Reestablishment of national airline ill timed – CTPD

CTPD Executive Director Isaac Mwaipopo

The Center for Trade Policy Development (CTPD) says the move by government to reestablish Zambia Airways is a wrong one given the current economic position the country is in.

The center says the move is a bad investment decision, further describing it as a blunder in the making than a blessing.

Addressing journalists in Lusaka, CTPD Executive Director Isaac Mwaipopo says in light of Zambia’s huge debt and the soon to mature Eurobonds, the government needs to pursue fiscal consolidation and not expanded expenditure on new projects.

Mr. Mwaipopo says this investment is against the backdrop of high and escalating public debt which is already more than half of Zambia’s Gross Domestic Product, high fiscal deficits, high poverty levels among other challenges.

He notes that government also has a highly inflated wage bill, with an analysis conducted by the World Bank in September 2017 indicating that 23% of revenues were allocated to interest repayments while 54 percent was allocated to salaries and wages leaving 23% for other expenses.

He has observed that this investment is only likely to lead to more debt accumulation and increase the public wage bill leaving lesser funds for poverty reduction initiatives in the country.

The CTPD Executive Director has since recommended that the government should prioritize the finalization of the infrastructure projects which they have already commissioned as opposed to reintroducing the national airline.