HH Calls For Economic Indaba
In light of the current state of the economy opposition leader Hakainde Hichilema has called on the PF government to convene an Economic Indaba. The UPND President has proposed putting aside partisan rivalries in order to collaborate regarding a plan to turn the economy around.
“We have been having consultations with our economic team and it is time for the PF government to consider our call for an economic Indaba. We want to begin repairing the economy now, before it deteriorates further,” Mr. Hichilema stated on Facebook earlier today.
His calls come as concern regarding low levels of economic growth and rising debt threaten to destabilise the country.
Last week Mr. Hichilema advised the government to consider reforming the Development Bank of Zambia (DBZ) and the Citizens Economic Empowerment Commission (CEEC) in order to tap into the potential of Zambian entrepreneurs.
Referring to a report in which Zambia was shown to rank second among African countries when it comes to entrepreneurial appetite, Mr. Hichilema proposed a series of measures government could take to provide entrepreneurs with additional support.
“We know that Zambians are very enterprising. What many entrepreneurs lack, is a package for their businesses to grow. It is a known fact that over 50% of formal employment in the world is created by SMEs. These are major contributors to GDP and taxes that run most economies. In Zambia over 88% of all formal jobs are in SMEs, they also contribute 70% to GDP. Making this a huge sector and engine of the economy,” Mr. Hichilema stated.
“Our plan for this sector is very simple. Firstly, the major problem with SMEs is access to financing. This is the reason if the current Government is serious about unlocking the sector, they should reform DBZ and CEEC into venture capital institutions (I will explain this further below). Secondly the Government must not just sign MOUs with foreign Governments like the much talked about Israel and India MOUs, but should actually sign contracts for supply of goods and services. This is called market linkage which an SME cannot do on its own. Third dimension is what we call contract discrimination, here is an example, a road contract has various components, technical and material supplies. We have been told that 20% contract value of any project must be given to the local contractors. I disagree and suggest an alternative; what if we exclude certain elements like supply of cement, supply of stones, supply of steel for instance during road construction to be exclusive for Zambians, that would have more impact than an arbitrary figure,” he continued.
“Let me talk about financing again. I am suggesting to PF to carry out drastic reforms at DBZ and CEEC and the pension funds that have money sitting idle sometimes. DBZ and CEEC must take the form of venture capitalists, where they finance Zambian start-ups and SMEs and they own shares in those companies and appoint management to those companies. This way they will ensure that they are part of the day-to-day decision-making process. While ZDA can be transformed into a proper Business Development Service outfit that could be the institution which looks for business opportunities for start-ups and SMEs to give them the necessary boost.”
