ECONOMY STABLE, ASSURES MUTATI

Fri, 09 Feb 2018 09:30:49 +0000

By BUUMBA CHIMBULU

MINISTER OF FINANCE, Felix Mutati, has said the economy is steady, sound and continues to grow as proved by its recent upgrade to stable from negative by an international credit rating agency, Moody’s.

And the minister has observed that the ability to boost domestic resource mobilisation has continued to be eroded by transfer pricing and other unethical practices.

Mr. Mutati said the economy which begun to gain traction in 2017 was in good shape.

“The upgrade from Moody’s is an endorsement that Zambia plus is beginning to work. The economy in 2017 begun to gain traction focusing on fiscal fitness to push it forward. Among our pillars for this year is boosting investor confidence, unless you have investment, you are not going to generate jobs, growth,” he said.

He was speaking yesterday at the 6th African Fiscal Forum organised by Government in collaboration with the International Monetary Fund (IMF) and the European Commission.

Mr. Mutati also said profit shifting through transfer pricing practices coupled with international treaty abuses and other unethical practices needed to be effectively addressed if Zambia and other countries were to effectively mobilise domestic revenue.

“We need to engage on how we increase tax compliance and at the same time combat tax avoidance and evasion .We must change the fortunes of our countries,” he said.

He observed that the conference provided an opportunity for African countries to share ideas on how to enhance tax compliance.

Meanwhile, IMF African Department deputy director, Roger Nord, said striking the right balance between debt and investment was among the most critical economic challenges faced by African countries.

Mr. Nord said much as infrastructure investment would raise economic growth and soar the private sector if well executed, it had the potential to create debt which became a burden rather than an engine for development.

“Fiscal policy stands at the centre of this debate and faces the dual task of increasing the efficiency of public spending, while expanding fiscal space by mobilising more domestic revenue,” he said.

He also observed that debt levels in many African countries had risen, including in countries with relatively high growth, often reflecting ambitious infrastructure investment programmes.

Meanwhile, EU head of delegation to Zambia and COMESA, Alessandro Mariani, said countries needed to define appropriate fiscal policies and strengthen the administration’s ability to collect taxes and spend effectively.