The removal of subsidies on mealie meal and fuel by the PF government smells like a dead rat! Something is amiss. Things don’t just seem to add up. First and foremost let us take a step back. Back to Michael Sata’s ten year journey towards the Presidency. Sata’s key campaign theme was the high cost of living and with that he became a darling of the urban dwellers mostly in Lusaka and on the Copperbelt.
Sata challenged Zambia’s high fuel pump price relative to other SADC countries. He wondered why a can of coca cola should be more expensive in Zambia compared to Botswana, Namibia, etc. Sata scoffed at the ‘high’ price of mealie meal saying, ‘Zambia nsi yo kongola!’ Towards the 2011 election Sata promised peasant farmers that he would more than double the number of free fertiliser bags to that which they were getting under the MMD. In short Sata promised to convert Zambia’s cost of living to an impressive standard of living within ’90 days’. What has changed?
Sata has all of a sudden ‘woken up’ and he has abandoned his cost of living project and instead says he wants to build universities, roads, stadiums, hospitals, etc and claims this is the reason why he has pulled the plug on subsidies. Sata then links this ‘wonderful infrastructural miracle’ to saving the poor. How, one can only wonder. And the gullible PF cadres are speaking of these beautiful projects to come as Moses the parrot spoke of the sugar candy Mountain in Animal Farm. But is this the real reason why the subsidies have been removed?
Why is the PF government announcing these budgetary changes in the middle of the fiscal year without recourse to the approving authority which is Parliament? The fuel and maize subsidies were budgeted for as were the health sector and infrastructure development which are being advanced as the areas where PF will take the subsidies money. This would simply mean that the PF have exhausted the money budgeted for health and infrastructure. Not only this but the PF also have a long unbudgeted for wish list including by-elections and big government payroll. In short, THE PF GOVERNMENT IS BROKE!!!
How can I make such claim when the PF has consistently said they are doing this to improve the redistribution of resources i.e. take more resources to the poor? Anyone who has done simple arithmetic could clearly see that the PF has been on the track to financial ruin from day one of assuming government. It is even shocking if not embarrassing that PF has two very experienced and supposedly intelligent economists in Guy Scott and Alexander Chikwanda. Scott and Chikwanda are very much alive to the principles of scarcity and opportunity cost. These two principles underpin the idea of ‘you cannot have your cake and eat it at the same it’. This is exactly what PF has been doing, eating their cake and wanting to have it at the same time.
From day one PF embarked on projects of little or no economic value. The rebasing of the Kwacha is one such exercise. Now that it has come and gone, it easy for all to see that it is was a valueless exercise which has, nonetheless, gobbled huge sums of tax payer’s money. The Euro bond, as sexy as it may be, is another venture that may drive this PF government to its knees. Very soon government will start servicing the interest on this bond. As others already pointed out, concessional loans are a better option but PF NEEDED to show that they CAN borrow from international capital markets.
Then there is Michael Sata’s favourite toy, politicking and the by-elections. Priscilla Isaacs now tells us that ECZ spends not less Kr5m on a single by-election and that they are projecting to spend Kr7.7m on Feira only! Adding to that money spent on government officials such the vice president and the ministers who have to camp in these areas for days, and we get close to Kr10m per by-election. So far we have had about 10 by-elections already or Kr100M in value terms in less than 2 years (against a budget of only Kr4 million for 2013). And we have not even talked about the massive vote buying and inducement money given to the defecting MPs.
The new districts also have eaten into our national purse. Every extra district means an extension of government as government operations have to be replicated at that level. And of course each new district comes with the infamous District Commissioner. In fact most of these DCs don’t even live in their districts and have to commute daily which is an extra cost to the tax payer. Muchinga province is another project that Zambia can ill afford to have at this point in time. But it has been President Sata’s live long dream so it was brought on-stream and not without a huge price tag.
Because of these new districts and province, the recent increase in government salaries and the ever growing number of deputy ministers, government pay roll is said to be reaching towards 60% of the total government revenue threshold.
Another valueless yet expensive project is said to be on its way; a national airline. So they would rather put a flag in the sky than feed the poor. It is no secret that an airline is a very expensive venture what with the current high price of oil. They can ask Mutembo Nchito or Fred Mmembe.
So Sugar candy mountaineers know that that candy is not coming any time soon because government is broke!