Here is how the IMF deal may affect you: Is Zambia the 21st Century IMF Case Study?

Each spring, thousands of government officials, journalists, civil society organizations, and participants from the academia and private sectors, gather in Washington DC for the Spring Meetings of the World Bank Group and the International Monetary Fund. At the heart of the gathering are meetings of the IMF's International Monetary and Financial Committee and the joint World Bank-IMF Development Committee, which discuss progress on the work of the IMF and the World Bank Group. Also featured are seminars, regional briefings, press conferences, and many other events focused on the global economy, international development, and the world’s financial markets. This year’s Spring Meetings events will take place in Washington, D.C., April 17-19, 2015. Photo: Simone D. McCourtie / World Bank

By Mwansa Chalwe Snr

The International Monetary Fund (IMF), has never been popular in Zambia as it presided over the destruction of Zambia’s industrial base and social fabric from the 1980s to mid-2000s, through its application of the Washington Consensus’s Structural Adjustment Programme (SAP) and its flagship privatisation programme. The current level of high unemployment, high poverty levels and the huge informal sector comprising of about 85% of employment in Zambia, can all be mainly traced back and be attributed to the IMF SAP programme. But, the IMF of the 1980s, 90s and early 2000s, is not the same IMF of 2022. Far from it. And people should not be misled by people who do not read and research to update their knowledge because they packed their degrees after graduation.

Zambia has been trying to get the International Monetary Fund (IMF) deal for eight years, since June, 2014 under the late President Michael Sata, as well as under former President Edgar Lungu, who took over from him in 2015.The Patriotic Front (PF) failed to secure the IMF programme because they were bad economic managers and not trusted by the financial markets including the IMF. I was a supporter of the IMF Program under the PF, and I have also been a supporter of the program under the United Party for National Development (UPND), because my opinions are based on facts and rationale. I am among non-partisan and patriotic citizens, the likes that any seating government should be seeking independent advice from, in order to get an objective and fair view of issues on the ground.

Dr. N’gandu’s frustration with delayed IMF bailout understandable, but who is to blame?

On the 31st August, 2022, the United Party for National Development (UPND) government, led by former businessman, and Zambian President Hakainde Hichilema, managed to secure the IMF deal within one year, which eluded the Patriotic Front for seven (7) years. The Fund released a statement announcing the approval of Zambia’s bail out.

“The Executive Board of the International Monetary Fund (IMF) approved a 38-month arrangement under the Extended Credit Facility (ECF) in an amount equivalent to SDR 978.2 million (around US$1.3 billion, or 100 percent of quota). The program is based on the authorities’ home-grown economic reform plan that aims to restore macroeconomic stability and foster higher, more resilient, and more inclusive growth,” The IMF said in statement announcing the bailout approval. “The authorities’ program, supported by the ECF-arrangement, will advance the authorities’ home-grown reform plan to restore debt sustainability, create fiscal space for much-needed social spending, and strengthen economic governance.”

I am one of the commentators who has written several articles on Zambia’s pursuit of the IMF program for eight years, including writing a book on Zambia’s ten year road to economic ruin under the Patriotic Front (PF), and the attendant result of the country turning into a battleground for the stealth economic war between China and the West, before most experts could discern it. The book is on Amazon, It is catalogued both in the USA Library of Congress and the United Nations library and as well as their on line libraries. READ MORE: CHINA-WEST BATTLEGROUND IN AFRICA: DEBT RIDDEN ZAMBIA: Why U.S. May Lose Geo-Economic Competition to China.

On the basis of my knowledge of the Zambian economy in recent times, and how a country that was weaned off the “dreaded” IMF, went back cap in hand for assistance, I decided to write a summarized educational piece on the expected impact of the IMF program from both the technical angle and from an ordinary Zambian’s point of view. I will also show how the IMF is using Zambia as a Case study to promote its new brand. I was motivated to write this piece because there is so much ignorance and lies flying around following the Zambia IMF deal.

Technical benefits of the IMF Program

Economic experts have explained and justified the benefits of the IMF program to be as follows: facilitating debt restructuring of Zambian foreign debts, supporting balance of payments, attracting foreign investments, facilitating borrowing from concessionary sources such as multilateral and bilateral partners and attract grants funds, reduction in domestic borrowing thus stopping government from overcrowding the private sector, and lastly, to make funds saved from debt repayments available to support social programs.
The majority of stakeholders agree that the IMF is highly effective during a financial crisis. It is also valued most for helping countries overcome financing difficulties and providing sound policy advice. The IMF has built its global reputation around these areas: providing sound policy advice and technical assistance to member countries, helping countries overcome financial crises but it has failed to meet its goal of promoting jobs.

There is no need to elaborate or expand on the above technical benefits because the targeted readership understand them very well. The problem is, the man on the street does not know the costs and benefits of the IMF program. And the lack of a communications strategy with a clearly laid out simple message has been the Achilles’ heel of many African governments, including the New Dawn. There is need for an aggressive communications strategy with simple messages in a language that the most important demographic- the uneducated and non-technical people – understand. I am going to provide free knowledge consultancy services to the current administration, which foreign advisors, who are out not in touch with ordinary Zambians, the voters, cannot provide. The advice herein should be the basis of how they should explain the IMF Program to the man on the street including villagers.

Expected Benefits to Ordinary Zambians of the IMF Program

The impact and translation of the technical benefits alluded to above, can be summarised as follows: the cost of living and doing business is likely to go down due to the strength of the kwacha, medicines in hospitals are likely to be available as there will more donor support, and even the donors who had left may come back or resume their support, more donor aid will flow in to support social programs due to perceived reduction or fight against corruption, free education financing likely to be sustained, fertilizers will be cheaper and more subsidies to deserving farmers is likely, low interest rates for micro and small businesses (MSEs) as the cost of capital will go down because banks will be stuck with billions of cash since government will no longer be borrowing at same level as before (Standard Chartered Bank’s recent reduction of interest rates is a good example and others are likely to follow). The cheap money is likely to result in increased economic activities and some limited job creation, but not the millions required which need extraordinary and innovative measures like the one I will suggest later in my conclusion. There should be no dispute that Zambia’s social programs will be supported in the current IMF deal. The 21st Century IMF has gone on record and committed to supporting Zambia’s social programs.

“Spending on social protection is projected to more than double from 0.7 percent of GDP in 2020 to 1.6 percent by 2025 (around the average for sub-Saharan African countries). Measures to support the most vulnerable include increasing the number of recipients of the Social Cash Transfer to 994,000—an almost 50 percent increase over 2019 recipients—and the monthly benefit increased from 90 to 110 kwacha, with World Bank support. Other social protection programs are also being expanded:  including programs to mitigate food security risks, keep girls in school, and help provide meals for students in schools. The Fund-supported program incorporates providing access to free education for all and a much-needed increase in spending on health and education, including hiring over 41,000 additional health and education workers,” They stated on their website.

According to some studies, IMF programs have been correlated and credited with an increase in free and fairer elections, free speech, and the right to organize in countries that were under IMF agreements. In some countries, therefore, the IMF has been said to be a blessing in disguise by their citizens in that it has helped them move from dictatorship to a democratic dispensation with good governance, rule of law, control of corruption, freedom of the press, strong and independent governance institutions. The Zambian Opposition and those against the IMF Program, should sometimes really think twice because most of the civil liberties that they are enjoying are courtesy of the IMF program. They should be thanking the IMF for the civil liberties that they are enjoying currently, because some of them could have been be in imprison by now serving huge sentences after trial in Kangaroo courts. This is a fact.

What are the possible conditions and negative impact of the current IMF program?

The critics of the IMF programs are predicting that Zambians will experience hardships like in the past during the Structural Adjustments Programmes (SAP). The summarised standard SAP conditions which Zambians should be looking out for and use as the checklist of the current IMF deal, are as follows: reduction in government spending and foreign borrowing, encouraging privatization of state owned enterprises, increasing taxes and enforcement, removal of agriculture subsidies, removal of free basic education, reduction in funding for the health sector, relentless fight against corruption, good governance and human rights promotion, lowering or eliminating tariffs on imported goods, opening up the economy to foreign investors on advantageous terms at almost any cost. On the basis of the aforementioned, they can make a determination whether the IMF has invoked these conditions in the current deal or not, and whether some the above conditions are good for the country or not. If the Authorities are not disclosing the IMF conditions, the above check list should be enough for critics to provide the checks and balances they need. READ MORE:

How the IMF of the 80s/90s has ‘changed’ in the 21st Century.

In my reading, I doubt whether ordinary Zambians will be substantially badly affected by the IMF deal than they are now, by the feared austerity measures as in the past. There are two main reasons for my view. The first is that Zambia has been on a de facto IMF programme for about seven years because the Patriotic Front (PF) had implemented most of the prior actions that the IMF normally demands. Zambians have been going through an effective austerity for quite a long time. It has been spread out over a number of years without ordinary citizens knowing and realizing it, and consequently attributing it to the IMF Program. To illustrate this point, is issue of power and fuel. The prices of fuel and power have been progressively going up over the years, as subsidies were being removed by both the PF and more recently the UPND. The current high cost of living started some years ago and it can easily be attributable to the prior conditions that IMF demanded under the four Finance Ministers: Felix Mutati, Margret Mwanakatwe, Bwalya Ng’andu and now Situmbeko Musokotwane. The high cost of living has just continued in 2022, but likely to level off later this year or next year due to the improved kwacha exchange rate.

The second reason is that the IMF of the 80s, 90s and early 2000 is quite different from the current one. This is due to the reforms the Fund embarked on in 2009, when most countries started avoiding to borrow from them especially after 1998 Asia Financial Crisis. IMF ended up getting stark with billions with no takers. IMF got resurrected by 2008 financial crisis caused by subprime mortgages in US .There is some evidence in the Zambian bail out deal of the new IMF, which can only denied by Opposition politicians and their sympathisers.

Is Zambia a Case study of the 21st Century IMF?

There was so much excitement after Zambia’s IMF Program was approved by the Board of Directors. The program was approved unanimously. And surprising enough, the excitement extended to the IMF management circles. Any curious observer could infer from the excitement that the Fund could be using Zambia as a benchmark case study in a number of respects. And the IMF Managing Director Kristalina Georgieva remarks seemed to give an inkling of that.

“Today’s decision is also a major milestone for the G20 Common Framework. Successfully implementing this programme will unlock new growth potential for the Zambian people and it shows others that the G20 Common Framework can deliver,” said Georgieva in her comments on the deal.
There is also evidence in the Zambian deal that IMF may want to launder its past image and improve its brand by projecting an image of a responsible and caring lender who is sensitive to members’ social programs. The Fund has allowed President HH’s administration to implement social programs that were unheard of before. Zambia has been allowed to increase the size of its civil service by the employment of teachers and health workers ,increase in the number and amount paid out as Social Cash Transfers, allowed increase in the Constituency Development Fund as well as doubled the amount of the Farmers input Support Program (FISP) in 2022 budget to K10billion from 2021.

The standard IMF conditions in the past have been reduction in the size of the civil service and elimination of subsidies and social programs. This is clearly not happening in Zambia, at least not to the same degree as in the past. This has shocked many people including former IMF employee and Zambia National Broadcasting Corporation Director General, Chibamba Kanyama. This has disarmed and silenced many objective critics of IMF.

“We have seen the IMF for the first time approving what they could not ordinarily approve. How do you employ 40,000 Civil servants within a given budget year? IMF would have resisted this. They would have recommended the opposite that you retrench the civil service,” Kanyama said to a Nigerian TV Station in an Interview.


Zambians should not be mistaken that the IMF program will solve the country’s economic problems, if no serious economic transformational steps are taken by the New Dawn government. The IMF deal is a pain killer, like Panadol, and it cannot be expected to heal the diseases in our economy, if the current structure of our economy is not changed. We have an economy which is foreign owned, dependent on one primary export which is copper, import dependent, without any manufacturing base, an undiversified economic portfolio and 85% informal economy! You cannot hope to develop with such an economic structure. The New Dawn should look on the above list and start addressing them
As Zambians, we should not be necessarily celebrating clinching the deal from an institution that specializes in bailing out countries who find themselves in desperate financial stress, because it is the third time that we have approached them. Botswana, which is less endowed has never been bailed out by IMF in 56 years of indpence but in fact lent IMF funds at one time. We should all be filled with a sense of shame about being such irresponsible managers of our economy and affairs. We can of course give credit to President HH, who is currently in charge to have brought back credibility and normalcy to Zambia. And one hopes that he starts listening more to those outside his inner circle. His predecessor partly failed due to his arrogance and ignoring advice outside his inner circle, including from this Author. He was so drunk with power that he publicly declared himself as the Alpha and the Omega.

“The same way people feel ashamed to go to a micro-lender (read Kaluba) because often-times it may reflect a serious lack of prudential discipline, in my view, is the same way Zambians should actually be feeling a bit of shame instead of celebrating as if we are in victory. This for me should have been a defining moment of deep self-reflection, for a 58 year old country during which we commit ourselves never again, to mismanage our affairs into such shame by making sure that we begin to make practical changes to our governance systems to ensure that no government or politicians such as the ones who ruled us in the last 10 years, ever get into leadership roles in the first place,” Jeff Mbizure, an Academic, posted on the University WhatsApp group of the pioneers-most of them retired after distinguished careers – of Zambia’s first Business School in Kitwe.

President HH launched the National Development Plan 8 (NDP 8) on the September 1, 2022 which is a very good document and Plan. But Zambia’s problem has not been the lack of plans but rather the absence of designing of innovative and practical programmes and projects to implement such plans. It is this respect that I would like to publicly ask the President to engage me so that I can share my designed innovative and technology based Programme to fast track the creation of hundreds of thousands Youth jobs through the transformation of Zambia’s huge informal sector as part of implementing NDP 8. The Initiative is based on three years of painstaking research to find solutions to Youth unemployment, and so it is not something to take lightly.

The writer is a Chartered Accountant and Author. He is a semi-retired international MSMEs Consultant and an independent financial commentator. He is also an Op-Ed Contributor to the Hong Kong based, Alibaba owned South China Morning Post (SCMP) as well as Author of : China-West Battleground in Africa: Debt ridden Zambia; Why US may lose Geo-economic Competition to China.
Contact: [email protected],


  1. Don’t be a f00I. The only reason imf didn’t want to give pf a deal is because we refused to sign a neo colonial deal. In hh they have a puppet

  2. The only positive about this article is that it’s different from the insults that have been rained on Peter Ng’andu Magande on UPND sponsored platforms. However, the misgivings about the IMF that Zambians have are based on experience. Whatever they say about the IMF is what they experienced and true to the adage “experience is the best the teacher”, who are we to dispute that? The veiled secrecy and the toxic anger with which the UPND are reacting to any questions about the IMF deal doesn’t give us the confidence that the IMF has come in peace this time around. So we’ll wait and see, bafisanji amambala?

  3. we dont need long long stories all we want is breif stories, so just tell us the conditions given to zambia and dont forget this money is not free money we adding on what we already have accrude, yes it is with no interest but we still adding on what we have.Is it privatisation coming back so that zesco,Mopani,Kcm and zamtel can be privatised.Please tell us the truth.No more stories.

  4. Job seeker hold on, attracting foreign investment and increasing credibility to open doors to financial institutions will not get us out of the current situation. It will be worse. The solution lies in exploiting our 18 Million labor force [ gigantic human energy and knowledge going to waste] and our natural resources [ we are unwisely and senselessly giving to foreign capitalists]. Tax holiday vs 1.3bn loan, I am lost in thought.

  5. 1. Reduction in government spending and foreign borrowing
    2. Encouraging Privatization of state owned enterprises
    3. Increased taxes and enforcement
    4. Removing agriculture subsidies,
    5. Removal of free basic education
    6. Reduced funding in health sector
    7. Relentless fight against corruption
    8. Good governance and human rights promotion
    9. Lowering or eliminating tariffs on imported goods
    10. Opening up the economy to foreign investors (FDI).

    • From your expected SAP analysis it still remains true that government spending will drop except in education, agriculture, health and social protection. IMF also told as the same things. You have not brought anything new to this loan debate.
      The IMF loan is public money to be repaid by Zambians. Zambians are prime stakeholders, whose honest concern matters too.
      We are grateful to the finance minister’s promise to have the loan conditions pasted on BOZ website for all to see.

  6. The fact that they’re hiding the condition of IMF deal is enough to confirm that Zambia has been auctioned…..unless you’re a Lumbani madoda praise singer

  7. The government should give the gentleman a hearing. He might have a better solution to tackle the youth unemployment. We should start embrace every Zambian with ideas especially those from diaspora. Botswana is better today because of skills and knowledge from Zambians including Sean Tembo and Zimbabweans.

  8. The solution lies in exploiting our 18 Million labor force [ gigantic human energy and knowledge going to waste] and our natural resources. I strongly agree with this view because so much has been spent by government on training Zambians locally and abroad. When will the intended return on what government has spent be recovered?

  9. This loan is interest free, payable for ten years.
    What is the IMF benefit? Have these lenders suddenly become saints, giving money for free? This is what this analyst missed to say.

    Here is the catch: When privatised, most companies in IDC like Zesco, ZRL, Infratel, LSMFEZ, Superior Milling, Zamtel, ZANACO, Kawambwa Tea, ESCO, Nittogen Chemicals, etc are the “cow milk” to feed into IMF when privatised. They will buy all at economic prices and charge goods and srevices at commercially exhorbitant rates to Zambians.
    Brace for high energy prices in exchange for the $1,300 million loan.

  10. This is a superb article from someone who knows what he is talking about.
    Yet we have uneducated comment’s from ALL those who do not know ANYTHING about the subject.

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