Using abnormal strategies to address economic hardships


One of the reasons for liking former president, Michael Sata when he was in opposition; and later electing him as a republican president in 2011 was to give him a chance to overhaul the economic malaise which engulfed Zambia for many decades; and put the economic rails back on the right track for the benefits of all Zambians.

And when President Sata started his seemingly haphazard infrastructure development projects, including establishing more districts, UPND leader, Hakainde Hichilema described late Sata as ‘chibwi no plan’.  But some people said Zambia needed  a leader like Sata with abnormal development strategies to reverse the sustained economic challenges the country was facing for decades.

It appears implementing normal economic theories and national development plans (NDPs) have disappointed Zambia for some time now. And in the process, unemployment, cost of living, poverty levels and the depreciation of our Kwacha are increasing.

To prove this, it is reported that from a population of about 14million people, only one million are in formal employment while only six million are in informal sector. With load shedding and increasing prices of goods and services; especially from the depreciation of the Kwacha, such a situation raises poverty levels further.

As a result, it is reported that 60 per cent of the same population are poor; with about 80 per cent of the rural population being in abject poverty. And US dollar is now pegged at more than K9.00. We need fresh strategies to come out of such negative trends.

While some development challenges are complex to address within a short time, some of such challenges can easily be solved through alternative practical strategies.

High unemployment, skyrocketing cost of living and high poverty levels should be addressed at all cost or else they might threaten the peace and stability our country has been enjoying for many years.

And they are many alternative practical measures government can take to address such negative trends to the benefit of all Zambians. Let’s suffer today for a better tomorrow.

For example, Bank of Zambia (BoZ) governor, Danny Kalyalya has observed that the high demand for United States dollar is negatively affecting the value of the Kwacha. One can ask: ‘Who demands US dollars? For what purpose? For whose benefit?

Dr Kalyalya and finance minister, Alexander Chikwanda in separate fora and at different times urged Zambians to work hard and export more to reduce the increasing rate between the Kwacha and the US dollar which negatively affect our cost of living.

And recently, BoZ said movements in the exchange rates were sending clear signals that Zambia’s economy needed an expanded export base; and a reduction in unnecessary imports.

Some people might wonder what the Central Bank means by unnecessary imports. Not until we know what unnecessary imports are will Zambia reduce these imports; and improve on the value of the Kwacha. However, what might be perceived as unnecessary imports to some citizens might be necessary to others.

Imports not only contribute to the depreciation of the currency but they also create high unemployment levels and sustain poor quality lives for many citizens in a country.

Therefore, can we allow the current socio-economic status quo just because some citizens are benefiting from the needless imports which are contributing to devastating our Kwacha against the US dollar; and in the process worsening our cost of living?

Moreover, where do the dollars raised from such a demand in our country go after the goods imported have been sold? Are realized dollars externalized or invested in this country? Why doesn’t the US dollar demand and supply in Zambia work like a revolving fund to benefit our economy?

While some citizens might be benefiting from avoidable imports, considering how many citizens and businesses have complained of the continued depreciation of the Kwacha; and how such aggravates the high cost of living, it is critical to consider public interest in whether such imports should continue or not. John S Mills propounded the concept of public interest to mean ‘the greatest good for the greatest number of people.

Consequently, whether some citizens are benefiting from high imports or not, public interest should prevail. And such invites practical economic strategies to address the current economic malaise our country is experiencing.

This implies that some policies should be reviewed to reverse some current unfortunate socio-economic trends. This is necessary because economic policies that promote free market economy don’t see, hear, smell, taste or feel their own effects on majority citizens.

It is the government through the electorate and their political representatives who use their five senses to understand the effects of such policies on majority citizens. Moreover, policies are  formulated to benefit citizens; and not citizens to benefit ‘senseless’ policies.

Some people might argue that reviewing some economic policies to reverse the current socio-economic challenges; especially the sustained depreciation of the Kwacha can be a sign of government inconsistencies in policies. Further, one can argue that government has no business in business; and therefore, market forces should continue allowing imports and few exports in our economy.

Okay. But for whose benefit? No government in the world watches market forces disadvantaging majority citizens; and in the process creating havoc and disturbing peace of minds on citizens. Without government intervention, hardly do market forces address all socio-economic challenges in a country.

This is the reason for Rainbow Party leader, Wynter Kabimba and his vice, Cosmas Musumali campaigning that they will introduce socialism ideology for fair distribution of national wealth. But Kabimba and Dr Musumali don’t mean 100 per cent implementation of socialism ideology. They know that such cannot work in the current socio-economic global environment! Kabimba and Dr Musumali merely mean that their government, whenever they will be in power, will be  intervening in market forces where and when such forces disadvantage majority citizens.

Therefore, PF government can start doing so now. It is not copying from Rainbow Party. Former UNIP government under Dr Kenneth Kaunda did it; and many other governments in the world do so when need arises!

Someone is whispering: ‘Reducing or stopping some imports will make some people lose jobs.’  Yes. Every new policy and law has casualties. But what is critical in policy review is whether it serves public interest or not. We can either allow the current socio-economic hardships to continue or reverse them through alternative practical strategies depending on public interest.

Some economic experts and some regional economic bodies might argue that the normal way of addressing Zambia’s economic hardships is through increasing production of high quality products that can attract international markets. But for how long has Zambia tried such a strategy; but in vain? The perceived normal economic strategies have failed to reduce high unemployment, high exchange rates and high poverty levels in this country!

More than five decades of political independence, we cannot allow the stated levels of high unemployment and high poverty levels to prevail! It’s now innovations beyond 50th jubilee.

Huge importation of second hand clothes (salaula) demands more US dollars. Importation of second hand vehicles increases demand for dollars. Bringing in videos and building hardware materials  increases demand for dollar. Moreover, beer and cigarettes imports also raise demand for US dollar. Can’t Zambia produce or start producing such products?

Imagine we have textile industries and manufacturing plants in Chipata, Choma, Kasama, Mansa and Lusaka provincial centres to produce such goods. Contemplate having textile industries and manufacturing plants in Mongu, Mpika and in Solwezi districts for the same purpose. Additionally, assume we have motor assemblies in the same provincial centres for those who want to buy vehicles.

With such industries in all provincial centres, do you think Zambia would still have such high unemployment and high poverty levels with sustained depreciation of the Kwacha?

Therefore, if the imported goods are on high demands, government should reduce or stop imports of such goods; and put a deliberate policy and capacity building strategies to produce such goods locally. Start from somewhere; and industries will grow.

Governments world over use standards, quotas, duty, tariff and non-tariff measures to control the inflow of imports in respective countries to safeguard many jobs for citizens for peace and stability to prevail.

But such strategies cannot work if malpractices such as nepotism, tribalism, bribery and corruption are sustained among many Zambians;  especially in civil service and government related institutions.

To reduce or stop some gratuitous imports, Zambia Revenue Authority and all security wings need to stiffen their disciplinary procedures and code of conduct to control bribery and corruption.

Government should consider the current stocks of imported salaula, second hand vehicles, beers, cigarettes, videos, building hardware materials, etc, as enough to satisfy the remaining demand for such goods; and put a grace period when quantities of importation of such goods will be reduced or stopped completely. No sooner will such imports be reduced or stopped completely than decent jobs for many citizens start; and will our Kwacha commence gaining value.

Allowing ourselves to have some shortages of unjustifiable imports can facilitate putting our socio-economic house in order; and with effective prioritization of allocation of scarce resources and prudent management of such resources, such an approach can eventually help us  reverse many socio-economic challenges we are currently facing; and put our economic rails on the right track for sustainable economic development processes.