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Sat, 25 Jan 2020 19:56 GMT

Lungu Attempts to Revive Zambia’s Ailing Economy


7Dnews London

Tue, 16 Jul 2019 02:55 GMT

A statement from the Zambian president has confirmed that President Edgar Lungu has fired Finance Minister Margaret Mwanakatwe on Sunday, July 14th, amidst an on-going crippling economic crisis. The president’s decision comes after serious concerns have been raised about the future of the country’s economic status, AFP reported.

The former finance minister was appointed only last year but was removed without reason given and replaced by central bank deputy governor Bwalya Ng’andu. In a letter to the minister, Lungu stated: “I hereby terminate your appointment as minister of finance”. 

Earlier in 2019, the president relieved army commander Lieutenant-General Paul Mihova and his deputy from their duties due to concerns over the military position in Africa. However, he did not give any reason to justify his decision, according to Zimbabwe news.

According to The Economist, the Zambian government is over-leveraged, and this will weigh on the macroeconomic outlook in 2019-2023. To meet its debt obligations, the government has increased taxes for the critical mining sector, which in turn will keep output, foreign direct investment, and exports well below their potential rates.

Despite this, the government is expected to continue borrowing heavily over the medium-term for a series of debt-financed infrastructure projects. The irrationality of this policy is expected to prevent an IMF program.

Moreover, Lungu called for Zambians to “work as a team and stabilize the economy.” On Monday, however, main opposition party UPND spokesman Charles Kakoma told AFP that Lungu’s government wasted money and a “cosmetic change” of ministers would not improve the economy.