Debt Suspension to Spur Zambia to Economic Transformation


By
Yohane Mbeeya Moono

The period between 2011 and 2021, Zambia under the Patriotic Front led government initiated many capital projects which required heavy Moneta investments. Among them was the Link Zambia Programme which was aimed at the construction of massive road networks across the country in order to open many areas of the country to both local and international business opportunities. The situation saw the country become highly indebted.
As of October, 2021, the country’s debt stood at $27 Billion Dollars that was owed to both foreign and local lenders. The impregnable debt position prompted the Government both the current and previous regimes to seek an International Monetary Fund Bailout Package which is valued at $1.4 Billion Dollars. The Government in Novemebr of 2021 reached a Staff Level Agreement with the Brentwood Institution but had to wait for the office Creditors Committee to get assurances from Zambia about the Debt being repaid.
Now with the Official Creditors Committee coming to an agreement for Zambia to access the Bailout Package. Zambia needs to have Key Performance Indicators that are going to Spur the country to Economic Transformation in the three years that Zambia’s Debt Servicing would be suspended. Zambia currently spends about 45.35% of the country’s revenue to Debt Servicing

How Should Zambia move with Economic Transformation Agenda?

1. The Creation of the Industrial Development Corporation should be a game changer in the Economic Transformation Agenda. The Corporation should focus on opening up and running industries that are going to improving the level of value addition to the Zambian Agricultural Produce. The Zambian Agricultural Sector has great economic potential to change the economies of the country. Industries such as the newly opened Kalene Hills Fruit Company, the Munushi Banana Plantation, the Kawambwa Tea Company, The Mongu Cashew Nut Industry, The Zampalm Project in Kanchibya Costituency just to name but a few. The country would be in great economic space once these industries are fully functional and produce products with value addition. That improves the export ability of the country and that would surely contribute to the growth of the Gross Domestic Product value of the country. Valuable Fruits such as Mango and Avocado are going to be key fruits with the Zambian Avocados now being given space in the European Union Market. Soya Beans also should help to improve the Agricultural as the country just signed a Memorandum of Understanding with China which wi see Zambian Soya Beans being exported to that country. China is arguably the biggest market in the world with the country’s population of over 1.3 billion people.

2. The Zambian Central Bank needs to create a Gold Reserve reservoir in the country. This has to be done through the creation of the Gold Processing Industry in the Mining Towns where the commodity is readily available. The refined gold should then be reserved at the Central Bank who in turn would have to attach value of the Gold using the Zambian currency.

3. The Mining Sector should cede the claim of being the biggest contributor to the Zambian Gross Domestic Product value. The opening of the Nickel Mine in Kalumbila and the signing of the Memorandum of Understanding in the Battery Electric Vehicle Value Chain with the Democratic Republic of Congo in order to control the value Chain of the resources needed to manufacture electric vehicles and other electronic products. Zambia stands to have the economy improved to the tune of $980 billion. Adding Value to our mineral resources would help to improve our economy during the period the country would not have to worry about Debt Servicing.

4. Zambia needs to improve Fiscal Discipline if the country needs to reap the benefits of the IMF bailout package. Reducing wastage and pilferage more especially in the public sector and the construction industry would help the country save resources that would be channeled to the needy areas of the economy. Africa and Zambia’s greatest undoing has been the lack of a fiscal discipline in public sector. Improving the fiscal discipline of the country would help to save resources for use to improve the economy

5. Trade and Investment should also be part of the Key Performance Indicators that the country needs to have in the next three years. Foreign Direct Investments remains one of the critical strategies for economic development in many countries. Providing an enabling and conducive Investment Climate would help to improve the flow of Investments in the country.

The Official Creditors Committee agreement on the Zambian Debt Restructuring Programme means that Zambia stands ready to access the IMF package. This is an opportunity for the country to show that it deserves that Debt Suspension and use the critical Key Performance Indicators to Spur Zambia’s Economic Transformation.

Time has come for Zambia to banish the assertion that no country has ever developed when under an IMF Programme.
Home Grown solutions to Improving the Economy are already being rolled out but were hampered by the huge chunk of resources that were channeled to Debt Servicing. However, the Debt Servicing due to be suspended, the solutions highlighted should be able to Spur Zambia to Economic Transformation

Published by MyWritings

A Writer, A Diplomat in Waiting, Climate Change Advocate and a Football Administrator

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