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Why Dr Situmbeko Musokotwane is appropriate appointment for Finance position at this time

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  1. I am receiving just too many questions about the appointment of Dr. Situmbeko Musokotwane as Finance Minister from local journalists and other interested parties. They want my views. This has prompted me to eat into my Facebook break just for this post.
  2. Some young professionals have raised concerns about his appointment as they seek for new younger brains to take up the mantle. The argument is that the global economy has swiftly changed into a complicated ‘Space economy’ that only younger minds can competently handle. This is well understood and valid.
  3. However, the nature of the Zambian economy as it stands requires someone who understands how it functions. On his appointment, Dr. Musokotwane told his technocrats at the Ministry that the economy is not as he left it. The economy has been mismanaged. Dr. Musokotwane possesses the right acumen for the task at hand. He has both the experience, and capacity to negotiate through various economic landmines we find ourselves in: low economic growth, high public debt, mismanaged resources, high unemployment, low private sector investment, high interest and inflation rates, unstable exchange rate, low international reserves (before factoring in the IMF Special Drawing Rights). With the support of competent technocrats who potentially include young brains (hope he brings them on board), these economic challenges should be history within 36 months (my expectation).
  4. Musokotwane is not a talking machine. He believes in practical action. He is private sector-oriented leader. As an example, he is credited for the Maltings Plant installed in one of the Processing Zones. The journey started in 2009 when he was Minister of Finance. I led a delegation of Zambian Breweries Directors to negotiate for low excise duty (promising him those high sales volumes would compensate for any potential losses in revenues). He assigned his then Chief Policy Analyst – Budget, Felix Nkulunkusa, to work with me to find a solution (I pray Felix Nkulukusa, who was unceremoniously retired as Permanent Secretary Budget in 2015, will play a key role in the new administration).
    After going through various elasticities, at times Dr. Musokotwane sitting in the Ministry of Finance Boardroom in person, he agreed to reduce excise duty on beer from 60 percent to 40 percent with four conditions: First, guarantee none loss of revenue to the treasury. Second, Zambian Breweries to source bottles from Kapiri Glass for its soft drink beverages (we could have met this condition if supplier was in a position to guarantee required quantities). Third, Zambian Breweries to source barley, a key ingredient in beer manufacturing, from the local farmers. He asked that we commission local farmers for total supply of barley within 24 months. Fourth, Zambian Breweries to commit to malting barley, at the time imported from Zimbabwe and Europe, by installing a maltings plant. His desire was that we should create jobs. Indeed, in 2017, the maltings plant was commissioned by President Lungu. The takeaway from this was that Dr. Musokotwane could easily have asked for some hefty kickback to grant concessions on excise duty. Instead, he negotiated for something that would benefit the country.
  5. In short, I find Dr. Musokotwane to be an open-mind and tactful individual who should fully succeed as Minister of Finance given the task at hand. He has managed an IMF programme before and should easily negotiate for one just now. I talked to him three weeks before elections ahead of my meeting with offshore investors. On the IMF programme, he told me, ‘We will get it within three months of coming to power’. He is a known individual internationally. I had a chat with a few investors last night following his appointment and it was clear they knew what he stood for. They trust him. That alone is a leverage we should translate into meaningful investment and economic growth. I wish him well.

Author Chibamba Kanyama is an economist

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