Director of the IMF's African Department Abebe Aemro Selasie
Director of the IMF’s African Department Abebe Aemro Selasie

The International Monterey Fund says the financial bailout that Zambia is negotiating will come with gradual structural adjustments.

IMF Africa Director Abebe Aemro Selassie told a media briefing at the IMF Headquarters that adjustment programs should be supported by safety nets that can help to minimize the impact on the poor.

Mr Selassie said there is a way to reduce eliminate the subsidy while putting in place protectionist measures for the people that will be impacted most.

So, very important aspect of our policy advice is to provide ideas, suggestions on how the tax rates can be made — taxing — tax adjustments are required and they can be made as progressive as possible. But importantly, adjustment programs are supported by safety nets that can help to minimize the impact on the poor.

“One of the challenges in Zambia, I think, is going to be trying to address the significant subsidies there are – a few subsidies in particular. In general, subsidies tends to be very regressive, so it tends to take up a lot of budgetary allocation and the beneficiaries tend to be the more wealthier segments of society,” Mr Selassie said.

“So, I think there is a way to reduce the subsidy, eliminate the subsidy while putting in place protectionist measures for the people that will be impacted most and have much lower levels of income.”

He added, “On Zambia, it is indeed [true] that Zambia is one of the countries that although not an oil exporter, of course, heavily relies on cooper exports and the decline in cooper prices has been a very severe shock to the economy. This has been coupled — with more domestic sources of pressure on the fiscal accounts, particularly, elevated spending in a number of areas.”

Mr Selassie said the first order of priority is going to be putting in place a significant fiscal adjustment.

“This needs to be coupled and supported by monetary policy steps, of course. You know, a lot of the work we do and a lot of the advice that we do with countries, we try and pay heed to the effect that fiscal policy adjustment can have on the poor.”

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73 COMMENTS

  1. Next 5 years we will see proper dununa reverse.
    With no bilateral support to cushion the impact…
    Chizalila…..with DJ ECL Jameson…”Mayo” “Mayo we”

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    • Of course it will be gradual, like removing K1 per week from fuel subsidies is also gradual. There are 12 months in a year and all these months will bring a higher level of difficulty for the citizens.

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    • These guys were not supposed to be allowed anywhere near Zambia. MMD left the country in a better condition. Sata tried but set a poor president. So we can say: A Banda abandiyo, a Sata aphika, a Lungu a lungusya.

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    • There is nowhere in that statement where the IMF is making a firm commitment to gradual adjustments for Zambia.

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    • How can there be significant fiscal adjustment when people who should act like they are saving money can jump in the plane from Lusaka to Ndola just to watch football when in fact he has big TV screens to use at statehouse. Furthermore he goes and pays for 40,000 fans to watch football. This behavior does not happen in Australia and other developed nations.

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    • In very simple language, you Zambians are well and truly facked and have no one else to blame. When the IMF conditions eventually penetrate to the poorest of the poor, change of government will not be an option and the powerful who are to blame will be least affected.
      It is every man and woman for themselves, devil and IMF catch the hindmost

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    • There is no such thing as structured or gradual “kalowa”, you just have to pay the loan shark.

      These big words they are pulling out are just there to confuse the masses and keep them from revolting so that the loan is eventually paid off.

      The only obligation the loan shark (in this case IMF / World Bank) has is to it’s share holders. They will prop up a clearly failed nation on the very edge of catastrophe only in the interest of getting their money back. No wonder then that congratulatory messages from the leaders of the most powerful nations keep coming in.

      The only thing Vodiga Rungu and the PF have to do these next five years is keep paying, no vision required here. But the nightmare for the clueless poor Zambian is more than guaranteed and IMF will happily deliver.

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    • Serious dancing is on the way…if you have sat on Red ants who will know what i mean…really sad..the likes of Fossil Chikwanda are enjoying retirement after leaving the economy in a mess for the second time. Used over $2 billion of Eurobond on the so called infrastructure development and eat your development.

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  2. The iPresident of Zambia, Conman EC Lungu will plunge the country into havoc. He is iPresident because he is illigal. Since they arrest people who call ECL as illigal, I have decided to call him iPresident.

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  3. I like IMF because they do not force governments to comply nor do they force any conditions. The governments put themselves in situations where they cannot negotiate any better conditions for their country. The donors and contributors to the IMF want their money and the broke Zambia under iPresident Chagwa have fallen for the sad condition but to sell the country’s assets to settle the bill. Sad indeed.

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    • IMF should not release any money to PF until political governance improves in Zambia. We don’t want loans to be used to buy pepper sprays, machine guns and armoured vehicles for oppressing Zambians with. Zambians will not support the poverty that PF has brought and Lungu will rely on the PF Police Force to subjugate Zambians.

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    • I am sure you like your bank manager as well you think he is your friend because he greets you when enter the bank.
      Wake up from your docility!!

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  4. IMF please let ECL run this country without your help. Some PF vuvuzelas on this platform think they can Zambia can do without you even if the coffers have been raided. Zambia was in this state 5 years ago. It’s been spending without thinking. Now we have Dununa Reverse where all tax collections go to pay salaries and nkogole.

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  5. Every day that Lungu delays in coming to terms with the financial irresponsibility of the PF and the massive debt that they have gotten Zambia into is only going to make things much, much worse.

    The longer he leaves it the harder it will be to fix.

    Instead of wasting even more taxpayers money going to football matches he should be working flat out to come up with a financial plan to save the country.

    Does this man even know what the job of president is?

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  6. People wiith small minds for the avoidance of dout, I mean UPND) conveniently forget how long His Excellency President Lungu has been in charge of this country and the impact of collapsed copper prices on Zambia’s economy. They confuse the ten years (2006 to 2016) that HH has been losing elections with Edgar Lungu’s tenure of office so far, forgetting that HH has been losing not to one person but different candidates during this time, meaning that people do not think that HH is a better alternative even to new comers or people with very humble education. So it will be in 2021 if HH dares to stand again: just not likeable or trustworthy that HH.

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    • @ assistant terrible; since you are saying that ECL has only been there a short while and should not be blamed for our debt; but he has caused havoc and major damage to our economy squandering borrowed money on his large entourage abroad and using government funds for campaigns etc; so for me one of the bloggers here he is to blame and more; the topic is on the IMF why do you talk about HH who has never been the president of this country; yes we believe an economist would have had better ideas on the country s economy; so if you are a tax payer you are paying for the squander of borrowed money that you did not benefit from;

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    • My question is this, and please I need genuine responses here not the rhetoric that we continue issuing even on straight forward matters: If HH had won (1) Where was he going to sale the Copper and was he going to determine the selling price? (II) Where was he going to get the money to pay the outstanding both internal and external debt (III) Was HH going to work without Ministers and the Civil Service? (IV) What would have happened to the current infrastructure commitments that are running at a huge cost to the government? I ask these questions because it seems there are people out there who have money readily available at their homes, business houses or in the bank that can readily be sued to settle ALL the financial obligations of this country. I am really confused.

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  7. Lungu is just a failure, Chabe. Welcome to IMF medicine again. Chawama Spar is closed and those who were dancing for Lungu will really dance with hunger.

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  8. At Mmd left the country in good condition? Show us where the so talked about wealth worked and I will agree with you. Mwanawasa failed to pay vat to the mines and it’s one of the conditions the IMF want us to address. And like Mozambique, Zambia has been hiding debts and the IMF wants to know the true figure. Zambia becomes “rich ” every time copper price goes up and the current Finance Minister becomes a genius.

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    • hav u not see yo poor family(pf) has gone back to mmd to pick some men in the name of mulusa and mutate to try and fix the economy,where is pf mind of pool(mp) to run the ministries.they have totally failed to produce even one that’s why lungu is using these mamadeees(mmd) recycled mind to help the kaponya party called poor of fools(pf)

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  9. Harsh reality is coming just sing eo twikwite and see if your stomach will be full,mulelapila mwakulanya amenshi those white t shirt you were given they are now totally stained you can’t even afford to but washing powder. Ifintu Wrungu

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  10. Structural adjustment bayisa. We told you. You thought spending borrowed money to build roads to please ignorant chaps like ndanje khakis would help you. Watch the imf tear this economy apart. All of mwanawsas work undone.

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  11. The infestation of MIGRANT ROGUE, POMPOUS, ARROGANT, LAZY, ILLITERATE TRIBES from Northern & Eastern provinces has damaged our once prosperous Nation, North/West Rhodesia. Today we have over 8Million immigrant tribes living in compounds in Lusaka & Copperbelt & the number is still growing becoz these low-lives breed like guinea-pigs. Our population (NWR is just a healthy 4.5million).

    Even USA is calling Mexicans & other immigrants to go back to there countries. RSA is forcing Zimbabweans & other immigrants back home. We NWR need to discourage Northern/Easterner tribes from migrating to NWR urban areas.

    Now their crooked corrupt leaders have led us into IMF debt/structural adjustment twice now. We need to reject these losers. Even the Bible says, Do not be yoked with unbelievers. NWR…

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    • CONTD
      Even the Bible says, Do not be yoked with unbelievers. NWR being yoked with NER is our downfall.

      By the bullet, by the bible, by the ballot, Freedom must come!

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    • @ Trevor Chanda. Its u & your tribesmen that are so dull that u would pack your bags & go & infest other provinces in shanty compounds.

      GO BACK TO THE LAND & DEVELOP NORTHERN/MUCHINGA PROVINCES from your sweat.

      LUSAKA is surrounded by Shanty Compounds. Cairo Rd, Intercity terminus, Soweto market etc. are all infested with your dirty, drunken unruly relatives who loiter around & don’t add anything to the economy.

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  12. THE WRITINGS ON THE WALL BY IMF IS VERY CLEAR, THAT ZAMBIA IS HEADING TO TOUGH DAYS IN THE NEAR FUTURE. OUR PEOPLE WHO ARE ALREADY SUFFERING WILL SUFFER MORE. ZAMBIA’S WAY OF IMPLEMENTING POLICIES IS SO MEDIOCRE THAT MILLIONS OF VULNERABLE ZAMBIANS WILL ADVERSELY BE AFFECTED BY THESE FISCAL MEASURES THAT WILL BE IMPLEMENTED ON THE ZAMBIANS BY THE MONEY LENDING INSTITUTION, AND OFCOURSE BY THE PF GOVERNMENT. CARELESSNESS BY GOVERNMENT ON ITS EXPENDITURES IS WHAT LANDED ZAMBIA INTO THIS MESS. MEANWHILE THE EXTRAVAGANT AND IRRESPONSBLE SPENDING CONTINUES TO TAKE ITS TOLL IN LUNGU’S ADMINISTRATION. ZAMBIANS ARE BECOMING ECONOMIC SLAVES IN AS MUCH AS WE ARE POLITICAL SLAVES IN OUR OWN COUNTRY. SHAME ON THE SERVING NATIONAL LEADERSHIP.

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  13. I totally agree with [email protected] left this country better than it is now. Even RB built roads and he would have continued doing so.There was no hunger in MMD.We used to have enough food.

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  14. Is their any presidential candidate amongst those who stood in the last elections that would have used their own money in order to improve the Zambian economy???

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    • Monze: That is my question as well. Evil and wicked minds will never say the truth but just continue issuing derogatory remarks on even straight forward matters that need a national approach. You can even see already 2 like your comment but 5 dont like it.

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  15. I have always said withdrawing a plate of nshima from a hungry man’s table matters less how you do it. The fact is that families cannot afford. I went to Ng’ombe compound, I was surprised to find a fist size pack of maize meal going for a silver coin. This say about safety nets, social impact protection blah blah blah is mere rhetoric. How further can a poor Zambian family further fall? How can a country that is massively developing end up with austerity measures during the time when its so called development is at its peak?

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  16. @8 Airport Cabinet, first of you will notice tgat I have omitted the respectable and venerable name “KK” from your name. Or have you also developed tribal hatred against the old man because he advised you that the elections were free and fair?
    Coming back to your question, who stole what elections? It’s all in your mind badala, there is nobody who stole any elections. As far as I know ALL election monitors both local and international including our own church monitoring group declared the elections free and fair and that one Edgar Lungu won by 50.4%. Note the figures all tally with ECZ figures. Everybody in the world community has accepted the President as duly elected except UPND. Do you yhink that the USA, UK, and other democratic countries would congratulate us if the elections…

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    • Terrible you know that the elections were not free and fair; there was people caught in the ITC room and video evidence is there so pls cut out all that fakeness of the elections being fair;

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    • No western power congratulated lungu.
      PF were printing fake congratulatory messages. The USA gave lungu a harranguuing for his violence when he was in NY.

      Go to any embassy web site or official tweet account of any western power you will not find any messages to congratulate lungu..

      Only on LT and ZNBC will you find reference to these so called congratulatory messages.

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  17. Contd… Everybody in the world community has accepted the President as duly elected except UPND. Do you yhink that the USA, UK, and other democratic countries would congratulate us if the elections were not democratic? Ask yourself whether you are normal that only you of ALL people think otherwise. Even in court when a complainant lodges a complaint he calls witnesses to support his evidence, so who are your witnesses and what is your evidence? The constitution gives you 14 days to present your case and evidence but you squandered it all while waiting for more aggravated robberies by your Mwalitetas, Matambos etc to bring stolen and “UPND doctored evidence”. Fortunately the criminals that HH sent were nabbed in time some red handed. Which is why HH has been trying to organise a…

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  18. Contd…Fortunately the criminals that HH sent were nabbed in time some red handed. Which is why HH has been trying to organise a campaign to release them because he caused their incarceration in the first place. As for the final Concourt verdict, read my earlier post that even your own judge freely participated in a split vote, and voting is normal in courts when there is no unanimous position. Did your judge boycott the court voting? No. Did she reject the vote? No. Did she freely participate in the voting by the five judges? Yes. Does the constitution allow for hearing petitions in perpetuity? No. Does it limit it hearings to 14 days? Yes. Did you lose all your court cases? Yes. Do we have another election scheduled before 2021? No. Has HH called for rebellion against Lungu’s…

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  19. Contd…Do we have another election scheduled before 2021? No. Has HH called for rebellion against Lungu’s government? Yes. Have Zambians responded? No. Why? Because they voted for Lungu and both they and those who did not vote for Lungu have accepted the verdict of the majority and want to move on until the next elections in 2021. So all you UPND get this into your one inch thick cast iron skulls and move on with the rest of the normal and majority Zambian people. In any country mad people are always in the tiny minority and we seem to have our fair share named UPND.

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  20. I am surprised that no one in this country called Zambia has said that HH and the UPND were correct during their campaign. When they said the economy is broken and it needs fixing!! They saw the problems without being in government and a plan to fix the economy. Am sure with people who had plan we would be better off. How can we trust people who denied that the economy was broken when they knew it? I can imagine the lies they are telling us now? Someone in the same government says that are not talking to the IMF the other one in the same government says they are talking to IMF. Good Luck to Zambia!!!

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  21. By the time I.M.F, is finished with you Dopey daft Zambians, you will be crying for the Tonga Man you are verbally abusing on a daily basis today ba Changa imwe’!!

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  22. @22 The Voice, I actually thought of that. Yes HH was right when he said the economy needed fixing. But then no one disputed the fact that our economy was going through a bad patch, I for one did not and I can also speak for President Lungu and all normal Zambians. Because of that tge IMF was already on the cards even before and during the campaigns. The problems with HH’s “I will fix it” mantra were:
    1. He was the only intelligent person in Zambia
    2. He does not believe in teamwork and harnessing all the expertise in Zambia to sole the problem
    3. He wrongly or deliberately diagnosed the cause as Lungu when all eminent conomists in Zambia and the world at large knew that the cause was the negative impact of the collapsed copper prices.
    4. Remember the deliberations of the…

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  23. @22 contd..
    4. Remember the deliberations of the meetings of the African Development Bank which also attributed our problems to lowcopper prices? HH was mute and seemed afraid of pitting his “economic knowledge” against the best economists in the world. He only spoke again after the meetings.
    5. Every Zambian knows the country’s historical over dependence on copper but HH wanted to tell us a different story for campaign purposes.
    6. For me and many others, we thought that HH was a joker if he thought he could fix the Zambian enonomy with the likes of GBM appointed as vice president. By that singular act, HH sent a clear message to would be voters that if he was incapable of selecting a good strong economic management team and and that he was simply politicking. GBM vice president,…

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  24. @22 contd
    6. For me and many others, we thought that HH was a joker if he thought he could fix the Zambian economy with the likes of GBM appointed as vice president. By that singular act, HH sent a clear message to would be voters that he wss not only a tribalist but also he was incapable of selecting a good strong economic management team and that he was simply politicking. GBM vice president, for the love of Mike!
    7. HH tried without success to attribute all Zambia’s problems on a man who had been President and inherited the Presidency barely 12 months before.
    8. HH misjudged the intelligence of Zambians, who know the copper problem since 1987. HH was suggesting that when in power he would normalise the copper prices!
    9. The solutions that HH offered were at best silly, like…

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  25. If PF have ruined the economy, the biggest culprit is in Upnd and that’s Guy Scott who was VP for almost five years of PF in power. Ask him what happened instead of troubling Edgar who not even known during that time. But I still believe if the money was spent on the roads, it’s money well spent.

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  26. @22 contd..
    9. For a man who previously claimed that HE WAS the “economic manager” (I dont know why he abandoned the mantra for the 2016 campaigns…kikikikiki) the solutions that HH offered were at best silly, and at worst dumb, like bringing back Anglo American to run the mines. This act was an admission by HH that he had no new ideas about the copper spoon. Also HH assumed that Zambians do.not follow international news and events and therefore they were not aware that Anglo itself was facing enormous financial problems due to copper prices.
    10. While stating correctly that Zambia’s oroblems were enormous, in the same breath HH was promising free education all the way to university, subsidies, cheap food, and all things that Zambians have come to know as electoral goodies. Without…

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  27. @22 contd..
    10. While stating correctly that Zambia’s oroblems were enormous, in the same breath HH was promising free education all the way to university, subsidies, cheap food, and all things that Zambians have come to know as electoral goodies. Without telling us where he would get the money from.
    11. These are just a few of HH’s dismal image that he created for himself, leading to his unusual loss. Unusual in the sense that normally, Zambians have always voted out governments on the basis of poor evonomy. This time it did not happen, despite the massive job losses on the mines Kopalas still rejected him because he came across as a liar.
    12. The tribal inheritance from Mazoka also came back to haunt him because either he had not handled it well or people thought that it was true…

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  28. Asked on Quest means business program, Meirelles the Brazilian MoF if Brazil is ready for the bitter medicine of Structural Adjustment said he “was ready and was sure the country would be out of recession by next year “

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  29. Hard times are here. To make matters worse the bandits in govt are eyeing even the bailout money to see how they can squeeze some of it for their pockets.

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  30. @22 contd
    12. The tribal inheritance from Mazoka also came back to haunt him because either he had not handled it well or people thought that it was true that he was a tribalist.

    HH’s lies convinced people like me and many others that he was untrustworthy and created suspicion of the motive of his lies, especially after the Post reduced him and GBM to no more than selfish tenderpreneurs.
    And finally, the cut and paste of Michael Sata’s tactics were all too obvious. The man HH had no original ideas of his own. Michael was Michael, and you HH or anybody else cannot imitate him. And how do.you use tactics from your rival party and hope to win an election? Obviously PF knew that it was past sell by date and came up with something else…sontapo…dununa reverse….kikikiki
    That’s…

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  31. @22 contd…
    And 2021 is also out of the question for HH because he has refused to prepare for it starting today. And if they change leadership of UPND the party collapses because there will be no financier, and that will be the end of the party and political careers of its MPs Mwiimbu, Mweetwa, Nkombo the lot. Little wonder the otherwise intelligent are desperate to continue looking stiuupid.

    That’s Terrible for today, okay badala?

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  32. If you think IMF is interested in the Zambian people then continue day dreaming there issue is about controlling you to gain more power.Their strategy is to impose difficult fiscal or structural adjustment programmes that will bring suffering to the people and force people to rebel against the government this is indirect regime change in the sense that instead of using guns they use money. Why was the west in panic mode when China started investing heavily in Zambia.They hope to push HH in power that way because they know he stands no chance otherwise.I have always told you that these economies are not controlled by you the price of copper is not controlled by you the producer. They know HH is in agreement with them the inde bwana attitude.But trust me if he goes against their plans…

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    • naimwe ba mpundu , what has aids ridden zambia got for the west to want regime change ? A few useless copper mines that the Chinese and Indians are running ?

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  33. Continued
    Trust me they will sink him in one day.Remember they did it to Kaunda.So you UPND supporters who think HH will fix it give him strong advice because he is very stubborn and listens to nobody if he goes against his promise katwishi.I rest my case.Let those who have ears listen. They are protecting their profits.Money the root of all evil.

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  34. They found a surplus in the coffers. They went on borrowing like they were monkeys in a maize field…..up to 10 billion US and overcharging the country on roads with no backup plan.

    When asked about the building of roads, as if people will eat roads, we were told that’s the only way investor’s will come.

    To this day not a single investor has come.
    And with the breakdown of law and order no investors will ever come. The investor’s know lungu can just wake up and interprete the consitution against them and no law can ever protect them.

    After spending 10 billion US they now run to the IMF like wet hungry dogs.

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    • @Spaka! Shocking! The break down of law is due to you and your party UPND! It’s good to hear you confess your intention was to prevent investors coming! People need to open their eyes and ears to know what UPND wants to destroy Zambia in some sort of undemocratic power grab!

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  35. @ Terrible, HH was surely going to fix it since he can use money from Huntley Farms, Zambeef, GBM Milling etc. It’s children’s play no IMF, no World Bank and no international control on copper price since the Jerabos are ready to buy at astronomical price.

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  36. And I quote “…This has been coupled — with more domestic sources of pressure on the fiscal accounts, particularly, elevated spending in a number of areas.”

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    • Which WAS necessary. Pot holes lead to accidents! The roads are necessary to transport goods etc. he did NOT say elevated unnecessary expenditure!

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  37. Some growth is important Its Government through its central Government Treasury and fiscal stimulation can help lead the BUSINESS to drink some water but cannot make that BUSINESS to forcibly drink It
    The IMF programme for Zambia has the same impact as above, making available money to Zambians empowered companies and coverture’s thereby helping to finance the much needed economic stabilization

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  38. There is currently some limitation in how much the central bank monetary policy directed stimulus can achieve and also how much velocity the overt monetary financing by MOF can have to stimulate and register that measure of Growth needed to ensure FOOD on the TABLE for our people

    IMF programme for NOW is one of the BEST options if YOU can get the EXOGENOUS MONEY else where cheaper then WEIGH the opportunity costs and GET A LIFE LINE

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  39. I hope when Zambia comes victorious at the end of the program you’ll say it’s because the “global economy has improved ” and such more stories.

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  40. I enjoy reading the responses from the laptop/PC/Smartphone critics.Always criticizing without telling us what there preferred candidates would have offered or done differently. no wonder none that comes out of there mouths is taken seriously. whether you rejoice that suffering is coming with the IMF package or not,your candidate was not convincing enough to the majority.You talk about jameson and booze,kikikiki….jameson has beaten everyone twice so far,church elders,Drs,economists etc……hahahahahaha it must hurt to lose to an alleged drunkard.Did you see how people rejoiced that a drunkard won,you must have been wondering what must have happened.Some leader insults judges and goes back to them to appeal ,kikikiki. Talk about taking a dump in a well and going back to draw water when…

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  41. Why is there so much hysteria from UPND cadres here. Most of them have failed to comment on the Mongu to Angola bridge development which will see Western province financially more capable than the rest of Zambia. Cursing what you are also gaining advantage from is shameful. If we all calm down, the evidence is clear, we are entering choppy waters but due to the decline of our mist important exports commodity, Copper and turmoil on the markets leading to economical imbalances globally. This modus operand of spreading hysterical untruths is childlike and is meant to disturb the peaceful and considered working of citizens to improve and contribute to their GDP. We need to adjust that all. Roll on the staged subsidy removal.

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  42. Ba Patriot Abroad. Let me challenge you on your points.

    For the last few years our Government’s income has been $5billion.

    They have been spending between 7,5 to $8 billion annually. That has led us to borrow $2,5billion per year (which equates to 10% of the entire country GDP output).

    Local interest rates on GRZ Bonds are clocking 24%. The Eurobonds we have already spent have doubled in value due to the doubling of the exchange rate. And then there is interest in US$ accumulating every day.

    If for whatever reason Government cannot continue to pump in the extra $2,5bn every year through more borrowings, the whole economy is affected. The GRZ worker who was getting paid from the $2,5bn fiscal deficit cannot buy mealie meal. That affects the shop keeper, who affects the…

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