Q FM Africa's Modern Radio
Former Finance Minister Katele Kalumba has observed that over exposure of the Kwacha due to government expenditure is what has caused failure in performance of the country’s fiscal policy.
Dr. Kalumba says this is why he thinks that the constraint measure by the Central Bank of setting the policy rate at 12.5 percent is an acknowledgement on the part of government that it lacks fiscal discipline.
He has told Qfm News in an interview that he further thinks that even the tight fiscal policy stance that Finance Minister Alexander Chikwanda indicated in the 2015 budget speech may not be met.
Dr. Kalumba says this is because there appears to be too many pressures being exerted on the Minister which could create inflationary trends, the reason why the Central Bank is trying to put some constraints.
He says it is however important to note that much as the Central Bank’s stance is good, the problem does not lie in the monetary policy practices, but the fiscal policy practices.
The former Finance Minister states that it is incumbent upon stakeholders to publicly express the concern on the need for government not to relax fiscal discipline on account of politics.
He says government cannot afford to relax commitment on stabilizing the kwacha and commitment to reducing both domestic and external debt.