Editor's Comment

K30m for retirees will stimulate economy

THE release of K30 million for former employees of Tanzania Zambia Railway Authority (TAZARA), Zamtel and Railway Systems of Zambia has indeed confirmed Government’s ongoing commitment to dismantling domestic arrears.
The K30 million will help to facilitate the settlement of terminal benefits to the eligible former employees, some of whom were represented by legal firms.
The gesture is without doubt a significant and timely undertaking for Government to clear debts for outstanding pensions. Government has many responsibilities, but it is gratifying that retirees have been remembered.
It has a moral responsibility to ensure that people that give in their best during their service to Zambia are not destitute. It is a costly undertaking to maintain retirees on the payroll (as provided in the Constitution) for as long as their dues are not paid.
What is even more important is that the retirees have been remembered during the coronavirus era, a challenging period when economic opportunities are constrained.
Currently, economic activities are on standstill because of constrained liquidity resulting from COVID-19 effects. Some sectors that drive the economy are operating partially because of measures that have been put in place to control the disease, which has killed 21 people in Zambia and about 500,000 globally.
That is why Government has come up with some stimulus package such as the COVID-19 bond.
It is also cardinal to note that the COVID-19 bonds that Government has issued through the Bank of Zambia are local and are at favourable rates.
It is, therefore, justified to issue the COVID-19 bonds provided their cost is less than that of maintaining these retirees on the payroll.
The K30 million for pensioners will also help to stimulate the economy in light of the devastating effects of COVID-19. It is most welcome and commendable.
The COVID-19 bond is an alternative investment vehicle for individuals and companies with disposable income.
Due to COVID-19, individuals and companies that had savings just held the money because there were no economic activities in which to channel it.
So for starters, the bond offers the people a relatively safe environment in which their money can be invested while the economy evolves post-COVID-19.
Secondly, payment of retirees, contractors and others shall jump-start the demand side of the economy and hopefully stimulate the wider economy
It is therefore gratifying to note also that Government has equally set aside funds to empower youths, as well as funds to boost the aquaculture sector, which has shown immense potential.
The key issue that arises is, however, on the accessibility and cost of these funds.
Government must ensure that these funds are made available at affordable rates and must be accessed by all eligible Zambians without looking at any social affiliation of the beneficiaries.
It is clear that during COVID-19, Government will remain the biggest economic player. And pensions, as well as local debts, hold the key.
Government should continue clearing outstanding pensions and debts owed to local contractors to enable the economy continue being liquid.
Liquidity in the economic will spur several other economic activities such as trading and investment in agriculture, education, health and real estate.
All these activities will in turn help create the much-needed jobs as well as help the Zambia Revenue Authority raise revenue for Government through taxes.


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