Green Party President Peter Sinkamba has prodded Chief Justice Irene Mambilima to develop a strategy to complement efforts being made by the executive and legislature to cushion economic impacts of the covid-19 pandemic.
Addressing the media through his Facebook page on the review of the first quarter of 2020, the Green Party leader said for the country to navigation through the covid-19 induced economic crisis, there will be need for all the three
arms of government to ‘think outside the box’ and come up with innovative ways of averting an economic disaster in the country.
“Covid-19 pandemic has brought the global economic order to its knees. The richest nations on earth have crumbled like cookies. That’s why, despite very high deaths and sickness in these countries, there is urgent pressure to reopen the economies. The economic impacts of this pandemic are horrifying.
“Here in Zambia, whilst we appreciate measures so far taken by the executive and legislature to come up with express legislation to stimulate the economy, we think that much more needs to be done. We do not think that the stimulation of the economy will depend on the executive and legislature alone. The judiciary should also come in. It is a key
the player in the economy”, said the Green Party Leader.
Mr. Sinkamba has noted that there are numerous claims before courts of law that run in billions of Kwacha with some yet to be determined while others have already been determined but awaiting enforcement orders.
“To use COVID-19 vocabulary, this is money in the economy which is ‘locked down’ or ‘quarantined’. It must be expressly released in the economy to stimulate the economy. So, the onus is on the Chief Justice to expressly intervene with a COVID-19 strategy to unlock these locked-down or quarantined funds. That way, all the three arms of government will be aiding one another to cushion the impacts of this COVID-19 induced economic crisis in the
country,” Mr. Sinkamba said.
Meanwhile, Mr. Sinkamba said the executive should consider discussing with China on dismantling of the entire domestic debt as a means of stimulation of the economy.
He said that at the moment, an International Monetary Fund package is ideal but will certainly not be forthcoming in the short-term because a lot of fundamentals are in disarray.
“Zambia’s domestic debt is around $5 billion. This money can make a difference if it were paid to domestic creditors at once in the short-term. Now, Zambia has no capacity to pay this debt at once. IMF cannot loan us this money in the short-term because our economic and governance fundamentals are in disarray. So, the only solution to this is for the government to approach China for one-shot dismantling of this debt on favorable terms”, Mr. Sinkamba has said.
He noted that China has been amorous to covid-19 pandemic mitigation adding that China could give Zambia a long-term low-interest bilateral loan to dismantle this debt.
He said no economic stimulus package for Zambia could be better than 100% one-shot dismantling of the domestic debt.
And Mr. Sinkamba said the K10 billion stimulus package which the Bank of Zambia has promised to release to commercial banks for onward lending to small and medium enterprises is unlikely to make any impacts on the targeted beneficiaries.
He said the collateral conditionalities and other risk considerations are likely to be impeding factors.
“We have reviewed various funding envelopes that have previously been used to cushion of impacts of financial crises in the two decades. We have looked at both government and donor envelopes to support small scale miners and SMEs in the mining sector”, he added.
He said the tendency by commercial banks has been that of investing in treasury bills and other off-shore less risky opportunities than supporting SMEs.
“We do not expect any change from this approach especially now when the property market is depressed. Banks are not longer too comfortable with houses and farms as collateral because selling these properties is a big now problem. This is the major reason we think dismantling already existing domestic debt makes lots of sense,” Mr. Sinkamba said.
