By Kalima Nkonde
The Zambian Government and the IMF issued separate statements following the conclusion of the IMF mission to Zambia. It is apparent from the statements issued – which were rather vague, confusing to a layman, couched in economic jargon and spin – that no concrete road map was agreed as to how the Zambian economy was going to be rescued with the assistance of the IMF in the immediate future. This article will try to unpack the two statements for the readers to understand what the statements were not saying in a lay person’s language.
It is apparent from the IMF statement that they were not asked for any balance of payments support (money or loan) by the Zambian government and this inference can be made if one contrasts the statement that the Fund made in June, 2014 and the one they made on 20 November, 2015. In the June, 2014 statement, when Zambia was not even dire straits like now, the IMF issued a statement that was more upbeat, robust and with specifics. This is what the IMF said then,
“The IMF is working closely with the Zambian authorities to develop a plan that will anchor macroeconomic stability. Recent steep depreciation of the kwacha is raising inflationary pressures and expansionary fiscal policy which has created large budgetary imbalances. The authorities have requested the IMF team to return in early September to discuss an economic programme that can be supported by a fund arrangement.”
The IMF’s statement on 20 November, 2015 is as follows,
“It was agreed that the authorities and IMF staff 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.”
It is apparent from the two statements that, whereas last year, the Government had committed itself to discussing a rescue package – although they subsequently chickened out and went for a Eurobond -currently, the Zambian Government is indecisive and clearly fearing the conditions that will come with IMF funding given their plans to spend big for the elections in 2016! But in absence of a bail out, the economy is likely to deteriorate further and will soon catch up with the government and they will have to bite the bullet and ask for cheaper IMF rescue package. The delay in agreeing to a rescue package will come at great cost to government in that IMF conditions are likely to be harsher for government than they are now. It would be very unwise for government to refuse the rescue plan now.
IMF assessment of Zambian economy
In its statement, the IMF was very categorical about the fact that economic mismanagement was the major cause of the problems that Zambia was facing, external shocks not withstanding. The Fund was clearly appalled by the fiscal indiscipline of the Zambian government when it observed,
“In recent months, the pressures on the economy have not only reflected the impact of external shocks but also waning market confidence. The fiscal discipline has been undermined by additional spending commitments that stand in contrast to lower than budgeted revenue.”
To put this in context, the IMF could as well been referring to the unbudgeted for expenditure like hiring jets costing over $300,000 as well as the creation of districts at the drop of a hat, the building of colleges and universities, starting national airlines, building roads leading to nowhere etc when we there is no money! The IMF’s expectation is that responsible economic managers are supposed to be cutting back expenditure and suspending certain projects in the light of reduced revenue but our government has not been behaving like that and it has been business as usual and this is the reason why the market has no confidence in it!
According to the Fund, the fiscal indiscipline is one of the major problems that the economy faces. In the IMF’s view, Zambia with all its endowments should not be having the current problems with better economic managers. The Fund feels, “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. The mission remains confident that with a resolute implementation of credible package of measures to lower the fiscal deficit will go a long way towards restoring market confidence, bringing stability to the economy, enabling speedy recovery in economic growth and ensuring debt sustainability.”
The IMF was, however, full of praise of the Bank of Zambia in as far as the management of the monetary policy of the country is concerned. According to the Fund, the Central Bank has tried its best to ensure that the Kwacha remains stable, inflation is kept in check and interest rates remain low but all these efforts are being undermined by the Government through reckless expenditure. In effect, what the Fund was saying in its statement is that as long as there is financial indiscipline, and the government engages in wasteful and unbudgeted for expenditure, Zambia should forget about a strong kwacha because measures by the Central Bank (monetary Policy) have to be complemented by fiscal discipline.
The Bank of Zambia Governor, Dr. Denny Kalyalya has been singing this song since he was appointed. He has stated from time to time that there is a limit to what the Bank of Zambia can do to protect the Kwacha without the assistance from the President or the Executive branch of government through fiscal measures! Nobody has listened to him. We have people in our current government who are so economically naïve like the late Idi Amin of Uganda, that they think Bank of Zambia can do some magic to protect the kwacha! They somehow do not understand the interdependency of economic policies and variables!
Zambia budget challenges as per IMF
The Government agreed with the IMF’s assessment of the economy and they shared the various policy measures required and their consequences. According to the IMF, the Zambian economy is in serious trouble and there is pressure on government with regard to the payment of bills in the light of reduced revenue and the continuous depreciation of the kwacha. The Fund noted “The mission and the Zambian authorities reached a shared understanding on the current economic challenges and the implications of alternative policy choices.”
In summary, below are the issues that are putting pressure on the government budget which are threatening to widen the budget deficit further and which both the Government and the IMF agreed on but although they must have differed on measures required to address them. The issues are:
- The fuel bill has increased tremendously due to the depreciation of the kwacha and the government has not passed on this cost to the consumer yet and so Government is currently subsidizing consumers. Some action will have to be done at some point as it is not sustainable.
- The importation of electricity is straining government coffers and the bill escalates with the depreciation of the kwacha. In the short term, there is very little that the government can be done about this
- There are other subsidies especially on maize and farmers input which are also putting pressure on government coffers
- Expenditure on infrastructure projects is also putting a strain on government revenue
- Increased debt servicing costs of foreign loans especially Euro bonds which have grown substantially in kwacha terms due to the depreciation of the kwacha.
Government economic strategy after IMF mission
The Zambian government largely agreed with the IMF’s assessment of the economy, but if we are to be brutally frank, there is nothing new that the IMF has said which this writer, other analysts, commentators, Bank of Zambia, ZIPAR and Opposition parties have not pointed out before. Government didn’t listen!
The Zambian government’s statement through Cabinet Office stated that: “The Government shares the views of the mission and fully acknowledges that fiscal consolidation is paramount in ensuring the sustained macro economic stability, growth and poverty reduction.”
In order to simply the above statement for some readers who have no economic background, the term fiscal consolidation simply means putting measures for increased revenue generation as well as measures for cutting expenditure in order to reduce the budget deficit. In Zambia’s case, there is limited scope for revenue generation in the short term and so the focus should be on expenditure reduction.
We have all heard about this song of fiscal consolidation from government since the budget speech but unfortunately, our government will say one thing to day and do the opposite the following day! It follows that the pronouncements made by Mr. Fedson Yamba, the Secretary to the Treasury with regard to fiscal consolidation are hollow and nobody believes in them due to the government past record. There is no independent and objective technical expert including this writer who has any confidence in the PF administration implementing the fiscal consolidation policy measures.
The Government lacks credibility and neither the international investor nor the donors, let alone the IMF, believe there is political will to implement the policy. The credibility of fiscal consolidation will only come with an IMF supervised programme once the Government has obtained a loan from them like Ghana painfully found out. Ghana acknowledged that their home grown austerity measures lacked credibility among the international community and could not stop the free fall of their currency, the Cedi. International investors and Donors do not trust African governments to implement policies that are not politically expedient especially in an election year. The Zambian government may be thinking of trying to put in place some home grown austerity measures and avoid the IMF and look for funding elsewhere but their options are very limited.
If the government had agreed on a road map for a rescue plan, the following would have been the potential benefits of an IMF programme going forward once agreed upon:
- Stabilize the kwacha through the balance of payments support thereby save kwacha from further depreciation and consequently forestall further escalation of inflation
- Reduce or contain public expenditure resulting in the reduction of the budget deficit and thereby assist in the kwacha appreciation
- Restore investor confidence and help in foreign direct investment inflows which have almost dried up and therefore assist with the kwacha appreciation
- Facilitate the mobilizing additional revenue sources from multilateral institution and bilateral Donors. It is common knowledge that most donor countries will only deal with you when your economy in shambles if you are on an IMF programme.
- Bring in better Public debt Management by carrying out credible debt sustainability analysis and strengthen risk management practices
- Reduce exposure to contingent liabilities by minimizing the use of sovereign guarantees
- Strengthen public financial management and restore budget credibility and avoid significant cost overruns
Conclusion and recommendations
The IMF has just confirmed the view some of us have had all along; which is that, the kwacha is not depreciating purely because of external factors. The kwacha has depreciated more than other currencies due to incompetent economic management which has in turn induced the lack of confidence by the market and consequently resulted in a run on the currency! One wonders how our politicians cannot understand that one of the basic factors that determine the value of the currency, is market confidence and sentiment!
It is a true that other currencies have depreciated as well due to the strength of dollar and poor commodity prices but not by 50%! Those that have done badly have depreciated by a maximum of 20% or so! The kwacha could have been in that range if we had good managers but our currency has depreciated by over 50% year to date! Crudely, one can say there is a premium of about 30% depreciation over and above normal currency depreciation purely attributable to mismanagement. Economic mismanagement in our context entails among other things, poor planning and risk management, policy inconsistency, irresponsible pronouncements on nationalization, price controls, exchange controls and so on and so forth!
The jury is out, now that the IMF has spoken. The two problems that the IMF has identified and which we can do something about as a country with nothing external about it are: lack of confidence by the market and fiscal indiscipline. There are measures that can be implemented and which are within the President’s control and have nothing to do with external factors.
I would recommend, therefore, that once the President and Cabinet have discussed the IMF report, he should hold a press conference. In that press conference, he should announce some brave and bold decisions which are the signs of the time, in order for him to address the country’s economic problems in the short term. This should include the following:
Announce far reaching cost cutting measures that even affects the Presidency and Ministers so as to show his seriousness and commitment to fiscal consolidation and also send a positive signal to the market
Suspend and cancel some expensive infrastructure projects especially the roads which we cannot afford!
Announce that Zambia is carrying out consultations with stakeholders regarding the recent proposals by the IMF mission. He should add that the country will soon re-engage the IMF and ask them for short term balance of payments support to stabilize the Kwacha and bring policy credibility and confidence to the market with the international community.
Make changes at the Ministry of Finance by honorably retiring Mr. Alexander Bwalya Chikwanda who has been indirectly asking to be retired! He clearly said he is too old to work and wants to rest in 2016 but now is a better time for him and the country! He has shown his frustration regarding the financial indiscipline in government by criticizing all his colleagues for their obsession of wanting to go on foreign trips even for a day purely to earn $500 per diem per day! All in all, he cannot possibly have the energy and motivation to enforce financial discipline at his age for an economy in crisis! Please be kind to him and save him the stress of the job at that age! We have seen that the old man has sent signals including his apparent lack of interest in the job by not being very proactive in seeking short term economic solutions for the country.
It would be a disaster for the Kwacha and the Zambian economy as a whole if the market confirms the rumour that Zambia has out rightly rejected the IMF rescue package. The decision to reject the IMF in our desperate circumstances can only be hailed by those who do not understand our current economic malaise. It may even have the opposite effect that the PF government may be thinking – by resulting in losing them 2016 election. There are tangible and intangible benefits of the IMF rescue package. The Ghanaians are not stupid to accept the IMF package! If anything, they have more smart people and are richer than us by virtue of their resources, population, better education system and being the first black African independent state! We supposed to learn from them. The IMF of the 1970s and 1980s is not necessarily the same as the 2015 IMF as the institution has undergone some reforms due to the criticism they received regarding the infamous structural adjustment programmes (SAP).
The writer is a Chartered Accountant by profession and a financial management expert. He is an independent and non partisan commentator. He has lived in the diaspora in England, South Africa and Botswana for over 25 years
Infintu are good, Zambia is best investment. These problems are globe. So vote Lungu 2016 even IMF have said from what i raed in IMF report. but please next time make reports simple for us cadres to understand
@ mary Tembo
To the contrary, Zambian economy needs ICU asap
I sincerely beg you my fellow Zambians not to be deceived by the reports that Lungu refused the IMF deal. To the contrary Lungu agreed to all IMF ‘s harsh conditions because PF is desperate to borrow money subsidies and campaigns for 2016.
IMF is the only lender of the last resort for Lungu and his bunch of thieves having exhausted all the life lines and dishonoured some loan repayments they got from Mugabe, Do Santos and the Nigerians. PF has a huge headache to look for money to settle the Eurobond interest .
I have on many occassions told you guys here that what ever PF f00ls mouths spew , the direct opposite is the truth. Basing on this “lying PF theory” Lungu accepted every thing IMF offered him and said fikaisova kuntashi. And deceive poor Zambians he let PF ‘s mouth…
Continued;
I have on many occassions told you guys here that what ever PF f00ls mouths spew , the direct opposite is the truth. Basing on this “lying PF theory” Lungu accepted every thing IMF offered him and said fikaisova kuntashi. And deceive poor Zambians he let PF ‘s mouth piece “the Lusaka times to issue ugly lies so that Zambians can think that he is a reasonable man.
Vote UPND in 2016.
Mary. I agree with you. I have transversed this country and country and I have never come across a road that is being worked on and leads nowhere. Sometimes even when you don’t like someone do not report on matters without facts. All the roads being upgraded are leading somewhere with people resident in these areas. Honestly do not insult the intelligence of the highly educated and experienced Engineers at RDA and other road authorities even if you are an Accountant. Just analyse matters in financial terms only
The 2016 budget will not work as it true value by now has fallen by over 40%, which means the govt must get external funds through grants or borrowing (at a higher rate) Though the best option is to cut expenditure in that budget by 50% or there about. This will imply ground a lot of the GRZ vehicles which roam our streets on govt paid for fuel; reduce the cabinet size to something like 12 ministers without deputies; firing cadre PSs so PF can build quality into Civil Service; all govt officials to stop international travel all together for 12 months; apply a phase approach to road construction.
Even if summarised “text msg” version…this would be very hard to understand by an ordinary PF minister or care.
It Sounds like the Author is an IMF FanBoy. To him the answer to everything is IMF IMF IMF and yes IMF again. Nobody can point to anything good that the IMF has ever done for Zambia without taking so much out of the country. And I will just leave it at that.
Instead of IMF, IMF, IMF we should shout BORROW, BORROW, BORROW?
Most of the comments by Kalima Nkonde are pointing to the fact that he is a strong supporter of the opposition. IMF earns most of its money by giving loans to struggling economies but a very high interest rate. Countries finish paying back the premium but they continue remaining in debt to IMF because of the huge interest being demanded.
PF is hesitant in cutting expenditure on some projects now because of elections next year. If some projects are chopped now then the opposition will use it as a weapon to say “WE TOLD YOU THAT PF ARE FAILURES; LOOK AT THEM NOW THEY ARE ABANDONING ALL PROJECTS THAT WERE INITIATED BY SATA”.
I can assure you that if PF wins 2016 elections then THEY WILL IMMEDIATELY IMPLEMENT ALL THESE IMF RECOMMENDATIONS (MINUS BORROWING MONEY FROM THEM). The debt of…
(continued):
I can assure you that if PF wins 2016 elections then THEY WILL IMMEDIATELY IMPLEMENT ALL THESE IMF RECOMMENDATIONS (MINUS BORROWING MONEY FROM THEM). The debt of IMF behaves like a cancer: ONCE THIS DEBT IS INCURRED IT KEEPS ON GROWING UNTIL THE COUNTRY IS MILKED TO THE BONE. BE WARE OF IMF AS THEY USUALLY MEAN NO GOOD TO ECONOMICALLY STRUGGLING COUNTRIES!!!
@C-General, i hold a contrary view, in as much as i dont like these institutions like IMF, i think in this case they are stating the obvious – we need to cut unnecessary spending but i would not want them to cut on expenditure on infrastructure because doing so will mean offloading more unemployed people on the streets and this is a recipe for lawlessness. i however feel that borrowing from IMF is much cheaper than from the market. the interest rates for the Eurobonds are in the region of 4 to 9% and if you compare the current rates in EU, its about 1-3%. compare this with IMF, its clear that we made wrong choice of where to borrow. in addition, we are spending on employing ministers and deputies plus the foreign missions. the politicians are the ones trying to work as civil servants and…
I hope he has been to Kumasi In Ghana and taken a ride in the Flash Buses and see what the impart has been
JUST On the Contrary IMF and CHRISTINE LARGADE are ZAMBIAN GOOD citizens They like Zambia because its a show case to the rest That is why they will always be available for the support but taking everything thrown at you without taking a RISKY VIEW long-term when the the balance of risks to our medium-term ”price stability objective is skewed to the downside”, we need to IMF policies that will help us act for the long-term using all the instruments available without being stifled in this global depressed economy
Whether it was in an election year or so what would consider and appraise the conditions to the bailout and see the SIZE of that bailout and relate to the gains in view of the term structure current on bonds and those proposals by IMF On the country it might even be cheaper to get a 1 Billion elsewhere and refinance or prepare looking at the similar tenure and yields being given by IMF and others in the market
I Like the ICE LAND VS GREECE comparison as it has similar characteristics to Zambia’s case
Yes you will Stabilize the kwacha through the balance assuming its all spent in the shorterm but for long-term you will go back to the same…
WITH LITTLE room and window Its better own savings as opposed to further and create REAL GDP growth that translates in long-term without focus on elections breaking therefore the debt cycle and IMF cycle Its better self managed
You should avoid artificially an effects of growing the economy and sustainably grow it next time
Lungu, you think IMF is not borrowing? This is what they do. They lend you money, then they demand interest, then they devalue your currency so that your debt in dollar terms goes higher, you fail to pay, then they give you conditions like you have to sell copper or other resources to them cheaper, and you have to maybe even sell your medicare system and privatise your education system. IMF is not your friend. Read, people. read. Watch documentaries. Bootlicker is telling you the truth. IMF temunobe.
IMF like any other fund whether closed or open need members and members who will form the fund Like any other fund the fund has to raise and make a return on its ASSETS created from supranational bonds You need to know also the operations of SDR and what it it means for Zambia if anything
Emerging countries often have seen to be a market to look to sell those products at a return ,which is good
Now with the creation of alternative funds and funding platforms including the inception of and entry of the Yuan , IMF must compete with like of regional members funding groups like Asia Development Bank ECB and others in those categories In as much as we…
may like the IMF there has to be flexibility and softening of those if the FUND has to live in current scenario in comparisons with other available funds like observed by many especially when one looks at the cornerstones on which the IMF rests Like any fund it must have members and new ones to persuade and innovate to live beyond otherwise Most African approach IMF like a charity as opposed to index tracking of the implied commodities exposure to those funding acquired and realise worse returns from the fund intended
Please also observe that It’s known fact and documented that capital inflows tend to surge to levels historical for many funding…
receiving emerging countries and then abruptly stop It’s also true that it’s because of these huge flows of CAPITAL to emerging economies that have put a lot of strain on many economies now exhibiting some crisis For instance in period of surged capital inflows CURRENCIES have artificially appreciated Debt levels have risen as a measure of national aggregates so has the debt resulting has grown with the premise that investments returns will accrues from the huge investments in infrastructural often not matched with REAL Growth What often has followed then is the explosion of domestic debt as seen on current accounts and depreciation of KWACHA as a result of Reduced…
Inflows and Expenditures
There is a time to sit back and see and control these inflows that to overvalued the local currency in operations and prevent many things and that what is seems to be the pre-occupation now
Such is the IMF scenario my friend is advancing In the short term the AGGREGATES AND PERFORMANCE of the KWACHA in the Short term will be artificially good and then long-term we go back to the same
The cycle should at some point end and become real We need to make a decision and break the debt cycle and ensure we manage the resources we are endowed in worse and good times
Lastly it should be thoroughly observed that Like any Fund The IMF fund has to be preserved and hence those not so much favourable conditions that should be tailored to reflect the unique credit quality -Credit Default likely for any country. The fund has to exist perpetually but must reform in line with other markets especially as its the first recourse for many previous sovereign debt obtaining countries now in foreclosure
For now The President made a careful decision Let IMF relook at the terms and Amount around the Two USD 950 Million and USD 1 Billion Bonds One off bailout and not strips
In return for full bellies and endless entertainment they have given their political responsibilities……Mocking Jay
Debate of the educated …… Bassop!
The issue for me (and I read Kalima’s excellent piece very carefully) is not whether the IMF is the panacea to our external debt trap or not, but rather, the wanton lack of fiscal restraint and discipline from the time our friends, PF, came into office. Everything was WITH IMMEDIATE EFFECT…….countless commission of inquiries, new districts, new institutions, new roads, new deputy ministers, new ministerial posts, new vehicles, new presidential retirement houses, new mausoleums…….and sadly, most of which was unplanned and un-budgeted for….thus our race to Euro for them Bonds, and now the only concern is WINNING 2016 elections. Maybe not be a bad idea to try new economic managers in 2016, I think.
WE HAVE STATED BEFORE ON THIS BLOG. LUNGU IS EITHER GRAND STANDING OR BEING STUBBORN. OUR ECONOMY IS ON ITS KNESS AND WILL SOON FALL FLAT. WHILST RIGHT NOW IT LOOKS LIKE THE IMF IS ABOUT TO EFFECT A STANDING 8 COUNT, IF WE WAIT ANY LONGER IT WILL BE TKO. IN SHORT WE HAVE NO CHOICE AND THE IMF IS OUR ONLY SAVIOR NOW. THE PF HAS ALREADY DONE THE DAMAGE. WE WILL SOON BE LIKE CONGO WAS IN THE 80’S. TOTALLY DYSFUNCTIONAL ECONOMY. LUNGU HAS NO WHERE ELSE TO GO IMF IS IT OR THE COUNTRY WILL SEE NEVER BEFORE SEEN LEVELS OF SUFFERING.
If follow what the IMF Maurice Obstfeld, director of research for the IMF,director has been saying on emerging markets in view of the FED rates decision December and onwards you will see that IMF is not the only saviour The ultimate saviour even in these circumstances is the ZAMBIAN GOV in fiscal and monetary austerity acting now will be better than never.
You only go to IMF if all has failed and your future fortunes match the conditions not the opposite otherwise the IMF should above 3 Billion and for long-term allowing ZAMBIA to come along long-term not with restrictive stance as it where especially that commodity prices are also long time to come along
We…
need to break out of the CYCLE of debt from sovereign and for the future deal like Mexico in its Oil Deal, the deal of the Mexico Set for $6 Billion Windfall The Mexican government paid $773 million in 2014 to lock in prices .Its like that is the way to go unlike the do nothing approach when prices are in backwardon based on the forecast cash flows embedded in the Debt Commodities will always be in a cycle and there will not be any time when long term it will be in Contagion You need to reserve and learn to hedge to break away from the cycle of DEBT sovereign or supranational like IMF
The utopian state is only achievable for those who see and forecast The ministry for…
for bo wina is there important now and hence forth in the same way Maurice Obstfeld, director of research for the IMF is saying that it could be helpful that the Fed rate hike should be be slow and gradual since the world economy will still face uncertainty if the Fed raises the federal funds rate as expected in December Is the same way that IMF should also be a little expansive on the Zambian economy if the bailout will be meaniful and culminate in the GROWTH in like with those aligned to INDIA and CHINA You know that correlation especially that the increase in rates suddenly because a cash flow decision for many investors towards emerging markets and Zambia negatively affected Two…
Well articulated article. I do hope that the people who have been singing the “it is global song” read this article.
@MWALIMU YOU ARE RIGHT ON POINT! I AGREE WITH EVERYTHING YOU HAVE SAID EXCEPT THE POINT YOU STATE THAT WE HAVE OTHER OPTIONS AT THIS POINT. REMEMBER THE PRICE OF OIL IS BOUND TO REBOUND BEFORE COPPER DOES. OUR BALANCE OF PAYMENTS IS STRETCHED ALREADY. IF WE WAIT TO INVITE THE IMF WE WILL BE IN A MORE DESPERATE SITUATION THAN OUR CURRENT ONE. 2 LUNGU IS ALREADY FACED WITH A HUGE DEFICIT AND REVENUES ARE DWINDLING. WHAT WE NEED IS MORE PRUDENT APPROACH TO FISCAL POLICY AND IMMEDIATE ALLEVIATION. LONG TERM APPROACH. IN THE MEAN TIME TO MAINTAIN SOCIAL AND ECONOMIC FUNCTION AND DEVELOPMENT THE IMF IS THE ONLY INSTITUTION THAT HAS THE RESOURCES AND MECHANISM TO DEAL WITH THE RISKS INVOLVED WITH ZAMBIA. WE ARE ALREADY IN TROUBLED WATERS BECAUSE OF PF CARELESSNESS. I WISH WE HAD OTHER OPTIONS…
thats right , maybe auction the GRZ vehicles ,those that unneccessary to waste the funds and fuel, been seen grz vehicle moving on weekend , but those are just private purposes . MMD INTRODUCED better policies against using grz vehicles during weekend days .
other thing is to reduce deputy ministers to a reasonable amount ,or just without any deputy ministers , most of the time we dont see deputies appearing , maybe just a secretary.
in china or india , fight against curruption is going on , in terms of ban officials to use vehicles for even reporting for work ,and going home . even reducing foreign trips , motor cade. what for we dont generate our own fuel , but we purchase by tax payers money , no one could attack the motor cade , zambia is peaceful country .
please implement…
In my opinion I feel that Zambians are like a wife who accepts to live in a very hash economic situation that month because his hasband spent his salary on beer and prostitutes.Me I don’t accept that our situation is not caused by humans thus PF,Sata and Lungu to some extend RB.It pains to see how Mwanawasa and Magande worked hard to repay the loans to IMF and world to reach HIPC completion point.We become free as Zambians.Some few years later we voted for an illiterate president(SATA) and a drunkard (LUNGU)from Chawama using tribe to come and mess up our economy taking as backward to stone age politics.The answer is not IMF borrowing but to vote out PF and begin afresh because no matter what amount of money we shall borrow it will go down the drain.We need an economic manage and thinks…
You will need to deal with issues of moral hazard and act like lc 70 has hinted Austerlitz on your own and break from the circle
There are really alternatives and critical savings can be made to the value of 1 Billion and avoid additional costs
You need to avoid the moral Hazard as laxity tends to repeat
Ba PF na be kuta.please register in numbers.we pf came in 2kg sugar was at k10.00 but now its k26.00 though Sata left it at k13.00.
please lets learn to vote objectively.
The problem is that Countries subject to IMF have performed poorly after the bailout as you can see from Mexico to Asia to Africa Check countries amongst, in a class of 100
The short-term IMF loans balance of payment support on macro stability has made many countries addictive to the dose and have failed therefore to grow and into a free market economy at which creditors and debtors will play their rules according –bankruptcy and insurance or credit derivatives according to efficient markets
That is why the new IMF should be difference from the OLD that targeted exchange rate stabilization alone as way of balance of payment support
The biggest moral…
hazard for countries is to always slip into crisis and always look forward to IMF as the last resort Check from Mexico to Asia and Africa and see These bailouts have often been expensive and sometimes unjust fundamentally as KWACHA currency solutions for our people using same frame work and policies and Gov that created the crisis
These are issue at the congress US to reform the fund and ensure its good intentions are achieved and avoid moral hazard, that causes more harm than good once a crisis does erupt, and undermines superior market solutions towards for a more stable and free global economy.
In as much as I understand the Good intention of IMF,there are several alternatives from normal business bankruptcy dealings to credit derivatives and other alternative funds now emerging as a result of discontent to IMF
There other alternatives but no so organized and capitalized as IMF but challenging the conditions and asking for the reform of IMF New Initiatives like the BRICS bank that assumes a similar role with world bank with access to voting rights given as opposed to IMF and stricter austerity therefore
One of the often used case of failed IMF policies has been the Jamaican 1980s also The IMF bailout have been documented to have caused the…
collapse of Jamaica’s agricultural industry The case of Argentina is more pronounced in budget cuts Argentina implement severe budget cuts during an already significant economic downturn in the late 1990s.Argentina also supported an unsustainable fixed exchange rate that emptied government coffers and brought the country closer to its inevitable default as a result of
We love the IMF but to remain relevant in the current global funding there must act to rebrand there has to be some relook and rebranding to position and actively participate in the National bailouts and ensure achievement long-term
@mwalimu,you seem to ve knowledge on this subject,but m finding it difficult to understand what you re posting because your grammar is pathetic. No commas,full stops and very bad sentence constructions.M not trying to embarrass you,but to help you improve your posting. Being an accountant myself,I ve picked one or two things from you,though.
People,this Kalima chap sounds exactly like HH. I agree with “The MMD Chief Bootlicker”that this Kalima is politicking.He must ve some links with Kachemas. We ve all read nd digested the IMF report on the state of our economy. I stand to disagree with this Kachema that the IMF report states that economic mismanagement is the major cause of our problems. In my earlier posting,i ve already alluded to the fact that this IMF report doesnt consider what variables were at play for the PF fiscal or budgetary decisions.Its like a “snap shot”,more in the “now” than in the “then”.Let me continue in the next page;
Very good analys?s.spot on
We just write You want me to start decorating ichalakwala Its good you picked points but if you want a very well researched and detailed analysis on IMF Zambia now and after bailout that we can do but it will be unfair to the owner of the site
I try to be to the level otherwise I could have just presented a table on each and every country amount of bailout and passing sentences Sometimes we are compelled to have a balanced discussion here
When you read through twice then it sinks
“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 His Excellency President Edgar Lungu, Finance Minister Alexander Chikwanda, Bank of Zambia (BoZ) Governor Denny Kalyalya, other senior government and BoZ officials, members of parliament, as well as representatives of the private sector, labor unions, civil society organizations, and Zambia’s development partners. The mission thanks the authorities and the other stakeholders it met, for their openness and the constructive spirit in which all discussions were held.”
Source: International Monetary Fund…
The risk management business around those discussions should be in mind and continue ///