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Remarks by Finance Minister at National Economic Summit

Republic of Zambia
Remarks by Hon. Dr. Bwalya Ng’andu, MP, Minister of Finance
At the National Economic Summit, Livingstone, July, 2019

Honourable Dr. Edify Hamukale, Provincial Minister Southern Province,
Hon. Christopher Yaluma, Minister of Commerce, Trade and Industry,
Hon. Alexander Chiteme, Minister of National Development Planning,
Other Cabinet Ministers Here Present,
Mr. Davis Chama, Secretary General, Patriotic Front,
Dr. Denny Kalyalya, Governor, Bank of Zambia,
Dr. Lubinda Habazoka, President, Economics Association of Zambia,
His Worship, The Mayor of Livingstone, Mr Eugene Mapuwo,
Members of the Diplomatic Corps and Other Cooperating Partners,
Distinguished Guests,
Ladies and Gentlemen.

I am delighted to be part of the inaugural National Economic Summit in the country, being hosted through the resourcefulness of the Economics Association of Zambia. As this is our first engagement since I was appointed Minister of Finance, I wish to express my gratitude to all of you that have made time to attend this critical partnership that I wish to see continuing and forming the basis for us to attain our national goals as envisioned under the National Vision, and the various objectives under the sustainable development goals and the Agenda 2030. The underlying objective of these international socio-economic development frameworks is the need for inclusive and sustainable development, which is coincidentally the theme for the summit which reads:

“The future of economic diplomacy: supporting inclusive growth and sustainable development in Africa”

As we work together going forward, you have my unwavering commitment to support further efforts of the Economics Association of Zambia in building a better Zambia. It is from the cooperation that I have seen exhibited here that we can begin to make in-roads in transforming our economy.

Ladies and Gentlemen,

We meet at a time when the economy is facing some headwinds. Growth has been sluggish, mainly at the back of adverse weather conditions that have had a dampening effect on the agricultural and energy sectors, resulting in real GDP growth projected at around 2.5 percent in 2019, down from an initial projection of almost 4 percent.

Liquidity conditions have been tight, adversely affecting businesses around the country and constraining economic activity. We have also encountered declining fiscal space for developmental projects as most of the resources have been utilised on debt service and other obligations that have a first call on the Treasury. Developments in the international economy have also not been supportive. Global growth remains sluggish while risks to the global economy are on the upside, adversely affecting commodity prices including copper prices.

These factors have culminated in negative market sentiments that in the second quarter of the year impacted negatively on the exchange rate of the Kwacha against major convertible currencies.

Ladies and Gentlemen,

It is therefore gratifying that the summit is being held at this time when we need to make strategic decisions and choices on the following challenges facing the economy:

  1. The need to reinvigorate growth;
  2. Dealing with debt vulnerabilities and ensuring debt sustainability;
  3. Building back fiscal buffers over the medium-term;
  4. Improving liquidity so as to support SMEs and the private sector in general through dismantling of arrears; and
  5. Ensuring support to the social sectors and the vulnerable in our society.

Ladies and Gentlemen,

The Government has a robust framework to address these challenges. My predecessors in the Ministry laid a strong foundation on what requires to be done. Implementation is at the heart of all these pronouncements. That will be my key objective.

Ladies and Gentlemen,

To kick-start growth, we must take appropriate measures to deal, adapt, mitigate and reduce the risks associated with climate change. We must also ensure that liquidity is improved. Reinvigorating the diversification drive is another area of priority.

We have also announced a number of measures aimed at slowing down the pace of debt accumulation, such as postponement and cancellation of debt, subject to discussions with our creditors. The importance of front-loading fiscal adjustment, including the expansion of the revenue base is another important area. Addressing the challenge of domestic arrears, and enhancing external buffers, are other areas for which government has devised appropriate policy responses.

The Government is also aware of the importance of undertaking policy, legal and structural reforms in the energy sector, and our procurement systems. This is in order to increase investments in energy production which has proven to be a constraint to growth in the recent past. Enhanced procurement legislation is aimed at changing the focus from processes to actual value for money when goods and services are procured. We are also working on improving, in the shortest possible time, the public appraisal system.

I am glad that in the deliberations over this two-day summit, these are some of issues under discussion, including best international practice on what needs to be done. Arising from this summit, we need to take concrete actions so that we can dispel the perception that we are a country that produces world class policies, but lack significantly in implementation. The task that has been set for me and indeed the nation is to jointly pull together our efforts so that we can have a correction on imbalances in the economy in the shortest possible time.

I am aware that these challenges are impacting on a range of countries on the continent. With the diversity of participants at this meeting, I am confident that the different experiences represented here will give us a diversity of solutions that can be replicated in other jurisdictions.

In conclusion, let me implore the summit participants to bring all issues that require to be addressed to the attention of Government leaders. It is only when we have candid discussions that we can surmount the challenges before us. We must be resolute in order to succeed.

I Thank You and God Bless!