Saturday, February 24, 2024

President Hakainde Hichilema Was Duped by the IMF-Sean Tembo

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The decision by Zambia’s President Hakainde Hichilema to obtain a bailout loan from the International Monetary Fund (IMF) has been challenged by Sean Tembo, President of the People’s Party (PeP). Mr Tembo has raised concerns over the President’s one-man decision to seek the IMF bailout without any cabinet scrutiny or debate.

In his statement, Mr. Tembo claimed that the President’s decision to obtain a bailout loan from the IMF, only 8 days after taking office, was a “one-man decision that was devoid of any cabinet scrutiny or debate.”

Mr. Tembo also criticized President Hichilema for not responding to his challenge to explain the necessity and benefits of the IMF bailout program. According to Mr. Tembo, “our economic prospects appeared stable at the time.” He added, “Our biggest export earner; copper was trading at about $10,000 per metric tonne, our gross foreign reserves were the highest in since independence at about $3 billion, the exchange rate was around K15 per dollar, the price of breakfast mealie meal was around K120 etcetera.”

However, Mr. Tembo praised the first Minister appointed by President Hichilema, Hon. Situmbeko Musokotwane, for attempting to justify the IMF bailout program. “His main argument was that the program was necessary as it would allow the country to obtain debt relief,” he said. Yet, Mr. Tembo criticized the Minister for not giving a “solid explanation” when pressed about the specifics of the targeted debt relief and how the IMF would deliver it.

Mr. Tembo believes that the President’s decision to use the IMF to achieve debt relief was flawed. “You see, when you talk about debt relief you are essentially asking your creditors to give you more flexible terms of payment,” he said. “This is either by increasing the payment period so that your repayment instalments can be smaller or giving you a repayment holiday of say a year or two so that you can have space to reorganize your finances or something to that effect.”

According to Mr. Tembo, the country had already defaulted on its creditors at the time of the IMF program, making debt relief more difficult to achieve. He also stated that the IMF was “a wrong vehicle to use to achieve debt relief or indeed debt cancellation” because most of Zambia’s foreign debt was commercial debt owed to institutions and not sovereign debt owed to governments. “In fact, out of the $12 billion, the largest sovereign debt of about $6.6 billion was owed to China,” he said. “It is extremely difficult to re-negotiate commercial debt, but sovereign debt can be negotiated because you can appeal to the moral guilt of the creditor nation. But in the case of China, the approach really matters and a pro-western vehicle like the IMF cannot work when it comes to negotiating with China.”

Mr. Tembo advised President Hichilema at the time that the country would have a better chance of success with debt relief and possibly even debt cancellation if they engaged the individual creditors directly instead of using the IMF. “When we were contracting this debt, we engaged our creditors directly and it is only respectful that now that we have problems paying back, we must engage them directly again to explain to them and to ask them how they can assist us,” he said. “Most of our bilateral creditors feel disrespected if not outrightly insulted that instead of engaging them directly regarding debt relief, we are asking the IMF to do it for us.”

Fast forward to 15 months later, and the government has implemented all the IMF conditionalities, with most having a harsh effect on the Zambian people. The amount of fertilizer allocated under the Farmer Input Support Programme (FISP) was cut to the extent that 12 farmers were sharing one bag of fertilizer in medas. The medicine grant to health facilities was also cut, leading to patients having to buy over 90% of their needed medicines and consumables from private pharmacies. Electricity tariffs for connection and meter separation were increased by more than 1,000%, and fuel pump prices were increased by more than 70% in the past 6 months, with a monthly review. The government also exported electricity while loadsheding the nation, leading to dire consequences for the economy.

Despite the government implementing all the harsh IMF conditionalities, the IMF was unable to deliver the promised debt relief. The Minister of Finance was crying in the media every day, asking the IMF to deliver the debt relief since they had implemented the IMF conditionalities as instructed.

23 COMMENTS

  1. The intension is to break our economy. People should realise that 2H is trying to fix things which are working. In other words, he is the right man to carry out the agenda on behalf of IMF.

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  2. IMF is now dealing with Sean Tembo – PeP president has taken over negotiations with IMF on behalf of Zambia and reveals that Zambia was duped.
    Really, Sean in his world thinks Zambians can buy the garbage he feeds on. Presidential bar is too high for Sean, the one man party man.

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  3. Now Tembo says the economy was stable…really laughable…Mr. Tembo believes that the President’s decision to use the IMF to achieve debt relief was flawed. Could Tembo tell us where GRZ was going to get emergency funding from…you can renegotiated debt but cash will always be king. Its easy to sit there writing articles everyday in hindsight the boy doesnt even dare mention PF but he is all over the place trying to incite the masses.

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  4. we failing to manage garbage in our Towns…failing to mend potholes and how do you expect us to manage our economy…did they show the IMF director the piles of garbage littered all over Lusaka

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  5. If practices were implemented in readiness for IMF scrutiny…………

    Those practices have beneficial end games for zambias economy…………..

    It’s like when you are struggling with debt and a debt relief agency gives conditions for debt relief…………

    Those conditions are usually meant to curtail unsustainable spending………

    Even if IMF does not come through, zambia has stopped the unsustainable hemorrhage of public funds and living on borrowed money……….

    Forward 2031…………

    • You can implement as many policies to reduce spending to appease the IMF as if you want BUT if HH keeps ignoring our biggest Creditor on the books China he is not going anyway he might kiss up to the muzungus but muzungus have nothing on China. One thing HH should get over is that it was not reckless PF tresuary who borrowed that Chinese debt but they did it in the name of GRZ. They Muzungus like him because he makes a good puppet and they confortable in his presence like a trained lap dog…he has to stop the coonery!!

    • Zambia will be the first country to be freed from the shackles of Chinese debt and encroachment……….

      With or without China……..

      Zambia is a sovereign country and free to choose its alignment

  6. WHAT THE NAME OF TEMBO SINS PARTY ? IS TEMBO SIIN ALSO A PRESIDENT ? IF TEMBO SIN IS A PRESIDENT WHO IS HIS SPOKESMAN ? IF HAS A PARTY WHY DOESNT HE TALK MUCH ABOUT HIS PARTY’S ACTIVITIES AND PLANS .?

  7. AS PROPHET , I CAN SEE HH LAYING A FOUNDATION FOR ECONOMIC REFORMS AND CHANGE, I CAN SEE MAJORITY YOUNG ZAMBIANS RECEIVING Education EASILY . I CAN SEE MANY Young ZAMBIANS ACQUIRING SKILLS EASILY FROM TECHNICAL COLLEGES . I CAN PRICES OF FUEL , FERTILIZER , TRANSPORT AND GOODS GOING DOWN IN ZAMBIA . I CAN SEE MANY ABANDONING THEIR POLITICAL PARTIES IN FAVOR OF HH ‘S PARTY

  8. Absolute nutcase…..This chap thinks 10 years of economic mismanagement and unprecedented of unsustainable national debt can be cured in just 1 year.
    Get a life.

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  9. Sounds like the replay of the 90s. Only him could be this careless just to get the IMF closer while demonizing China with a load of $#!+ hole bull $#!+. Whose the better of them both? But the guy was busy to have started with a MOF. That first cabinet was a two man cabinet. He peddled lies about empty treasury and hastened to borrow to pay his newly recruits. Sorry to say that at his lightening speed he could have missed some of the critical demands of the evil IMF. May the Evil IMF stay out so that niggaz can start thinking with their heards.

  10. Sean Tembo is just an obsessed confused man with a Lot of hate and no political programmer.
    Such people are not popular . But only want attention. Whatever comes at Sean Tembo mouth is just rubbish with no scientific foundation.

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  11. the problem with same politics is when one offer food for thought a section of people became so unstable, lets try to brain storm issues rather than calling each other names, yes west has no interest in african development, the west will make you feel like you are moving when you are not, the west are slowly but surly want to use africa to fight china and zambia is china

    • 2024 I pray that the American people vote for Donald Trump. He’s not interested in wars and interference in other nations.

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