That the government of the Republic of Zambia is overwhelmed by the economic slump is no longer a secret. We should spare each other insults and the blame game. We are a sinking titanic and we must act as one to survive. There are many ways of reacting to this development. One is exploiting it for political gains, another is to sympathise with the government hoping and praying that somehow miraculously the present government will be able to turn the tides round. There however, yet another way of reacting to this, it is to stand up and be counted in the hour of need. Becoming a part of the solution. I can no longer take it in, I feel I must do my part per adventure; the Lord may be raising us for such a time as this.
This hour is tempting for emerging leaders like me to want to enter the Presidential race now. I must confess, I am prompted to want to stand for the President of the Republic of Zambia. But reason demands otherwise. I will weigh my options in the coming months and probably years. But for now, I think it is time to put our heads together for a National Economic Dialogue. We have come to a point where it does not matter who you are and what you political persuasion is, but uphold national interest. It is time for unity of purpose.
Why a National Economic Dialogue now?
It’s Time to change our way of thinking as Zambians
In 1945, Albert Einstein said, “The release of atomic power has changed everything except our way of thinking.” During the last 70 years, Einstein’s statement has often reminded us to be critical of anachronistic worldviews in a profoundly changing world.
In view of the declining Kwacha and the Moody decision to downgrade the credit ratings of Zambia, all sides of the political divide should be less preoccupied by contentious issues, but be more inspired by Einstein’s call for a new way of thinking. Two important factors have highlighted the urgent need for this broad strategic rethinking.
First, over reliance on Copper exports can no longer be sustainable. This matter has been an issue of discussion for many generations and nothing has happened to date. It will not happen soon unless some drastic measures are taken. The recent steep depreciation of the kwacha is raising inflationary pressures and expansionary fiscal policy which has created large budgetary imbalances. Zambia is Africa’s second biggest copper producer and this red metal accounts for 70% of our export earnings.
In recent months and weeks, demand for copper, which is used across industry from construction to car manufacturing, has suffered from the slowing Chinese economy. Commodity prices have been plunging in recent weeks, caused by China’s economic slowdown. Zambia does not process copper but sales it as raw material weakening our price bargaining power.
Copper prices have declined more than 9% in 2015, making servicing of our national foreign debt more costly. Copper last traded at $3.06 a pound in New York after a steep slide for the week as worries mount over growth in China, which buys half of all Zambia’s copper.
Our government scrapped restrictions on the use of foreign currencies this year as it tried to halt the slide in its currency. The forex measures which were introduced by late Michael Sata in 2011 were abandoned by the current government after the demise of Sata.
Now GRZ is again seeking help from the International Monetary Fund, after an 18% slump in the Kwacha and the value of our key export commodity – copper. For how long will this be the only solution? I am weary of the proposals from IMF, as they will only sink us further to the bottom. No, not IMF again since the Chiluba era. When will we learn? It’s time to swallow all manner of pride and seek local solutions for local Zambian problems.
The Second reason is that we need a Paradigm shift for our nation Zambia.
A new thinking and a new way of doing business is necessary to see us out of this mess. Good practice follows sound theory. Successful managers and problem-solvers always start with a paradigm, a conceptual framework with widely accepted assumptions that they can turn to for analysing and solving everyday problems. We have come a long way as a country without analysing how we are moving. It is time to stop, think and reflect. Good ideas work. If the paradigm is defective, a solution will not work, at least not for long.
I am one of those that are beginning to ask whether our government’s welfare approach is out of date for a nation like Zambia. I am questioning whether income security can be guaranteed by the government of Zambia – a unique social invention which was never intended to be an efficient producer of goods and services or a generator of income for Zambian citizens. What the government of Zambia does well and was designed for is to ensure that all citizens can enjoy equal justice and to lift unjust social barriers to equal opportunity, not necessarily equal results, for all.
Clearly the Marxist paradigm introduced by our first President Kaunda and carried on by successful governments albeit in a modified way has been discredited with the breakdown of the Zambian economy especially our current crisis. Increasingly the benevolent behaviours of successful governments have proven to be inadequate in being able to predict the future condition of our economy or to guarantee income security for most of the Zambian citizens within a welfare country guided by Keynesian principles.
A new approach or paradigm based on the expansion of equity ownership opportunities for working and poor people is beginning to emerge around the world. This paradigm envisions a private, free market economy that genuinely empowers every citizen. Rather than redistributing the present economic pie or relying on trickle-down economics, this new paradigm offers ways to ensure that all citizens become owners of the new wealth created by a more sustainable economic expansion.
It is time for a new thinking based on proven approaches to empowering the poor people and the working citizens, without increasing government spending or transferring existing wealth from others. For a country as poor as Zambia we need to start challenging all policymakers to move beyond the traditional opposition vs. ruling party debate. The new thinking of empowering citizens offers Zambia new means for improving the quality of life for citizens who are largely left out of the mainstream of our economy.
For the last several years in Zambia, there has been much glib rhetoric on the subject of “empowerment.” There is, however, little talk about economic empowerment. A National Economic Dialogue can focus primarily on the issue of economic empowerment and how those at the bottom of the social ladder can begin to enjoy effective economic empowerment. How can we start empowering Zambians to own mines? How can one of the largest Copper producing countries have no local mine owners? How? Surely how?
What about other minerals, who owns the mines? What are we doing with our vast land? Giving it away to foreigners in the name of investors? Are we any better today since we privatised to foreigners and not to Zambians all of our economic production means? What became of us after Chiluba sold our national assets? Simply professional beggars for the international community to bail us. We turned into professional importers of product made by other nations causing an imbalance in our trade business. Ooh Zambia, who has bewitched us that we cannot think or arise anymore?
I think as a nation, we have compelling reasons to have a robust discussion of our country’s economic trends and to try to make progress on turning round the tide. If anything, tension and anxiety in the nation right now makes the economic talks more important.
The most important part of the dialogue which we should have should be to stage a strategic discussion of issues affecting our economy