A man's admiration for absolute government is proportionate to the contempt he feels for those around him.
― Alexis de Tocqueville
Friday, 31 January 2014
Thursday, 30 January 2014
Wednesday, 29 January 2014
Editor's note : The article below is taken from VoxEU publication 'Democracy in Africa' by professor of economics at Iceland University.
Tuesday, 28 January 2014
Editor's note: This is a guest post by Henry Kyambalesa (PhD), a resident contributor to Zambian Economist. He is a Zambian academic currently residing in Colorado, USA. This article is a response to comments received by the author on his previous piece published here.
- Abolition of price controls;
- Abolition of exchange rate controls;
- Privatization of state-owned companies;
- Liberalization of interest rates;
- Provision for 100% repatriation of profits;
- Removal of quantitative restrictions on imports; and
- Removal of restrictions on investment in all sectors of the country's economy.
Monday, 27 January 2014
"...The recent [IMF] assessment found a deterioration in [Zambia’s] Public Financial Management (PFM) , including reporting and quality control. Procurement practices have also deteriorated, with single-source contracts for some large projects. While the rollout of the Integrated Financial Management Information System (IFMIS) has continued, its implementation, as well as that of the Treasury Single Account (TSA), has been weak, and only release-based fiscal data are available. In addition, consolidation of financing data with the Bank of Zambia (BOZ) needs to be improved..."
Saturday, 25 January 2014
Friday, 24 January 2014
Thursday, 23 January 2014
It appears that Finance Minister Alexander Chikwanda is addicted to intellectual and moral error. Here is what he said recently in the Post on mining companies and borrowing :
"...we are putting in place measures to generate enough revenue so that we can avoid borrowing. Of course, some people are saying windfall taxes for the mines but that is a 'fetish' which some people want to hang on to whether it is logical or not. We do understand that contribution of the mining sector is very low at five per cent but we shouldn't just look at taxes; there are other factors like having the mines generating 70 per cent of foreign exchange and creating jobs. Ideally, we want to see the mines contributing about 10 per cent and ZRA is being strengthened to ensure efficient revenue collection." (The Post)This is economic bumbling. Such language does not mean anything, but designed to fool the economic illiterate. Of course people are easily fooled because his statement has gone unchallenged for over a week! So, what do we make of the latest Chikwanomics?
Wednesday, 22 January 2014
The recent IMF Article 4 report suggests that Zambia will again exceed its fiscal deficit set out in the Budget 2014 :
IMF stressed that the proposed 2014 budget does not take sufficient steps to start addressing the large fiscal deficit. The budget submitted to Parliament in October calls for a deficit of 6.2 percent of GDP in 2014, above staff’s recommendation of 5 percent. The budget aims to increase domestic revenue by about 1.3 percent of GDP, mainly through non tax measures (including bringing revenue from FRA and other government agencies on budget, raising road tolls, and introducing a surcharge on money transfers).Contrary to [IMF] advice, the [Zambia] budget proposes raising the Personal Income Tax (PIT) tax-free threshold to K3,000 from the current 2,200, which will generate a revenue loss of about 1 percent of GDP [Under the new PIT tax-free threshold, only about 33 percent of employees in the formal sector are expected to pay income taxes]. The budget also proposes a wage freeze for 2014 and 2015, as well as a net recruitment freeze for 2014 and limits FRA activities to maintaining a strategic reserve.
Monday, 20 January 2014
Editor's note: This is a guest post by Henry Kyambalesa (PhD), a resident contributor to Zambian Economist. He is a Zambian academic currently residing in Colorado, USA.
Saturday, 18 January 2014
Thursday, 16 January 2014
Press Release No. 13/535December 19, 2013On December 11, 2013, the Executive Board of the International Monetary Fund (IMF) concluded the Article IV consultation with Zambia.
Zambia has achieved strong and sustained economic growth over the past decade due to improved macroeconomic management and increased copper production; however, risks have over the past year increased with rising fiscal imbalances and lower reserve coverage. Robust output growth continued in 2012 at slightly above 7 percent, driven by agriculture and services, but is slowing in 2013 due to a weaker harvest. Expansionary fiscal policies, mainly from spending on subsidies and wages, have raised the projected 2013 deficit to about 8½ percent of GDP. Rising imports together with weakened copper prices are expected to move the current account into deficit, and international reserve coverage has fallen to 2.3 months of next year’s imports.