Editorial

Economic tonic ideal

THE relief measures put in motion thus far will ameliorate the financial strain in critical and other sectors in the wake of the ravaging Covid-19 pandemic.
Zambians, through Government, are the largest stakeholders in the economic affairs of the country although the economy is private-sector driven.
Therefore, it is only reasonable that the government has adjusted fiscal and monetary policies to provide relief and incentives; economic growth has slowed down.
The adjustments will not only benefit the critical sectors but will also benefit citizens at the household level.
It is now apparent that the global economy is on a downward trend, particularly because of the pandemic sweeping across the world.
Yes, the economic meltdown will affect the world as seen from the projection that the global economy will ebb to as low as negative three percent this year while Zambia’s economy will shrink to negative 2.6 percent
Therefore, Finance Minister, Bwalya Ng’andu and his team are on course with the measures to forestall economic crisis.
Some captains of industry may argue that Government should provide more relief, but they ought to understand that Dr Ng’andu has to strike a reasonable balance between incentivising the private sector and retaining a reliable revenue stream.
In addition, Dr Ng’andu has to tread carefully knowing too well that Zambia is already under strain because of the staggering external debt standing at $11.23 billion while domestic debt in terms of Government securities is at K80.2 billion.
The biggest headache for the Finance Minister is the mounting pressure to service debt and also to finance the civil service wage bill, leaving a lean resource line to meet other equally important obligations.
It is cardinal to note that while Government is providing domestic relief, it is also fervently seeking emergency relief funds from the African Development Bank and multilateral institutions such as the World Bank and the International Monetary Fund.
Under the circumstances, therefore, the K10 billion stimulus package administered through the Bank of Zambia to commercial banks is a milestone, so is the waiver of penalties on outstanding tax liabilities.
The first to register positive trajectory are crocodile farmers after Government suspended the 10 percent export duty on crocodile skin.
In the gemstone sub-sector, Government suspended the 15 percent export duty while mainstream mining sector got a five percent relief on imports of copper concentrates.
In fact, the Chamber of Mines cried foul over the mine tax regime on which it heaped blame for the fall in copper production to 750, 000 tonnes in 2019 from 857, 847 in 2018.
Mining remains Zambia’s main economic mainstay generating 70 percent of foreign earnings through copper exports and thus requires some relief at this point in time.
Government should verily ensure that the World Bank and IMF respond favourably to requests for emergency support facilities, what with the country’s growth now projected at negative 2.6 percent.
Most worrying is the fact that Zambia will fall short of target by 19.7 percent of the 2020 National Budget.
However, the state has been magnanimous enough to point out the expected economic ills to prepare the citizens for hard times ahead.
Therefore, Zambians must strictly adhere to health guidelines to prevent the spread of Covid-19 and ultimately eliminate it altogether.
Yes, as Dr Ng’andu stated, Covid-19 is a health catastrophe as well as an economic catastrophe and unless citizens look at it that way, the pandemic will be difficult to eliminate.

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