Bold reforms needed in 2022

I HAVE a cousin who inherited a Toyota Rider from his father in 2008. In the past seven years, the vehicle has been on stones for failure to fix it. I have advised him to dispose of the vehicle while it still has value and use the cash to sort out other family issues, or perhaps invest it in his business where he has some leverage. He is adamant. The vehicle is a family asset and selling it would be huge betrayal to his late father. He strongly believes he will have enough money one day to overhaul the engine, change the gearbox and repaint it. This picture relates well with what Zambia is going through right now. While we are desirous of a real economic change and transformation as a country, we are not ready for that change. Our decisions do not reflect the inner desire to transform our systems. People are hugely emotive about any mention of real change. Mention the word privatisation, nearly everyone is up in arms. We believe we can attain the required transformation with ill-functioning, underperforming and undercapitalised parastatals. This does not only apply to Government. Many companies are not ready for the bold decisions and reforms that should transform businesses. Families are equally afraid of generating life-transforming ideas that can change their economic fortunes. This is what I propose for 2022. Government should be decisive. There is an emerging strong campaign to thwart intentions of Government to reform the economy. Many activists are resisting the planned reform programme that is supported by the International Monetary Fund. These individuals are genuinely afraid, citing the experiences of the Structural Adjustment Programme of the 1980s. One of the areas that did not fully succeed in the 1990s was the privatisation programme. Everyone is quick to mention the ‘failed’ privatisation as reason to reject any such change.
My view is different. We should move on with bold and ambitious policy actions provided these take us out of the current economic quagmire. This economy has been running around like a plane circling the city because of non-retracting landing gears. We now realise that fuel is running out and we cannot be in the dead air for long. In 2022, Government should resolve to move on with the planned policy reforms by, firstly, understanding what it wants to achieve. This intent must be understood within Cabinet. Second, Government should learn from the past efforts at reforming the economy. What did not work in our previous IMF engagements and how can we do better this time? What lessons have we captured from the previous privatisation programmes? Progressive minds do not retract because of past failures. They move on, except much better informed this time. That is the reason flying has continued despite numerous plane crashes. Third, we need to communicate these bold reforms across the country so that every citizen understands the implications and knows where we are going, the expected results and what is expected of everyone.

Timely decision-making for corporates

The Covid-19 challenge still appears to pose serious challenges for businesses. Many multinationals are responding to the economic recession of 2020/21 by downsizing via retrenchments. This is because the private sector is designed to respond very effectively and decisively to any threats to profitability. They can afford to do that because they possess capacity in terms of systems and finances. To survive in 2022 and make money, the corporate world should resolve to do the following: First, learn to make timely and effective decisions. These decisions should improve performance. Second, the strategic responses should respond to the following questions: How will the business sustain operations? How will the business meet external needs? What are the new efficiencies that deliver on sustainability? Where are the new opportunities? How does the business leverage online platforms and change the route to market? You should reform your strategic positioning by understanding market trends, timely provision of information to stakeholders, possessing the ability to see all the connections for the business and making strategic decisions through data-driven approaches. It is time to review your company’s strategic plan.
Families need to rationalise spending

It is evident many households are struggling financially owing to the rise in the cost of living. Growth in incomes at individual level has remained more or less static while the cost of goods and services has gone up in the past few years. Your resolution in 2022 is to make bold decisions that capture both your spending and your revenue sources. I advise that you start with a strong family policy that defines your financial priorities. Some of you may need to communicate this policy to the extended family members so that they manage their own expectations out of your income. It is not possible that you can support every relative financially. It is time to rationalise. Understand your spending patterns so that you live within your means. The fridge and pantry have a huge story about where your money has been going. Most products in those circuits are expired. On the other hand, earn more. Even if the economy is stressed, we still have a gross domestic product of over K380 billion. This is the wealth we have this year. You can tap into this by providing a good or service. This can turn your fortunes around. It just requires bold reforms to re-engineer your financial life! The author is managing consultant at Bridges Limited.

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