The International Monetary Fund (IMF) has so far disbursed over 195 million United States dollars to Zambia as the first installment for the 1.3 billion approved bailout package.
The Ministry of Finance and National Planning has explained that the disbursement is the first out of the seven which the country is expected to get over a period of three years when the loan will be implemented.
Permanent Secretary in charge of Budget, Mukuli Chikuba has reiterated that the IMF bailout has no hidden conditions apart from the ones that have been made public and published on the Ministry of Finance website.
Mr. Chikuba explained that the objectives of the loan is aimed at ensuring that there is debt sustainability, provide balance of payment support, increased funding to social protection services and economic growth.
He has stressed that no employment and wage freeze will be implemented as government will continue with its all planned social protection activities targeted at fostering economic growth of the country.
Mr. Chikuba noted that government has already planned for more recruitments in the 2023 national Budget in the social sectors such as health and education among others, even with the IMF programme in place.
“The IMF bailout package has no other conditionalities other than the one we have shared, among the conditions is to provide balance of payment support and ensure that there is maximum on social spending to grow the economy. In the olden days IMF was criticised for creating poverty but the current IMF is emphasizing on investing more in social spending like health, education, social protection programmes and paying of retirees,” he explained.
The PS stated that the IMF is also focusing more on poverty reduction, hence 50 percent of its allocation will be put in the national Budget to finance social protection programmes in order to enhance economic growth.
Mr. Chikuba said the other focus area is also ensuring that government does not accrue any commercial loans but instead get concessional loans that are more beneficial to the general citizenry.
He stressed that government is also not doing away with any subsidies either on agriculture or any other social sector, adding that the only reforms on subsidies will be done in the energy sector on fuel and electricity but will be done in accordance with the law.
” We are not doing away with subsidies, subsidies in the agriculture will be there, agriculture is a big employer of the country’s population, what we are doing is just revise them to make them better, the only reforms will be done on direct subsidies on fuel were VAT and excise duty will be put back,” he stated.
Ministry of Finance Director in charge of Economic Affairs, Mulele Mulele explained that the IMF credit facility is a home grown programme, which was presented to IMF to help in debt restructuring programmes to help boost the country’s economy.
Mr. Mulele said the programme will also help in dismantling domestic arrears, and halt the accumulation of new arrears to enhance sustainability in the country’s economy.
He added that the loan is a concessional at zero interest rate which will be more beneficial to the public through increased social sector spending.