Sun, 11 Feb 2018 09:06:20 +0000
AN international credit rating agency, Moody’s, recently upgraded the rating outlook for Zambia from negative to stable.
According to a rating action statement issued in London by Moody’s Investors Service, the stable outlook reflected the Zambian government’s reduction in liquidity pressures and a slowdown in debt accumulation.
The Moody’s rating committee during its discussion indicated that Zambia’s fiscal or financial strength, including its debt profile, had materially decreased. Moody’s indicated that the affirmed B3 long-term issuer rating balanced a strong growth potential boosted by ample natural resources.
And commenting on the development, Minister of Finance Felix Mutati said that the improved outlook was not only an important indicator of the international community’s discernment of Zambia’s political, social and economic stability but an endorsement of the country’s consistent and market-friendly development policies.
He said the rating upgrade was a confirmation that Zambia’s image was respected, adding that the private sector should leverage on this positive outlook to develop credible alliances with players in the international community and grow empires which would generate jobs and create wealth.
The Finance Minister’s response was a way for the country to improve its credit rating further, grow the economy and cut unemployment.
To be honest above else, an ideological debate is one thing that is desperately needed to sort out options Zambia could pursue to find a way out of its current economic morass.
Zambia needs to grow the economy, that means making things easier for businesses to grow and to create jobs and for investment.
It is precisely what the ratings agencies like Moody’s, the IMF and the World Bank have consistently complained about: economic growth.
So Zambia ought to start reducing domestic and foreign debt stock and investment taxes and business taxes and taxes on savings accounts and partially-privatise those loss-making state-owned enterprises.
The government owns 20 percent of the land while 80 percent is owned by chiefs as customary land. The government ought to redistribute this land to people that are in need: the poor peasants and unemployed youths in both urban and rural areas, especially in the newly created districts.
The land is just idle. Zone more residential and commercial, agricultural and industrial zones. Our government must start making positive economic reforms that these rating agencies, the IMF and the World Bank want that would boost investment and savings in the economy.
The rest of the world’s economy is at the very moment growing at an average of three percent, these credit ratings agencies handle the credit ratings of 220 countries plus their companies and they want to see positive economic steps towards economic growth in our country.
Zambia is economically projected to grow this year at more than three percent, with an estimated 60 percent youth unemployment.
Unemployed youths must be encouraged and empowered to start putting small-scale businesses first. It has been the biggest mistake of the PF the past six years not to do so.
Small-scale businesses create the wealth and jobs and youths first need jobs to become financially independent, 80% of the total 15 million people relying on government welfare – suffering from “Boma Liyanganepo syndrome”, won’t make them rich. Youths and other grownup people only become rich once they work and start a business.
Our employable youths’ mindset must be geared to self-reliance and self-discipline in paying back the youth-empowerment loans and starting a business, that’s their best and fastest solution to all their economic and financial problems.
Less ostentatious life-styles, less welfare dependency syndrome and more hard work, saving, investment and more productivity – so empowered youths must stop squandering their savings and investments from the youth-empowerment loans.
All in all, the Minister of Finance acknowledged that the positive upgrade was based on, among other considerations, the critical reforms which the government had embarked on under the Economic Stabilisation and Growth Programme.
These included implementing fiscal consolidation, removing subsidies, reform the energy sector, and embark on diversification of the economy through agriculture, tourism, and industrialisation. He assured all sceptics, cynics and critics that the results of the assessment conducted by Moody’s was a welcome assurance to investors, adding that they should remain confident that Zambia was on track with economic stabilisation and growth.
By all accounts, the Minister of Finance’s acknowledgement was a positive response to Moody’s upgraded rating outlook for Zambia.