Tuesday, 2 April 2013

Populist Politics, Economic Policies Are Hurting Zambia

Good standards of governance and economic policies do not just happen; they need to be designed with greater thought crafted into unwavering statutes that exudes the spirit of a nation. The differences in political ideologies should not take new regimes to pulling down what others before them took time to build and to a large extent, apart from minor defects, has been working so well for the country. 

By Nyalubinge Ngwende

How would we know that political parties in Zambia are committed as partners in the political processes to enhance the democratic and economic growth of this country, other than a rush of blood to their heads for a day in government? And when that day arrives, how are we going to be sure that the best thing politicians will do is not to start pulling down everything that their predecessors left functioning well just for political expediency?

It is known that political parties come into government on platforms which they believe in and they are going to use to organise the economy. But in this country these platforms are marred by lack of principles, they follow a trajectory of ill personalized decisions and party patronage at the expense of the general good. This is not new with the Patriotic Front government; it is an observed fact.

In fact Zambia has suffered reverse in development because the forbearers who have gone before this generation did not lay out a strong foundation on which the future of this country was supposed to be built. Instead, they respected to safeguard against progress by inculcating and promoting ideologies that subordinate all institutions of governance and the electorates to the executive and political patronage. Worse still even successive governments have taken a path of doing development of populist politics, taking on unintelligent (or intelligent, but rushed) measures to please their supporters.

When the MMD government took over government, it came in as an enemy of everything that was of the former regime—UNIP. It was a succession that saw the existing economic structures hurriedly pulled down. Mostly affected was the agriculture sector where without any plan of transition, the government-organised-agriculture-structures were pulled down, farmer input subsidies were quickly removed and the marketing institutions, such as the Zambia Cooperative Federation,  starved of support and left to whither out of operation. 

The textbook theories of a free market were put forward to the nation as justification for such a destruction of the government driven agriculture production and marketing system. This was done with dogmatism on economic principles that just required plain good sense to know that market structures of a sector are built of an economic culture of any country, and they cannot be altered and replaced to perfect functioning overnight. It requires a cool head to know that a shift from one economic practice to another must be gradual. But sadly, Ronald Penza, the minister of finance considered as one of the best on the African continent in the whirl wind of change in the 90s (when African countries embraced democracy and free market), quickly pulled down the old house, when he had not even brought to site bricks, mortar and scaffolds to start constructing a new one.

To drop the metaphor, the government made a wrong move to remove the existing market functionaries in the agriculture system, insult the crafters of those structures through intoxication of newly found political freedom, firing experienced managers and appointing people to positions based on patronage. Zambia did not have the strong financial lending institutions to support rural agriculture while the peasant farmers who were being outsourced by the government to produce food for the country did not have the collateral required by commercial banks to acquire loans for inputs in the absence of subsidies.

The private sector was not ready to enter the input distribution paid from their own capital in the face of poor roads and lack of information on the statistics of the farmers who could borrow fertiliser, produce a good crop and pay back their loans. The country agriculture system plunged into chaos; the few enterprises that tested the unchartered waters of agro business reached a few farmers and, as though heavens had cursed the land, the country was hit by successive years of drought and there was widespread crop failure. To recover the money for the inputs that they gave to farmers, the private suppliers (briefcase input dealers) started confiscating ploughs, small livestock like chickens and goats, furniture and stripping roofing sheets from farmers’ houses.

In short, the first 10 years of the MMD government was chaotic in terms of agriculture, leaving the country to subsist on imported yellow maize. It was the same time that one village in southern province became infamous for feeding on Mushitu Grass. On the verge of starving to death due to famine, villagers in Mushitu areas of Siavonga turned to greening grain from rye from a wild grass, which they pounded to make flour that they boiled for hours to remove the poison to produce gruel which they were feeding on.

It was a lesson that good standards of governance and economic policies do not just happen; they need to be designed with greater thought crafted into unwavering statutes that exudes the spirit of a nation. The differences in political ideologies should not take new regimes to pulling down what others before them took time to build and to a large extent, apart from minor defects, is working so well for the country.

Subsidies have improved maize crop production
Our politicians do not seem to learn. At the time the MMD was leaving office the agriculture sector was functioning, with the country garnering sufficient stocks of maize. This was on the back of altering the administration of the ruling party, and the new president, Levy Mwanawasa, reintroducing farm input subsidies and government fixing a floor price for maize. There was also an intrinsic business understanding between the Food Reserve Agency and the millers, as well as between the government and the millers.  The stability in the food production saw the country’s GDP grow between six and seven percent. Over a period of six years a bag of mealie meal never cost above K50.00 (K50,000.00 before rebasing) and inflation was stabilized within a single digit.

Only 16 months of the Patriotic Front in government, with stacks of maize from bumper harvests left in silos by the outgoing MMD administration and same market price of the grain for millers to grind the grain and put sacks of the country’s staple maize meal into retail outlets across the country, things are going bad and getting worse. All over a sudden government is quarreling with millers accusing them of causing artificial shortages, the price of a bag of mealie meal has almost doubled in some places and the government has resorted to price controls. The cross border trading of essentials that thrived normally, without smuggling, is now under state police harassment with entrepreneurs, who had opened shop on borders posts between Zambia and Congo like the Kasumbalesa in Chingola, being told to fold their business. 

An Independent economist, Muhabi Lungu, has cautioned that this is not good for business, but policy makers in the Patriotic Front government argue otherwise that those trading in mealie meal on the border areas are causing the artificial shortage in the country thereby triggering high prices of the commodity that in some parts of the country is fetching K80.00 (K80,000.00).  These changes in trends in the food economy is the tip of an iceberg how government leadership, with unguided populist policies, can cause discomfort in the country’s commodity market. The uncivil language that scoffs at the market structures and calls business actors crooks is hurting us. One would ask if negative language can disturb the market and lead to unrest in the cost of living. The answer is yes!


Miles Sampa denies price controls on mealie meal
There have been several outbursts by President Sata's ministers who have been shouting down the farmer input programme of being riddled with crooks and there have been uncouth accusations of millers operating cartels that are hoarding grain and exploiting consumers. Some of these outbursts have been hinting on taking back Zambia’s economy to State control. However, Government refuses to accept that it is instituting a price control by ordering millers to sell the mealie meal at K55.00 (K55,000.00); with Finance deputy minister Miles Sampa choosing the euphemism that the Patriotic Front government is only trying to bring fairness to the market so that people can benefit from the maize produced with huge government subsidies. 

The factor of negative communication affecting the market could be subliminal, but that of doing personalized populist politics is clear. It points to how continuity in strategic institutions must be secured, by ensuring that managers in strategic public institutions are not fired and only to be replaced with others on pure political patronage. If none of these observations is happening now, then it is scaring to see the Patriotic Front campaign policies translate into policies that can create unnecessary tremors in the economy within a short time.
 
It may be argued that even the good gains that came with the MMD in its last five of the twenty years in power were not going to be with us if we did not accept to swallow the bitter pill of their conflicting errors in pursuing the newly found opportunity to learn and implement the intricacies of free market. It is also argued that it is only a fool who says he will only jump into water when he learns how to swim. But we already learnt how to swim in the free market under the MMD, which I think was good; now I do not know what the Patriotic Front is trying to do! Maybe this government is trying to take us back to the times of government controls that hurt us so much.

The country will need to find means to perfect these errors in order to ensure a good sense of principles and a cool head in our leaders when handling reform even when there is regime change. Let not professionals who have mustered certain systems become the maxim of ‘throwing the bath together with the baby’.
Excerpts from my book: “About Mature Politics” (under manuscript).