Fri. Oct 18th, 2019

Take austerity measures seriously-CTPD urges govt

The Centre for Trade Policy and Development Executive Director Isaac Mwaipopo said the center welcomes the speech delivered by the head of state during the official opening of parliament.

He said that the center has taken note of several issues the president raised in his speech with regards to the state of the Economy among others the issues raised of the growing effects of climate change on development.
“While we appreciate the adverse effects climate change may have on some sectors of our economy, we do not think that all the challenges the country is facing are as a result of climate change, some of the challenges are our own making as a country, they are a result of bad choices we have made in the past, examples of these include the rising public debt which is now consuming 40 percent of the countries discretionary expenditure” Adds Mwaipopo.

“This is taking a serious strain as the country has borrowed too much, this is negatively impacting the economy, especially for the local private sector players”.

Mwaipopo said the Centre for Trade Policy and Development (CTPD) remains greatly concerned with Zambia’s current level of indebtedness.

Mr Mwaipopo disclosed that During the official opening of the 4th Session of the 12th National Assembly, the president revealed that 50.1% of the budget now goes towards salaries and emoluments, while 40.0% is towards debt servicing, leaving the country with only 9.9% for other critical sectors.

He said that this situation is deeply worrying and is indicative of a growing debt burden, which is leading to reductions in spending towards education, health and social protection and a host of macroeconomic challenges. If this situation is not urgently corrected, the country will not have the capacity to continue servicing its external debt obligations.

Meanwhile, CTPD urges government to take austerity measures seriously in order to reduce the portion of government expenditure towards operations such as foreign trips.

Mr mwaipopo said there is need to urgently halt the contraction of new loans and non- economically viable projects such as plans to re-launch a national airline, the country needs to gravitate more towards Public Private Partnerships for important and viable strategic infrastructural projects.

He said the gains from austerity measures can then be used to dismantle the domestic arrears in order to stimulate growth through the private sector.

“It is greatly disturbing that the government continues to blame external influences for every economic problem the country is facing. The best option will be to own up and open for dialogue on what can be done collectively to solve the challenges. If urgent measures, which begin with looking from within, are not taken, Zambia will fall into a debt crisis” adds Mwaipopo.

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