Former Finance Minister Situmbeko Musokotwane
Former Finance Minister Situmbeko Musokotwane

Former Finance Minister Situmbeko Musokotwane says Zambia should access emergency funding from the International Monetary Fund to prevent further deterioration in the economy.

Dr Musokotwane said in a statement that Zambia is quickly running out of money saying it is incumbent upon the government to agree with the IMF on a program that not only stabilizes the economy, but also quickly restores investor confidence and re-kindles faster economic growth as it was before.

He said Zambia is resisting an IMF deal to avoid the strict conditions that will accompany it, said Musokotwane, who was finance minister from 2008 to 2011.

Dr Musokotwane said President Edgar Lungu’s government doesn’t want to cut spending before general elections next year.

An IMF team from the Washington visited Zambia this month at the invitation of the government to assess the state of the economy and Zambia’s responses to the fiscal issues facing the country.
But neither the government nor the IMF mentioned the possibility of talks about an economic program in statements released at the end of the tour on Friday.

Below is Dr Musokotwane’s full statement

WHICH WAY FOR THE ECONOMY AFTER THE IMF VISIT?

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A team from the International Monetary Fund (IMF) just left Zambia after making an assessment of the economic situation of the country. They found a dire situation. However, the government has rejected the idea of taking matters forwards by agreeing on a corrective economic program with them.

What is the IMF? What is the nature of its interactions with countries? What would Zambians have experienced with an IMF economic program in place?

Now that there will be no such program, what does this mean for the future of the Zambian economy? These are the questions to be answered in this paper.

The IMF and the World Bank – sometimes referred to as the Bretton Wood Institutions (BWI) are international institutions; Zambia is a member of both. After World War II, most countries were in economic ruin.

Among the measures taken to revive the world economy was the creation of the two institutions.

The World Bank was established to help countries to re-construct.

This was to happen by financing development projects, especially infrastructure. The IMF was established to help countries deal with short-term balance of payments problems.

It was to provide short-term credit to needy countries. Over the years, the functions of the two institutions have evolved a lot and in many cases they work jointly to help a country even while each one is tackling issues at the core of its mandate.

How do the BWIs engage with countries?

The institutions HAVE to be approached and invited in by a member country. In other words, a country (say Zambia) must approach the BWI to seek for assistance.

Zambia (through the Federation of Rhodesia and Nyasaland) first engaged the World Bank in the 1950s with the construction of the Kariba Dam being one of the outcomes.

Her engagement with the IMF, on the other hand, started in the 1970s.

At the time, Zambia was running into foreign exchange shortages. The initial trigger for her problems was declining copper prices, just as is the case today.

Assistance from the BWIs comes in different forms. The form that is commonly known is provision of credit. Very poor (low income) countries will typically be given soft or concessional credit.

For a poor country, credit from the BWIs is normally the cheapest that can be accessed in the world. Interest can be as low as 0.5 percent per annum, grace period can be five to ten years and repayment period can be as long as 40 years, depending on the lending institution.

If a country graduates from being low income to middle income as Zambia did in 2010, the concessional credit window from the BWIs is generally reduced or gets shuts off.

Concessional funds are scarce and they are reserved for the very poor countries with non-concessional funding being accessible to the rest.

Not all assistance from the BWIs is in form of credit. It may also be in other forms like advice or technical assistance. It may also be in form of references to third parties like donors if they inquire about the performance of the economy in question.

Even lenders under the Eurobonds will be interested to hear what the IMF thinks about economic management in Zambia to assist them judge whether or not to lend to us.

In the early years of the BWIs, it was not uncommon for both rich and poor countries to ask for financial assistance. Britain, France, China, India, etc. did approach the IMF. With time, however, the BWIs financial help became more associated with the developing world.

The high-income industrialized countries since then have relied more on domestic and international capital markets for funding. Indeed, the trend has been clear: as countries (including those from Africa) made progress and grew wealthier, they tended to “graduate”from the BWIs especially the IMF.

By 2010, Zambia had “graduated “from the IMF programs.

She was able to make do with her own money and from development institutions like the World Bank, African Development Bank, Eximbank of China and the European Investment Bank. In addition, the improved Zambian economy enabled her, if needed, to raise funding on the international bond markets.

When a country “runs”to the IMF for assistance that may sometimes, though not always, reflect failure to manage its own financial affairs.

A recent example is Greece, a member of the European Union. Her level of indebtedness deteriorated to levels that made it imperative for her to seek the assistance of the IMF and other official creditors.

The international capital markets alone for her were no longer appropriate. This was humiliating.

The humiliation by a country seeking assistance from BWIs arises because it must adhere to conditions in exchange for being granted credit. Typically such conditions include: -Restricting the size of the budget deficit for the country or, expressed differently, restricting how much the country can borrow each year Restricting the type of borrowing that the country may incur: domestic versus foreign; concessional versus non-concessional, etc.

Prescribing the minimum amount of additional foreign exchange reserves that the country must accumulate.

The effect of this is to tie the hands of the central bank regarding the interventions it can make in the foreign exchange markets Getting rid of loss making parastatal companies, say through privatization.

Reducing or removing consumer and producer subsidies.

In certain cases, demanding that the government devalues the currency.

Although a freely acting government can undertake any of the measures mentioned above, it can be humiliating to undertake them under the auspices of an IMF program: It will appear like it acted under duress.

During the 1980s and the 1990s, IMF programs led to some governments in Africa, Latin America, and Asia losing popularity because of conditionality.

Zambia today faces economic problems that are hard to resolve without the help of the BWIs.

The country is losing foreign exchange fast as can be seen from the rapid fall of the Kwacha exchange rate.

With reduced revenue, mining companies are either closing or threatening to close some mines, causing serious social problems in mining areas as people lose jobs.

The government budget itself is out of control with economic destabilization effects as tax revenues dwindle because companies are facing difficulties. Confidence in the economy is waning.

The government blames the economic problems on low copper prices and what it calls the drought induced energy shortage. The explanation about low price for copper is correct and indeed there is nothing the country can do to improve it. But this explanation is not complete for the economic problems that we face.

The government is silent on another important cause of the crisis, namely that copper output has also fallen so badly.

According to a Bloomberg’s story attributed to government, copper production in 2015 may only reach 600, 000 MT. When compared with the production of 830,000 MT achieved in 2011, the drop in production is serious.

Even if the average copper price had remained at the higher 2014 level of $6,863/MT the reduced production would have accounted for about $1.6 billion loss in export revenue.

Whereas the low copper prices are beyond the government’s control the same cannot be said of the reduced mining output. In fact, had the government not mishandled the mining sector, copper production by now would have reached at least 1,500,000 MT per annum.

This is the production target that the MMD government had set, knowing well that it was a matter of time before copper prices fell as they usually do. The plans on copper output expansion were laid out and were already under implementation. Specifically, there was the Konkola Deep project (KCM), Kansanshi Expansion (First Quantum), Lumwana Expansion (Barrick Gold), synclinorium shaft (Mopani) and opening of Kalumbila mine by First Quantum.

The best way to prepare for low prices is to encourage copper production to expand during the time when prices are good. The effects of low copper price when that time came would be strongly counteracted by the high volumes of copper sales.

Export proceeds would not have fallen that badly. In addition, individual mining companies’ ability to survive at low prices when prices are low would have been better with expanded output.

Contrary to this thinking, the PF ushered in policies that discouraged expansion or indeed maintenance of copper production. Here are the mistakes they have made.

Firstly, the government withheld VAT refunds to mining companies until it now owes colossal amounts.

This is money that should have been used to maintain or expand production at a time when liquidity in the sector is constrained by low prices.

Secondly the mining tax regime has been full of confusion culminating in the introduction of a strange mineral royalty tax rate, which the President dropped but only after Lumwana had threatened to close the mine in response.

Thirdly, the government has over the past four years failed to maintain healthy dialogue with the mining industry. A few years ago, some mines planned to restructure their operations by reducing labor and other costs.

Had they succeeded to do so, their ability to survive with low prices would have improved and this may have prevented their harsher survival measures that we see today.

However the government blocked the companies and the restructuring was not done.

The chief executive officer of the company was deported. Even at this critical present time, government still threatens mining companies instead of engaging them constructively.

Confidence has been lost. How can it be surprising that copper output has been falling amidst this confusion?

Even without copper related problems, Zambia would still have faced serious economic and foreign exchange crisis. The reason is that from 2011 the PF have carelessly spent public money.

Construction of new universities has been declared without planning. Similarly, construction of new districts, roads, sports stadia have been declared also without plans. Expensive bye-elections have been the order of the day.

This kind of conduct eventually leads to a country getting bankrupt in both Kwacha and foreign exchange terms.

It may sound strange that domestic expenditure on roads, universities, new districts, etc. can lead to foreign exchange shortages. In actual fact such a result is not surprising because most so-called domestic expenditure in Kwacha have foreign exchange implications.

For example, in constructing a road or a university, some of the expenditure will surely be externalized in profits or to import inputs.

Even something seemingly innocent like paying of salaries for officials of new districts has foreign exchange consequences. For instance, a salary recipient may decide to import consumer goods like TV.

It follows from all this, therefore, that lack of restraint in public expenditure by the government contributes to exchange rate depreciation and economic dislocation. This is why previous administrations under MMD adhered to sustainable budget deficits, which is the normal practice
globally.

However, this has not been seriously done under PF even after continuous advice over the past four years from both local and foreign experts.

Let us get back to the issues of the IMF.

Had the government agreed to engage the IMF it would have asked for credit in foreign exchange.

The credit would have provided confidence that the country has continuous access to new money that can be used to intervene on the foreign exchange markets.

Further confidence would have arisen from the understanding that the IMF will monitor the government to ensure compliance to agreed upon prudential performance or else they will freeze the credit lines.

The IMF would have come up with conditions for Zambia observe. Which would have been the conditions and how could they have affected the lives of the ordinary Zambians?

The conditions set would have stemmed from the IMF’s understanding of what has gone wrong with the economy and thereafter determine the “dos”and “don’ts “required to correct things.

They would have comprehensively looked at different aspects of the economy including but not restricted to the external sector as well as public finances.

On the external sector, they would have accepted that there is nothing Zambia can do to change the low copper prices. However, they were unlikely to accept that Zambia is powerless to reverse the massive drop in copper production. That being the case, there would have been discussion on all matters that may have led to the drop.

Questions on governments plan to pay back the VAT refunds they owe the mining companies would have been raised.

The government has held on to these funds for about three years.

The refunds, which the government has finally accepted as legitimate, can assist to improve mining liquidity.

However, government already spent this money and it is not easy to say where they find it.

There may also have been discussion on the mineral royalty tax. Last year, the government introduced mineral royalty tax at rates as high as 20 percent for open cast mines.

No other mining country in the world has the mineral royalty tax at that high rate, and this should have been enough reason, even without technical analysis, for the government to ask themselves whether such a tax rate was sensible.

As pointed out already the tax rate was eventually lowered but not before a lot of confidence in the industry had been lost. But there is still dissatisfaction in the industry that the tax rate still remains too high given the prevailing low copper prices.

What is the government’s response to this issue at the time when miners are losing jobs?

These two issues of VAT refunds and the mineral royalty tax may not affect the general public although, if they were resolved, the business environment on the Copperbelt should improve as normal mining activities gradually resume.

The external economic issues for discussions that would have drawn public attention relate to the exchange rate. As indicated earlier, the IMF were likely to oppose the manner by which the government has been intervening by selling dollars from reserves to fight Kwacha depreciation.

The government has done this at its full discretion. The IMF’s position may have been that it is pointless for the government to keep on selling dollars in interventions without first tackling the fundamental root cause of the economic crisis including the depreciations. In other words, the total freedom that the government has exercised to date regarding when to intervene and by how, may have been curtailed.

This would have been a clashing point between the IMF and the government. For the general public, this might have meant more Kwacha depreciation, at least initially, unless the government quickly became serious in tackling budget deficits, leading to stabilization of the exchange rate without need for foreign exchange based interventions.

Finally on the external sector of the economy, the IMF would have imposed restrictions not just on domestic but also on new external loans. In other words, the era of the government freely borrowing via Euro bonds and other sources would have ended.

This would now have been subject of negotiations with the IMF and the outcome could either be yes or no.

This would have been another point of tension between the government and the IMF because, after all, the government sees big spending as its best bet for political survival.

Let’s now delve into the possible tension issues between the government and the IMF regarding matters of public finances. It is certainly in this area where the two were likely to clash a lot and where the ordinary person is most likely to feel the presence of the IMF.

Public expenditure control under the PF has been weak. It is like there was no gatekeeper on public finances.

This, as we have seen, eventually leads to foreign exchange problems. Zambia cannot therefore expect to stabilize the exchange rate unless more effective gate keeping on public finances is established. It follows that the IMF would focus a lot on public expenditure.

Zambians should therefore expect pressure from the IMF that the government drastically reduces subsidies, for example on petroleum fuel. Petroleum (dollar) prices on the international markets have fallen significantly.

However their prices in Zambia ought to be higher because of the Kwacha depreciation.

The current prices for fuel in Kwacha reflects the exchange rate of not more than K8/US$ or thereabout.

The removal of subsidies on petroleum prices will worsen the lives of the already pressed Zambian consumer. In addition to the direct increase in fuel prices, prices of most goods and services will rise in response to the cost of transportation.

Another area of clash with the IMF on control of public expenditure would be the subsidies on the farming input support program (FSP) and on maize marketing, both of which are currently are making huge losses.

Once again these are difficult areas, which are likely to make the life of the farmer and the consumers of maize harder.

The chaotic approach to infrastructure development by the PF is unlikely to escape the attention of the IMF.

From 2011, the PF has embarked on many big infrastructural projects without any sound planning and regard to the sustainable availability of financial resources to do so.

This has resulted in rapid accumulation of both domestic and foreign debt, which will soon become difficult to service.

Demands from the IMF that the government prioritizes its investments in infrastructure to suit limited money will see some projects already announced or even embarked upon put on hold.

For the affected communities, this will prove frustrating and disappointing. For the contractors, this will be massive loss of business.

We should also expect many contractors to sue the state for loss of business.

There are many other potential areas of tension between the IMF and the government. Overall, the biggest source of tension between the IMF and the government will arise from the former’s attempt to get the latter to reign in its chaotic ways of spending beyond its means and slow down on borrowing. This will come at the wrong time for the PF who seem to believe that their political survival depends on spending, and spending.

As the saying goes, it is the grass that suffers when elephants fight. Assuming the government reduces expenditures, in which areas will this happen more?

Is it on expenditures that matter to the poor (e.g. health, education, water, etc.? If so then the ordinary Zambian will suffer. But if the focus of the expenditure reduction will protect social spending on the poor, then the suffering will be less severe.

With the insistence of the government to proceed with expensive infrastructure, it is likely that this will be done at the expense of social spending.

Let us wrap it up. Zambia is quickly running out of money. There is rapid shrinkage in industry, led by the mining sector with the consequent loss of jobs.

Similar difficulties will follow in non- mining sectors because loss of incomes in mining means reduced buying power for consumers in
other sectors. Further, the massive depreciation of the Kwacha also means further loss of business across the board because buying power is eroded.

New money is required to help stabilize the economy. The financing that the government has hitherto so much relied upon, namely Eurobonds and others including domestic sources are becoming less available.

Some lenders may still offer money to the government but this money will increasingly become more and more expensive and unsuitable.

The only credible funding sources that remain at this point in time are the IMF and the World Bank. But these institutions will not permit the government to continue “business as usual”.

They will demand corrective actions and this in the short term will be unpleasant for most people. And it is these corrective actions that the government has rejected and thereby expressed no interest in agreeing on a program with the IMF.

In other words the government remains uncommitted to controlling expenditure because it believes it is the infrastructure development that will win it elections. Similarly, the government believes expanded bureaucracy in districts and even foreign missions are good for it. Although the government is rejecting a program with the IMF, it has to-date remained silent and not offering adequate solutions to the huge economic problems the country is going through.

Nothing on the crisis on the mines. Nothing on the exchange rate except selling dollars which everyone knows will run out. Nothing on restoring the confidence of the business community.

Nothing on the escalating debt problem and to the contrary the government wants more borrowing.

It is incumbent upon the government to agree with the IMF on a program that not only stabilizes the economy but also quickly restores investor confidence and re-kindles faster economic growth as it was before.

It is doubtful that there is patience in today’s young population for a prolonged period of stabilizing the economy while jobs and livelihoods remain scarce. In this respect, the attitude taken by the government of rejecting a program without tangible alternatives is not helpful and will just see the economy spinning further out of control.

The PF must take responsibility for the current economic hardships and act.

They should not blame everything on drought and low copper prices. A global economic crisis which resulted in even lower copper prices than they are today occurred also between 2008 and 2009 but things did not deteriorate as they have done this year.

Concrete measures then were taken that minimized the negative effects of the crisis.

The PF must also take practical steps to stabilize the economy and return it to strong growth. The main problem is that right from start in 2011, the PF economic policy was internally contradictory and inconsistent: On one hand they believed that development was about the government spending big on infrastructure and other things like bye-elections and expanding government bureaucracy. On the other hand they instituted policies that discouraged the private sector and thereby leading to a declining economy.

Given that they wanted to spend big, they should have made it a top priority to promote investments and expand the economy.

This would have cultivated the next crop of tax payers. By grabbing private companies (e.g. Zamtel), by introducing unreasonable taxes in mining, by deporting company chief executives (Lafarge, KCM), by abandoning or delaying projects designed to promote future economic growth (Kasaba Bay Tourism Project, Mamba Thermal Power Station, Kafue Gorge Lower Power Station), etc. the PF was actually killing future tax payers who should have produced the money for them to spend.

It is this contradiction of killing industry while wanting to spend big that has crystalized in the economic crisis we face today.

By Situmbeko Musokotwane

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47 COMMENTS

  1. a few days ago or weeks you were condemning the loans gotten from China. What has changed. Are you saying this with interests? Politicians awee mwatufilwa

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    • @Kays, what were the interest rates on the same loans from China and were there conditions attached to the loans? Think we need to answer some questions before we draw conclusions.

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    • Excellent article by the former Finance minister.This is the type of information the man on the streets needs. Having said that I do not subscribe to the IMF and think they are there to keep Africa poor and bound BUT having PF in government has been worse than having IMF. The excessive borrowing,by elections, massive un targeted infrastructure developements have such Zambia into a hole. Zambians what the hell were we thinking voting for Sata..too late now but PF has to go! We need to put our country above politics.We need to think of future generations. Forget 2016 elections it’s not only pawato sinking it’s Zambia sinking.Lungu needs to step up and fess up!

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    • So much of volumetric analysis … the answer lies in two items that are putting pressure on the ZMK and $1Billion from IMF is not enough to mitigate the current circumstances. Fuel imports and Power imports are coupled with low copper output at lower prices.

      You can’t do anything about the demand side which is the later but you can do everything within our powers about the supply side which is fuel and electricity. We can add 600 MWs in the next 10 months and immediately become a net export to replace some lost revenues from copper.

      We can finish the pipeline and immediately save forex but having a cheaper landing cost. Insanity is doing the same things and expecting a different result. With all due respect Musokotwane is wanting us to go back to doing the same old things and…

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  2. Say what you say, and say what you want, bottom line is Michael Sata was a real disaster for Zambia, basically took the country 20 years back with his populists agenda and and it is so sad that he is not even around to see the mess he has caused. MMD worked so hard to bring Zambia to where it was in 2011 despite the world’s worst economic crisis of 2008. And it is even jaw dropping that some people have even the guts to say bring back Sata’s PF. Really? Are you out of your mind? And some are busy copying Sata thinking he was a great leader. The man was a disaster people, the evidence is there for all to see.

    And those who celebrated the Grabbing of Zamtel by their Sata , where are they now? Celebrating free talk time?

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    • People just got tire with no reason, the other factor MCS promised to turn around the country in 90 days & people believed him because he was such manipulator.

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  3. KK resisted IMF. After a few sips of tip top (malubbeni) he went crawling to them. Whether we like it or not we will crawl back to IMF. The only gratifying thing is this time around we will be carrying Jameson’s head as our initial sacrifice.

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    • De javu, Chikwanda the current finance minister was in charge of the national coffers and advising KK to resist IMF until the country’s economy was rock bottom!

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  4. The Petro Dollar Dr is the issue??

    The question on the bailout is not that it has been refused but the structural fit What should be the tenure that allows the austerity to pass without necessary being onerous and restrictive to box the economy and make it fail to achieve its potential growth to enable it create revenue and meet other commitments healthily and still remain an economy when the cycle of the global economics return

    The issue rather should not be to take the bailout at all terms even when the reinvestments arising will not be matched with the returns to the tenure and maturity profile over those years for that principal…

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  5. The other issue has been because of result of similar bailouts recently and often countries have achieved worse results and have tended to be addictive for more and even bigger bailouts to refinance earlier

    The question is which is better self austerity and migrate to a level of self sustenance or becoming more addictive and way the quality and stream of revenues to meet repayment infact you become more pronounced and impaired if you fail to meet the Bailout conditions and eventual repayment

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  6. MMD Chief Bootlicker: “And it is even jaw dropping that some people have even the guts to say bring back Sata’s PF. Really? Are you out of your mind? And some are busy copying Sata thinking he was a great leader. The man was a disaster people, the evidence is there for all to see…”

    …….And some are busy copying Sata thinking he was a great leader……..chuckle, this caught my eye…….reminds me of a prominent student of Sata in the name of HH, never mind his status as “economic manager” …chuckle again!

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  7. Judge Ngona, you make me laugh. You could also remind us that Kabimba, Mmembe were either part of the Sata legacy or were tolerant of his misdeeds. Look at Mmembe, it was all Michael this Michael that…..and HH was silent and learning the ropes. Today Kabimba and Mmembe talk and write as if they were aliens at the time!

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    • @Terrible, point of correction. Who gave Sata the name Chimbwi no plan? HH was not silent but the masses were deaf to him. People were all ears when Sata spoke and turned a blind eye to the violence which was being unleashed on the opposition.

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  8. Dealing with a significant shortage of tax revenue is an issue to start from because growth or lack of it arising from financing decisions will be as a result of that

    Like India recently we should always avoid and discourage “bond tourists or bailout tourists ” Instead “real” investors in financiers for long-term and who will term sheets that goes with the risks that Zambia faces

    India is an example now of resilient emerging market issuing similar debt to an array of investors that includes banks like Nomura, Standard Chartered and Bank of America Merrill Lynch bought although most of them have now been speculated upon The point is there is more good options in the…

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  9. All the things that Hon Musokotwane has said are true and we said it in 2011. What Hon Musokotwane has omitted is to advise Edgar to beware of wrong expenditures and wrong decisions that were done before his era. All the bye elections that have occurred under Edgar were initiated under Sata and Kabimba with Mmembe in tow singing praises of Michael halleluiah!
    I hope President Edgar Chagwa Lungu has learn some lessons, otherwise I shudder to think that some opportunist opposition politician, a student donchi kubeba, is given even a small chance to (mis)lead us.
    If I recall, one HH has on several occasions accused Edgar of losing the legacy of Sata…my foot! HH, take a leaf from honourable politicians like Hon Musokotwane who will state it as it is and stick to it, not tying their mouths…

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    • It is a shame that your “…honourable politicians like Hon Musokotwane…” has newer explained why, how and because of Pepsi illegal tax incentives. So much about “honourable”!!!

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  10. If I recall correctly, one HH has on several occasions accused Edgar of losing the legacy of Sata…my foot! HH, take a leaf from honourable politicians like Hon Musokotwane who will state it as it is and stick to it, not tying their mouths to the direction of the wind.

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  11. in the small USD 3 Billion we have faced with
    For IMF they need to come in a package that meets the risks facing Zambia and allow growth from which revenues will accrue to continue

    Now when you consider the PETRO DOLLAR ISSUES and New developments similar to the structure of IMF you need to see how that impacts on the conditionality’s and terms that the IMF is likely to give I will give you a few points Here and factor in in that decision

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  12. musokotwane what is it that you did with your RB? absolutely nothing.i would have taken a point if it was Magande who issued such a statement,musokotwane completely failed you eventually joined politcs coz of the sweet you tested with RB,give us solutions not nkongole and stop talking about the dead this shows how retarded we are.it is the same you talk about FJT who sold the mines together wit Halenya Haleya and have made the situation to be the way it is today.stop bullshitting us

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  13. Caution: Economists do not always agree on solutions to specific economic challenges, or even the cause of the challenge itself. So Hon Musokotwane’s views are just one side, Another economist like Dr Kalyalya of Bank of Zambia may hold slightly or very different views, so would an economist from CBU. Worst of all one from UPND may also look at things differently for obvious reasons, that one to be ignored promptly because of the bias of several factors including bias of DNA.

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  14. There are so many sovereign wealth funds to look to build with US dollars holding as much as $7.3 Trillion dollars in assets liquid amongst the largest institutional investors similar in mandate to IMF Its because of depressed oil prices that these institutional investors are expected to offload and invest in socially responsible manner and Zambia might be a good case Countries such as Norway is likely to be a good point to look to for the less than 3 Billion Dollars because of its rich sovereign wealth Fund Norway has more than $800 Billion at its disposal and can afford to fund Zambia’s current crisis

    In case of sound Arabia the fund is not sound and because of…

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  15. of geopolitical issues it might be favourable and the fund is not as performing as one would have expected by end of august the fund had suffered erosion Saudi Arabia isn’t quite as fiscally sound.
    Though Russia has its own problems due to the current recession My friend Putin has $140 billion to look to for that small $ 3 Billion Dollars we need
    There are so many alternatives but for geopolitical reasons we can still ask our IMF friends to mirror the terms behind these and see how Not forgetting the BRICs pass through loans and other regional banks
    The situation is not desperate as portrayed Norway can be a solution

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  16. FELLOW ZAMBIANS AS I SAID LAST WEEK. LUNGU IS EITHER BEING STUBBORN OR GRAND STANDING. EITHER WAY HE IS WASTING VALUABLE TIME. WE HAVE NO CHOICE AT THIS POINT BUT TO WORK WITH THE IMF. OUR DEBT TO INCOME IS STRETCHED OUT TO FAR AND SOON WE WILL IMPLODE. NO OTHER LENDING INSTITUTIONS CAN TAKE AND HANDLE THE RISKS INVOLVED WITH ZAMBIA RIGHT NOW. THE CHINESE PLEASE GIVE ME A BREAK. THEY HAVE THIER OWN STRUGGLES RIGHT NOW WITH AN ECONOMY THAT IS PEAKING IN TERMS OF GROWTH. WORKING WITH THE IMF WILL ACHIEVE AMONG MANY TWO IMPORTANT GOALS. ONE IS BOOST INVESTOR CONFIDENCE THAT ZAMBIA IS COMMITTED TO FIXING THIS MESS. TWO PROVIDE A BRIDGE FOR CONTROLLING BALANCE OF PAYMENTS WHILE WE RECOVER AND BOOST PRODUCTUON WHICH HOPEFULLY CAN CREATE AN INCREASE IN EXPORTS ESPECIALLY AGRICULTURAL PRODUCTS…

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  17. It is advisable to focus on cause-effect relations of the current politico-economic crisis in the country. Problems are by definition unavoidable. If they were avoidable then problem-free society (utopia) would be possible. Each problem needs a range of suitable solutions. The problem today is a combination of factors, namely energy import bill and low copper prices. There is no panacea to that, but economic diversification can serve as a guiding principle. Why waste time blaming PF when MMD was beaten a democratic contest? The voters are always right by definition. When voters reject colonization, then they are right. When voters reject UNIP, then they are right. When voters reject MMD then they are right. Why are certain political parties rejected and yet other political parties are…

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  18. GROWTH. WORKING WITH THE IMF WILL ACHIEVE AMONG MANY TWO IMPORTANT GOALS. ONE IS BOOST INVESTOR CONFIDENCE THAT ZAMBIA IS COMMITTED TO FIXING THIS MESS. TWO PROVIDE A BRIDGE FOR CONTROLLING BALANCE OF PAYMENTS WHILE WE RECOVER AND BOOST PRODUCTUON WHICH HOPEFULLY CAN CREATE AN INCREASE IN EXPORTS ESPECIALLY AGRICULTURAL PRODUCTS. LIKE IT OR NOT THE DAMAGE IS DONE AND IMF IS IT. LUNGU WILL GRAND STAND AND PUMP HIS FISTS ALL HE WANTS BOTTOM LINE IS GRZ IS BROKE AND LESS AND LESS REVENUE COMING IN. SO AH LUNGU PLEASE GROW UP AND FAFE REALITY IMF IS YOUR ONLY HOPE AND WE ALL K NOW THAT YOU WILL GO BACK TO THEM SO STOP WASTING TIME WE HAVE WORK TO DO. TIME IS RUNNING OUT

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  19. IMF BOYS ALWAYS IMF BUT LEARN TO LOOK AT THE OTHER SIDE , WHAT INVESTOR CONFIDENCE HAS ARISEN IN BRASIL MEXICO ICELAND GREECE GHANA ZAMBIA ARGENTINA JAMAICA THROUGH IMF BAILOUT

    THE OPPOSITE IS TRUE CONFIDENCE HAS WANED BECAUSE OF THAT ENTRY TO THE CONTRARY

    THERE ARE MANY SOLUTIONS LOOK TO NORWAY AS OPPOSED TO CHINESE

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    • @INVESTOR IF YOU LOOK CAREFULLY AT BRAZILS ECONOMIC POSITION IN THE 1980 BEFORE THE IMF CAME IN AND NOW YOU WILL SEE A BIG DIFFERENCE. OVER THE LONG TERM THE AUSTERITY MEASURES INSTITUTED BECAUSE THE IMF LAID THEM OUT AS CONDITIONS FOR THE IMF TO LEND TO AND HELP BRAZIL HAVE LARGELY WORKED. AT ONE POINT BRAZIL HAD A FORIEGN DEBT OF 111 BILLION DOLLARS YES BILLION. NOW THEY HAVE COME A LONG WAY TO A POINT WHERE THEY CAN ACTUALLY HOST EVENTS LIKE THE OLYMPICS. THAT MY FRIEND IS A TURN ARROUND. THERE EXPOSURE TO CHINA IS WHAT IS HURTING THEM A LITTLE RIGHT NOW COMPARED TO WHERE THEY WERE IN 1980.

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  20. PF are resisting the IMF because they won’t be able to steal by way of overcharging the country on unplanned developments. They will also have to reduce enriching and living in lacsury as ministers. No more rents, talk time, free fuel, loans for furniture being paid for on the backs of suffering zambians.

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  21. This is one of the best articles ever written with regards to economic problems that the country is facing today ever since pf came into power. Well articulated easy enough for any sane person to understand. Maybe, just maybe this is what (suffering) Zambians needed to go through in order to get cured from whatever delusion they were suffering from. This may sound harsh but it is a fact.
    Up to now I have never come to understood why on earth Zambian voted for PF. What makes this even more serious is the fact that even some people with degree, MAs and PhD voted in favour pf in both elections (2011 & 2015). Prove results in both copperbelt and Lusaka speak for themselves. I hope come next elections, Zambian would have learnt a lesson, never should we ever let this happen again. Vote with…

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  22. But I get amazed at how Africans cannot think outside the box. They still do not understand how the world operates. Even the so-called educated ones. Cry my beloved country.

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  23. MMD Chief Bottom licker, which Michael Sata are you talking about? The man who turned Zambia around in three years? Laying a strong foundation of development?

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    • What strong foundation? A huge debt mountain and no capacity to generate revenue to support a bloated civil service? Give us a break! Borrowing and spending money is very easy, sustainably growing an economy is not for populist leaders. Now I ask, what value in economic terms will Satas ultra modern stadium in Mongu bring? Or his countless by elections. Your mind is being held captive my friend, free yourself and think critically.

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  24. Whilst I agree with some of the points argued by Musokwatane,I disagree with him on the issue of mines meeting their projected production numbers
    particularly KCM.KCM under Vedanta has run down the mines.They know nothing about mining,they are traders and the CEO who was deported was one of the worst to head KCM apart from being arrogant.MMD failed to correct the wrongs KCM was committing just like PF is failing.Maybe Ministers of mines are compromised.under MMD we saw abuse of resources and increased corruption,Mwanawasa tried to curb this but RB,the worst.and that is Lungu’s problem today,consorting with this man RB who is only interested in his personal comfort.KCM will never improve for as long as it is under Vedanta ,but politicians are bought through giving them contracts ,so…

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  25. Kapotwe,it is your mind that is held captive.Give credit where it is due.we all make mistakes,at least Sata spent money on Zambia,if the roads had not been worked on,this volume of traffic we are seeing what would have happened.chingola Kitwe road was a death trap.Sata has left a mark whether you like it or not,and Lungu will go through come 2016 because of Sata and his infrastructure development.Yes,agreed,there should have been a slow down,but wrong or right he had to set the tone ,and he did.MHSRIP

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    • Yes set the tone of stealing by over inflating road prices to some of the most expensive/km in the world and pocketing the differences among themselves. He even moved the RDA to his bedroom. As the bloger above says it is easy to borrow and spend, any one can do that, but wealth generation for the country is another matter.

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    • @nzelu!!! KEKEKEKEKE! ATI LOOK AT ALL THE ENEMIES OFZAMBIA. ITS OKAY FOR US TO HAVE DIFFERENT POINTS OF VIEW. YOUR COMMENT IS FUNNY THOUGH! LOL

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