Wednesday, June 19, 2024

IMF deal impossible before August-HH

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Zambia’s main opposition leader Hakainde Hichilema says it will not be possible for the government to secure a bailout from the International Monetary Fund before general elections in August.

The Finance Ministry is targeting a deal before the vote, which would form the basis of talks to restructure its commercial debt, but few see that happening.

“A program before the elections is not feasible,” Mr. Hichilema said in an interview with Bloomberg from Lusaka.

“Why would you throw good money after bad, for heaven’s sake? No-one, who is sane, can do that.

President Lungu’s cabinet will dissolve along with Parliament on May 14, meaning time is extremely short for any agreement.

With fiscal sustainability at stake, the August presidential and Parliamentary polls will be key for the country that’s struggling to emerge from its deepest economic slump since 1994 and became Africa’s first pandemic-era default in November after missing an interest payment on a dollar bond.

It’s skipped two payments since, while it seeks a funding program from the IMF.

The IMF made significant progress in a virtual mission with the Zambian authorities that ended this month, and talks will continue in coming weeks, the Washington-based lender said in a statement March 4.

It said the government still needs to address debt and spending transparency, and stop building arrears for fuel and electricity.

That could entail price increases, which won’t be easy politically ahead of the elections.

Mr. Hichilema said the UPND, which narrowly lost to President Lungu’s ruling Patriotic Front in the 2016 election, will move quickly to secure a deal with the IMF if it wins.

He said the UPND would have a better chance of restoring sustainability with creditors as the ruling party created what he called a mountain of government debt, which the fund saw reaching 120% of GDP at the end of last year.

“We would go to the table with clean hands, with credibility,” he said. “There has to be a haircut. It has to be equitable. We don’t want one group of creditors holding debt stock to cross subsidize another.”

Mr Hichilema emphasized that all creditors should face equal treatment.

Zambia’s public external debt stood at $12.74 billion at the end of 2020, the Finance Ministry said Thursday, with about $3.5 billion owed to Eurobond holders.

Barclays Plc economists last month forecast creditors including Eurobond holders would exit the restructuring with a 20% haircut, and that’s a reasonable starting point for talks, Mr Hichilema, said.

50 COMMENTS

  1. Zambia’s economic indicators have been in freefall since 2015 so the coming five months won’t cure this long running ailment.Then add Covid pandemic effects.

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  2. Actually the 1st cure for Zambia’s debt and economy is to remove Lungu and PF then restructure.Zambia is in a hole so we need to stop digging.

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  3. Well its going to be tough ride for zambia who ever wins, but atleast with HH there will be light at the end, with lungu , you are doomed………

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  4. “…as the ruling party created what he called a mountain of government debt, which the fund saw reaching 120% of GDP at the end of last year….”
    “…Zambia’s public external debt stood at $12.74 billion at the end of 2020…”
    How can you trust the country to a person who can’t even accept facts and truths?? He would rather believe his lies??? No wonder Kambwili abandoned him.

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  5. It is not possible for IMF to enter in a Cash Bailout Package with the Corrupt and reckless ECL/PF Govt. ECL’s Fiscal and Monetary Policies are not sound. Right now they are printing money like confetti and dishing out money to buy votes. This is fueling inflation and macro-economic instability. ECL with his moto: “Ubomba Mwibala Alya Mwibala” is encouraging everybody to be corrupt.ECL and PF Govt simply has no Capacity and Competencies to implement an IMF Programme in Zambia. It’s only an Economic and Financial literate Govt that is capable of negotiating and implementing a Fund assisted Programme in Zambia. That can only happen if there is a New Govt elected in the August 12,2021 Elections.

  6. IMF doesn t trust the Lungu PF Govt. ECL’s Govt has no idea on how to properly manage an Economy. All they know is how to loot Govt Resources. That is why they believe in “Ubomba Mwibala Alya Mwibala “. IMF cannot deal with such an Economic and Financially illiterate Govt. Those Negotiations can only resume if HH and UPND Alliance Govt into Power after the August 12, 2021 Elections. If ECL and PF steal that the Elections then Zambia can forget about an IMF Programme. Zambians should brace for tough times ahead under an illegitimate ECL Govt. The writing is on the wall.

  7. E Lungu and the PF have to credibility to manage the $27 billion debt situation they put the country in.
    Zambians need to understand the IMF is only offering $1.5 billion bailout. Edgar Lungu has failed to get this relief while holding office twice.

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  8. HH is one of the 100 reasons why UPND has been losing elections since 1998!!This man is not a politician.Surely how many poor Zambians from Katete,Isoka,Mununga,Kalingalinga,Kawama,Chibolya,etc would vote for HH by promising to secure IMF bailout for Zambia?ZERO!HH do not know political message which attracts votes to a party in Zambia!Majority poor voters want to hear about food,schools,hospitals,roads,jobs,small loans to boast their businesses,fertilizer,buying maize from them,social cash transfer,etc and NOT IMF NONSENSE!!
    For sure PF has no opposition!!

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  9. E Lungu and the PF dont have the credibility to manage the $27 billion debt situation they put the country in.
    Zambians need to understand the IMF is only offering $1.5 billion bailout. Edgar Lungu has failed to get this relief while holding office twice.

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  10. PF and UNPD time out.

    “To overhaul is to completely renovate, making major changes in order to repair. A few shutters and a new coat of paint won’t come close to fixing that old, boarded-up house — it needs a complete overhaul.”

    IMF does not want to be engraved in history without oversight.

    We need a leader will recognize our diversity makes Zambia strong and not to apologize about it. Diversity: practice or quality of including or involving people from a range of different social and ethnic backgrounds and of different genders, sexual orientations.

    Please get involved so the IMF can give us cash Advance.

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  11. HH always wishes the worst for his country. For he believes only when things get worse in Zambia can he win. But Zambians are smarter than him. They know he cannot make a good leader. He cannot unite the country and has no public service experience to convince them he can do better. Running your private business is not the same as running a country. Running a country is about service and not amassing wealth for yourself like HH did during the privatization process.

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  12. These “Uubomba Mwibala Alya Mwibala ” guys only know how to eat and loot Govt Resources. There is no way these looters can negotiate and implement an IMF Programme. All they know is how to loot and get rich. An IMF Cash Bailout would all be squandered by these Corrupt PF Politicians. Its only an HH and UPND Alliance Govt which could negotiate and implement a Programme with IMF and other International Financial Institutions. Another 5 years under a blind and Corrupt ECL Govt will spell doom for Zambia. Voting 4 ECL and PF is as good as committing Economic and Financial suicide. Time will tell.

  13. And it is impossible for this baboon hh to ever win any election under the zambian sun. If you don’t believe me then wait for August. Nasty tribalists

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  14. Even after August 12, 2021 IMF deal will not be possible. If ECL steals the Elections and retains Power IMF Programme will not be possible. Corrupt ECL and PF are not trusted by IMF and other IFIs. Even the World Bank has no faith in ECL and his Govt. These “Uubomba Mwibala Alya Mwibala ” guys are not trustworthy. They believe in “eating” and looting Govt Resources. The $1.3 B IMF Cash Bailout would be looted by PF Politicians in no time.

  15. why does pf cadres hate reality, as humans its important to consider pitfalls for our actions , especially on economic matters and tackle them appropriately.

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  16. Lungu can not win any free and fair election…….fact

    Lungu can not manage a countries economy…….fact

    Lungu is fundamentally corrupt …….fact

    The Zambian economy risks being sold to the Chinese by lungu.,…….fact

    As I say to all people in diaspora, you will not find a better time to buy land in zambia like when lungu is still president after August……..the Zambian kwacha will be junk , with massive unemployment of PF caders in GRZ who will be selling land like salaula……..just hold on

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  17. HOW DOES PF AND BANK OF ZAMBIA EXPLAIN ANYONE NEEDING $$ 10,000 or more HAS TO WAIT UPTO 14 DAYS FOR IT TO BE ALLOCATED
    IS THE A SIGN OF A THRIVING ECONOMY ??????

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  18. Yes no deal with IMF b4 August 12, 2021 Elections. After Elections it will depend on the outcome of that Election. If ECL Riggs his way and the Election is disputed then IMF will find it difficult to negotiate and conclude a Cash Bailout Package with an illegitimate ECL Govt. If HH wins and forms a UPND Govt then the chances of concluding an IMF Programme with Zambia will be high. IMF and other IFIs will probably not deal with the illegitimate Govt. The writing is on the wall.

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  19. The indications are that Zambia’s 2021 Elections will be declared Not free, fair and credible. An illegitimate ECL Govt will fail to negotiate a Cash Bailout Package with IMF. IMF and other IFIs have no trust and confidence in the illegitimate Lungu PF Govt. Without financial assistance from IFIs the Zambian Economy will collapse further with dire consequences. Just wait and see!

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  20. Interesting, some people in PF ‘s pocket confessing, they don’t understand Complexity of Microeconomics Visa-vis Multilateral finance debt restructuring pedagogy. Small wonder Zambia is haemorrhaging financially.

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  21. Hakainde, you may have to go to the IMF with the hands of Zambia. Your personal hands are not clean at all. You may have dirty hands from the privatisation gold rush!!!

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  22. After the lamentable failure of PF where all economic indicators are in negative with other countries with similar covid situation in positive economic indicators, PF should start packing and going. This election should be a no contest with PF packing and going. I was PF till today when I carefully analyzed the situation

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  23. Thanks HH. For the first time Peter Chanda spoke about his party last week, maybe next might be Yali, they might also speak about either their party or their alliance with the PF

  24. U can’t negotiate and agree on an IMF Package with 4 months b4 crucial August 12, 2021 Elections. Its only a Govt that will be elected on August 12, 2021 that will have a full mandate to negotiate and implement an IMF Deal with its usual IMF Conditionality. Depending on the outcome of the 2021 Elections a Deal will be negotiated with a New Govt. If however 2021 Elections are disputed an illegitimate Govt will not be able to negotiate a Deal with IMF. If ECL steals a Third Term and the 2021 Elections the chances are that that illegitimate ECL Govt will not be able to access IMF Funds. ECL’s Govt has no credility. An HH and UPND Alliance Govt will have a better chance to clinch an IMF Deal.The writing is on the wall.

  25. Mwiinga, The interview was with Bloomberg and not the people of “Zambians from Katete, Isoka, Mununga, Kalingalinga, Kawama ,Chibolya, etc.” as you mentioned. please learn to read entire stories before commenting. Did you expect him talk about gassing and Honey to Bloomberg?

  26. ““Why would you throw good money after bad, for heaven’s sake? No-one, who is sane, can do that.””

    Already thinking along with the IMF/WB? They aren’t investors, they’re imperialist speculators intent on stealing everything. What good have their ínvestments done in the last 25 years?

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  27. Ok. Would IMF give the bailout package on platter if you go and ask for it? I knew that you are ignorant about government procedures. But didn’t know that you are this pathetic!

  28. What if the deal is struck before August? Would you apologise publically? Why do you always put your foot in mouth?

  29. “A program before the elections is not feasible.” Are you IMF? Are you decision maker there? Would they ask for your opinion? Why do you want to grab attention and try to impose that you know it all? Why can’t you just concentrate on election campaign for 2036?

  30. You have been making tall claims about debt restructuring. Come on. Now tell me how are you going to achieve it? You have been criticising the government in harshest words possible. Show me how intelligent your are when it come to economic matters. Prove yourself.

  31. How will you secure a deal with IMF? What is your plan? Is IMF waiting for you to extend the aid? Do you thing people out here are dull to believe whatever crap you say?

  32. “We would go to the table with clean hands, with credibility.” Wow! The one who is named in Panama Papers and facing trials inquiry for many other corruption charges, has dubious track record of selling national assets in the name of privatization would go to the table with clean hands!?

  33. Why are you so negative? The government is trying to revive the economy and it will succeed. I am confident. No matter whether before or after August, the ultimate outcome will be that IMF will bail out Zambia.

  34. So what? The same PF will be in government even after August. So how does it matter? I am ok with it. You go and find something else to criticise the government.

  35. Fiscal sustainability is not at all at stake. It’s the delusion you are creating to please your followers. That is the only way you can keep you flock together. Otherwise they will abandon you in no time.

  36. The IMF made significant progress in a virtual mission with the Zambian authorities that ended this month, and talks will continue in coming weeks, the Washington-based lender said in a statement — Did you read this HH? Hope it answers all your questions.

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