EXTRAORDINARY MEASURES FOR EXTRAORDINARY TIMES: TOWARDS SHORT-TERM ECONOMIC STABILITY AND MEDIUM-TERM GROWTH AMIDST THE COVID-19 PANDEMIC

1. INTRODUCTION

The COVID-19 pandemic has given rise to extraordinary circumstances worldwide.This calls for bold and heroic home-grown efforts in response. It also calls for bold leadership and unity of purpose. Now is the time for us, leaders to show leadership from the front and relegate our leadership responsibilities to others. Extraordinary times require us to rise up and show our courageous leadership in mounting extraordinary responses to the COVID-19 pandemic.

We wish to make the following proposals of what the Government should do right now to address the heightened thread of COVID-19, which is now within our borders (albeit with only 3 confirmed cases, thank God):

(a) Short-term measures

(i) In accordance with Article 75(3) of the Constitution (2016), we propose that the President summons the Speaker for an immediate reconvening and sitting of the National Assembly, ensuring that if necessary, this is done electronically, to protect the Members of Parliament (MPs) from risks of COVID-19 contagion to among other things:-

§ reprogramme the 2020 National Budget in view of the COVID-19 pandemic through a supplementary Budget or completely cut off expenditure for capital projects;

§ develop a legal framework for the interaction of health, sanitary and phytosanitary, and social welfare services under an integrated guiding protocol;

§ develop legislation governing the restricted, well-management and well-monitored movement of essential persons, labour, goods and services and to prohibit the unnecessary movement of non-essential persons, labour, goods and services domestically and internationally; and

(ii) Call for an emergent Cabinet Meeting to discuss International and Regional Trade and Trade Facilitation Protocol and immediately negotiate with our main international and regional trading partners so as to ensure efficient flow of essential persons, labour, goods and services into Zambia, governed by a clear and coherent operating procedure.

(iii) Provide adequate resources to the Judiciary, particularly the Industrial Relations Court, and to the Labour Commissioners Office, as a robust and safe standby dispute resolution mechanism in anticipation of possible disputes that may arise during the period of adjusting to the COVID-19 pandemic. We must ensure to avoid a deterioration into further lawlessness under the guise of social and economic responses to the COVID-19 pandemic.

(b) Short-term economic measures:

We should institute the following short-term economic measures:

(i) Institute fiscal prudency: immediately suspend or cancel the following projects and institute the following new fiscal plans and measures:

§ Cancel the controversial relaunch of Zambia Airways, at an estimated monthly cost of US$700,000 (or annual cost of US$8.4 million) and an initial investment cost of US$30 million (ZMW520 million) by the Zambian Government. This is a project that Zambia cannot afford to pursue given the state of our health care system and in view of this crisis.

§ Cancel the recently contracted US$825 million pipeline debt from China Railways.

§ Suspend the 2020 Census and large-scale public surveys until the COVID-19 pandemic has been brought under full control in Zambia and abroad.

§ Reallocate savings to priority health responses such as procurement of surveillance and logistical supplies.

(ii) Formulate an Emergency External Debt Relief Plan: urgently profile Zambian creditors and outstanding loan amounts, as a basis for negotiating for debt forgiveness or other relief from multilateral and bilateral development partners as well as repayment breaks or holidays on external debt interest payments.

§ Reallocated domestic resource savings from the debt relief to the dismantling of arrears on suppliers of goods and services, as a fiscal stimulus, prioritizing what has been classified as essential goods and services here.

(iii) Mitigate economic effects through fiscal stimulus: This will entail, among other things, engaging international community to tap into newly mobilized COVID-19 emergency response funds. The World Bank has established a US$14 billion fund to help sustain economies and protect jobs particularly in developing countries; while the IMF has announced five (5) facilities – Emergency Financing, Catastrophe Containment and Relief Trust, Augmentation under existing programmes, New Financing Arrangement, and Capacity Development – which it will use to help countries address the economic effect of CODIV-19. With the above-mentioned fiscal discipline measures in place, Zambia will be in contention to access the multilateral financing and use it as a stimulus package, particularly targeting the following:

§ Agriculture and agro-process: the demand for nutritious (organic) foods and beverages will surely rise, particularly as Europe, China and the USA start to achieve social and economic stability from the COVID-19 pandemic. Zambia, with its water agricultural resources (water, land, sunlight and a health young population that will largely be spared from the long-term adverse effects of the Pandemic) should invest the international financing into areas that foster domestic, regional and international nutritious food security.

§ Energy: COVID-19 has shown significant discrimination in targeting elderly people. As we approach winter, we will have to invest in establishing rapid deployment emergency micro- and small-energy installations, particularly for heating and foods and beverage warming in homes with old people.

§ Water and sanitation: during the pandemic, we will have to scale-up our water supply capacity as well as capacity to produce sanitation commodities (particularly soaps and other detergents, wipes, face masks, etc.); this will require providing structured technical support and financing to the manufacturing sector.

§ Pharmaceutical industry support: once the chloroquine treatment and prophylaxis trails are confirmed, the world will be in great need of the medicine. Zambia would start increasing its productive capacities now through strategic public and PPP investments in the pharmaceutical industry.

The domestic measures alone will release an estimated ZMW10.5 billion even before we access the funds being mobilized by the international institutions such as the World Bank and the International Monetary Fund (IMF) as well as the United Nations.

All of the above measures will be crucial for helping to sustain the Zambian economy and to protect jobs.

HH

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