The International Monetary Fund has clarified that the Zambian Government did not request for an aid programme with the IMF during a recent mission visit to Zambia.
IMF Director of Communications Gerry Rice explained that the Zambian Government did not and have not made any request for a programme from the Fund.
Mr Rice was speaking on Thursday at the IMF Headquarters in Washington during a news briefing.
‘On Zambia, the question is it’s reported that the IMF proposed a billion facility which the President had turned down. A sticking point for the President was the insistence by the IMF that the government commit to drastic reductions in expenditure, particularly on road construction. What is the IMF’s response? Well, just to be clear, the Zambian authorities did not and have not requested a program with the IMF,’ Mr Rice said.
‘But just a bit of context. There was an IMF staff team in Zambia during November to review recent economic developments and have discussions with the authorities. What was agreed was that the authorities and the IMF staff would remain closely engaged in the period ahead, and the Zambian authorities undertook to conduct internal consultations based on the outcome of the mission, which I mentioned.’
‘That’s where we are. So, again, just to be clear, no request as yet for a program from Zambia,’ Mr Rice said.
But Highly placed sources at the Zambian Ministry of Finance had revealed that the IMF had offered Zambia a US$1 billion aid package to resuscitate the ailing economy at the invitation of the Zambian government.
The sources indicated that the deal fell through after President Edgar Lungu refused to accept the austerity measures that the IMF staff mission had attached to the aid package.
The IMF team demanded that Government slows down on its infrastructure spending, increases electricity tariffs, cuts fuel subsidies and bans non essential foreign travel.
The sources stated that President Lungu refused to sign up to the deal as he feared the austerity measures would make the PF very unpopular heading into an election year.
The sources further revealed that President Lungu’s response left Finance Minister Alexander Chikwanda highly frustrated as he is the one who invited the IMF team into Zambia seeking their intervention.
It is believed that Mr Chikwanda was left frustrated and contemplated resigning which forced President Lungu to u-turn and announce a raft of austerity measures at his first news conference and that his administration is still keeping the door open for the IMF to return in March next year.
‘What they are not telling you is that the Zambian situation is now desperate and there is no way out apart from the IMF. How do you bring in the IMF to just come and monitor when you don’t have a programme or even considering one with the IMF? It does not work like that,’ the source said.
‘Watch what will happen in March, if they show seriousness in the way they are manner they will implement these austerity measures, then they will surely sign up to at least a US$1 billion bailout package by the end of the first quarter,’ the source added.
‘You have seen the urgency in increasing the power tariffs, no new procurement of infrastructure works unless those already budgeted for and whose financing is agreed. The President has cancelled the France trip for the Cop 21 and Zambia sent a smaller delegation there. Next will be fuel prices review and a lot of other measures, all these are aimed at pleasing the IMF so that when they return in March, a deal would be imminent,’ the source said.
TOO LITTLE TOO LATE,KUYABEBELE.
You have been saying that for the past decade but tabaya. Tamunaka?
The highly placed source at the MOU who is spreading fake rroumers as usual must be a TONGA. What a tribe.Shame.
Its your HH who is so desperate to the bone that when he loses the coming elections, debtors, bailiffs and party internal upheavals will be too much for him to bear. But sorry, its all clear that President Lungu is here to stay as Republican President for the next ten years. Watch this space.
Nice one Saulosi
Ba Shikulu Ba Chikwanda ebaleya nomba … ama leaking yacilamo under his watch. We need a tight lipped GRZ confident in our own programs, period! The smart people of the Zambian Enterprise can control their destiny and we don’t need the IMF to tell us what to do.
We will turn this ship around … we are Zambians for crying out loud.
brazil is in serious trouble coz of the IMF bailout Lungu well done they want you to start dancing to their tune see what we can do within zambia not inviting those crooks to start running our economy,for how are going to depend on you IMF so that you give conditions that will creeple the economy completly
Lungu is the man !! Tiye tiye iwe. PF nafuti nafuti!!
Comment:stil lungu
Well the question is not ..DID THEY REQUEST, but rather did you offer the Aid Package and did they turn it down? That is the question..
We should not be in a hurry to accept any offer from them. National austerity measures driven by proper management of resources can bolster the stability of our economy.
It will probably take longer for an economic recovery to set than when we get an aid package but what matters is that we are not on the hook of any international financial institute.
I wonder why Lusaka times insists on the ‘sources story.’ You have an official statement from IMF telling and explaining to you what transpired but its evident you wish to believe the other story.. LWENU ULO.. The IMF organization has clarified the ‘reliable’ sources statement…PERIOD!!!!!
I wonder why Lusaka times insists on the ‘sources story.’ You have an official statement from IMF telling and explaining to you what transpired but its evident you wish to believe the other story.. LWENU ULO.. The IMF organization has clarified the ‘reliable’ sources statement…PERIOD!!!!! Tell the ‘sources’ to issue an official statement too
well its like the driver and conductor not agreeing on the route to take their passengers, ECL driver and hon Chikwanda the conductor collecting money, if we up our economic output we shal b okey or else uncle IMF is coming because then even ECL wil not ve choice, together we can
Yes, we can!
of course they wont cut down on road expenditure – this is one way the steal money! They don’t want IMF money because they will have to stop stealing!
Remove the title of queen from your name. IMF are not to be trusted. Leeches of the highest order. Even Greece refused a bailout from them. Told you guys Lungu denied the IMF plan. This was our chance to have fossil chimwanda to resign.
Reporters just want to confuse us. Terrible people these
That’s chibamba boss speaking
Our economy is indeed in a poor state such that the most vulnerable of our society can not afford a meal in a day. NB; THE ZAMBIAN economy suffered terribly in the 1990 when the MMD administration introduced the Structural Adjustments Program SAPs . President Lungus refusal to accept the aid package from the IMF is at this time is welcome owing to the conditions that come with the aid. Increasing electricity Tariffs would further worsen our economy due to the already on-going power outages because economic production will became expensive more worse to an average citizen. The same applies to cut down fuel subsides because transport is a commodity that caters across all areas of the economy hence the impact will be worse.
It took the IMF to point out to them that they are spending beyond their means. I for one hope the IMF come in if ECL wins the next elections, then we will have someone protecting what’s left of our money from these PF theives and their supporters. Concentrating on roads from where you steal while you produce nothing to earn money to enable you to maintain those roads. How can they agree to pay for roads at the most expensive prices in the world? Can a PF supporter explain this pleas.?
Comment:i wish zambians who enjoy politics of hate shal receive purdon from God. i wonder why always insults and hate speeche
The best way out to deal with IMF is to negotiate and put suggestions the way greece did. The problem isnt IMF but ZED cos we dont plan for the economy but put things pn populality sake.
look pipo had we planned based on population groth we couldnt have these power shortage and zambia could be an exporter of electricity in africa. All we needed was to increase our generation ,transmition and storage capacity progressively to march population growth every ten yrs. By now we could have electricity dams on river chambeshi ,kabompo,lunga and luapula instead of depending on kariba.
So we have to face IMF with counter proporsal and courage bt not chickening out..
EL or HH no way out of an IMF programme.
You are right KC!
In that case you May be consider a PRECAUTIONARY LIQUIDITY LINE ABOVE USD 3 BILLION line but what you are asking must be within to help you realize your growth fortunes
EURO BONDS ZAMBIA OBTAINED MAY EVEN BE THOUGH CHEAPER THAN IMF BAILOUT
UPND Bloggers caught pants down……
IMF is still a credible ethical alternative and their risk management is something good though to follow
You can also structure and tailor the financing to meet Zambia’s We know the IMF love Zambia and its in their interest to do some co-operate image using Zambia as a perfect straight and structurally not so rigid as cast in the stone
Its a perfect opportunity to show the other alternatives that IMF policies work
finance ministry source is empty- abc has been talking about change of GRZ expenditure behaviour, abc can never resign, we all know austerity measures is no subsidies, cost reflective pricing.. So rewind to early 1990’s environment, cut free loaders