FORMER Finance Minister Situmbeko Musokotwane has welcomed the decision by the Government to seek the support of the International Monetary Fund (IMF) and that the fund’s conditions are bearable.
Dr Musokotwane, who was a minister in the Rupiah Banda-Cabinet, noted that the current country’s economic situation has left government with no option but to borrow from the global organisation to restore sanity in the financial market.
Zambia is currently grappling with various economic challenges which have seen the country’s fiscal deficit rising, foreign-exchange reserves declining, and economic growth falling to the near lowest since 1998.
This has forced the government to seek IMF financial support of up to the maximum of US $1.6 billion in form of loan.
There have been, however, concerns that the conditions of the IMF cause a lot of harm to ordinary people in short term before improving the situation in the long run.
But Dr Musokotwane said that there were no conditions that would be too difficult for the country to meet.
The economist-cum-politician said in an interview that the country’s finances were overstretched and could not stand without the help of such organisations like the IMF.
Dr Musokotwane is also United Party for National Development (UPND) Liuwa Member of Parliament.
“The country’s finances are difficult; difficult in the sense that we have two big debts that are coming in the next four years – those Eurobonds. We need to get prepared in terms of paying off those debts.
“I don’t see the ability of the country now to pay off those debts because they are supposed to be paid in bullet form, meaning that in one goal we need to pay off everything,” he said.
He said that the only way Zambia could afford to pay back the loans under the Eurobonds was to have a vibrant economic programme which would build its capacity in the next four years.
Dr Musokotwane said apart from the IMF, it is difficult for the country to find a credible lender because the country’s finances need bailout due to government’s overspending and the rising debt.
He called for reduced unnecessary expenditure by the government to ensure that it was able to borrow without facing stringent conditions from lenders.