That the corona virus pandemic triggered a decline in economic growth in 2020 is now a moot point. We know that economic growth shrunk by seven (7) percent in 2020 as opposed to a positive growth rate of three per cent in the previous year. So we get all that.
When economic growth declines, this direly translates into reduced commercial activities. And when such activities are limited, it means that business do not make enough money or profits. This situation inevitably forces them to put any investment expansion plans on hold to preserve cash. It also means that employees get sent home and the impact of their families is harmful. So this, if you like, is why economic growth is essential at all times and therefore we should never put barriers on its path
What we can also not afford to indulge in under these circumstances, is wailing and allowing the virus to take over our lives. We can also ill afford to continue to impose measures whose net effect is to block economic activity as we did recently with the prohibition of alcohol sales for example.
Instead, we have to emulate the rest of the world and thereby focus on a vaccination plan for the whole country to allow ordinary people to get on with their lives. While doing so, we should not then drop our guard but remember that once the corona virus dissipates, our economic challenges would still be gripping us. What this does is to remind us of the need to fight the virus without necessarily giving up or postponing the important mission of economic reforms. For us as they say, this is a matter of “chewing gum and walking at the same time”. You do not stop walking because you are still chewing gum or vice versa. In the same vein, we need to save lives and livelihoods at the same time.
Where we are now, saving lives is primarily about vaccination. As for livelihoods though, I must confess that I no longer know the plan that we are executing. In the early days of the Masisi administration, I at least knew that we had a Transformation team to develop plans to set us on a path of high growth and high income. And then COVID happened. Amid the ravages of the pandemic, we got -rightfully for that matter- an Economic Recovery and Transformation Plan (ERTP).
The ERTP set out to entrench export competitiveness as a key pillar of economic recovery and job creation. It enjoined us to do the right but difficult stuff. Since then, very little has been heard about the status of the ERTP, at least for those of us outside Government enclave. In the interim, venerable parties such as the IMF and Moody’s have proffered well considered thoughts on some of the fundamental things we have to do to recover from the impact of the pandemic as well as absorb future shocks. It is the painful but efficacious medicine that these institutions have been recommending for some time now namely; privatisation of state owned enterprises, improving the business environment and rationalisation of the bloated public sector wage bill which gobbles up 40 % of total expenditure.
Instead of following through on the ERTP, we are now onto something called the Reset Agenda. The Agenda alludes to value chains, digitisation and mindset change but I hope these are not seen as substitutes for privatisation and reducing the public wage bill. So far no one has bothered to explain how the Reset addresses the structural problems which precede the pandemic.
