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Sunday, March 3, 2024

Very risky budget!

By Kingsley Jasi

Reading the budget statement, I see a dad who – upon realizing how his reckless conducts have inflicted pain on the broke family – decides to spoil the children with sweets and new clothes just to ease the tension in the house. And he uses borrowed money. Does that sound like a plan?

The K1.3 trillion deficit will fuel foreign exchange woes and push up inflation, making people continue to suffer eroded purchasing power. You borrow idle money from the banks for people to spend it on imported items, the kwacha suffers. That idle money needs to finance forex generating activities.

Why not develop concepts for production ventures? Where is the problem? Waiting for the private sector to take the initiative when on the other hand you’re crowding them out on the financial market is a lousy approach towards industrialisation.

This is the cancer that has been eating the economy and fuel poverty. It’s surprising there is no attempt to depart from this. In the same statement the Minister bemoans high rising debt that needs to be brought down, he later announces the same rate of borrowing. Does that make any sense?

There is no serious effort on industrialization. No mention of industrial parks financing. No any game changing industrial projects announced. No new power project plans announced. The only projects that we hear about were inherited from the previous government and are not even enough to eradicate the power woes.

We’re in the 3rd year now with Tonse government, where is the strategy to end the power crisis within the term?

Unless there is State lead industrialization drive that sees State financed industrial projects, the country will forever remain as wretched as it is. You don’t copy budget principles used in developed countries. This is a poor country, the economy has to be built from scratch.

The job of a Finance Minister in a developing country is to build an economy with effective wealth creating fiscal policies. In a developed country the Finance Minister manages a matured economy.

I don’t see the thinking that can change the course, besides the ongoing industrialisation rhetoric.

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