The Coronavirus pandemic is a challenge that was not anticipated by the global economy. At the dawn of the year 2020, nations planned their economic growth strategies with hope of attaining development but the pandemic is upon us and counter measures have since been instituted which are aimed at; (1) protecting the health of the citizenry, (2) minimizing the spread of the virus as much as possible and (3) ensuring that the economy is shielded from adverse effects. As of April 6, 2020 there have been more than 1,275,037 COVID-19 cases reported globally with 69,501 deaths and 265,887 recoveries. Zambia has recorded 39 cases with 1 fatality and 5 recoveries. The impact of the pandemic has been both extensive and severe, including but not limited to, a health and an economic strain characterized by financial market stress and a collapse in commodity prices in several countries. The outbreak has led to disruptions in supply chains, created uncertainties and significantly dampened near-term growth prospects. Around the world, the COVID-19 outbreak is putting significant strain on countries’ health-care systems, economies, and social fabric. The global economic damage from the COVID-19 pandemic is largely tangible and in response, nations have turned to fiscal and monetary policy adjustments among other measures to cushion the effect of COVID-19 on the economy. This has been coupled with other measures such as non-essential travel restrictions and cancellations of large gatherings coupled with a campaign for social distancing.
The 7th National Development Plan (2017-2021); under Pillar 4 clearly; provides guidelines on strengthening public health programmes in Zambia and commits towards investments in primary healthcare to strengthen the health system. The Plan emphasizes that primary health is the pillar of the health system and is central to preventing epidemics and controlling major infectious diseases among others. Anchoring on this, the Government has instituted several measures aimed at containing the spread of this scourge and as a nation, we have been informed of various strategic measures from the Republican President, the Minister of Health, the Minister of Finance and the Bank of Zambia; aimed at ensuring that the citizens and the economy are protected.
Some of the key measures that have been implemented include:
(A) The Fiscal Side
- An Epidemic Preparedness Fund has been set up;
- A COVID-19 contingency and Response Plan has been set up; and
- To support the easing of liquidity, Government is to release K 2.5 billion and this is aimed at (a) reducing domestic arrears owed to domestic suppliers of goods and services (b) reducing outstanding arrears to pensioners and retirees (c) reducing outstanding third party arrears and other employee related commitments.
In order to provide relief to businesses, Government will:
- Suspend excise duty on ethanol for use in alcohol-based sanitizers and other medical-related commodities;
- Remove provisions of SI 90 relating to claim of VAT on imported spare parts, lubricants and stationery to ease pressure on companies;
- Suspend export duties on the export of concentrates in the mining sector to ease pressure on the sector; and
- Suspend export duty on precious metals and crocodile skin.
The Monetary Side
To complement the measures taken by other arms of Government, the Bank of Zambia (BOZ) has put together a set of comprehensive measures to safeguard financial systems stability, promote the greater use of digital financial services and mitigate the negative effects of this shock to the economy. BOZ has established a Targeted Medium-Term Refinancing Facility with an initial amount of K 10 billion to provide medium term liquidity. This is a 3 to 5 years facility that will be available to eligible Financial Service Providers (FSP) in the country to enable them to restructure of refinance qualifying facilities or on-lend to eligible clients. BOZ has also scaled up open market operations to promote short-term liquidity support to commercial banks on more flexible terms than those obtaining before the outbreak of COVID-19.
Handling of cash has also been discouraged at this point and this is timely in Zambia as we are witnessing a growth in digital financial services. The aim is to promote contactless mobile payment mechanisms aimed at preventing the spread of the disease by minimizing person-to-person contact, decongesting banks and other financial institutions. Some of the measures that have been instituted to promote non-handling of cash include;
- Increasing transaction and wallet limits for individuals;
- Waving charges for person-to-person money transaction values of up to K 150 by all electronic money issuers; and
- Urging commercial banks to remove transfer fees on the bank account to electronic wallet transactions for an initial period of (3) months and to reduce the Merchant Discount Rate (MDR). MDR is a fee charged from a merchant by a bank for accepting payments from customers through credit and debit cards in their establishments.
Regional Strengthening Towards WinNing The COVID-19 Fight
Regional strengthening and coordination response is key towards winning the COVID-19 fight. In our view, this response must consider 3 elements; as follows;
- Public Health institutions in SADC must consider sharing information and resources, including data on the spread of the disease, details of their response plans, capabilities such as epidemiological modeling, and health-care equipment.
- Regional and sub regional institutions need to ensure that movement of food and essential supplies continues even if some borders are closed, since these actions will support food security and help minimize the disruption to economic activity along supply chains. We have recently observed this development and it is commendable.
- Governments and regional institutions must maintain their commitment to social progress, enhancing social safety nets including ensuring human rights and sustaining advances made on key sustainable development goals in the health sector.
We observe that the SADC Council of Ministers has commenced discussions on best practices. This is commendable and indeed a huge component of the three-dimensional approach and other institutions also need to follow suit so as to strengthen our concerted collaborative approach.
PMRC commends Government for the concerted efforts and measures that have been instituted this far to fight COVID-19. As an Institution, we are also playing our part by collaborating with Government agencies to recommend implementation modalities to some of these measures. We are also contributing with widespread dissemination of information to increase awareness and also challenging the citizenry to play their part. It is also laudable that Government has ensured that movement of goods is not affected by putting in place logistics to allow for market reach. This among other things also reaffirms that agriculture production and marketing are uninterrupted in this difficult period. The Government is doing its part and this is, therefore, a call for all citizens to also be responsible and endeavor to adhere to all the guidelines as provided by the Ministry of Health. If we are to win this fight, we should endeavor to all come on board with our different institutional expertise, to complement efforts being led by the Government. The citizens are therefore called upon to be responsible and support the Government efforts by exercising concentrated adherence to all provisions as stipulated. Further, the Ministry of Labour has provided guidelines on how workers should be treated henceforth. It is understood that many sectors have been affected especially the Tourism, Aviation among others, which have resulted in workers being laid off temporarily. This is a call for the Government to continue engaging all heads of Institutions, Private Sector and Cooperating Partners to develop further strategies that will ensure that the workers are protected even as several businesses are facing difficult moments. This will ensure that households are also cushioned. In conclusion, PMRC further calls for massive sensitizations so as to equip the citizenry with adequate information that will allow them to exhibit precaution and also contribute to flattening the curve. At this stage, we should employ all innovative mediums that will allow us to reach as many citizens as possible.
The Coronavirus is not just a public health crisis; it is a crisis that has affected every sector and therefore every institution and individual must be involved in the fight. Together we shall win
Mrs. Bernadette Deka-Zulu – PMRC Executive Director