YEAR OF DEVELOPMENTAL VISION, YEAR 2017
IT is argued among political enthusiasts that 2017 marked the beginning of the implementation of President Edgar Lungu’s vision for Zambia having exhausted his predecessor’s vision, the late President Michael Chilufya Sata, as promised when he first came into office in 2015.
This in a way has some truth in it or it could merely be coincidence seeing that it is the year that the Seventh National Development Plan (7NDP) for the period 2017 to 202 was launched in July 2017.
Consequently, the presentation and approach in the implementation of the 7DNP faced a complete paradigm shift to the Sixth National Development Plan (6NDP) and the Revised Sixth National Development Plan (R-SNDP) for the period 2013 to 2016.
The 7NDP delinks from sectoral-based planning to an integrated multi-sectoral development approach under the theme “Accelerating Development efforts towards the vision 2030 without leaving anyone behind” (7NDP 2017; 1).
It is under this vision that the PF government under President Lungu continued to flourish in its agenda to create a diversified and resilient economy and one that can secure sustainable development and sustainable growth and socio-economic transformation in line with the aspirations and hopes of the nation.
President Lungu and the PF government recognised the fact that this can only be achieved through a diversified agricultural sector, mining sector, tourism sector and manufacturing sector among other key sectors in response to the Smart Zambia agenda 2064 and in line with the United Nations Agenda 2030 for sustainable development and the African Union Agenda 2063.
Growth in 2017 for most African countries which are commodity-led economies continued to be subdued mainly due to the low commodity prices and the stiff growth in emerging markets like China and in developed markets as well.
However, despite this fact, the year 2017 from a global perspective was envisaged to continue to show growth with the promising commodity price rise and an increased industrial activity which in due course coincided with a pick-up in global trade and the global economic growth which was projected at 2.7 percent in 2017 after a floppy 2.4 percent global economic growth in 2016 which eventually closed at 3.7 percent according to the Organisation for Economic Co-operation and Development (OECD) Interim Economic Outlook (2018; 1).
Coincidentally, at the local scene, the Zambian economy grew by 3.4 percent in 2017 against a target of seven percent as contained in the Revised Sixth National Development Plan (R-SNDP).
The Kwacha also appreciated against the dollar among other major currencies and this appreciation helped ease government’s cost of servicing the external and dollar denominated debt.
Furthermore, inflation continued to remain at 7.5 as a single digit compared to 14.4 in 2016 and this was attributed to the PF government’s fiscal consolidation efforts which eventually culminated into a stable economy.
The Zambian economy further experienced a significant reduction in mealie meal prices while industrial equipment importation also became cheaper among other positive economic vibrations experienced in 2017 (SONA, 2017).
This favourable economic performance in 2017 was inspired by a great number of factors. According to the “Zambia in Figures”, a Central Statistics Office publication for 2018, there was an increased electricity generation in 2017 with a total of 14, 321, 529 megawatts per hour compared to electricity generation in 2016 with a total of 11, 618, 531 megawatts per hour.
This increase in electricity generation was attributed to the good rainfall during the 2016/2017 rain season and the addition of new hydro power generation to the national grid. This in turn helped to boost the economy of Zambia through stable electricity supply to the local industries hence helping in reducing the Trade Balance deficit from a whopping -12, 535, 944, 776 in 2015 and -10, 458, 087, 910 in 2016 to -5, 739, 974, 515 in 2017 (CSO,2018).
There was also a sure increase in the total of Traditional Exports (TE’s) and Non-Traditional Exports (NTE’s) in absolute Zambian Kwacha from K67, 223, 106, 880 in 2016 to K77, 910, 809, 622 in 2017, measuring to almost a billion kwacha in total exports difference.
That was not all but there was also increased mineral production in the country. For instance, Copper production increased to 797, 266 metric tonnes in 2017 from 770, 598 metric tonnes in 2016, while Coal production also increased to 70, 808 metric tonnes in 2017 from 57, 293 metric tonnes in 2016 and Cement production increased to 2, 235, 550 metric tonnes in 2017 from 1, 953, 498 metric tonnes in 2016.
Additionally, crop harvest was also expected to increase and so were the total hectares to be planted for various crops. However, most significantly was the increase in Maize production, the source of the country’s staple food, nshima, which was at 2, 873, 053 metric tonnes in 2015/2016 farming season to 3, 606, 549 metric tonnes in 2016/2017 farming season (CSO, 2018).
This was a plausible increase that considerably contributed to the reduction in mealie meal prices throughout the year 2017.
All these achievements recorded in the year 2017 did not happen in a vacuum as there were a number of interventions under taken by President Lungu and the PF government to secure this much needed positive socio-economic development.
For instance, the increased electricity generation came at a huge investment in the infrastructure of hydro power generation under the development agenda of President Lungu and the PF government.
Additionally, the PF government under President Lungu systematically implemented the Economic Stabilisation and Growth Programme (ESGP) aimed at fostering national economic growth and stability.
The programme which was launched in September 2017, was Zambia’s bold and decisive plan of action for restoring fiscal fitness and overall macroeconomic stability for sustained inclusive growth and development during 2017-2019.
It specified a range of policy and structural reforms, which the government would pursue towards fiscal fitness and broad macroeconomic stabilisation.
It is evident from the foregoing that the vision and plan of President Lungu, both in the medium and long term, as espoused in national documents of the 7NDP and the ESGP, not only gave investor confidence to spur a positive national economic outlook but equally projected Zambia’s intention to sustainable national economic development.
It is worth noting that at the time of this improved economic outlook for Zambia, in the same year under review and in the month of August, the International Monetary Fund (IMF) pulled out of negotiations with the Zambian government over a possible package for financial support.
The IMFs position was reflected in their Article IV Consultations Report of 2017 which stated that Zambia was at a high risk of debt distress, and that while financial management and fiscal discipline were improving, the extent of the improvement was sufficient to mitigate the growing public debt and fiscal deficit according to Caesar Cheelo, of Zambia Institute for Policy Analysis and Research (ZIPAR), in his working Paper No. 29 entitled “Financing Economic Stabilisation and Growth Programme (Zambia Plus) in the shadow of the IMF.”
This however did not deter the positive economic trajectory that Zambia was undergoing through neither did it stop the PF government in pursuing more and more interventions to make real economic development in poverty eradication and sustainable livelihood for all Zambians without leaving any one behind.
Furthermore, the PF government under President Lungu in their efforts towards cajoling and securing the IMF financial package, under took some measures that countries agree with the fund before the IMF Executive Board approves financing or completes a review.
These relatively successful policy and structural reforms, as Caesar Cheelo argues, included the strong measures to phase out longstanding fuel and electricity subsidies, which were viewed as regressive by many including CUTS and ZIPAR (2017)1 Cheelo and Haatonga-Masenke (2018), PMRC (2017), and IMF (2017b).
The anti-poor bias or regressive nature of the subsidies was part of the rationale for their removal. Firstly, the fuel subsidy was eliminated in October 2016 and then electricity subsidies were partially removed, through migrations towards cost-reflective electricity tariffs based on a 50 percent increase in tariffs in May 2017 and a further 25 percent upward revision in September 2017. This move, according to President Lungu in his address to parliament on September 15, 2017, was in part intended to attract investment especially in the power sector during the transition to cost reflective electricity tariffs.
Additionally, President Lungu and the PF government also made significant progress in fiscal consolidation. For instance, according to Caesar Cheelo, “the stock of domestic arrears as at end June 2017 was K13.2 billion, from K19.1 billion in December 2016. The significant reduction in arrears was attributed to Government’s concerted effort to clear (the) arrears.” The government clearly had set in motion a strategy for clearing the arrears. Consequently, in the same year under review, President Lungu and the PF government launched the Medium-Term Debt Strategy 2017-2019 in September 2017, which would aim to reduce the risk of public debt distress, and also planned to revise the Loans and Guarantees (Authorization) Act in 2018.
The PF government equally through the Bank of Zambia (BoZ) did well by undertaking carefully considered monetary policy adjustments over 2015-2017.
After a considerably tight stance during part of 2015 and most of 2016, in 2017 the centtal bank commendably gradually unwound the quantitative and administrative measures it had applied to tighten the monetary conditions as argued by Caesar Cheelo.
These are many more strong interventions the PF government undertook to stir the economy positively and evidently 2017 closed at a rather positive note that saw mealie meal prices reducing, the cost of importation of industrial equipment reduced, helped ease the cost of serving external and dollar denominated debt and generally resulted in the economy being stable and working to the benefit of all Zambians as indicated by President Lungu.
While 2017 enjoyed a general positive outlook, this is not to say the PF government did not come short of expectations based on its plans. Accordingly, President Lungu admitted at infrastructure development, which is a key contributor to job creation stalled in 2017 due to the economic challenges that were encountered.
Similarly, agriculture, forestry, and fishing slowed down on account of poor economic growth rate. This goes to show President Lungu’s realistic and in tune with the prevailing economic situation at the time as is the case today in his effort to secure sustainable economic development for all Zambians without leaving anyone behind.
Lengwe Cornelius Bwalya (BIRD-MU; DPPPR-ZIDIS; CD-ComDev) is the Founder and Executive Director of RHOMA Foreign Relations Institute, an International Affairs Policy Think Tank registered in Zambia. Mr. Lengwe Cornelius Bwalya is also a blogger, Image Builder and an International Relations and Political Analyst with over 5 years’ experience in both national and International politics. For comments, suggestions or questions, please email lengwecb@gmail.com or visit rhomaforeignrelationinstituteorg.wordpress.com or simply call on +260 950 004 050. © RHOMA Institute 2020
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