Newly appointed Minister of Finance, Situmbeko Musokotwane says government intends to roll out the International Monetary Fund (IMF) programme as a strategy to dismantle the huge debt that the country has amassed in the last 10 years.
Dr Musokotwane said government is considering getting creditors to agree on stretching the initial period of repayment, as a way of mitigating the country’s debt crisis.
The Minister of Finance said the IMF programme, therefore, becomes a critical link to give confidence to the lenders who need an independent institution that will monitor what government is doing.
During ZNBC’s Sunday Interview programme last evening, monitored by ZANIS, Dr Musokotwane, disclosed that the IMF will also provide a longer and cheaper credit to Zambia.
“Yes it makes sense to get credit from the IMF because financing will come in cheaper and we will be able to assure the creditors and investors who would like to invest in Zambia as the IMF will give them confidence,” he added.
Dr Musokotwane stated that the social economic pressures that the country is currently experiencing, is as a result of excessive debt, a situation which urgently needs to be addressed.
“For every kwacha of the revenue that was collected, it was only used to pay salaries for service workers and paying back loans. The money spent in debt servicing is in dollars and led to the shortage in dollars that is why the price of the dollars escalated,” he explained.
Meanwhile, Economist Yusuf Dodia suggests that government must try and utilise the readily available resources in the county to pay back the loans.
In an interview with ZANIS in Lusaka today, Mr Dodia said it is not sustainable to get more debt when the country is in a debt crisis.
He said government must consider growing the economy based on exports such as copper and timber, as opposed to getting more loans.
“Currently, we are exporting about 40 million dollars of copper a week. The loan from the IMF is equivalent to one month’s copper exports,” he said.
You provoke me and take a video of me without my consent, and you expect me to smile at you? Lucky f00Iish upnd cadre. Next time someone will kill you for behaving like a Bush pig
Good move from the minister. The IMF programme is the way to go. BUT: this program comes with quite a number of conditions attached, and the government will have to agree to those. For example: absolutely NO subsidies anymore on energy, be it fuel or electricity. That will cost the Zambian household a LOT of money, because the Zesco tariffs will go up with at least 75%, and petrol and diesel will go up with more than 50%. For the remainder: stringent tax policies, especially with regards to 100% tax collection. Furthermore very strict anti corruption policies. Keeping on the current ACC heads will NOT suffice, they have done nothing the last ten years. Also, the fact that PF abolished the second anti corruption bureau also will not go down well. Yes, the IMF program will help enormously,…
FUSEKE LOSER FUSEKE
Yes the IMF program will help enormously, but it will come at a COST to the ordinary ZAMBIAN. Don’t say you weren’t warned!
It is not long before homosexuality is legalised in Zambia. Don’t say I didn’t warn you. I am CIA 1 and have access to information from credible sources. When the gay Community fund your election, they expect a return on their investment in the form of many more backsides for their enjoyment
If I may add, has anyone looked into Anthony bwalyas sexual orientation. Don’t say I didn’t tell you.
What’s the rush with IMF? What conditions are being imposed by these harvesters? Please can the FM also explain to the Zambian people exactly how much is owed and to whom we owe this money? We know that Chinese debts do not conform to IMF conditions which could explain the extensive speculation on our economy by outsiders. We should be careful with these so called deals, the same people who are controlling our resources are busy lobbying powerful institutions which will use every loophole to ensure 1000% return on their investment. Zambians should demand life imprisonment for government officials signing deals knowingly that they will disadvantage the country. The people are tired and will not take kindly to such nonsense. Zambia has enough resources to payback its debt, we just need to…
Loan to solve a loan. What a mess. Bwana we thought you had unique solutions and not debt. If you spent the last 10years condemning debt why should you rush for it before you even clock 10days in the office?.
WE ARE WATCHING.
DAY 7
I’m not any good at economics, but if I am not wrong, this what happened to the MMD after winning the election against our founding Father KK. They brought in strange things like SAP whatever that meant. All said was ” we asked during our campaigns if you were ready to sacrifice and you said YES!”
#7 I totally agree with you. These Western institutions just want to milk our countries. They create conditions so that you have no option but to run to them. Looking around one can see that Zambia has enough resources as you say. All need is harness everything, reduce on forex issuance for non essentials, control our exports like maize. If we didn’t have resources, we wouldn’t have so many Chinese coming into the country through bush paths. These guys have been a government in waiting for twenty years and would be expected to have worked out our survival plan.
I slightly disagree. Dr Situmbeko Musokotwane should concentrate on sealing revenue leakages and improve efficiency for now before bringing in the IMF.
VIVA homosexuality VIVA
ABOUT TIME TOO
SEEING RELIGION IS THE TOPIC OF THE DAY ARE THEY NOT GODS CHILDREN TOO
AND TO THE TROOLL THE PERSON YOU NAMED HAS HE AFFECTED YOU IN ANY WAY ??
HAVE YOU STUDIED GENEOLGY ???
All this is Lungu’s debt crisis just to get re-elected…and eventually failing at both.
Dont mind the UK based impostor he combs social media browsing for current updates on the real KZ…very sad individual …just ignore it!!
No Corruption Zambia – You say no subsides on energy but you forget that mines have signed 10-15 year developmental agreements to keep energy tariffs static.
The recklessness of the PF govt is now being exposed …all that social cash transfer even when a chunk of the budget is going to debt servicing.
Tarino #14 Power supply deal was signed with the mines and MMD government and it doesn’t matter who’s now in government the deal stands. You are now sounding historical like Kaizer. If don’t want your party to fail don’t close your ears to advice otherwise you’ll end up like PF or even worse.
The UK based troll and imposter… man is sick to crave attention using someone else’s identity. Most bloggers are duped this dude is Zambia… just look at his flag. He just uses WordPress account to upload the real Kaizar Zulu’s photo. As Tarino (aka former Jay Jay) says, ignore the troll.
@Kaizer, the topic is debt financing. In addition to the UK govt assistance for housing, did they not give you NHS meds for your bi-polar disorder? You are sounding REALLY unhinged. If you were in Zambia (we know you are not), I would recommend a visit to Chainama.
To the topic! There is no easy solution here for the mess created by PF. How can Zambia build credibility with the debtors and actually start paying back loans other than with support form the IMF. There is way too much debt – in the billions – and not anywhere near enough revenue in the short term. All of this is grossly unfair to Zambians who were not the ones recklessly borrowing, but whose grandchildren will still be paying for the stupidity of the previous government.
SAP ver.2.2021
Its like Dejavu
Chapwa yapwa.
IMF again? Same gimmick trickery behavior. Oh the economy is bad, the coffers are empty. IMF is the only way out?
The WB and the IIMF were set up during the end of the World War II to rebuild the economies of Europe. However, in order for the world bank and the IMF to implement their policies, they began offering loans to poor countries but only if the poor countries privatized their economies and allowed western corporations an almost free access to their raw materials and markets. That was a poverty trap and many poor countries realized it when it was too late. We were already in chains. By Africa W.
@Future Zed
Am shaking my head…rob Peter to pay Paul…IMF is a predator…look what happened to Greece….expect no Job creation for the youths….less companies will be hiring and money will become tight..and the youths will remain unemployed
The World Bank and the IMF never forgive and because of the huge debts developing countries owe these international financial institutions, they (including the United States as a major partner of these institutions) control almost all the affairs of those poor countries. In other words, if you don’t obey what the World Bank and the IMF say then you must pay back the debt and because you cannot pay back the debt, you must obey whatever instruction they forwarded into your face.
Any country of leader who resisted or disobeyed these financial institutions will be considered as a “Dictator” or a “Terrorist” and must be eliminated in most cases. For example, when there is an oil discovery in a certain developing country (that owes the World Bank) and the leader of that country is not ready to cooperate (for an easy manipulation and take over by western corporations), it will be decided that that government or country need to quickly get rid of, most of the time through rebellion or war. A case in point is Iraq, Libya, Sudan, etc.
I have serious doubts about the so called IMF bailout. IMF to allow you subsidies on electricity, water , fertiliser ? Bufi! IMF to allow you increase salaries for civil servants after you have employed more teachers , nurses and doctors??? Bufi!!! IMF to allow you free education ? Bufi Bufi Bufi.
IMF any day of the week than the Chinese debt trap. The PF are a bunch of hypocrites, their Humble One govt spent sleepiness nights trying to convince the IMF to come to the rescue, but IMF refused because they were looting uncontrollably. But now they want to condemn the same IMF, what kind of hypocrisy is this?
The debt the PF and Lungu obtained will take generations to pay off, and I’m simply surprised you even have the nerve to talk about someone trying to fix this massive debt. HH can forgive these thieves, but he should not let them keep all that loot their accumulated. He should spare them jailtime on condition that they return the money they stole.
FYI, almost the entire country has been auctioned to the Chinese on a silver platter!
Deja Vu – First you have already pigeon hole me as a UPND supporter (which I am not) meaning that whatever response I give you, wont matter to you…you have also lamentably failed to understand my post and what it is alluding to. Secondly if you would have understood my comment you wouldn’t have repeated what I posted and FYI PF had signed some agreements with the mines all those closed meetings with the PF mines minister when the mines were about to reduce their labour force were not about the weather…deals were signed.
I am already playing the famous Pilato song……..BUFI.
“huge debt that the country has amassed in the last 10 years” … So you telling us that PF found debt free economy. Musokotwane be honest please. MMD ten years ago tumbled to PF SATA, wholly due to huge debt overhang that MMD had amassed! Anything ascribe it to PF. Ba mukuta aba, nimwebo bangwele zoona!
#26 Abena Ng’umbo-Luapula Boy
August 30, 2021 At 5:28 pm
“huge debt that the country has amassed in the last 10 years” … So you telling us that PF found debt free economy. Musokotwane be honest please. MMD ten years ago tumbled to PF SATA, wholly…,”
Laupula boy, PF found a debt of roughly
$3 billion and reserves of close to $4 billion…
The debt now stands at close to $20 billion. The highest per population in Africa…..
Zambia needs IMF help to restructure this massive $20 billion debt to something manageable, including renegotiating timelines for repayment. You need the backing of a respected creditor like the IMF (regardless of their colonial approach) than going on your own. The IMF shark is better than the Eurobond holders and Chinese who will take every asset you own as collateral. What resources does Zambia have to pay back that massive debt currently? It can’t just continue to default on PF loans into perpetuity. You need a credible plan and actual money to pay back, one that addresses use of resources to grow the economy and cut down on waste.
For all those trashing the IMF way, HOW do you propose to do this? Please provide concrete examples.
Well hope it will work out, but im not of the idea that you stretch the period of repayment because this may prolong our target to become self reliant we need to quickly clear this debt maybe by looking at dormant sectors of the economy and reviving them and also if only we were able to process our raw materials into finished goods our country could reach greater heights.
After what the west has done to China’s huawei and the economy of iran , this sh*t is evidence enough they want us to remain stagnant but nevertheless africa will rise a blackman is in the right way and he should just hope and pray
@Saulosi, we are watching them. Make no mistake about it, the youth of this country have had enough. We are not as foolish as they think, we can see the propaganda from miles away. UPND should do the right thing otherwise they will soon realise that this election was not about them. If we owe the Chinese this debt, why are the owners of the debt not making noise? IMF want us to transfer our Chinese debt to them so that they can put their machinery of distortion into motion. KK warned us but we keep going back expecting different results.
IMF is said to give Zambia manageable loans and flooding of investees.
Zambia has sold their debt to IMF. The creditors can then get our raw materials.
We keep hearing about the struggles to pay back our debt, defaulting etc but no one is talking about who we owe this huge debt. If it’s the Chinese, why are the Europeans speaking on their behalf? Why is the US prepared to give us half a billion in budget support aide but refuse bilateral trade agreements which could see us pay our way out of debt? If the US are so concerned about Zambia’s debt, why are they not assisting us with a cheaper grant after all $20 billion is pocket change to them. Why do we have to give up our sovereignty for a debt we owe elsewhere. What would happen if China decided to write off this debt?
@FutureZed #34 can you tell us what bilateral trade agreements the IMF refused? Or is this just in general that they don’t like these agreements? Was there a specific agreement that Zambia tried to enter in with a specific country that was somehow blocked?
We don’t even begin to know the true magnitude of Chinese debts as many were under the table and rumor is they own our assets if we default. The IMF or West is not negotiating that as a lot of it was hidden. Do you really think China, or any other country, will just write off debts in the billions? China for sure will not, you have seen what they have done in countries like Djibouti and Sri Lanka when you don’t pay?
I story is basically not about loans. It is to shift the economic ideology from the East to the West.
Most Eastern loans are cheaper than those of the Westerners.
Only a fool never learns from previous mistakes
A lot of you in here don’t understand what IMF will hang around Zambia’s thin neck. Wait and see.
Mwanawasa(RIP) knows BETTER.
You humble cadres in here have very short momories then if you were part of the population 2001-2005 which I cast a doubt on.
To remind you. It’s actually what made Mwanawasa unpopular and Sata rose to stardom. IMF and ADB.
Some bloggers are just delusional … surely how can you defend PF govt of Lazy Lungu these chaps were absolutely reckless kaponyas who took money from toll gates to go and pay civil servants, had zero respect for FIC Reports or AG Reports,
Zambia currently attracting 8 times more bids for domestic currency bonds..the market has confidence in this new govt,
@Sarah, you sound like an intelligent person but please read properly. David Young announced on his interview that the Biden administration sent a delegation to Zambia to look at bilateral talks on condition that we sign up to the IMF as soon as possible. The Finance minister is negotiating cheaper finance for Zambia with the IMF. The people of Zambia have the right to demand the conditions attached to this deal. We keep hearing speculations on our Chinese debt from competitors with vested interests. Why are the owners of the debt not threatening us? The US owes China trillions of dollars, why is this not an issue for them? China is exploiting what IMF has been doing since it’s existence. My issue is that our debt can be paid back without the IMF entrapment which will ensure we give-up…
My issue is that our debt can be paid back without the IMF entrapment which will ensure we give-up our economic independence.
@ Sarah, Zambia does not need IMF. We can pay off that $20 billion in six months if we had full control of our resources. If they cared so much then why don’t they give us cheap financing without any conditions attached? They did this to European countries and used COVID as an excuse. We are being lured into a debt trap. The IMF is a tool of the US foreign policy that furthers its strategic and economic interests. The speculation of our economy from the heart of Washington is proof of side taking and interference. They will use their economic machinery to spin us up or down depending on how we dance to their tune. We are watching them very closely on this one.
@FutureZed, trying to sound intelligent on things you clearly have no knowledge of.
The 1st question you should ask yourself is why the PF govt spent all that effort and time negotiating with the IMF to restructure its debt, even with their cosy relationship with the Chinese.
You think the Chinese are much better creditors just because they are not publicly making noise and they do things in the dark. Mate you are naive.
The Chinese use your land and country as collateral.
The Chinese give you loans at high interest, with national assets as collateral; ask you to give inflated contracts to their state controlled companies (meaning the same money is going back to their country); then ask you to pay back while they sip tea and laugh. You fail to pay, they repossess your country. It’s called a ‘debt trap’.
How do you think China got so rich… while the West were busy focussing on wars in Iraq and Afghanistan, China was going to Africa and South America to buy natural assets and these countries at a platter and using bribery and corruption… Zambia is a worst case study for it.
At least IMF will ask you to reduce waste spending and good governance as conditions, not the “I don’t care as long as I get what I want”
@ FutureZed, I’m intelligent AND realistic AND an Economist by training. The rhetoric on the ills of IMF et al are known. The debtors want their money, believe that. There is currently a global moratorium on how hard they can push because of covid economic downturn.
Was this money borrowed without conditions and what are the conditions the IMF actually offering? Do you know or are you speculating, based on IMF’s history? How ‘cheap’ is the loan from IMF vs. existing repayment terms,including the Chinese loans?
But forget loans, you don’t want more debt. We all want that. What would be helpful is your ACTUAL articulation on how Zambia can repay this using its own resources. I’m wondering why none of the PhD Economists of Zambia or elsewhere have provided the how. This is what…
@41
If you know what the IMF is all about then you won’t even ask them for a penny…IMF is funded and 70% controlled by the USA….the USA makes all the decisions..do you thinks the USA likes to give money for free…????… America wants to dominate the world so once you get money from USA…they move in with their own rules and control every move that you make…sort of modern day slavery….. so expect NO JOB CREATION and any salary increases in the next 5 years……so guys are you sure Zambia as a country can’t come up with a mere 1.2 billion $ just from within ourselves…seriously????? Instead of going to the dreaded loan shack the IMF
Real solution when we harvest all the Mukula trees and sell the copper from Mopani and KCM for the next 6 months. All the debts will be paid and we will still make profit in billions of dollars. These companies are Zambian owned currently be UPND thinks of selling Mopani, KCM to the IMF, World bank vulture funds. ZAFFICO, KCM and MOPANI are our answers for settling the so called 20 billion dollars debt. Otherwise HH and Musokotwani are economic hitmen if they get IMF loans.
@Sarah
Zambia does not need IMF….we have enough resources all we need to do is curb corruption and theft and Friendship appointments like Musokotwane and Kajoba…this is where the problem is,,,,ZRA is full of corruption and theft
Wise words, Future Zed. Just like Yusuf Dodia says, these loans are manageable with the price of copper today and the oncoming gold mine. The problem is that upnd and Situmbeko are trying to convince everyone that it’s a crisis and only IMF can help. China deferred its loans, and Situmbeko should engage them first before rushing to IMF. This situation requires deep thinking not rushed decisions.
@Kaizar zulu why you trying to pretend. We already heard from the grape fine that you are GAY. So knock it off with your fake claims that Zambia is going to legalize homosexuality.
I wonder weather this government is listening to our views and the concerns about the decision to go back to 1991 .
When problems manifest we shall remind them of their arrogance against the the people of Zambia, this Musokotwane is corrupt he has vested interest in getting some kickbacks from the lender the reason why he is so stubborn he doesn’t want to listen to the voice reason and concern.
He will live to regret for putting Zambia on fire.
IMF is not the solution for Zambia it will just make the UPND unpopular. The solution lies in our resources, Hydro power, robust agriculture, smart way of mining etc. The debt we have now is a drop in the ocean. We surrounded by 8 neighbors who badly need our produce Zambia is a rich country it’s only lacking smart leadership
#25 Tarino you cannot change history. Either you are not aware or you just playing games. The immidiate former government wanted to revise power tariffs to Mopani and all Mopani did was to produce an agreement signed with the GRZ. So that was the end of the story. The only time GRZ got involved with power issues is when CEC wanted to cut power supply to KCM due to long standing debts by KCM from unpaid bills to CEC. About you being Upnd, the truth is in your heart… but all of us are free to associate with any political party…. like me I detest all politicians… it’s my choice.
What has sexual orientation got to do with national development? Dont waste time on trivial issues- honeybee, fire tenders , 48 houses and overpriced contracts affect people’s life, not sexual orientation of an individual!
@ Sarah, you might be an economist but you are reasoning on emotional grounds. Again, please learn to read and not just utter opinions or put words in my mouth. At no point did I say we shouldn’t pay our debts. Zambia is not the only country in debt, even the countries painting such a bleak picture are heavy in debt. My issue is that $20 billion is the equivalent of annual turnover of 1 company here in the UK. Hand on heart, do you really think resource rich country like Zambia would fail to pay its way out of a $20 or even $100 billion? Please start loving yourselves for once. For your information I see the real figures on your resources declared here in Europe, starting from your copper all the way to your baby corn. We are not poor, we have poor managers of resources.
I listened to Musokotwane, some of his points are valid but my concern is that he appears to have already struck deals with the likes of IMF and US delegation way before the inauguration. This in itself is highly suspicious because the harvesters will hoodwink the Zambian people with calculated artificial investments and speculations on our economy through debt. What we need is local and foreign partnership so that we can retain capital generated from the sale of our resources. We say no to state capture, we want to be treated as an equal partner in this otherwise these people should leave us alone.
Here we go again, I mention IMF and I get the moderation bug.
@44, I’m not even going to waste my time with you because you seem to be on another planet. Come back to earth mate.
@Sarah #46, my apologies, I have a taste of my own medicine of not reading properly. You raise a valid point of questioning the use of debt to pay off another debt. According to the FM, the IMF would allow us to consolidate and extend the terms of payment. You know and I know that extending a loan results in compound interest. So to an ordinary person, restructuring may seem attractive short term but could be expensive long term. We could pay our way out by first reorganising ZCCM-IH to acquire more shares in the mining sector. The government should deliberately target local players in the sector to produce the deficit in projected output of cooper and gold so that we are not only reliant on taxation but value addition. The FM seems open to ideas and I hope he will sweet talk our way out…
The guy masquerading as Kaizer Zulu is breaking the international laws and implying that he works for the CIA and other law enforcements agencies whilst spewing hate speech and innuendos. This is now a warning. You cannot hide behind a keyboard whether in internet cafés or unregistered gadgets. I am sure he has been careless enough to send some of his vile messages from his genuinely owned gadget leaving a trail whether behind a VPN or spoofed IP Addresses. The net will close in soon. Each gadget he has used will have a unique MAC address and we will demand footage of all the places where this person has entered to go and spew his vile messages. This can’t go on like this! Lusaka Times, we would like you to help with the investigations through your archives. Thank you.
@Future Zed, this is getting tiring, including your insults at me instead of actually answering the questions I asked. But anyway, we agree to disagree. In addition to being an economist and not a keyboard strategist, I don’t feel the need to engage in insulting you or anyone else who is entitled to their opinion on the situation.
I reserve that for KZ. : )
Have a good life.
@ Sarah, please read my comments #58.
“Newly appointed Minister of Finance, Situmbeko Musokotwane”
And around and around we go. MMD Finance Minister Situmbeko Musokotwane in 2010: (LUSAKA TIMES) State will never re-introduce the windfall Tax.
If the Zambian government had collected a Windfall Tax instead of taking debt at interest, it would now not have billions of Eurobond dollars to pay off in 2024. The difference between the two is stolen money.