The decision that President Edgar Lungu made on Sunday was so important such that its announcement couldn’t wait for the morning – it had to be done in the night so that all the Zambians and, of course, the investors know about it. This was the removal of Ms Margaret Mwanakatwe at the helm of the country’s key department – the Ministry of Finance – and the appointment of Dr Bwalya Ng’andu, who was then Bank of Zambia deputy governor, as her replacement.
Dr Ng’andu was sworn in on Monday morning, at which time markets were active and a response to this major change in the Cabinet triggered a movement in Zambia’s dollar denominated government bonds. Like always, the announcement of a new Minister of Finance triggers market movements – either positively or negatively. And for this particular one, the positive showing of the dollar denominated government bonds were a sign that this pick by the Head of State for the finance portfolio has sent a sense of calm among investors. And two days later, a quarterly briefing was held where he spelt out a plan for the country’s economy and promised to ensure implementation of austerity measures in efforts to ‘resuscitate’ the economy.
Why was this so? The Ministry of Finance is a very important ministry, created by the Minister of Finance (Incorporation) Act that allows it to run as a Corporation Sole. This means the Ministry of Finance is a legal entity occupied by a single person (the Finance Minister), who makes critical economic decisions on behalf of the entire country (over 17 million Zambians). This means one who heads this corporation sole can either have positive or negative effect on a country. And right now, what Zambia desperately needs is a positive effect on its economy.
It is undeniable that the country’s economy was almost getting into a comma, while its debt levels kept soaring. This is a fact that President Lungu himself mentioned when swearing in Dr Ng’andu whom he directed, as his first assignment, to stabilize the economy and ensure amortization of the country’s huge debts. This was a huge statement! But obviously, this was not to mean Ms Mwanakatwe, who took over this position from Felix Mutati whom the President had moved to the Ministry of Works and Supply and later fired him. It would be suicidal for any Head of State to watch an economy tumble without taking action to find solutions for it. And the choice for finance minister this time seems to be one that Zambians had long waited for but, of course, it is never too late to try at this stage to reverse what has been lost within a very short time.
The courage to make a tough decision on this matter for the country’s benefit is what will determine the results of the solutions that the new finance minister will spell out and implement to reduce debt and ensure the country’s economy is put back on the rails. Party interests did not matter in this case – Ms Mwanakatwe’s replacement did not have to come from the ruling Patriotic Front! What matters in the end is an individual’s capabilities to discharge the functions of that office to their best ability on behalf of over 17 million people.