Finance Minister Felix Mutati says the Zambian government is proceeding with a home grown economic recovery programme and that everyone including the International Monetary Fund (IMF) will have to fit into it.
And IMF Resident Coordinator Alfredo Baldini has urged Zambians not to fear the possible return of the IMF but embrace the home grown recovery programme.
An IMF mission team is due to arrive in Zambia on March 1st 2017 to conclude negotiations for a possible economic bailout package believed to be in the region of US$ 1 billion.
But Mr Mutati explained that the Zambian government has already kick-started the implementation of a home grown economic recovery programme called Zambia Plus adding that the IMF will have to fit into that.
The Finance Minister was speaking in Lusaka Thursday during a well-attended public discussion organised by the Economics Association of Zambia on the IMF recovery programme.
IMF may become Zambia’s undertaker and not doctor
“This is a home grown economic recovery programme and the rest of you including the IMF will have to fit into our programme. We will tell them we don’t need you if they don’t fit in,” Mr Mutati said.
The Finance Minister said Zambia should be allowed to enjoy some of the benefits of belonging to the IMF.
“Our voice should be heard, we are members after all. We should be able access those benefits which we are entitled to as members,” he said.
Mr Mutati said the Zambian economy which was beginning to grind to a halt has now started showing signs of recovery with stability in the foreign exchange market, low inflation and increased tax collection.
He however said challenges around debt servicing and the quantum of debt still remain and the need to maintain consistent policies for recovery.Mr Mutati stressed that government is also committed to fiscal discipline and realigning its expenditure to the key priorities.
He said some non-priority projects have either been cancelled or differed adding that only K8.9 billion has been allocated for capital projects this year.
“The message we keep telling our spending agencies is that you can’t spend what you don’t have,” he said.
And IMF Resident Coordinator Alfredo Baldini admitted that there is still anxiety about the IMF presence in Zambia given the history that the Fund has had with Zambia.
Mr Baldini who likened the IMF to a Coach or a Doctor who administers severe medicines or a fire fighter who is called upon when there is a crisis said the Fund has undergone serious reforms since 2009 which enabled it to disburse more money with less conditions.
“The anxiety about the IMF severe medicine perhaps was like that 20 years ago when we were a bit aloof about the country challenges but since 2009, there was a reform programme at the IMF and now there is more money for lending but with less conditions,” Mr Baldini said.
Speaking during the same event, Economic Consultant Professor Oliver Saasa said he does not believe that the IMF should be a Coach or a Doctor urging that countries should be supported to come up with their own set of policies to steer economic recovery.
Professor Saasa stressed that he does not believe there should even be such a thing as an IMF programme but rather an IMF supported programme.
He has since advised government to delay signing up to the IMF programme if it is not ready with a clear picture of what it wants to do.
“First and foremost, there must be a very clear picture as to what government wants to do and that the IMF only come to compliment and supplement government’s efforts because of that he (Mr Baldini) needed to characterise the IMF as a doctor and doctor do prescribe and the prescription is really where we need challenges because if you follow religiously especially when the competencies within the country to follow those prescriptions are faulty then we end up having the IMF not being the doctor but an undertaker,” Professor Saasa said.
Professor Saasa said he does not believe that Zambia needs additional resources from the IMF but that what the country needs is technical assistance to improve its budget execution which is provided by the Washington based lender.
He also warned government to cut on unnecessary expenditure if it is to continue implementing the economic recovery programme.
“Honourable Mutati, let us tighten our grip on financial discipline and that means that we shouldn’t hear that a new district is being created because there is a by election in that area,” he said.
And WaterAid Country Director Pamela Chisanga said the civil society is concerned that government might be moved to cutting what it might feel as unnecessary expenditure when it signs up to the IMF which might hurt the poor more.
Ms Chisanga said any removal of subsidies that benefit the poor should be done in phased approach saying whatever measures are implemented by government, they should not impact on its ability to deliver basic services for the poor.