The Ministry of Finance and National Planning Situmbeko Musokotwane has said that the new reform programme that the new Dawn government has embarked on will encompass fixing inefficient supply chains in the energy sector and remove excesses in the Farmer Input Support Programme (FISP) that have negatively impacted on the fiscal position of the country.
Speaking at a joint press briefing this afternoon with the International Monetary Fund (IMF) team led by Ms Allison Holland, Mission Chief for Zambia, Dr Musokotwane said that the reforms will also have to reform the electricity sub-sector by migrating to cost-reflective tariffs to attract investment.
The Minister said that the 2022 national budget has no provision for subsidies on fuel and electricity and that government spends over $67 million monthly to subsidize the cost of fuel, before adding that Zambia currently owes about $480 million for unpaid fuel supplied which has been inherited by the UPND administration.
The Minister said that the rationalization of these expenditures will free up more resources that will be channeled to the poor and vulnerable in society through the social cash transfer programme.
The Minister further said that the resources freed up will also enable the Government to effectively provide free education, free and proper medical care for our people, as well as scale-up youth and women empowerment programmes, and with these interventions, the Government will be able to once again start talking about inclusive growth where no single person will be left behind.
The Minister was also quick to point out that reaching a staff-level agreement is not an end in itself, but paves the way for debt restructuring engagement with Zambia’s creditors, following which Zambia’s application for an Extended Credit Facility will be considered by the IMF Executive Board.
The Minister said that the Debt Sustainability Analysis (DSA) exercise, undertaken during technical discussions with the Fund over the past few weeks provides the basis for our engagement with creditors and that DSA will help to define the quantum of support that Zambia will require from the creditors.
The Minister further said that, with the support of financial and legal advisors, Zambia will immediately commence engagements with creditors on public debt restructuring.
“It is my hope and expectation that we will make progress on these discussion in the coming few weeks. Our commitment is to ensure equitable treatment of all creditors, ” the Minister said before appealing to all of Zambia’s ceditors to come forth and join creditor groups and engagement with his team.
The Minister said that once the Government concludes with the creditors and Zambia will successfully get on a formal programme with the IMF, and will start accessing budget support from multilateral and bilateral partners, adding that this will support our macroeconomic conditions and boost investor confidence.
“……adding that Zambia currently owes about $480 million for unpaid fuel supplied which has been inherited by the UPND administration…..”
So this lungu and his gang even failed to pay for the fuel being used , ontop of failing to pay due instalments on the most borrowed ??????
Everything he was going commissioning was on borrowed money he could not even pay back ????
How has FISP impacted negatively on the nation? Just say it openly that the IMF have instructed you to remove all subsidies. Just hope that when we face food shortfall you will not put the blame on PF
Zambia’s Debt Stock $15 billion to foreign creditors and $12 billion to local creditors . Total Debt Stock: $27 billion. All contracted in a decade. PF should dissolve itself. And all former PF Ministers should recuse themselves from holding any public office.
It seems like every new Zambian Govt drinks the same IMF “Cool Aid” when they come into power. PF sort of resisted this behavior until the same IMF pushed them onto the open credit marketplace through Euro Bonds and got the country deep to it’s neck in debt. Remember the Middle Income rating Zambia was riding on to credit markets, of course with the blessing of the IMF and it’s cousin, the WB? Yeah, that’s what got Zambia into trouble. Now IMF pretends like it had nothing to do with the current indebtedness of Zambia. What IMF is doing to Zambia right now isn’t new. Zambia has been here before, and Musokotwane should know better. Because he was in Govt (if I am not mistaken) during the Chiluba administration. IMF can NEVER point to one country that has done better or thrived with…
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with its help, NOT ONE. But wait until those riots start breaking out again across Zambia due to draconian reform conditions imposed by the IMF in order to access the loan, then you will understand why some people are reluctant to deal with the IMF again. And I pray that the money will be used prudently to grow the economy than further propping up consumerism. And don’t be fooled, certain subsides are crucial to any country. The United States of America still provides billions of dollars in subsides to its farmers, so be careful. Good luck HH, I sure hope you know and understand what you are getting our country into again!
Why is the last part of my comment awaiting moderation? What did I say that’s unacceptable?
Why is everyone objecting against the IMF and the conditions it puts on lending a huge amount of money to the government? IMF didn’t ask for anything, the government asked for money. And then it’s only natural that conditions are being put forward. As mentioned more than SIX months ago, fuel pump prices will double, and Zesco tariffs increase with 85%.
This is why Chiluba said he could rule for a hundred years. Doing the same things and expecting different results.
ZAMBIA NEEDS A NEW ECONOMIC MODEL.
HOW COME THE UNITED ARAB EMIRATES HAS DEVELOPED SO MUCH IN ONLY 50 YEARS AND YET WE ARE STILL LANGUISHINH IN DEBT AND POVERTY. THE UAE ONLY DISCOVRED OIL ABOUT 50 YERRS AGO AND THEN DECLARED THAT ALL PROFITS FROM THEIR RESOURCES SHOULD BE REINVESTED IN THEIR COUNTRY.
IN ZAMBIA WE HAVE BEEN DOING ALMOST THE OPPOSITE AND WE HAVE NO SHAME IN ASKING FOR FOREIGN AID AND IMF BAILOUTS??
We will have to pass through pain to get better, take this as a medical operation, they will be pain but all should be fine later. Had PF not borrowed recklessly, we would not obviously have been in this position. The IMF pill will be bitter but that is the cure, fuel and electricity hikes inevitable for us to have our brothers and sisters employed, some thing has to give and this time it will be electricity tariffs and fuel prices
Socialist state defined as a dictatorship.
UPND administration I don’t think they understand deliberation statements and lecturing statements.
UPND administration and IMF, we have the tools to hold you accountable.
HH true-colors revealing Slowly.
Socialist state defined as a dictatorship.
UPND administration I don’t think you understand deliberation statements and lecturing statements.
Socialist state defined as a dictatorship.
UPND administration and IMF, we have the tools to hold you accountable.
HH true-colors revealing Slowly.
Socialist state defined as a dictatorship.
Ma2uvi yeka yeka aya
UPND administration Please give us deliberation statements not lecturing statements.
Basi, kwamana! January 1 2022 fuel and electricity tariffs will go up. Effectively all workers should ask for a pay hike.
No subsidies means a hell of life for majority poor Zambians and more misery.
Energy, fuel and electricity in Zambia are said to be not cost effect. So this is the story we have heard day in day out that we don’t buy fuel for it’s true pump price. These guys are a bunch of jokers, to claim that resources freed up will also enable the Government to effectively provide free education, free and proper medical care for our people, as well as scale-up blablabla is a lie. IMF is ruling Zambia. Icalo bagoleka abamasampo.
@Zambian First. We used to laugh at Chinese products and type of their governance. They stuck to their guns and here we are.. they are now a World Power House. Reason? They don’t cat copy like us. Libya had their own way of government and were successful until their leader was eliminated. It’s not oil that made Libya great, it was the brains how to use that oil that did it… remember Nigeria has oil but? There’s a lot of excitement about Rwanda’s success.. there’s need to know how they have managed.
Honorable….you are very stu.pid
You want to remove incentives from your own people and punish them yet you have given mining firms incentives
Shame on you…
Kawalala wa nchinga (the bicycle thief) wants himself, his cronies in the NEW DARK GOVERNMENT, and the IMF to benefit from our suffering. We are already on the verge of what is looking like a drought. Wait until Zambian farmers are not able to produce enough food due to drought and a revision of the FISP, then we shall see prices of mealie meal soar. Contrary to the campaign lies of the NEW DARK GOVERNMENT, the price of mealie meal will not be K 50 but way above where the PF left it. With this, it is no prophecy but a mere intelligent guess that Zambia can expect food riots of the 1990’s. Zambians must have seen the pattern of drought emerging in the region from average to below average rainfall in Namibia last year, Western Tanzania and Kenya where wild animals, as seen from BBC…
heartrending pictures, are dying from lack of drinking water and pastures this year. We are slowly getting there and the NEW DARK GOVERNMENT should not be overly excited with exporting the bumper maize harvest that was grown with the help of FISP under the PF government. Otherwise, Zambians will realise faster than before that the PF meant well for the country than the NEW DARK GOVERNMENT that is ready to do away with mineral royalties from foreign mining companies because of their insatiable appetite for borrowed dollars from the IMF.
Francis don’t just look at Liabilities side of the Balance Sheet left by PF, BUT AT ASSETS side as well. Accountants/Economist worth the salt will attest to the fact that to “EVERY DEBT there must be a CREDIT”
Today UPND, can boost of employing 30 and 11 thousand Teachers and Medical personnel RESPECTIVELY “COS” of INFRASTURE NET WORK (SCHOOLS/HOSPITALS etc, etc) left by PF. Zambia is no longer Landlocked but land linked and she has the State of art Airports and am not surprised that our Current Head of State must be feeling proud to be flying off and back as evidenced from the many trips is undertaking. Note that PF debt stocks no doubt have left a lot of positives Infrastructure wise. Once COVID disappears TOURISM will take center stage. Good Investment indeed
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As for Mr. Magande, happiness for UPND not taking too long to clinch a deal. IMF behaves like “vultures” you can clinch a deal with them EVEN in less than a “minute” so long you agree to their Slavetude conditions. The only time frame GIVEN is the SLAVERY period they give to undertake their PROGRAMME (MINIMUM 3 YEARS). Anyway BALLY will FIX IT, now it’s the CITIZENs being FIXED INSTEAD
I am struggling to understand ma polotics neo mwe. Nanga yaja ma subsidy mudala Sata anacosa cinali bwanji? Or was it an intention and then it was never carried out. Wina azabwela next time and remove subsidies again. Nuvutika na muyanu to understand this whole saga. Elo nanga ma subsidy ndalama ni za make IMF? We pay those taxes, just do some social safety nets so that you take care of those who really, really benefit from subsidized things.
Zambians forget easily. Can we now be told the truth about the oil that was oozing out of a hill in Gwembe. Why not exploit the resource?.
Kalol.
I do remember when Sata resisted the IMF when they said freeze pays for workers he refused to freeze their pays and increased their pay, it was in the news internationally, but these guys they agree to anything stupid IMF brings about, subsidies are necessary to any country Zambia deserves a better set of leaders than these cowards with out backbone.
@9-ZAMBIA FIRST: It starts with the Citizens. If you don’t believe in yourselves that Zambians can achieve more, then nothing will be Done. Zambians are so lazy that they want free things, while ARABS don’t accept to be given something for free. They take it as Taboo. WE TALK TOO MUCH AS A SOCIETY, BRING EACH OTHER DOWN AND DO NOTHING. Just see how they have politicized the vaccination, yet, if those NOT vaccinated make others sick?? Who suffers? WE NEED TO CHANGE…