Zambia’s head of state on 08 November invited the media for a get together at his residence where he indulged them with the state of the economy at a platform which he used to issue key directives to key government ministries. President Edgar Lungu appreciated the emergence of young entrants in the journalism market and recognized that media had evolved to digital platforms from the traditional printing press.
Addressing the media, Lungu highlighted the following pointers on the state of the economy:
That his government was committed to ensuring that debt is contained within sustainable levels through implementation of austerity measures. President Lungu noted that inflation was contained within the 6-8% target band in the first 5 months of 2019 supported by appropriate monetary policy interventions. President Lungu acknowledged that inflation has come under pressure of late due to low agriculture productivity output and as such the average nudged higher to levels of 9.6% on average breaching the upper bound of the target range.
The President informed the media in his speech that the exchange rate averaged 12.6 for a unit of dollar while the cost of borrowing remains fairly high.
“My government has implemented a number of policy measures this year to maintain debt within sustainable levels, to protect the vulnerable and reduce the cost of running government,” President Lungu said.
The state has operationalized the Public Finance Management Act of 2018 which provides a framework of and strengthens control of institutional accountability, he said. With roll out of the Treasury Single Account alongside digitization across government, revenue collection has been enhanced. Other areas the President spoke on where limiting construction to projects that were 80% and above, curtailing travel costs and ring fencing financing to social sectors are some of the expenditure management strategies the state has implored.
President Lungu echoed energy reforms in his government’s quest to achieve 100% private sector importation of petroleum to improve efficiencies in the sector. However his Excellency bemoaned the unsustainable pension reforms that’s have led to ballooning of pension arrears and has implored his government to devise social protection schemes that are more sustainable.
Presidential directives
The Zambian head of state said he was very convinced that Africa’s copper producer had the capacity to generate resources locally and as such bemoaned the low tax compliance and revenue leakages in the revenue collection process through collusion with revenue collection officers. In this vain the President directed the Ministry of Finance through the Zambia Revenue Authority (ZRA) to ensure compliance of VAT and the associated administration issues are aptly addressed without fail. This he said taking cognizance of the reversal of intent to implement sales tax.
He also directed the Ministry of Finance to address the skewed business activities characterized by the uneven opportunities in the clearing and forwarding faculty where 80% of the clearing business was in the hands of a few agents while over 800 small agents fight for a paltry 20% of the opportunities. This the President said must be corrected.
Despite successfully implementing the National Construction Council in 2003, the President acknowledged the great strides in local contraction empowerment vis the 20% sub contractors policy. He recognized that their are no hurdles in contracts involving government and foreigners but bemoaned the foreign investors and sub contractor relationships whose opportunities/scope of works were narrowed to road drainages, paving and markings. This the President identified as a hurdle in skills transfer. The President directed the Road Development Agency (RDA) to review this anomaly and provide him with a report in 2 weeks time.
To increase accountability in government ministries, the President directed the Secretary to the Cabinet to introduce Directorates of Internal Audit reporting to the Controller of Internal Audit a role he created and elevated to Permanent Secretary level earlier. This the President said in light of the year in year out misappropriation, misapplication and misuse of public funds. There is need for strengthened accountability.
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