The International Monetary Fund has observed that the Zambian economy is under stress because of low copper prices and a severe electricity shortage that are straining economic activity.
This is according to a statement issued shortly after the IMF team led by Tsidi Tsikata concluded its November 11–20 tour at the invitation of the Zambian Government to review recent economic developments and discuss the authorities’ policy responses to the macroeconomic challenges currently facing the country.
Mr. Tsikata the Zambian kwacha has lost half of its value since the beginning of the year, causing difficulties for many segments of the economy and population, and putting upward pressure on inflation.
He said domestic and external financing conditions have tightened markedly, with increased interest rates on Zambian government debt.
[pullquote]It was agreed that the authorities and IMF staff would remain closely engaged in the period ahead[/pullquote]
“In recent months, the pressures on the economy have not only reflected the impact of external shocks but also waning market confidence. Fiscal discipline has been undermined by additional spending commitments that stand in contrast to lower-than-budgeted revenues,’ he said,
‘Further, delayed implementation of critical policy pronouncements such as ensuring cost-reflective pricing of petroleum products and electricity continues to impact negatively on the budget.’
Mr. Tsikata said monetary policy has been appropriately tightened to counter the pressures on the exchange rate and rising inflation, but success will depend on complementary tightening of fiscal policy.
“The mission and the Zambian authorities reached a shared understanding on the current economic challenges and the implications of alternative policy choices,’ he said.
‘Zambia, with a record of peace and political stability and abundant natural resources remains a country with great potential to achieve strong and inclusive growth.’
He said the mission remains confident that resolute implementation of a credible package of measures to lower the fiscal deficit will go a long way towards restoring market confidence, bringing stability to the economy, enabling a speedy recovery in economic growth, and ensuring debt sustainability.
‘It was agreed that the authorities and IMF staff would remain closely engaged in the period ahead. The Zambian authorities undertook to conduct internal consultations based on the outcome of the mission, with a view to defining the forms and timing of engagement.’
The team met with President Edgar Lungu, Finance Minister Alexander Chikwanda, Bank of Zambia Governor Denny Kalyalya, other senior government and BoZ officials, members of parliament, as well as representatives of the private sector, labour unions, civil society organizations, and Zambia’s development partners.
Ba IMF! Shi Tasila has no vision so he doesn’t understand what you are saying
What didn’t they invite the opposition leader i.e. HH, Nawakwi who understand these issues better. After all he said “let those who think they have better brains to fix the crisis overnight come forward..”. He should have extended an invitation to them instead of some of those MPs who just came for allowances. Twanaka.
People have already forgotten that the president said “ifintu nafilubana”. Just a few days ago he went did what he is good which is “spending”. Bought tickets for football goers. Kwena ehh. This is getting serious. Those monies could have bought medicines – poor prioritising.
UKO!
Visionless Lungu & PF are in limbo. Let this poverty teach Zambians’ a great lesson of voting for PF BANDITS. Today Lungu has been booed up in Livingstone. Visionless veep Inonge ran away from their own shadows of Donchi Kubeba sickness!
X~Mas & New Year, the whole country will be on LOAD SHEDDING, the economy in shutterss & kwacha melting to K20,000 per $. 4 months left to PF bandits & failures, Kambwili to piss in Kariba Dam!
IMF good job!
The Skeleton Key
~206~
@Ndobo, how is Bashi Tashila doing with stress this week? Did he return to game park after watching Mbesuma?
Let the pain began, I am sure they warned him not interfere with the mining retrenchments.
And why is the press guy always the one attending these important meetings? Where is the Special Assistant for Economic Affairs?
We already know that the IMF’s vision for anything is not pretty. Maybe the Finance Minister set up this scenario with the IMF. The Eurobonds turned out to be a currency devaluation by proxy, and the IMF is always looking for currency devaluation to lower labour costs and eliminate local competition for it’s corporate baronial masters.
@MrK: You now see how you PF id.iots have no brains. IMF never told you to get Euro bonds and in fact warned you not to do it. But you and Satan never listened and kept on borrowing in the name of infrastructure development!! Now look at the mess you PFools and old fossil Chikwanda have created.
@Chilyata
This did not start with the PF taking power. There is a reason that they are borrowing instead of taxing the mines. I have been advocating a Windfall Tax on the mines for many years now. (Google the title for the articles online)
Finance Minister Situmbeko Musokotwane, MMD:
(LUSAKA TIMES) State will never re-introduce the windfall tax
October 12, 2010
Finance Minister Alexander Chikwanda, PF:
(STICKY) Chikwanda describes advocates of windfall tax as lunatics
these are results of depending only on copper chiluba is one to blame not edgar
You, I and a lot more know this. PF and UPND cadres will not notice or recognize this. They are too bitter and too region oriented they think Zambia is only northern and Southern province. They forget we from the west, east and central also exist.
@christopher sinsunga,blaming your parents for your failure to educate your kids is a sign of mental illness .blaming chiluba who ruled zambia 14 yrs ago does not make us solve our economic challenges,lets start offering practical solutions on this forum,of course i know that pf will not listen to zambians but will rather listen to foreigners.
I disagree, Mwanawasa put a lot of emphasis on agric development and establishing economic zones. To be fair RB in his short stint tried to maintain this path. Then came PF, talk of MFEZ and establishing commercial farming blocks suddenly took a back burner. Let us be realistic, building roads in itself is not development, for example what economic value is there to justify construction of the most expensive road in the country to Mongu? PF blinded Zambians with cosmetic development from borrowed money and neglected true economic growth and development. Just my two cents worth.
@Ndobo, its Bashi Tashila who is stressed, not Zambian economy. Is he still hiding in the national park?
@Nostradamus, from the Post “LIVINGSTONE residents yesterday booed President Edgar Lungu as the Head of State stood through the sunroof of his official vehicle to greet the southerners in the central business district of the tourist capital. ”
He has guts, people are booing him from Solwezi to C/belt and he still dares to stand thru’ the sunroof of his official vehicle. Sorry bwana, booing is contagious.
Ba Pretty – Solwezi and Livingstone are not Zambia – they are part of Zambia. Booing the president is just being disrespectful and by the way, HH is not even treated like that even though he is still losing next year. We are watching – just continue with this behavior and we will teach you a lesson again.
Who are you to preach respect to me? Do you even understand the word respect, ba Observer??
What are you watching? Football? Planning to rig is that what you are insinuating? Teach me a lesson? I doubt very much. You will teach all those who voted you in power a lesson. And they are having a lesson of their life. As for me “CAN’T NEVER”. (swingiing my arm in the air)
Our economy is really on its rocks. If I am asked to predict, it may not get any better than this. It requires a drastic shift in mind set where all of our leaders and the people of Zambia are concerned. This requires a strong minded President and a formidable group of leaders, advisers and analysts to steer the economy in a different and better direction. The simple rule is to look at the revenue, and the expenditure. If the revenue is not good at all, the expenditure has to be to be tightened and this is the most difficult part. Our leaders want to impress the people that voted them into power and hence they go for loans that they may not be able to pay back even if they were President for 30 years. All in all the leaders especially our President has to accept this fact. Otherwise, if…
@UFO PLEASE COMMENT ON THE FINDINGS OF THE IMF! HAVE WE NOT TOLD YOU AND YOUR PF CADRE COMPADRES FOR MONTHS ON HOW THE FISCAL INDISCIPLINE OF YOUR PF IS MAKING MATTERS WORSE AND PUTTING UNNECESSARY PREASURE ON OUR ECONOMY AND THE KWACHA? IF YOU TAKE TIME TO READ AND UNDERSTAND THE REPORT YOU WILL SEE HOW THE IMF IS BASICALLY SAYING GOVERNMENT IS TO BLAME MORE THAN THE EXTERNAL FACTORS FOR OUR CURRENT MALAISE. PF SPENDING AND CARELESS BORROWING IS STRANGLING THE ECONOMY. FACE IT PEOPLE WE HAVE A GOVERNMENT THAT HAS NO IDEA WHAT THEY ARE DOING!!!! WE HAVE CALLED FOR AUSTERITY MEASUES FOR MONTHS. INSTEAD LUNGU SPENDS $300000 ON A TRIP TO NYC. UFO PLEASE DEFEND YOUR INCOMPETENT PF NOW!
The biggest calamity facing our nation is that there are so many PF cadres of the like of Nzelu, Citizen something, who think like Kambwili. They now say Lungu is not to blame for this mess. Can they not comprehend a simple sentence like the following? “…Fiscal discipline has been undermined by additional spending commitments that stand in contrast to lower-than-budgeted revenues.” This is a straight forward statement by the IMF and you cannot understand it. Are these the people we have entrusted to run this economy? By the way, if UPND is only in Southern, why are you dead scared of allowing HH into the Copperbelt? shame!
@jjp.spot on the vice mama wina said zambians need to change our mindset but she herself is still occupied in the old wine skin while expecting to harvest new wine.the creation of 5 more ministries is an additional spending as these ministries will have ps,ministers ,directors and supporting staffs.the problem pa zed is jealous and pride,pf is taking us nowhere.
No one would have done anything better than the current govt.
Some people think thieve could do a btter job , to the contrally the thief all what he wants is to steal and nothing .
By this I mean E Lungu is the best to take zambia through this spell , which of the said opposition is capable of bringing rain or controll the copper prices no nobody at all copper prices are controlled at international market , where these guys don’t go,.
These two dynamics are the drivers of zambian economy no one should decieve you about the situation because you can not ditermin any thing on this one
@nshili…. the President you are claiming to be the best has confessed that “Ifintu nafilubana……..let those who think they have better brains to fix the crisis overnight come forward..”.
It is people like you who forced ECL to be president even when he said he had no vision.
@NSHILIMUBEMBA THIS IS A DIRECT QUOTE FOR THE ARTICLE JUST IN CASE YOU MISSED IT PLEASE READ IT AGAIN!!!!
“In recent months, the pressures on the economy have not only reflected the impact of external shocks but also waning market confidence. Fiscal discipline has been undermined by additional spending commitments that stand in contrast to lower-than-budgeted revenues,’ he said,‘Further, delayed implementation of critical policy pronouncements such as ensuring cost-reflective pricing of petroleum products and electricity continues to impact negatively on the budget.’Mr. Tsikata said monetary policy has been appropriately tightened to counter the pressures on the exchange rate and rising inflation, but success will depend on complementary tightening of fiscal policy.
Guys Kwacha yalipenunukako panono mailo yaisafika napa K11 to one dollar. What caused this? Twebeniko
BOZ were instructed to offload most of the eurobond into the market thereby temporarily strengthening the kwacha. In a few days once this eurobond money is swallowed up the kwacha will go back to its true rate of K15. Even professor Sassa said this.
Good point nshilimubemba London Metal Exchange is still in control of the copper prices world wide. No government or person can change this controlled international market policy.
On the fiscal side, it was totally wrong and totally reckless for PF to have caused so many unnecessary by-elections. It is so annoying that they adopted the same people they accused of corruption to stand on the PF ticket and later appointed them Ministers! What kind of behavior is? PF has been so deceitful! Look at the effect on the nation!
IMF were being polite when they met tourist Lungu, big spender who hires planes for socer fans also tells FAZ not to charge at International matches. When and see wen they get back to their offices, the report. But note their comment, delayed implementation of critical policy pronouncements such as ensuring cost-reflective pricing of petroleum products continues to impact negatively on the economy. ECL has been holding down price of fuel to hide mismgt of the country to be popular. But for how long
One will die next year.
Time to get more kongolay. Good JOB BA Eddie.
The Zambian voters are now buried deep in their own crap, I hope they learn how to vote.
some people even oppose something straight. This what we call umungulu. Everything ati Lungu imfula nayambo kuloka mwalayambo kulanda ati amenshi wafulisha talekanyako nokukanya kano ngani hh enanganakanyako imfulu ubu bulwele…
Some guys are not realistic in the way the criticise Lungu. What Lungu on the rains and copper prices. The rains has just started we shall hear some upnd cadres calling for Lungu to stop the rains due to floods. Guys make sensible contributions not ifyamungulu fyeka fyeka
I am waiting to look at their faces when the economy gains some stability, they have put all their eggs in one basket, all their bets on one supposedly super human being. When conditions change they will be disappearing one by one with their tails between their legs.
The Zambian economy will stabilize soon, with support of our cooperating partners, investors, IMF. Look at how IMF is concerned about the impact of the bad economy on our people. The one who wants to rule them is not concerned at all, he is just focussed on entering state house. He went to the Copperbelt to cause mayhem, but fortunately he was hounded out by our vigilant police. Actually the people ignored him too, if it was not so you would riots at koala on hearing about HH, but no they just said ” kaifwile umwine” ,…
Help from IMF.????, the IMF will want to half the bloated cabinet and cut spending, PF won’t agree because they won’t be able to steal and enrich themselves.
Hahaha! Lungu has just refused the IMF package Mr. Dull Terrible. Whats your next plan you clueless dunderheads?
If it was not so you could have riots in kopala but the clever miners just said kaifwile uko umwine, kwati tulalya nankwe ifyuma flaked kapala, ifwe atumonafye kwati tulifipuba, akapapa sana ku no ku kopala.
Wow, came all the way just to tell us what we already know! I wonder how many more of our few remaining dollars this trip gobbled up!
I now understand why people label Kachemas as under 5.Kachemas,we ve understood nd digested the IMF report on the state of our economy. The following are some issues you ve to consider before you start criticising;
(1) The ethics of governance are different from that of a business entity.This report cant take into account issues that relate to managing people on a huge scale. By and large,the political aspect of the economy has not been considered by this report.
@la liga!! after having said all that, what’s your point? it looks like you got yourself all messed up trying to understand the Zambian situation and then type here.
In case of Iceland (success) and Greece (failure)Consider the policies and performance in those aggregates before the IMF and after the IMF intervention See the structural issues in Zambia’s economy and discuss appropriately without locking up the available potential to roll and become more viable
If you have studied Supranational and Regional Banks in blocks you will understand I find this case in comparison between Greece VS Iceland very critical a point to augment Zambia’s case and see what is specific
See the difference in economic characteristics and scenarios for Zambia give the sovereign and single currency exposure in deficits and see the…
The case in comparison should be ICELAND VS GREECE IMF policies results and see what it will be like for Zambia given the similar characteristics almost to the Greeks but with Fiscal Potential better
See also that on currency wise Zimbabwe is achieving confidence in multi currency environments that was not attained by the ZIM Dollar
Simply look at Lazy Lungu’s dull face the man looks like he was on a heavy out last night and nursing a hang-over…Standards have dropped so much in State House that the interior looks like a bedsitter in Chamwama!!
Well spotted, Jay Jay….I noticed the same untidiness. No standards even in statehouse….what a shame.
Tribalism makes some people lose their brains. Some of our educated people supporting a non performing govt just because its perceived to tulemiteka. Wait until your own bussinesses are collapsing due to no buying power then you will it your tulemiteka.
I personally dont blame Lungu, the rot started well before Lungu. A different mindset is required to stop the rot.
Meant you will be eating your tulemiteka.
Hope the IMF know that the President does not understand anything about economics apart from by elections , booze and insulting HH and GBM. Not even one day has he ever spoken of what is happening in the country economy wise all he knows is to rub away from the BBC.
He looks not presidential, but a pupil summoned by the head teacher and his deputy for absenteeism, chagwa things are falling apart stop that hands grasped together like in handcuffs posture, it’s a sign your hands are tied and no idea what to do next.
‘Terrible’, That is a hollow and terrible argument. the tragedy is that you are not alone, some are even in government. When IMF bails out Zambia through a ‘programme’, they effectively become the ‘Minister of Finance’. That’s why many ministers of finance resign shortly after IMF takes over. If you read this statement carefully (unfortunately, due to you cadre mentality you are obsessed with HH), their focus is austerity. The measures will be a sure license towards landslide victory for opposition because there will be no government spending for elections. Follow the events in Ghana right now if you have some level of intellect.
Lazy Bum Lungu is so utterly useless and vision-less all he can do is grin like donkey and wait for the World Bank and IMF to come back and read out the terms and conditions with our children’s natural resources as collateral!!
@Ba Jay Jay,its politics in gear one and the economy in gear 5 for these visionless PF politrickcians.
CONTINUED;
No government in this World can hike prices of essential commodities anyhow at the expense of popularity.
(2) No magician or economic manager could ve foreseen dwindling copper prices. Kachemas,even your messiah HH,could not ve seen China’s economic slow down. So,this IMF report is like a ‘snap shot’.Its much more in the ‘now’ rather than in the ‘then’.
(3) As regards PF fiscal discipline;PF’s expenditure in the previous months was budgeted and on reasonable pre supposition that the external shocks were temporal.
IMF is right.Zambia’s economy is under stress,under dressed and undressed by our visionless kaponya leaders who want to leave the poor Zambian more bare.
@incognito,I bet I ve not lost u along the way. What most of u Kachemas ve deliberately choosen is subjectivity over objectivity on many topical subject s.And this has impaired your judgement and understanding on a lot of issues. For u,it is HH and UPND only who re efficient,proficient,intelligent,educated,knows it all and this is not helping u at all. Because for HH to go to state house,you need a revolution,which can only come when most people believe in your idealogies.To be truthful,the masses dont know what you stand for. Meaning,u need to be vivid in proving the faults or lapses of PF nd not this falsehood peddling on straight forward issues like load shedding.
ies, lies and more lies. The Zambian economy is healthy. Admittedly, we are going through a period of turbulence. This is good, our industries/companies will emerge more robust and ready to face any such future downturns. Keep on mentoring/inspiring/motivating us President Lungu…YOU ARE ON THE RIGHT TRACK SIR!
Keep on dreaming in your docility …what industry will emerge when we can not even manufacture simple black shoe polish, you import it..as kids we used to make it using charcoal, paraffin and candle wax in a tin can.. in those ghastly RSA stores roll after roll of shelves is full of imported products.
If only we can have voters n not cadres we would have been voting wisely. This whole mess we are in started with Sata just he died earlier before we could see the results of his reckless borrowing, he started it. Am sure this will teach us a lesson… Next time wen voting we should realise that tribe or party is not important compared to someone’s ability to rule.
Here how things will play out over the next few months:
– Government will dismiss or water down the IMF statement and will not make changes;
– The Kwacha will take a further dip and inflation will cross 20 percent;
– Mines continue laying off;
– Unions, students, and other groups will continue to be a threat to social stability;
– With tax revenue lower government will fail to make key payment, follow by a ratings downgrade;
– With eurobond bill payment coming, Zambia craws back to the IMF.
– Zambia undertakes the tightening it should have done years ago.
– Before this stabilize, Zambian face tough economic situation then go to the ballot.
The sharks have smelled blood and are circling. The IMF itself is a highly corrupt organisation. Rife with financial conflicts of interest.
Reading between the lines, IMF is as expected, calling for ‘belt-tightening’. The sad thing though is political leaders themselves will not feel the pain the poor Citizens will need to go through to attain the required goals. It would be a good idea to enact that when a nation fails, perks are withdrawn from leaders. Then they will always do the right thing!
ZAMBIANS GO EN-MASS TO THE POLLS NEXT YEAR AND VOTE FOR CHANGE. VOTE VISION LESS EDGAR LUNGU OUT AND BRING IN HH WHO HAS A DEEP PASSION TO GROW ZAMBIA’S ECONOMY. HE SEEMS TO HAVE THE KNOW-HOW ON HOW TO DO IT. VIVA HH VIVA! THE STRONG WIND OF CHANGE IS SWEEPING ACROSS ZAMBIA. ZAMBIA FORWARD!