Key eight questions on PF claims of development

Key eight questions on PF claims of development


The biggest mess PF has committed against the Zambian economy is that, of all administrations, they are the only ones who inherited the strongest economy with low debt levels and experienced stable copper prices and low oil prices. Today the coffers are empty, we are heavily indebted and in a recession.

Here are my responses to key questions on PF’s failed economic policies.

1. Is Zambia developing? There is no such thing as economic development when the economy is in a decline (2012 = 7% to 2019 = 1.5%). If economics is all about production and income, then our GDP is telling a story that is different from PF claims. The economy has been in decline since 2012, meaning we are simply not making the money required to create jobs.

2. Is public infrastructure proof of economic growth? – This is true if it is expenditure based on ability to make a return on investment and if it is private sector-led. If the economy is doing fine investors come forward and build infrastructure themselves. However Government-led infrastructure, like PF, has been a disaster due to poor prioritization, corruption and overpricing. Why would any normal Zambian be proud of spending $4.3million on MCS tollgate when they could just levy a tax on fuel to collect funds for road maintenance? Other countries that invested in infrastructure like Ghana, Ethiopia and Rwanda have been experiencing growth since 2014, while it has been the opposite for us.

3. Is Zambia’s debt sustainable? – When we are using 50% of budget for salaries, 41% for debt service and only 9% for developmental projects and on top of all this the kwacha is weakening then we are doomed if we don’t correct this. The solution, is not only a question of how to pay back debts, but also how to grow the economy under such financial distress.

4. Is any infrastructure always a priority to any economy? – Not all infrastructures is a priority. Why spend $400m on Ndola Airport which serves less than 5 commercial flights per day? The airport only has what looks like a tuck shop and it is hardly busy. This money would have created over 150,000 direct jobs if it was invested in agriculture. The $13m Makeni speed hump alone could have recapitalized Mulungushi Textiles. There was no shortage of milling capacity, but government procured solar-powered milling plants at $200m, which are now being used for lighting and charging phones during load shedding. This could have built a 150MW solar plant in six months.

5. What is the real cost of PF infrastructure projects? – Apart from inflated contracts, the dollar value of most contracts means the kwacha depreciation has made them 2 to 3 times more expensive. For example, for every US$1m Eurobond, used to build a school in 2012 at K6/ US$ we spent K6,000,000. Today, to pay off that loan we need K18,000,000 meaning the cost of that school has effectively been K18m plus annual interest paid between 2012 – 2020. That ladies and gentlemen is why failure to run the economy has but our treasury in a serious mess. Serious mess that no PF vuvuzela can address.

6. What is the value for money for Airport Infrastructure? – The value of Airport infrastructure is very complex and does not only depend on having an ulta-modern infrastructure. It depends on the country having visitors that are attracted by tourism and a growing industry. People will not visit Zambia because we have a nice airport, but will visit to do business in a growing economy. What is imminent is that a Chinese company will run the Airport for 30 to 50 years, so that it can only give mechandising business to chinese shops on the premise that it wants to recover the debt. We challenge Government to publish the operating licence/contract or strategy for KKIA if that is not the case.

7. PF is a pro-poor government? – This is the biggest lie always claimed by PF, designed merely to woo votes from the low income majority. It is the PF policies that have hurt the poor more than anyone else. They removed subsidies on fuel and maize instead of addressing the procurement or input costs. It is the PF corruption that resulted in the suspension of social cash transfer. The cost of living has skyrocketed living the poor with no room to save and invest. The transport costs have doubled during PF reign. etc. Under PF more people have graduated from having savings to having food to mouth livelihoods. And all they expect is the poor to be happy because the face of Lusaka has changed.

8. What is the solution? The solution is addressing the economy, period. PF is running away from this debate and are obsessed with reciting the Chinese funded projects which they have no idea how they will pay back. It is a sign of being in denial and clueless.

Even when a youth gets empowered with K30m he will face the following challenges
– Import machinery at a high cost due to the weak kwacha
– Take long to secure titles, licenses and permits due to bureaucracy or corruption
– Take 6 to 12 months to get additional funding from banks in case of liquidity problems
– Operate it at 30% capacity due to load shedding
– Fail to improve quality due to cash problems
– Compete with Chinese businesses which sell at low prices because they use cheaper credit and cheaper labour than Zambians
– Struggle to get a supply contract from Government or large corporations due to corruption
– When he gets a contract it would take 2 years for government to pay him
– In less than 1 year his business goes under

Richard W

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