Friday, January 08, 2010
By Yusuf Dodia
Tue 05 Jan. 2010, 04:00 CAT
2010 is now here and life must go on. The region has been in frenzy over the 2010 World Cup with special impact on the Southern African countries. Even Zimbabwe, which is grappling with recovery from an economic meltdown, is targeting at least seven top world cup countries including Brazil, to set up camp in the country.
Zambia is also grappling with finding some solutions to the growing power deficit as industry, mining, and agriculture continue to register growth. There is a seeming impasse highlighted by the inconclusive path and way forward for Zambia’s fibre optic backbone as Zamtel and Zesco struggle to come to some meaningful understanding as they roll out billions of kwachas of tax payer’s money on infrastructure development. No solutions are yet in sight in respect to the fate of Indeni Oil Refinery.
What is the way forward? What institutions are best placed to help the country steer a course that will hopefully lead to prosperity? Where will the resources come from? How can we best use our comparative and competitive advantages for economic development? What is happening in the regional and global economies? How do we adapt to the new challenges?
It is quite obvious that one initiative for the way forward is for government to strategically partner with the private sector using both the Public Private Partnership (PPP) program and other mechanisms such as Ministerial authority to appoint boards for public institutions. This strategic alliance will bring to the table government’s national agenda for development and the private sector’s practical experiences and concerns that need to be addressed before businesses start to invest flat out in the economy.
The current problems experienced at Zesco in respect to the future developments of the national fibre optic backbone indicate the lack of dialogue between the board and their parent Ministry, and also the seemingly lack of dialogue between the Ministry of Energy and the Ministry of Transport and Communications. Zambia needs to develop sincere and productive PPP relationships at policy formulation levels such that the national interests always come first.
In the same vein, the challenges of becoming an active player in the Comesa Customs Union requires the same partnerships because ultimately the private sector will be required to spearhead intra regional trade that should benefit the country as government recedes into the background with diminishing political influences on the trade regime. Private companies will have to take responsibility for sustaining their own businesses and remaining viable as government steps back and removes the protection that many companies have enjoyed over the decades.
One key sub sector is the insurance business which is currently protected by legislation from outside competition. Already the Comesa yellow book third party insurance for motor vehicles is blind to sovereign borders and this phenomenon will only grow with other insurance products. Poor performers will soon become vulnerable to losing business to the good service providers when the Customs Union becomes active. For the private sector, getting involved in strategising on how business can be best done under the Customs Union regime is a matter of survival and not choice. This also applies to the government because a growing and vibrant private sector reflects higher tax collection which finances the national budget and other development programs.
At government level, the need to be more prudent with government expenditure is of prime importance. To this end, monitoring and evaluation of the budget roll out is one way forward to ensure that public money is building the economy. This does not necessarily mean that government should trim down the size of the civil service, but on the contrary, government should become more efficient, cost effective to the tax payer, and possibly should employ more civil servants to deliver the services that the growing economy requires. The size of the government workforce is dependant on the service demands made by both civil society and the private sector. A strong continuous monitoring and evaluation system in government, coupled with a remedial system that will patch up the weaknesses and gaps, will go a long way towards developing an effective and delivering public system.
The way forward in 2010 is to move on from the hype and marketing of economic zones, to the implementation stage. Value addition for copper and other minerals will develop the economy exponentially. Food processing and other assembly plants will be strategic as feed stock for products into the region. The opportunities for private sector employment and emerging small businesses are great when focused on the impact of economic zones on the economy. Some useful ideas and diversification options can be unlocked through the economic zones initiative.
The Sixth National Development Plan (SNDP) is on the table awaiting finalisation. A PPP approach to streamline this document for the private sector to use in business development will surpass the achievements made by the FNDP. More private sector input will give the SNDP credibility and will channel the strategies and investments that government will make in developing the economy towards real issues and concerns faced by the private sector.
Partnership at the domestic level prepares the nation to deal with the challenges of the global economy. Zambia is negotiating with the European Union to finalise an economic partnership agreement, and at a higher level, the country has to input at the World Trade Organisation meetings to ensure that developing economies are not trampled by the developed nations, but are supported to grow and become self sustaining. These pressing negotiations require the full wit of the nation through strong partnerships at the domestic level and good partnerships at the regional level.
Every economy has the challenge of building infrastructure to service the aspirations of the people and to promote, support, and facilitate economic development. The way forward for Zambia is to first decide clearly about what infrastructure should be built by government to support both social and economic development, and what infrastructure can be left to the private sector to develop for business enhancement. This distinction is paramount to deciding the role of government in economic development and the role of the private sector in building a country. The way forward for Zambia in 2010 is actually in our own hands.