Maravi

Magande explains quick recovery of economy

Magande explains quick recovery of economy
By Chiwoyu Sinyangwe
Wed 30 Dec. 2009, 04:01 CAT

Ng’andu Magande has explained the quicker than expected recovery of the country’s economy, saying late president Levy Mwanawasa’s economic team left the mood of Zambians too high to be changed by anyone.

Whereas most African economies, especially commodity-driven countries like Zambia, were grappling with the effects of the global economic crisis which had sliced their economic output after commodity prices crashed, the local economy had shown resilience with growth revised to six per cent for this year.

The rebounding economic growth corresponds with the drop in annual inflation rate expected to close the year around 10 per cent from the targeted 12 per cent.

The local foreign exchange market remains relatively stable after seeing the kwacha appreciate to around K3, 300 against US dollar before collapsing to K5, 800. It has now settled in the current band of K4, 600 against the US dollar.

Commenting on the development, Magande, a former finance minister, said the economic vision left by Mwanawasa had embedded strong dedication and resilience by Zambians towards the country’s economic development.

Magande, the country’s longest-serving finance minister, said although the current government had benefited from the strong economic foundation left by their predecessors, he regretted the abolishment of popular windfall taxation on the mining sector as well as the change in the fertiliser support programme.

“I said at that time that no new president is going to change anything. What they did in this year’s budget was to come and start changing things,” Magande said. “You read the minister’s budget…he was saying ‘I am going to do things differently.’

The budget he presented in October is the same as we were presenting it before. So, they said they will change things for you as Zambians, the whole mood that was left by president Mwanawasa is too high for them to just change and that is why they are having problems.”

Asked if the current government was failing to manage the country’s economy, Magande responded: “Well, I don’t know whether they are failing…Perhaps there is a longer time frame of doing things differently like the minister said that ‘no we can’t tax these mines now because they will make a loss and they will leave, so what we do is let them continue taking our minerals now and then when they become profitable, we can start taxing them’.

He doesn’t realise that every day one tonne of copper which leaves the ground is lost revenue for the country. So, if at the time that they will make profits and they have taken away all the copper, what are you going to get? So now you are telling the younger people like you that let the people enjoy now, the mining companies and the employees who are employed enjoy now but in 20 years time, you will find big holes and you have no hope and is that how you give hope to the future? What we should do now is to share the little that we are making so that you create the environment for the future.”

Magande also condemned the government for reducing the amount of inputs to farmers after altering the Fertiliser Support Programme (FSP) to the Farmer Input Support Programme (FISP) under the 2009/20101 farming season.

“The farmers, perhaps next year, they will be told that now you have graduated because last year we gave you four bags of fertiliser now you to stand on your own,” said Magande. “If you have to build somebody, you have to build them into reasonable levels. Four bags, what can you do?

And the farmers have been complaining everywhere I raised the matter in Parliament…Mr Vice-President (George Kunda) everywhere we have gone in the country the two problems people are raising are roads and fertiliser, what is your answer? He said ‘no we reduced the fertilisers so that we can have more people to benefit.’ Is that how you are going to make a cow fat? …you can’t say ‘because I have more animals now I will reduce rations…when do you get them to the market?”

Labels: ECONOMY, GREAT DEPRESSION II, MAGANDE, MWANAWASA

posted by MrK @ 8:14 AM