In the face of an ever-rising cost of living and falling Kwacha, Zambians are becoming increasingly alarmed at the state of the economy. This concern is very understandable and justified. After all people across the country are struggling to keep their businesses open, failing to make ends meet and going without meals.
I do not need to rehearse the various impacts in this statement, as readers will know the cost for themselves, their families and their communities. The question now is what can be done.
I do not deny that the falling Kwacha and our current economic woes are related in part to external events over which we have little direct control, for example the movements in the Chinese economy which are impacting the global economy and are particularly damaging for the copper prices we rely on for foreign exchange earnings.
The UPND does not pretend it is possible to tackle such trends directly. However, we cannot simply blame our current situation on external factors alone and it is laziness and ignorance to do so, just as it is to only blame our current power crisis on low water levels without considering the impact of failed management.
Rather than seeking to blame forces beyond our control, which are just one piece of the puzzle, let me explain what can be done. Firstly, we can take measures to limit the impact of one country or variations in one commodity price on our economy; measures such as diversification and the development of value-addition industries.
The underlying potential for these already exists in Zambia, in our large amount of arable land, vast water bodies and large youthful population. Government needs to unlock these areas by creating a stable policy environment that minimises the cost of starting and running a business. Government also needs to consider providing incentives to value-addition industries, after all such businesses will deliver high rewards other than tax revenues as they create jobs and lower pressure on the Kwacha through reducing our reliance on imports.
We cannot continue to import everything and export nothing – no wonder there are too few jobs and the Kwacha is weak!
Government must consult business and investors on how expansion of emerging industries can be achieved and supported by Government, and it must use that insight to set out a vision that inspires confidence. They must work hard and quickly to deliver on that vision because time is not on our side.
Too many sectors with great potential have been woefully neglected for too long, tourism, manufacturing, agribusiness… the list goes on! If we had spent time building these up we’d be much better insulated from current external events by now.
A second avenue, which must be pursued alongside the first, is to plan ahead for such variations. After all we have been here before when copper prices fell in the 1980s and left us struggling, yet we still depend on the mining industry for the vast majority of our foreign exchange earnings. Preparing in advance for possible fluctuations will enable Government and public bodies to react quickly to minimise the harm of fluctuations and at the same time inspire confidence in its ability to navigate any uncertainty it presents.
It is important to know, as any business professional or economics professor in Zambia will already know, that uncertainty and instability come with additional costs and that Government must inspire confidence in its stakeholders if it wants to weather such storms.
It is only with strong, informed leadership that inspires confidence in its vision for the economy and country, and with a Government that focuses its energies tirelessly on creating an enabling business environment, facilitating investment in emerging industries, and providing incentives for value-addition enterprises, that we will find ourselves less and less vulnerable over time. We can take back control and move Zambia forward.