Reacting To 2010

The 2010 budget has been presented and the economic programs for the next 12 months are now on paper awaiting debate and ratification by Parliament before being implemented in January.

2010 is a pre-election year leading to the 2011 Presidential and General elections. It is quite obvious that many resources will go towards preparing the Electoral Commission of Zambia for the tripartite elections. It is also obvious that the campaigns will kick off next year by all political parties to please and attract the voting public in an effort to win the necessary votes to form the next Government. History reminds us all that vast amounts of money are poured into this exercise at the expense of structured development.

As the elections campaigns kick off in 2010, so does the World Cup dominate the African sporting calendar with the spotlight being on South Africa in particular and Southern Africa in general.

Many European and South American teams will scramble to South Africa and her southern region neighbours to finalize their master plans to lift the prestigious trophy by the end of the tournament. South Africa and her Southern Africa Customs Union (SACU) neighbours have invested resources in providing training bases for the World Cup visiting teams and are likely to reap the benefits of increased tourism.

Zambia may have to react to the challenges of the 2010 World Cup event by making some

overnight provisions. We have to assess whether the 2010 budget opens up options for attracting the massive flow of tourists into the sub continent. Is the 2010 budget providing for Visas on demand at our ports of entry to facilitate the attraction of South Africa bound tourists to visit Livingstone and the rest of the country? If we have not made any meaningful provisions to tap this opportunity, then we may have to react to the challenge with some creative interventions.

The 2010 World Cup will push the demand for accommodation throughout the region. Zambia has not responded to the anticipated demand and we do not have an up to date audit of bed spaces available in the country. If the 2010 budget has not addressed this issue then we may need to react to the evolving opportunities by persuading both Central Government and Local Government to collectively motivate and market the establishment of Guest Houses and Lodges to cater for the influx of visitors in 2010. The motivation exercise may have to waive the ‘red tape’ that is associated with licensing and permits, and the Local Councils may have to allow the ‘free’ erection of sign posts for these business investments. The Finance Ministry can inject a new enthusiasm by removing taxes during 2010 on the operations of Guest Houses and Lodges.

In order for Zambia to link to the 2010 euphoria, it will be necessary for regular flights to be established during the World Cup period. If the 2010 budget has not focused on this challenge, then another reactive investment may have to be made to open the skies to airlines that are willing to connect Zambia to South Africa and other parts of the world that will fly in those tourists that have put the World Cup in their plans for next year. This should not under play the impact of road transport that can cater for regional travel to and from South Africa

As the SACU prepares to engage with South Africa for the 2010 World Cup, Zambia has

joined other Common Market for Eastern and Southern Africa (COMESA) countries to launch a Customs Union in 2010.

The COMESA Customs Union poses some key challenges to member

states as it potentially offers an open market covering nearly 20 countries. Learning from the experiences of SACU, the weaker economies in a Customs Union will have to strategically re-engineer their economies to become equitable partners in the union or allow themselves to develop into markets for the stronger economies.

As for Zambia, the 2010 budget will need to make provisions for programs to support the rapid development of the Zambia manufacturing sector in an effort to build national capacity to produce and export into the Customs Union. If we have not catered for the Customs Union in our 2010 budget, then we may have to react by introducing some new initiatives to build and strengthen our capacity to manufacture, to process our food crops, and to package various commodities so that we can favourably compete with the better organized manufacturing economies of Kenya and Zimbabwe.

2010 promises to exhibit the first Multi Facility Economic Zone (MFEZ) in the country. Hopefully, the 2010 budget addresses the gap for Zambian investors to meaningfully and actively participate in this program. The media reports the increasing number of foreign investors taking up space in the MFEZ’s but there are no statistics given on domestic investors participating in the Zones.

Once again, if the 2010 budget does not address this anomaly, then some reactive measures may have to be introduced to attract and absorb Zambian investment if sustainable development is to be achieved.

As the details of the 2010 budget are released it is hoped that the concerns around responding to the challenges of 2010 will be addressed. It is better to have a ‘storm in a tea cup’ brought about by perceptions, anticipation and nail biting expectations, than to be in a situation where the country is forced to react to the emerging challenges that had not been strategically planned for in the budget.

Reaction is often very costly and is seldom done in the most cost efficient manner. Too often, reactions are always too late, and the opportunities are often missed, but the legacy of reactions tend to be poorly researched and constructed actions that create more public harm than good.

After going through the 2010 budget, is there an opportunity to plan some reactions for 2010?

Published 13 October 2009