FINANCE and National Planning Minister Alexander Chikwanda has said Zambia’s re-classification to a lower middle-income bracket is meaningless because it has not benefitted many ordinary Zambians.
Mr Chikwanda said the re-classification was made at a time when the prices of copper – the country’s leading foreign exchange earner – rose to around US$10,000 per tonne, which influenced the figures but did not have economic benefits for many Zambians. He said Zambia remained poor and a major policy shift was urgently required by focusing on the fight against corruption while strengthening the capacity for financial management systems and improving agriculture and other sectors.
During a meeting with visiting World Bank executive director for Africa group Hassan Ahmed Taha at the ministry of Finance, Mr Chikwanda said previous governments had paid little attention to critical issues that ensure real development, such as corruption. The World Bank team is in the country to receive the Government’s economic and social development roadmap to help provide assistance, especially in the short-term targets that President Michael Sata wants to achieve within 90 days in power, as well as long-term targets.
Mr Chikwanda said the fight against corruption was important because it protected wrong actors while condemning hard workers, and that money meant for development went into the pockets of a few people.
He said the Government would listen to the World Bank because Zambia was a member and that the bank needed support for it to succeed, more so that it helped influence Zambia’s qualification to the Highly Indebted Poor Countries (HIPC) completion point to win debt write-off. “I wonder if we can qualify now that copper prices have gone down. When that information was being compiled, the prices of copper went up to around $10,000 per ton,” Mr Chikwanda said.
He said Zambia was not able to finance the national Budget using its locally-sourced finances despite being graded as a lower middle-income nation and urged the Bank to continue providing Budget assistance.
Mr Chikwanda said the re-classification was influenced by the conditions that prevailed at the time and it was clear that the country had not developed since the attainment of independence from Britain in 1964. Mr Chikwanda said at independence, Zambia’s employment portfolio stood at 400, 000 people out of a population of about three million and that 47 years afterwards, the number had only moved to 600, 000 out of 14 million people, representing 25 per cent.
The minister said the population had continued to grow while the capacity of industries to create jobs had remained static.
Mr Chikwanda said minor improvements had been made such as the country’s ability to finance 90 per cent of the national Budget while 35 per cent of the previous budgets were externally financed, but that required restructuring by allowing for borrowing to save the social sector from collapsing further. He said there was need to invest in the energy and agriculture sectors to stimulate job creation while meeting the energy deficits the country was experiencing.
And Mr Taha called for improved investment in the education sector as an engine for economic development. He assured that the World Bank would continue to provide Budget assistance to Zambia despite being re-classified to lower middle-income status until it was certain that the Government could stand on its own.
And World Bank alternate executive director Denny Kalyalya, who is a former Bank of Zambia deputy governor, told the minister that the Bank had been transformed and was no longer running programmes based on restrictive conditionalities.
[Times of Zambia]
Mr. Chikwanda you raise a valid point which was also raised by Auditor General – Anne Chifungula about concerning corruption. “Fight against corruption was important because it protected wrong actors while condemning hard workers, and that money meant for development went into the pockets of a few people”.
Anne Chifungula said “I’m actually elated and very energised because it is very frustrating especially for my officers, they go out and do the work then at the end of the day they see nothing being done and even laughed at.Some of them who are unfortunate they are even threatened, beaten up and nothing gets done.”
# 1 Should read Anne Chifungula – concerning corruption and not (about) concerning
I find it weird though that “Zambia’s re-classification to a lower middle-income bracket is because of prices of copper which rose to around US$10,000 per tonne.
I thought that the re-classification had to do with the at micro economics the cost of living for the majority of Zambians.
Pretty,the second part of your second comment should read: I thought the re-classification had to do with aggregate economic conditions for Zambians,.
Can someone tell me, was Chikwanda caught up by stray shrapnels from Nato bormbadments or what? The face looks like he was part of the Gaddafi’s last efforts to escape from Sirte.
Mulilo wa kwa Lesa mwe bantu
mulilo wakwalesa
Those are mulilo wakwalesa
Mulilo wakwa Lesa
Chinyemba umuchishi usuma you must respect elders 4 you to lve longer waufwa.
400,000 people were employed in 1964, but without diplomas or degrees and paid what a house servant gets today in Zambia. 3 million people at independence, but 60% were above the age of 20! Now of the 13 million, 0nly 35% are above the age of 25 and life expectanvcy is less than 50. Fertility rates are among the highest in the world. So Mr Chikwanda, put statistics in perspective and stop quoting absolute figures.
how do you classify a coutry rating by using one commodity…this is insane..
Chikwanda did take your ARVs today,retirees making money for their grand children.Alex how poor people are in America,UK,France?Yet we are told these are world riches economies,the classification of Zambia was a foundation very important for financing etc the same money you are looking for to put into your fellow Bembas’ pockets.You have no plans for the country you finished politician.
And be informed that politicians are usually against promotions in economic classifications coz it means less Financial Aid and less room to manouver for their corrupt gains, its called rent seeking. We like it or not, Zambia is a lower middle income, lets move on from there, not regretting. I think ba Chikwanda has old theories, economics is a living subject, its not like law which thrives on dead precedence. I think Chikwanda is just like RB’s political economy. Thats why we need young talent with contemporary economic ideas.
Classsification was impotant and financing RB and his vuvuzelas. How much did we make when copper was at US$10,000 per ton? Where was the money used? What growth was attained in the period in terms macro and micro economy?
This man Chikwanda looks tired. Does he know how to operate a spreadsheet? Forecasting, etc
No. 7; Ba 90 days going, going….. what is it about Bemba’s? You have insantiable hatred for them. Sorry Mr inferior tribe; it is not our fault that Bembas are in charge.
So why don’t you ask for reclassification back to poor country status then if you are so offended by the re-classifcation to middle income? Enough of the complaints. Please ask for the reclassification so that we can move on.
excellent points mr. honourable, but what programs are you putting in place to get us out of this misery?
Mr. Chikwanda, you’re talking absolute bullsh!t! For operational and analytical purposes, the World Bank’s main criterion for classifying economies is gross national income (GNI) per capita. Based on its GNI per capita, every economy is classified as low income, middle income (subdivided into lower middle and upper middle), or high income. The groups are: low income, $1,005 or less; lower middle income, $1,006 – $3,975; upper middle income, $3,976 – $12,275; and high income, $12,276 or more. I shudder to think you’re the one tasked with looking after our money. You’re one of the guys who originally put us in the indebtedness hole in the first place and you’re trying to take us back there.
its like this govt interest is only corruption. what plans are they having on investments and economic development.? it like there is something not clear and surely zed
The man simplifies and explaination for you you call him an *****… What do ARV’s have to do with ones capacity to deliver, this is why this country will always remain behind because we don’t want to deal issues… In as much as several other factors are used in determining the clasification of a country, the copper price aspect plays a segnificant role. Some of you are talk about GDP or per capita income, don’t we sell copper from this country??? Economists can clarify this for you better. Otherwise visit the World Bank websites and Educate yourself, don’t insult people based on perceived technical know how when you don’t know anything about the subject.
Reading just the first paragraph has led me to wonder Chikwanda’s level of education. Classification simply means we are able to meet our recurrent departmental charges. We do not need borrowing to meet our normal costs. Further if there’s some surplus we would take it to other infratsructure developments like roads without going to the Paris Club to beg for money. I think if roads and other inftrastructre are worked on, we would benefit moving on better roads and this wud translate in stable or reduced transport costs. It does not mean that they should be a queue of pipo receiving money from govt Mr chikwanda. Yes it does mean something Mr Chikwanda. What have you studied Sir?
# 4
Chinyemba mwaiche you should grow up! I will tell your brother that you are a nuisance on LT
Chinyemba at 4. U have made my day lol. The minister is an old man and years have worn him down.
Ba LT what is you problem why are you not showing my comments
It is wrong for the minister to put so much focus on corruption. He should leave that to the politicians and relevant agencies. We expect him to talk about his national plans for economic development etc. The Word bank and IMF dont play corruption games. They mean business. Yes corruption is there but is teh Ministry of Finance the arena?
LPM, RB and Sata have all vowed to fight corruption. This just shows how baseless and hard to define corruption is. It may just be something we think the West is interested in. But really, we must be talking more about how to get more money from the mines, how to create jobs, how to make Zambia a truly middle income economy.
The fight against corruption is a holy grail. Dont spend too much time on it.
Chikwanda, I thought you were an economist. Good credit rating means you can get loans on favourable rates. And when you sell Bonds as a government, investors will have confidence in them hence you are likely to have higher subscription. The money that you raise will therefore be used for national development, schools, hospitals roads,etc. This is how the common man benefits. It’s not always about money in the pocket you dimwit!
Welcome to the world of Satanomics!
So when the country is reclassified as low income by next year that will also be meaningless, Mr Chikwanada Te?
Nobody needs to blame you when you bring the economy to its knees through your planned ‘heavy’ borrowing.
#4, I am not trying to scandalise the man but his face appears to have been affcetd by ‘umulilo wakwa lesa’ which has healed.
Help me understand is this word corruption the only tool that the PF have for support?The World Bank Rep called on you to give the road map for economic development not this corruption if today corruption ceases then what next when you have no plans laid for economic growth…tell us how best you’ll make Zambia be a lower middle economy not condemning the previous govt show us what you made of the country’s finances are under your control;
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