ZAMBIA, just like other members of the global community, will need to prepare adequately for the economic downturn that is likely to spiral from the coronavirus disease (COVID-19) that is raging across the globe.
Firstly, it is important to examine the immediate negative effects that have choked the economic outlay of the country thus far.
Undoubtedly, inflation rate will during this period be racing upwards from the already frightening level of 13.9 percent recorded in February and 12.5 percent in January this year.
The exchange rate is not impressive either at almost K17-$1 while commercial bank lending rates are unreachable for the average private sector.
Zambians ought to look at the current economic fundamentals and make a forecast bearing in mind that the COVID-19 is still raging.
The second important point to examine is the effect of lockdown implemented by many countries, including economic giants in the West and Africa’s economic nerve centre South Africa.
This means, therefore, that the level of imports and exports will greatly be affected and so will be the global economy in its entirety.
In fact, it follows that when the global economy is shrinking, the domestic economy also takes the same pattern.
As the World Bank has suggested, bilateral creditors of the poor countries should offer debt relief to allow nations concentrate their resources on fighting the COVID-19 pandemic.
Thus World Bank Group President, David Malpass, is spot on to urge the Group of Twenty (G20) to allow the countries suspend all repayments of official bilateral credit until the Bretton Woods institutions make a full assessment of their reconstruction and financing needs.
Locally, the Economics Association of Zambia (EAZ) has urged commercial banks to consider restructuring loans to assist their clients deal with the impact of the COVID-19.
At household level, it is obviously expected that families will have to make adjustments to their expenditure and take into account needs such as sanitisers which must always be available.
Initially, Zambia and other countries viewed COVID-19 remotely as it ravaged Wuhan, which was the epicentre of the outbreak in China.
It is no longer a threat, but it has dawned and affected Zambians in Zambia.
From the economic perspective, all sectors are affected particularly the Micro, Small and Medium Enterprises (MSMEs) that are susceptible to any distortion in the economy.
The cross border traders are the hardest hit as they literary have to stop operating in view of the lockdown in China, United Arab Emirates – the two most sought after business destinations.
However, the private sector particularly manufacturers ought to take advantage and boost production of hand sanitisers, cleaning materials, utensils, containers such as buckets and other requirements that are being used in the fight against COVID-19.
In the same vein, commercial banks will find comfort in promoting digital transactions as crowding banking halls is a health risk.
Many other private sector players must innovate and find a niche in the COVID-19 crisis, as in every dark cloud, there is a silver lining.
But marketeers and traders will have to be extra careful and fully adhere to health guidelines such as social distancing, washing their hands regularly and generally keeping the surroundings clean.
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