Zambia still needs IMF bailout, Chinese loans not the solution-Trevor Simumba

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International Trade Expert Trevor Simumba has maintained that Zambia still needs an urgent financial bailout from the International Monetary Fund.

Reacting to reports that President Edgar Lungu may not be too keen on concluding negotiations with the IMF over bailout package believed to be in the region of US$1.2 billion, Mr Simumba said Zambia needs an IMF program as a foundation for other financial players to come to the game.

“For those who think China is a solution will be shocked. China does not fund direct budget support or Balance of payments. It’s a pipedream to think China is a solution,” Mr Simumba said.

He charged that China can only be an additional support mechanism.

“Zambia needs an IMF program as a foundation for other players to come to the game. Even China will be reluctant to lend Zambia without some measure of reforms. Zimbabwe is an example of the failure of the look East policy. Swallow your pride and do the right thing Zambia,” Mr Simumba advised.

He said China only fund projects with strict conditions that only Chinese firms implement such projects.

Mr Simumba said what Zambia needs is general Budget and Balance of Payment support.

Reports have emerged that President Lungu’s administration may not be proceeding with signing up to the IMF supported programme due to the several strict conditionalities attached to the financing and is now looking to China for financial support.

34 COMMENTS

  1. +17
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    The biggest problem Zambia has is that Edgar Lungu has no basic clue about these dynamics of the economy: budget, balance of payments, etc. He thinks all Zambia needs is more money even through loans. And I am sure Lungu is not comfortable with Mutati’s honest about the economy and his robust efforts in clinching the IMF deal. Lungu is not happy. Mutati might not last long as Finance Minister.

    • +7
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      There is only one way for this country once called Zambia. Sadly this has been all too obvious to most sensible people. But as usual with Africa, you can always bet your last savings on them doing the wrong thing.
      All roads in Zambia now lead to Zimbabwe.
      God help you lot, but I doubt even he is interested!

    • +10
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      The question is ‘Why should Zambia have to constantly borrow its way through existence’. Is it not possible to find leadership that can run the country within its means?

    • +11
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      Running from one organization (IMF) to another country (China) thinking they hold the key to your country’s success is completely a fallacy. Someone would wonder how Zambia has found itself in this dilemma in a space of just 5 years. Politics aside in as much as we want to blame the current leadership of ECL, Sata is the root cause of all this mess. The man was too excited for nothing and did a lot of things without thinking and you wonder why some people still regard him in high esteem (anyway a dead person is always a hero) Before Sata stepped into Statehouse we had our own problems as a country but just allowing him (Sata) access to the first house, Zambia started moving in reverse gear at a very high speed (Traffic would call that dangerous driving) Borrowing after borrowing and now…

    • +9
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      Continued……
      we have started reaping what Sata was sowing. No wonder he was dribbled by Chiluba in favor of a man from the farm Levy.

    • +3
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      As I have said before, Lungu needs to go to Beijing and dance Dununa Reverse for President Xi if he wants any Yuan from China. He will not get that money while chilling in State House.

    • +5
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      On the other hand, the IMF will not give PF more money to pour into roads leading to nowhere while productive roads like Chingola-Solwezi and Kitwe-Chingola have been abandoned. The IMF also demands good governance (hey, stop battering and harassing the opposition and private media!) as some of the preconditions that Lungu and PF cannot meet.

    • +3
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      Some people didnt know that the song Duny0ny0 REVERSE has a meaning:- It’s kicking us backwards to UNIP days:-
      1. IMF DEBT
      2. High mealie-meal prices
      3. police brutality
      4. One-party state with a supreme leader they worship
      5. Brain-washed violent cadres who are above the law
      6. Billionaire president
      7. Biased DeadNBC
      8. High youth unemployment
      9. Muzzling of independent Media
      10. Budget being controlled by IMF
      11. Corrupt politicians with ill-gotten wealth (FTJ Era)
      12.

    • +1
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      Basiyeni. by the end of this 5 years, they will be renting for the president at State House and cabinet office from the Chinese, the new landlord of all properties.

  2. +7
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    True Joseph- that’s what happens when nicompumps impose themselves as God given leaders – I think our own is learning the hard way that it’s easier to manipulate minds of illiterates & semi literates & rig elections than manage an economy especially when u have no understanding of fundamentals – to them it was borrowing & borrowing so as to create a conduit for stealing than finally u are stuck & can’t think anymore. And even God closes his eyes & ears to such ungodly hypocrites- And like you rightly say most characters are not sensible- no wonder they talk of things they don’t understand ie that PF has brought development without even defining whether it is social or economic development – Zambia is gone & this leadership is incapable of resurrecting it….

  3. +7
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    The downfall of KK was this same path which PF00Ls are taking us through.

    1. One-Party dictatorship
    2. Brain-washed cadres
    3. IMF & world Bank Kaloba
    4. Over dependence on copper

    At the end of the day it’ll be N/W Rhodesia to pay for the mistakes made by PF00LS who are mostly pompous migrant tribes from N/E Rhodesia, Nyasaland & Zaire who have occupied our once prosperous nation.

  4. +9
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    Mr Simumba is spot on! China does not give a cash bailout to finance the National Budget and Balance of Payments support. Its true an IMF Programme with Zambia will act as a catalyst to attract more financial assistance from other sources. Having said all this Legitimacy is the Elephant in the room. Budget support to an illegitimate Lungu govt will not be possible and the sooner Lungu realises this the better. The only way to restore legitimacy is to dispose off the Petetion process without further delay. Even IMF money may not come to Zambia until rule of law is restored and the rights of the Petetioners have been respected. Lungu will be ill advised to follow Zimbabwe’s Look East Policy which has dismally failed. Without the support of Western Creditors, Zambia will repeat Zimbabwe’s…

  5. +3
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    The new Ministry of Guidance and Religious Affairs will capture some miracles meant for healing and direct it to failed venetures like fiscal policy, rainfall, and the Kariba Dam wall. Just watch he space…

  6. +1
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    IMF doesn’t work with chines. china is one country who give loans and put conditions to give contracts to chines company.

  7. +4
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    This is just putting off the inevitable. The IMF bailout should have been implemented months ago, soon after they first set foot on our soil and laid out our available options, ie. NONE! This government should just be grateful that they were even given the breathing space of IMF not coming in prior to the elections so that the illusion that things are not as bad as they actually are could be maintained for their voters. Enough already! Tapali ichenu pano! Our situation is that of a bad debtor where absolutely no-one will lend you money except for the worst Shylock in town coz they will get their money back by hook or by crook, even if it means stripping your house bare and/or breaking your kneecaps. Just accept the conditions and let the belt-tightening begin. After all nifwe, the…

  8. vote

    Let the game be played. the same Bemba’s say, Uwabinga ukowa reminina, meaning the (one who has. gone to the river to bath and has undressed does not stand aloof goes ahead to bath.
    PF you are in….steer the ship!

  9. +4
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    In going to the IMF for budget support I think what will not work is for Zambia to go and ‘negotiate’ stick and carrot. Now first Mutati is in beyond his depths in all this as he is NOT an economist so he might not fully understand the dynamics at play thus he might have been over awed when he was at the spring meetings..to fix this let ECL send Dr. Chipimo from Boz to sit in as Sec to the Treasury for sanity to begin. Next let us do the obvious clean up of our budget expenditure, rid the nation of the DCs, reduce capital expenditure, halt unplanned infrastructure development, curb on Fisical indiscipline which includes reducing embassies we opened, reduction of subsidies, then cap the gap through DIFID and the reminder get from IMF

  10. +3
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    Further let us open up agriculture initiatives targeted at feeding the region we have the land and the soils stop building malls build farms , this is the gold we have; forget about copper and raise taxes so that our only concern for now be royalty collections..long-term let us add value to our copper through proper investment. Next relook at tourism not by sending cadres to run that industry and focus on those corrupt concessions..send pros…lastly get serious about grand scale corruption bring the thieves to book, stop ignoring the AG reports, refocus the function of the DPP/Anti Cor/Investigator General…let us get results instead of just chasing Fred Membe around…

  11. +3
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    What conditions except that you have no stable government in place because of abuse of human rights

  12. +3
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    The people who have lived in both worlds have told PF and Edger to be a bit more smar when it comes to economicst. If I were LUNGU I would definately leave the whole game to HH since he genuinely warn and has some insights of economics, in the first place LUNGU already knew that the country was already in a direstress economicaly, but because of greedness and wanting power, let him strunggle those PF and the rest of us. PF is being led by dull illiterate people and all they focus is Zambia and do not know what Zambia is all about. Zambia is part of the global village and you may not do away with the laws that govern it to fit in the global village. Right now LUNGU is chilling in statehouse, he thinks it only ends up being called Mr. President, as for me LUNGU is not at all fit tto be…

  13. +1
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    Dombwa; you have contributed positively and thumbs up! Running from one organization (IMF) to another country (China) thinking they hold the key to your country’s success is completely a fallacy. Someone would wonder how Zambia has found itself in this dilemma in a space of just 5 years. Politics aside in as much as we want to blame the current leadership of ECL, Sata is the root cause of all this mess. The man was too excited for nothing and did a lot of things without thinking and you wonder why some people still regard him in high esteem (anyway a dead person is always a hero) Before Sata stepped into Statehouse we had our own problems as a country but just allowing him (Sata) access to the first house, Zambia started moving in reverse gear at a very high speed (Traffic would call that…

  14. 0
    -1
    vote

    I Think if ECL is not keen then its a good thing, he has seen the light that IMF is offering a raw deal for Zambia. If China is offering better conditions for that loan then its better, it also means ECL is actually thinking of lessening the negative impact of the ordinary Zambians. Lets give credit where its due. Good move not to sign deal with IMF.

  15. vote

    Zambia is a tiny country with a tiny poulation even less than the population of the little malawi, zambian population fits in the population of one nigeria town of lagos.
    Lagos has is In habited by 21,000,000 people, yes indeed I just wonder why zambia lags bihind with little development or nill how do our leaders think ?
    Are we failing in leadership do we need IMF when we are just a small nation , do we know the implications of IMF, well do you know how european countries try to avoid the beast , you haven’t seen how greece had riots every where people crying even saying IMF wants to imprison us , the way it treats Africans who become prisoners of IMF.
    We Africans are at the mercy of this monster and we think it is fair,

  16. 0
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    Zimbabwe is an example of the failure of the look East policy. Swallow your pride and do the right thing Zambia,” Mr Simumba advised.

    Who is giving this advice? It is very cheap politics to tell people to ‘look at Zimbabwe’, without telling anyone what actually happened in Zimbabwe. Zimbabwe is under economic sanctions. Zambia is not. What’s the difference for ordinary people? An international credit freeze caused the destruction of the Zimbabwe Dollar, just as the Versailles Treaty caused hyperinflation in Weimar Germany. Legislative manipulation of the money mass and the economy through it. However, what is the future for Zambia under IMF rule? More debt, more extraction of wealth from the people and the economy. And they dare talk about Zimbabwe.

  17. vote

    IMF is not a safe solution to Zambias financial challenges and the experts knows the negative impact the IMF deals will bring to Zambia. Some of you can incinuate that ECL is making a mistake and yet he is doing things at the heart of uplifting the Zambian peoples living conditions. IMF is not for free like you are backing! Let ECL work and most of you condemning his efforts are junk UPND carders, so go and resolve your upnd president issues.

  18. +1
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    Mr Simusamba the only reason why some people like me are uncomfortable with the IMF package is the issue of removing subsidies from agriculture and energy as part of the conditionalities. If the issue of subsidies is not tied to the package, it could be good to try it. Most developed countries if not all have subsidies in the agricultural and energy industries because they are the main drivers of any economy. America has have had oil subsidies since world 1. Germany subsidizes eve n start-ups to boost their economy. We had SAPP Mr Simisamba you know what it did to us. Its better to in one position than move into a direction you don’t know the end because with waiting you will eventually see clearly and take a right step. Why the rush?

  19. vote

    The PROBLEM IN ZAMBIA: 1)The GOVERNMENT HAS NO COHERENT WAY OF COMMUNICATING its PLANS,STRATEGIES and ACTIVITIES SO THAT WE CAN KNOW WHERE WE ARE GOING AS A NATION. This leads to 2)EVERY JIM AND JACK BECOMES an EXPERT ON EVERY ISSUE OF RUNNING THE COUNTRY!! When the Government is NEGOTIATING it means they are BARGAINING,how does Simumba expect them to just accept anything without examining the effect it will have on the population? Yes,the IMF BAILOUT at the moment looks INEVITABLE but IT IS ALSO NEGOTIABLE! It will BITE but a responsible govt.must look at HOW TO TAKE THE PAIN IN BEARABLE DOSES. At the end of the day it is Govt.to be blamed when sacrifices are too harsh to bear not simple glory seeker!

  20. +1
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    Ba Simumba working on upping his credentials with this lending institution whose Kaloba never ends once you get hooked! Africans never cease to amaze me!

  21. vote
  22. vote

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