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Tuesday, September 14, 2021

Why Zambia still needs IMF Bailout despite the SDR1.33 billion

Columns Why Zambia still needs IMF Bailout despite the SDR1.33 billion

By Mwansa P. Chalwe snr

Zambians have debated the merits and demerits of the IMF program ad nauseam for the past seven years. And one would have thought that the issue was long settled. This is so because the previous PF administration were already implementing what is called prior actions of the IMF program bail out process. The PF were within a few weeks of getting the deal if it was not for the August 12, elections. However, since the new UPND administration came into power, the issue has been resurrected for debate mainly by three known and more or less brief case Opposition Parties leaders.
The Opponents of the IMF programme have made some misleading and uninformed statements based on antiquated knowledge about the IMF. These statements need to be countered, and corrected with facts so as to prevent the unsuspecting public from being misled. The ignorance exhibited by some of our political leaders on the issue is mind boggling. This article, therefore, is purely an educational piece on the IMF and the impact of its anticipated program will have on the economy and ordinary Zambians.

One of the major weaknesses of the arguments by the opponents of the IMF bailout, is the fact that it is based on the 1980s and 1990s IMF financing structure and the structural adjustment programme (SAP), which have since been discredited and discarded. The 21st Century IMF is not the same as that of 1980s and 90s. The critics seem to be stuck in that era because of the poor reading culture in our country. It is, therefore, vital to start by updating readers briefly about the IMF reforms.

As a way of background, the IMF experienced a decline in lending towards the end of the 1990s and the beginning of 2000. The institution was almost becoming irrelevant as most countries did not want to borrow from it. And as a result, it accumulated huge unutilized financial resources. Its brand was badly damaged. The design and implementation of IMF programs at that time, were insensitive to individual countries’ situations. Consequently, the IMF was accused of making economic and social conditions worse for countries than improving them because of its Structural Adjustment Programme.

Reformed IMF has 86 countries on its programmes

There are two major issues that compelled the IMF to change its operational model. The failures of the Structural Adjustment Programmes (SAP) in the 1980s/90s and the Asian Crisis of 1997/8. The two experiences taught the IMF a lesson about how to best engage with countries when designing a programme support. The Fund decided that there was a need for reforms. In 2001, the IMF created an Independent Evaluation Office (IEO).The IEO was to conduct independent and objective evaluations of IMF programs. The IMF carried out a wide-ranging review of its lending facilities and terms on which it provided loans. In March 2009, the Fund announced a major overhaul of its lending framework, including modernizing conditionality, introducing a new flexible credit line, enhancing the flexibility of the Fund’s regular stand-by lending arrangement, doubling access limits on loans etc. The other reforms included changes in shareholding and making the institution more transparent than before.
The IMF has changed from imposing a program on the country to being consultative. The Fund now asks the host country to design its own economic reform program which of course should address issues that caused the economic problems in the first place. Following the IMF reforms, more countries started trickling back to the IMF. The advent of the financial crisis of 2008 thrust the IMF into a central position of lending to the developed and developing countries. The IMF currently has programs with more than 86 countries around the world, out of which 33 are in Africa. The African countries on some form of IMF financial assistance programmes include the following: Angola, Benin, Burkina Faso, Cape Verde, Cameroon, Central African Republic, Democratic Republic of Congo, Ivory Coast, Ethiopia, Gabon, Gambia, Guinea, Togo, Uganda, Namibia, Niger, Nigeria, Sierra Leone, South Sudan, Sudan, Senegal, South Africa, Rwanda, Kenya, Mali, Mozambique, Malawi and many more.

Zambia’s recent history with IMF

Zambia’s recent experience with the IMF dates back to June, 2014 when the country approached IMF after the kwacha depreciated badly. In 2015, the currency and economy continued deteriorating and haemorrhaging. The IMF started providing Zambia with technical support with a view to programme support. In November, 2015, Zambia was offered a deal of about $1billion which was similar to the one that Ghana got. The former President, Edgar Lungu, rejected it for fear of losing the August 2016 elections. The technical support and programme talks only restarted after the August, 2016 elections. And as a result of being assisted by the IMF in the management of the economy, the economy started picking up in 2017. The IMF acknowledged the improvement in the Zambian economy in 2017 compared to the near-crisis of the fourth quarter of 2015 and most of 2016. The market confidence by both local and foreign investors rose and Zambia’s Euro bonds were among the best performing. Foreign direct investments and portfolio investments started flowing into the country in droves during the whole of 2017 with treasury bills and government bonds being oversubscribed and the economy was showing signs of recovery. The Kwacha stabilized below K10 to a dollar, inflation reduced from the high of 22.9 per cent to single digit of 6.8 per cent. But as was typical with former President Lungu’s administration, they were soon to score an own goal or commit an unforced error. And indeed, they did.

In July 2017, President Lungu declared the State of Emergency and subsequently arrested main Opposition leader Hakainde Hichilema for “treason”, and dared the IMF to pull out if they wanted to. In August, 2017, the IMF cancelled talks with Zambia citing the country’s excessive borrowing plans. In 2018, Zambia forced the IMF to recall Dr. Alfredo Baldini, the Country representative. The relations between IMF and Zambia soured badly. And guess what? From then on, the country’s economy has been on the downward economic spiral. This has resulted in the foreign debt of $12.7 billion by December 2019, depletion of foreign reserves to as low as $1.37 billion or 1.8 months import cover. The Kwacha depreciation to about K23 to a US Dollar and inflation was 24.4 per cent in August 2021.
Zambia’s number one economic problem is the debt crisis and how to restructure. Zambia owes Eurobond holders, Multilateral lending institutions, bilateral countries the debt, Commercial banks and China. It is very clear from the debt composition, that Zambia owes multiple creditors and therefore, its debt restructuring is quite complex. It is also apparent that the lion’s share of Zambia’s external debt stock is owed to Western and Western allied institutions. And according to the World Bank data, about 70 per cent of Zambia’s external debt at the end of 2019 was owed to Western allied institutions. Western commercial banks and hedge funds together held about $6 billion which is over 50 per cent of Zambia’s external debt. In the light of this, anybody saying Zambia has no debt crisis should not be taken serious and their economic expertise and credentials questioned.

The International Monetary Fund (IMF) is at the centre of the resolution of the debt crisis and anybody who thinks otherwise must be living in cuckoo land. Zambian Western creditors have expressly stated that they can only agree to a debt restructuring if the country was on an IMF program. Bloomberg report of April, 2021 confirmed this status.
“External commercial creditors, including those holding the nation’s $3 billion of Eurobonds, want the government to reach a deal with the IMF, which they will then base their restructuring talks on,” The Financial Media Company reported. “The International Monetary Fund still hopes to reach a deal with Zambia before elections in August on an economic program that will form the basis of the nation’s planned debt restructuring. Talks that began last year are continuing, and the Washington-based lender aims to conclude them in the next few weeks,” The paper added quoting IMF Africa Director Abebe Aemro.

The facts on the ground, therefore, show that Zambia does not really have a choice on how to get out of the debt crisis apart from being on an IMF programme. The PF administration started the IMF negotiations and the new UPND administration is simply continuing where PF left from. In the light of the aforementioned facts and the scenario painted above, the critics of the IMF bailout are, in a way, just being disingenuous. There is also some element of simplicity in the understanding of the reasoning behind the IMF program. It is not just an act of BORROWING MONEY per se, as it is being presented by some politicians. The programme is much more than just getting $1.3billion loan. It is much more complex than that and has a lot of intangible benefits. Also, the SDR1.33 Zambia received to boost its reserves has nothing to do with the bailout talks that have been going on between Zambia and IMF but rather a Covid-19 initiative for IMF member countries.

Benefits of IMF programme to Zambia

There are about six clear benefits to the Zambian economy if it goes on an IMF programme. Firstly, it will open the door for talks for the restructuring of Zambia’s foreign debts with its creditors as former Finance Minister Dr. Bwalya Ng’andu once clearly spelt out in one of his statements on the issue.

“Zambia’s total public and publicly guaranteed debt reached USD 18.5bn, or approximately 104 per cent of GDP as at end 2019, impacting Zambia’s ability to advance social and economic initiatives, especially in the current COVID-19 environment,’’ Dr Ngándu once told creditors “It has become increasingly difficult to service debt. Zambia is spending half of government revenue collections to service interest on debt currently, compared to a few years ago when only 20 per cent of revenues would be channelled towards interest obligations,” Dr. Ng’andu added.

Debt restructuring is the top priority of the new administration. Zambia has a $750m Eurobond which is due next year – 2022- but the country has no money to pay that amount and so the negotiations with the creditors is imperative. The new finance minister, Dr. Situmbeko Musokotwane, confirmed the same in a Zambia National Broadcasting Corporation (ZNBC) interview.

“We don’t have the money to pay back. This is why it is important that we get on (an) IMF (programme) so that we can re-arrange not to pay next year. I am 100% confident that it will be done,” he told the interviewer.

Secondly, the programme would come with the balance of payments support which would help with the stabilisation of the Kwacha by forestalling the currency depreciation. Consequently, as an import dependent economy, this will prevent inflation from escalating and thus result in reduction in cost of living and cost of doing business.

Thirdly, since Zambia entered the international capital market in 2012 by borrowing Eurobonds, its economy and the currency became subject to the dictates of the international financial markets. These markets are highly sensitive to even mere statements by authorities. This is what most people fail to understand. If Zambia goes on the IMF programme, the cost of servicing foreign debts which has been causing havoc in the economy will start going down. The reduction in interest payments on loans will result in more funds being available for social services such as health and education.

Fourthly, there will be restoration of confidence in the management of Zambia’s economy under an IMF programme. This would in turn attract both foreign direct investors and portfolio investors resulting in increased inflow of foreign exchange (dollars). This will assist with the Kwacha appreciation. This increased confidence is already happening following the reduction of the country’s political risk as a result of the election victory of President Hakainde Hichilema. The IMF programme will just add further to the positive market sentiment.

Fifthly, the IMF programme would open up opportunities for Zambia to borrow at concessionary rates (borrow cheaply).The majority, if not all, bi-lateral and multilateral lenders, would only lend Zambia, if it was on IMF programme as it reduces their exposure to risk.

Sixth, the IMF programme will instil some financial discipline and help in the restoration of budget credibility. Government expenditure is likely to be strictly controlled. This could lead to the reduction in the budget deficit. The strict expenditure control would lead to the reduction in government borrowing from the domestic banking system thus make more funds available to private sector as government will no longer be crowding out the private sector. There will also be reduction of domestic interest rates. This can in turn lead to increased economic activity and job creation.

There is one politician who challenged supporters of an IMF programme to name a country that was successful whilst on IMF programme. Following the reforms of the 21st Century, there are many countries that have been in debt and economic crisis that the IMF has helped return to economic stability and growth. There are two countries that come mind. One is in Europe and the other in Africa. In 2014 Serbia’s economy was in serious trouble. The authorities adopted an ambitious program of fiscal adjustment and broad-based economic reforms under the IMF supported program, economic advice and monitoring. After three years of effort under the program, by 2017, the economy had been turned around. In early 2015, Ghana turned to the IMF for a $918 million loan to help stabilize the economy. IMF advisors, working with the Ghanaian government, developed a three-part program to restore debt sustainability. By the end of the three year period in 2018, the Ghanaian economy had recovered. The pace of economic growth rose to 8.8 percent in 2019 from 2.2 percent in 2015. The inflation rate had fallen to about 8 percent from 19 percent. Cuts in wasteful government spending made room for much needed social services, such as free secondary education. Ghana has free education now!

There is no denying the fact that the IMF program will certainly come with some pain but one gets the feeling that the PF administration had implemented most of the harsh conditions. And these have already filtered through the Zambian economy as experienced by the high cost of living and high cost of doing business. One gets the impression that the remaining big prior conditions are likely to be issues of removal of fuel and electricity subsidies.

All things considered, there are more benefits than costs from the IMF Program. If there is one thing that the PF and UPND agree on, it is the fact that Zambia needs the IMF program to solve its debt crisis and for the economy to recover. On the basis of the election results, the two major parties represent 98% of the Zambian population. It is, therefore, rational to state that the uninformed views of three minor Opposition parties on a highly economic technical and consequential subject, (and when one of them was not even on the ballot paper), should really be ignored as there is very little or no merit in their arguments and are merely politicking.

The writer is a Chartered Accountant and Author. He is a retired international MSMEs Consultant and an independent financial commentator. He is also an Op-Ed Contributor to the Hong Kong based, Alibaba owned, and South China Morning Post (SCMP) .Contact: [email protected]
Most of the contents of this article are abridged excerpts from my book whose link is below.
CHINA-WEST BATTLEGROUND IN AFRICA: DEBT RIDDEN ZAMBIA: Why U.S. May Lose Geo-Economic Competition to China https://www.amazon.com/dp/B097DVXBKH/ref=cm_sw_r_wa_api_glt_7PR5H7YBZZ14FCDNT54Y

55 COMMENTS

  1. Brief case politicians? That is no way to describe other people no matter how lowly you perceive their intellectual capacity. Just as you have expounded on the advantages and necessity of the IMF program they also need a chance to put forward their misgivings on the issue. You mentioned that the the PF government were within weeks to get this IMF assistance but for the August elections….so If Lungu had won Zambia was still going to get these loans? But later own you attribute the acquiring of this loan due to the confidence in Mr Hichilema the Institution has? Anyway let’s wait and see what result will come out.

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  2. Yak yak.
    Can the writer please refrain from misleading Zambians.
    Politicians in Zambia can not be trusted, period. 4 out 5 politicians are corrupt
    in Zambia. The current regime is not different and not sacred also scary seeing MMDs and hh replay.
    Imf and word bank are nothing but selfish corporate and political capitalists devouring developing countries. Zambia can not sit on those still hash programs.
    Save us your rhetoric.
    What a as waste of post space.

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  3. We do not have confidence to control ourselves but we should trust an outsider to put our house in order. That’s foolish coming from an Accountant
    Secondly,PF never implemented any austerity measures. The high cost of leaving was due to inflationary pressures from the depreciation of the currency

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  4. And he agrees with the fears of most people “There is no denying the fact that the IMF program will certainly come with some pain”……..what is your point? You equally sound less convinced

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  5. We do not have confidence to control ourselves but we should trust an outsider to put our house in order. That’s foolish coming from an Accountant
    Secondly,PF never implemented any austerity measures. The high cost of leaving was due to inflationary pressures from the depreciation of the currency

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  6. #4 The article is too long with points which could have been adequately covered in two simple paragraphs. He thinks the pomposity in lengthy discourse will impress those who are too lazy to read.

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  7. In Bemba they say ichikwanka bachimwena kumampalanya. UPND not ready to bring a change that is needed in Zambia.

    If the International Monetary Fund Bailout Zambia we will hold them accountable.

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  8. Any loan from IMF will come with stringent conditions. One of which has already been announced by the president, namely cost-effective electricity tariffs. That means DOUBLING the Zesco tariffs. And removal of all fuel subsidies: that will mean 50% increase of fuel prices. Good luck with improving the economy!

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  9. So according to this author, ELECTRICITY AND FUEL WILL HAVE TO BECOME EVEN MORE EXPENSIVE AND YET HE EXPECTS THE ECONOMY TO GROW? How when the cost of production will have gone up??

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  10. To be honest, Chalwe is not a good writer who is able to convince his readers. He starts off his article by caricaturing Zambian opposition political parties that have raised concern about the new UPND government engaging IMF as being brief-case parties. Even when he wants to talk positively about the new terms of engagement of the IMF, he only uses two examples of Serbia and Ghana but fails to talk about what have been the positive outcomes of engagements with the IMF by the many other countries he cites from Angola, Benin, Burkina Faso, Cape Verde, Cameroon, Central African Republic, Democratic Republic of Congo, Ivory Coast, Ethiopia, Gabon, Gambia, Guinea, Togo, Uganda, Namibia, Niger, Nigeria, Sierra Leone, South Sudan, Sudan, Senegal, South Africa, Rwanda, Kenya, Mali, Mozambique to…

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  11. … Malawi. He should have endeavoured to bring out common positive outcomes of IMF engagements by these countries including those in Europe like Greece to convince us that the IMF of the 80s and 90s is different from that of t2021. A focus on what has changed about individual IMF conditionalities would have helped even when countries asking for IMF assistance have to come up with their own reform programmes. Let Chalwe also avoid using the American spelling for program but the British one (programme) which is standard for Zambia.

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  12. The writer says the pf government introduced the state of emergency and charged HH with a case of treason. What connection has this point for Zambia’s relationship with the IMF? He further confirms that the pf government was about halfway into
    Acquiring the IMF loan, meaning that with or without Upnd winning the elections the IMF was going to be in place. If zambia implements the IMF program under the new Upnd government what will be the main real economic indicators or benchmarks that Zambian people are likely to use to gauge the benefits of voting in the new Upnd government? Besides, the author does not pinpoint the negative effects that the IMF program will bring apart from his sweeping statement that it will bring some bad news without going into specifics. To me, in a scale of 10…

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  13. The likes of Sean Tembo should give us alternative solutions to Zambia’s Debt Crisis. An IMF Programme is a catalyst to mobilising Donor Aid, Debt writeoffs and other concessionary funding. Zambia has no choice but to pursue an IMF Programme to resolve its Debt Crisis b4 2022 when the Eurobond bullet Payments are due.

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  14. Way too much hypocrisy …..if it’s Lungu it’s bad…if it’s HH then it’s ok….and guess what don’t think HH is fighting for Zambians….HH is trying to pay back all the loans he acquired for the past 20 years and 70 % of the money coming from IMF and other donations will end up in his account…do you think he appointed “yes boss” corrupt and thieving Musokotwane for nothing

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  15. And HH knows that he will just be a one term President…so he needs to get all the loans ASAP……and pocket as much as he can……..slowly but surely all his campaign promises are vanishing into thin air

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  16. Just take a close look at what’s happening in Botswana….Politicians are all the same….their main purpose is to enrich themselves and HH is no exception…the man is will milk Zambia dry….talk to me 4 years from now…

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  17. The fact of the matter is that its cheaper to borrow from IMF and WB with its conditions than going to the market…if you have any solution state it instead of saying I hate IMF …just send good negotiators to Washington.

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  18. Just give us 1 country which took the IMF program and its economy stabilised.

    All i see about the imf is that whichever country takes it, it comes back every few years and the countrys growth and economy gets finished up.

    We can see what is happening to countries like Argentina which are on the IMF program in and out for the past 50 years. Same with Pakistan and countless other countries.

    imf Finishes up the country and hands over the key resources to foreign agents.

    Stay far from the IMF!!!

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  19. If Zambia gets an IMF package now this new government will be booted out in the next elections. These bodies have an expectation of poverty of Africa and even the infrastructure development we have put in place is deemed unnecessary by them.
    1. Let President HH use his good will and other influence with his friends to get Zambia’s debt forgiven, renegotiated.
    2. Put a stop to transfer pricing on Zambia’s minerals we are robbed this way.

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  20. …..3. Make mining companies give us half physically of what is mined, not profits or taxes because this is another loophole, they never declare a profit so they don’t pay tax. We can sell our own portion of the copper mined. Monitor the portion of interest expense assigned to zambia for multinational group borrowing, big tax evasion loophole.
    4. Start building the Batoka Dam it pays for itself but it will need to be backed by a sovereign guarantee so more debt unfortunately but it will provide much needed jobs.
    Remember our prayer is that you succeed and not fail. Please listen.

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  21. #11 Zambiaisours. Yes it will grow like some writer said FOR BIG BUSINESS. For the foreigner extracting our ore free of taxes, on cheap labor it will look nice. For Vitanta and Glencore when they get KCM and Mopani respectively and prune 50 percent of labor force, the economy will grow.

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  22. Quote ‘ Zambia was offered a deal of about $1billion which was similar to the one that Ghana got. The former President, Edgar Lungu, rejected it for fear of losing the August 2016 elections.’ End of quote! Really???? Some people are just unbelievable! Are these the points to give out to a nation, every time is Lungu this ,Lungu that….For me this is utter rubbish……..President HH is a good person but the people that want to surround him like this writer are the ones tarnishing his name. He needs to cage them before they destroy his vision……Zambians are aware that there is a tug of war between East and West but I believe we will do the right thing at the end of the day. IMF temunobe!

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  23. We need to be self sufficient in some form of capacity, IMF are like puppeteers holding a country with strings ( policies and conditions attached)

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  24. Well done Mwansa. Blessed are those who read and can understand. Zambia is a member state of the IMF. It pays dues every year. If it cannot take advantage of that status when in trouble why continue being a member. To hear politicians saying that the economy will be in the hands of foreigners is a sign of ignorance. Who are the foreigners? You have allowed the PF to borrow more than 50% of your debt from a Communist party. What is more foreign than that? If you bank your money in a bank, you are entitled to its financial packages. Zambians should be contributing negotiation strategies.

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  25. The IMF loans are cheaper then Chinese loans, atleast IMF watch how you spend the borrowed money…….unlike the Chinese who keep lending you until you can’t borrow no more……..

    Right now zambia needs a cash injection and the IMF is the most logical place….

    Every loan is negotiable, excessive electricity and fuel hikes are not a must……
    That is why you negotiate….

    If you are dull and reckless , and expect the IMF to do your economic recovery for you , it won’t happen………you have to do the hard work.

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  26. Dull Sean tembo and his LT followers think because zambia has $1.4 billion plus some other IMF money in reserves , that that money cam be spent ………no it is not spending money……

    They also think toll gate recites and mine tax money is there so no need to borrow ?
    If that is the case why did PF fail to pay loan repayments ? And why are retires and ther workers going unpaid ?

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  27. HEHH has always said zambia needs an IMF bailout to repair the PF damage…..

    The difference between lungu and HEHH is that lungu is a reckless corrupt spender, with no concept of tomorrow or sustainable economics , while HEHH is a seasoned international investor and business man……..with a proven track record.

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  28. Mr. Chalwe Sir, what the your so called “brief case opposition Politicians” have been saying is what you admit to in the 2nd from last paragraph. You say the IMF program will bring some pain. The previous administration were already implementing what is called prior actions of the IMF program bail out process and these have already filtered through the Zambian economy as experienced by the high cost of living and high cost of doing business. Unfortunately still all of this is even before we consider the inevitable removal of fuel and electricity subsidies!!

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  29. This is a well reasoned article. Some of us have tried to point out these facts about the modern day IMF, the cost of borrowing generally, but the readers here don’t even READ and are just stuck on ignorance and dumb social media conspiracy theories. I kept asking one particular commenter, I think FutureZed, for actually examples of how Zambia should just use internal resources to deal with its massive external induced debt, all I got was insults, because s/he can’t actually provide a realistic solution, so the mindset of insecure simpletons is to insult anyone who doesn’t agree with them. A lot of the commenters here offer no ACTUAL solutions, just regurgitated false rhetoric, with zero understanding or insight into real world. If Zambia didn’t need to borrow money or could…

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  30. part 2: get money cheap, it would have done so already. Don’t be so naive. If here enough internal resources or cheap loans to fix this problem do you not think financial advisors and economists would have formulated a plan to leverage already?

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  31. Its clear that the conventional and Dynamic Revenue estimates and Financing are outside best estimates that are normally acceptable in the Fiscal period 2021 to 2026 especially reading and reducing the estimates and forecasts in pronouncements in the Presidential Speech One
    can forecast the Budget and Financing plan in the short-term to long-term and see progress to be made Therefore any funding and Financing to address the Budget balance or deficit to grow the economy in an optimal way must be appreciated but such funding must not curtail the economic prospects of the country be it in structural or frictional way That is why the Presidential speech and prospects needed to be more catchy on…

  32. It’s not even rocket science…whenever you think about the IMF think about Shylock the money lender….thats the IMF for you…and the sad part is 70% of the money will end up in liar in chief HH’s pocket

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  33. Malabish! did the IMF sponsor you to say these things? IMF is not a charity but a lending institution with the aim of making money from its activities. The most obvious place for people to borrow money especially in Zambia is the Bank. Do people do it? Some will say, hell no because the interest rates are high or the conditions of the loans are not realistic. The IMF may have reformed itself but the argument of first looking within to pay off our debt still stand because we know that as a mineral rich nation, we can afford to pay off our debt without the need of accumulating further conditional debts. The author could have done better by explaining what’s in this bailout deal that is so favourable to Zambia.

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  34. When we have accountants or academics home grown who have never experienced reality of working in Europe, the perceptions of level playing field is slightly distorted. When it comes to dealing with the likes of IMF & Co. there is this false sense of security if the Muzungu is showing anikonda. But guess what, the same Muzungu is busy ku zonda muzake but uniting against the likes of you. First of all, the playing field is not level. After giving you all the conditions, the same Muzungu will move your goal posts when you are just about to score. This why I say we keep doing the same things but expect different results at the end of it.

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  35. I can see s scenario where if this IMF deal backfires where the government will put all the blame on Lungu and his government for “having accepted the unfavorable conditions”. Or if the program works well, the Upnd will pat it’s own shoulders for being very shrewd in their negotiations. It’s a blame game/self praise game.

  36. HH knows that for him to deliver devt to the People he needs to free Revenue away from Debt Service to Recurrent and Capital Expenditures. To do this HH needs to reschedule Zambia’s Debt. This can only be done with Technical and Financial assistance from IMF. A Programme with IMF will act as a catalyst to Donor Aid,Debt writeoffs and more concessionary financing. Besides IMF Money is cheaper than from Commercial Bank sources. IMF Conditionality will help
    the Zambian Govt maintain Fiscal and Monetary Policy Discipline. Thats why President HH will be meeting with Heads of IMF and the World Bank during his visit to Washington DC next week. HH will resolve the Zambian Debt Crisis soon. The writing is on the wall.

  37. @Sarah #35, I think you are just trying to pick a fight with me. I apologised to you for calling you emotional and I pointed out how we should strive to increase our share in the mines and increase production on the new ones to pay our way out of debt. Stop accusing others of trading insults when you doing the same. You are entitled to your opinion but it will take more than your rhetoric to convince me of how our resources are taken from us with our eyes open. The people involved with previous IMF deals have spoken out against rushing to the IMF, what makes them so special for you?

  38. @Sarah, stop insulting people’s intelligence about the operations of the IMF. They are a lending institution and with every lender you need to study the terms of the deal. If as you claim we are stuck to dumb conspiracy theories, explain to us dumb people what these new favourable terms the IMF spent month negotiating with our government? We are also not so dumb to know that the IMF does not treat every one of its members the same. So without trading insults, please convince us of why we should rush to pay a debt with another debt and as you claim to be an economist, is this a good thing?

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  39. Ba Sara nabo chipuba. Ati’ but the readers here don’t even READ and are just stuck on ignorance and dumb social media conspiracy theories.’ Really? Everyone is entitled to opinion… I personally would want to see all of us freely debate and not have a dangerously closed up mind like you are portraying about others that are contributing! Lets all avoid insulting our former and current leaders. We can debate about them respectfully

  40. #40  FutureZed
     September 13, 2021 At 1:13 pm

    “When we have accountants or academics home grown who have never experienced reality of working in Europe, the perceptions of level playing field is slightly distorted. When it comes to dealing with the likes of IMF & Co. there is this false sense of security if the Muzungu is showing anikonda. But guess what, the same Muzung…….”

    You have a serious case of inferiority complex………

    One wonders why you are in the UK if you mistrust whites so much ?????

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  41. Once beaten, twice shy. The idea that the IMF offers Zambia the best option with a $1.3 billion bailout is rather simplistic. To start with this figure does not allow Zambia to debt-consolidate, if that is what it is meant to do. I agree with those that suggest that the country looks deeper at ways in which the fiscal position can be consolidated and the economy grown. Some innovative ideas of financing productive projects such as power generation, Lusaka-Ndola Road, public transport infrastructure and others without government borrowing directly has to be an option. The reason the IMF remains unattractive is that it remains allied to the west and directly or indirectly lobbies in their interest. HH and UPND should seek trimming unnecessary expenditure.

  42. We have no choice with going to IMF, indeed this will bring stability to our economy. I am certain during the President’s official trip to USA the discussion with IMF will be concluded in a few weeks time we will be on IMF support machine. I remember the late Kebby Musokotwane stating it as a bitter bill which we have to swallow whether we like it or not cure our illness.

  43. @Spaka, you have an issue with understanding what people write. I would argue that the one with an inferiority complex is you because you think anything that comes from a Muzungu is gospel. I’m in the UK to get back my grandmother’s copper and gold. I work with them and I see and hear what they think about us. Just like the ones you have back home taking our resources, we are here to take it back home. You abviously don’t work for professional services otherwise you wouldn’t have asked me such a silly question.

  44. IMF is a business money making machine for America and it’s greedy friends, now if you paint IMF so innocent and Beautiful for Africans , my question to you is are they offering those loans without any profits or conditions which are not acceptable to our African cultures? sorry these guys have a lot of things hiding behind those twisted languages they use and you don’t clearly understand them .
    Well if they found out that Africans were staying away from such loans then they must have created a language to bring back Africans into the same trap, how do you really want to trust your opponent who once trapped you and you went through hell to say the least.
    Africa in the whole wide world is considered as sitting duck without brains so anyone can easily walk in and take…

  45. I agree with Cha Cha Cha, in fact the current FM is not immune to Zambia’s history with the IMF after he admitted that he worked under all previous Presidents in one way or another. We have the same characters such Alex Chikwanda partly responsible for the debts under UNIP through to MMD and PF and the likes of Magande and Musokotwane as part of our negotiating team. The questions is, how do we find ourselves in the same position or worse? How can we trust the people that have let us down on multiple occasions to do a better job this time round? When Sir Alex went on his spending spree, we questioned why and we got called all sorts of names. How I wish LT could re-publish some of these articles so that we can learn lessons.

  46. So out of the 33 African countries on the IMF programme, the writer could only single out Ghana as a success story. By his own admission, we conclude that the rest( 32 ) are a failure. As for the rest of the world ( 53 ) countries, the writer can only cite Serbia as a success story and still goes ahead to argue in favour of the IMF loan.
    Advise to upnd, if you want to lose the next elections, go ahead and make people’s lives unbearable by increasing electricity tariffs and fuel prices. This will certainly have a spiral upward increase in the cost of living as the prices of other goods will go up.
    Result? Redundancies, massive lay off of labour , increased poverty, and the resultant social ills that go with it. How does this grow the economy? Filiokotuleya!

  47. IMF is the most trusted money lender world over.
    All of Zambia’s creditors want to lean on Zambia getting an IMF loan then other talks can follow.
    The USD1.3 Zambia recently received is for BoZ reserve assets boost. It is not part of the IMF bargaining power Zambia is hoping to get from the long awaited loan on which other debt renegotiations currently hinge.

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