to creditors on how the debt can be restructured.
“I want to say that as Zambia we have done our part. We have done our part on whatever is needed that we agreed to deliver this debt
service. What we are waiting for now are those who promised us that if we did this, they would deliver debt restructuring. That is what we are waiting for.

“As for us, we have done our part, totally and on time. And therefore, of course, it is our plea once again especially to the official creditors. We have said over and over again, we have delivered…can we also get debt relief one way or another so that we have a chance of
attracting serious investment into our country and then the economy will grow. So that we become part of the global economic scene
answering to the issues of us contributing to this world economy. So we are waiting to hear what progress they are making to deliver the debt relief that it is very important and I hope it happens soon rather than later,” he said.

Dr Musokotwane projected the economic growth in 2023 to remain at around four per cent.
He projected inflation to swing between six and eight percentage points.

The Mast