Zambia’s international business image has been damaged – HH

United Party for National Development (UPND) President Hakainde Hichilema has charged that Zambia’s image in the international business arena has been damaged as a result of PF policy inconsistencies and uncertainty.

Mr Hichilema says the over US$2 billion in Foreign Direct Investment Zambia recorded in 2013 is being threatened by policy inconsistencies.

In his weekly policy issue, Mr Hichilema cites the recent reversal of the mining tax regime barely three months into its implementation as the latest in the long list of policy inconsistencies and u-turns by by the PF Government.

He explains that the cumulative effect of policy inconsistency is that Zambia will be viewed as an increasingly unreliable investment destination.

Mr Hichilema points out that the recent downgrades by international credit agencies attest to this.

He says long-term investors will shy away from investing in Zambia, with only speculators and other short-term investors investing in the country with a view to making quick profit and repatriate their investments before policy changes prevent the structured growth of their investments.

Mr Hichilema adds that it also increases the cost of capital should Zambia decide to borrow internationally again, since lenders will also be aware that the poor investment climate increases the risk of default.

He states that in order to enhance the attractiveness in the investment climate, the UPND will pay particular attention to maintaining a stable and predictable fiscal policy, exchange rate stability as well as sustaining a robust GDP growth of over 10% per annum.

Mr Hichilema says his party already knows the untapped growth sectors of the economy.

He adds that the UPND will ensure consistency between the fiscal and monetary policies and will not borrow to destabilise the interest rates.

Mr Hichilema further states that the UPND will introduce a robust budget implementation policy to avoid wastage by the Government which lends the Government to start unplanned borrowing thereby affecting the monetary policy.