Zambia’s Lungu Appoints Felix Mutati as His Finance Minister

LUSAKA, Capital Markets in Africa: Zambian President Edgar Lungu named part of his new cabinet, nominating accountant and ex-commerce and trade minister Felix Mutati as finance minister, the presidency said.

Mutati, along with the rest of the partial cabinet Lungu announced, are scheduled to be sworn in Thursday, the presidency said in an e-mailed statement on Wednesday.

Mutati, 57, will need to steady an economy that’s expanding at the slowest pace since 1998, where inflation is hovering near 20 percent and the budget shortfall widened to almost 10 percent last year. One of his first tasks will be to start formal talks with the International Monetary Fund about an aid package that could top $1.2 billion, and will likely include conditions such as cutting energy and farm subsidies.

“The current finances of the government are pretty bad. We’re running a huge budget deficit that must be dismantled,” Oliver Saasa, chief executive officer at Lusaka-based Premier Consult, said by phone. “We are in dire straits, and we don’t have many options right now. It’s an imperative to go to the IMF, not an option.”

Mutati takes over from Alexander Chikwanda, who was finance minister from 2011 until parliament was dissolved in May, and under whose leadership government debt in Africa’s second-biggest copper producer soared from 22 percent of gross domestic product GDP to more than 50 percent in the space of five years. Mutati, who leads a faction of the opposition Movement for Multiparty Democracy that campaigned for Lungu ahead of the Aug. 11 elections, has previously served as deputy finance minister.

“He’s somebody who has been through the mill,” said Saasa. “As an individual he’s fairly calm and sober and he has come out publicly on some the challenges facing the country.”

Lungu also nominated Lucky Mulusa as national development planning minister,Margaret Mwanakatwe as commerce and trade minister and appointed Joyce Nonde-Simukoko minister of labor and social security.

Source: Bloomberg Business News