SOCIALIST Party general secretary and first vice-president Dr Cosmas Musumali says Zambia’s monetary policy tools have been rendered irrelevant to effect drastic economic change.
Dr Musumali, an economist, also says despite Dr Denny Kalyalya being one of Zambia’s finest economists, he had to be fired because he had become: “a stumbling block in an evil machinery that is destroying the entire Zambian society and economy.”
He was commenting on President Edgar Lungu’s termination of the contract of Bank of Zambia governor Dr Kalyalya, on Saturday.
Dr Kalyalya was replaced with deputy secretary to the Cabinet – finance and economic development Christopher Mvunga.
The President’s appointment was roundly laughed at by social media commenters.
Dr Kalyalya was appointed in February 2015 and sworn into office on March 18, 2015.
Dr Musumali, in a statement, recalled that all signs of pending economic stress have been ignored by the PF government.
He said it has always been business as usual.
Dr Musumali stated that by 2015, the situation was getting out of hand and that various variables pointed to policy intervention that would ensure pro-poor growth whilst working towards macro-economic stability.
“We provided suggestions on many occasions as to how this could be achieved. [But] all this advice was arrogantly ignored,” Dr Musumali stated.
“We further warned the Zambian cooperating partners that they were also failing to read the pending economic disaster awaiting the country. They all sheepishly gave in to allow President Lungu pursue a corrupt and ruinous policy that was meant to secure him and the PF the 2016 general elections!”
He said once on that path, there was no return to sanity.
Dr Musumali indicated that the economy was on autopilot.
“Four years later and with the 2021 elections pending, monetary policy tools have been rendered irrelevant to effect drastic change,” he said.
Dr Musumali noted that Dr Kalyalya is, by far, one of Zambia’s finest economists.
“He understands the potency of monetary policy tools but is also clear about their limitations. Much more important, he is a sober and objective personality. These are qualities lacking in most Zambian economists,” Dr Musumali explained.
“His appointment as Bank governor was always seen as a panacea to the otherwise misinformed and rogues policies of President Lungu’s regime.”
He stated that it was, however, just a question of time as to when frustration would set in.
Dr Musumali stated that it is ironic that President Lungu lost the patience instead.
“The President wants to win next year’s elections at all costs, even if this means a total destruction of the Zambian economy,” he stated.
“Dr Kalyalya therefore had to go. He had become a stumbling block in an evil machinery that is destroying the entire Zambian society and economy.”
Dr Musumali further stated that the termination of Dr Kalyalya’s contract with immediate effect came at the wrong time.
He said it would have huge negative repercussions for macro-economic stability.
“Dr Kalyalya and his BoZ team were the opiate doses for a critical ill Zambian economy. Beyond a certain level of pain, opiates and other painkillers are ineffective. The patient is then exposed to excruciating pain and death,” Dr Musumali explained.
“On several occasions, we had warned against the overstretching of the monetary policy tools in trying to respond to structural and fiscal policy failure. By 2013, it was already apparent that the Zambian economy needed deep fiscal consolidation.”
He has told President Lungu that macro-economic instability would be his ruin and that of his government.
“You have destroyed the Zambian economy in the shortest period of governance. The termination of [the contract of] Dr Kalyalya comes at a time when COVID-19 is causing economic havoc to an already depressed, high debt economy,” Dr Musumali stated.
“You have mistimed and this will have huge negative impact on the financial market for months to come. As expected, you continue failing our country where and when it matters most.”
To Dr Kalyalya, Dr Musumali said: “please take a well-deserved rest.”
“You have served your country diligently and with a lot of civil courage. The Socialist Party appreciates your efforts – even if at times we never agreed with some of the policy decisions taken by your team,” stated Dr Musumali.