The International Monetary Fund says Zambia’s medium term growth outlook is uncertain due to significant policy uncertainties.
And the International Monetary Fund has charged that Zambia’s current fiscal stance is clearly unsustainable and warns that government debt would rise to over 50 percent by 2018 from the current net present value of about 30 percent of GDP in 2013.
The IMF says in light of the significant policy uncertainties, Zambia’s growth and inflation outlook in the medium-term is uncertain.
The Fund however projects that Zambia’s projects growth will remain between 7 and 8 percent and inflation to decline gradually to 5 percent assuming front-loaded fiscal reforms leading to a medium-term deficit of 3 percent of GDP, and a business friendly policy environment
This is according to the IMF’s latest country staff report for Zambia released at the end of a staff mission to Zambia in October 2013.
The IMF noted that the balance of risks to growth is on the downside due to the uncertainties regarding the pace of fiscal adjustment and the investment climate.
It warned that the Zambian economy would be highly vulnerable to negative shocks, with low international reserves and rapidly rising public debt if the needed fiscal adjustment is delayed.
The Fund observed that policy priorities should include preserving the economy’s hard won macroeconomic stability called for a reduction of the fiscal deficit and increased international reserves.
“This will require mobilizing additional domestic revenue, realigning spending priorities, and creating fiscal space for infrastructure investment, while also maintaining a business environment that encourages job creation. At the same time, the targeted transformation of the Zambian economy requires fundamental administrative and institutional reforms to promote credible policy implementation, higher efficiency of public infrastructure investment, and deeper financial intermediation,” the lender said in a report.
The IMF added, “The fiscal deficit for 2013 is projected to reach 8.6 percent of GDP, assuming that the government implements planned fourth quarter spending cuts through reducing spending on goods and services and maintaining capital spending at least 0.5 percent of GDP below the annual budget.
It said virtually all categories of spending have deviated substantially from approved levels adding that the sharp increase in wages and the large overruns on subsidies forced the government to make sharp cuts in goods and services, intergovernmental transfers, and capital spending.
“To finance the above-budget deficit, the Zambian Government has increased issuance of Treasury bills, used part of the 2012 Eurobond proceeds that had earlier been transferred to State Owned Enterprises for investments but had not yet been spent, and intend to borrow abroad via a syndicated loan,” It said.
The IMF said there are risks that the fiscal deficit for 2013 will be higher than currently planned, if the authorities fail to implement the spending cuts discussed with the mission.
It warned that this could lead to a substantial accumulation of arrears or reliance on central bank financing.
“In this regard, the IMF staff expressed concern about the recourse to central bank bridge loans, which are intended to assist with cash management but could if not quickly repaid constitute central bank financing of the budget.”
The IMF also advised against raising the Personal Income tax free threshold, which the Government was considering, noting that the threshold is already high at 3 times the Gross National Income per capita. The proposed tax measures together with rising mining revenue and improved non-tax revenue collection are expected to raise revenues by5 percent of GDP over the medium term.
The Washington based lender also welcomed the Pension system saying Public Service Pension Fund (PSPF)has accumulated pension arrears of an estimated 1.1 percent of GDP, and its annual funding is insufficient to prevent the accumulation of new arrears.
Staff supported the government’s intention to reform the system, including through increasing the retirement age to 65 from 55 years.
Let the wise and Mushota make things clear here…I do not understand the implications of this current prevailing economic status in light with the IMF report.
mushota is not wise. she is just a bragging cat
thanks
@Sichali . And also luapula premier, gen, haleisa halenia, jo and other pf vuvuzelas. And of course chellah and kapeya plus goebels membe will accuse the imf’s madam largade as being bitter! Truth be told. We are in maningi ubuchushi as a nation with the high accumulation of debt which is being procured as though its over ripe masuku or mangoes! Ba ABC …. slow down and you chi Gondwe ati BoZ governor ulindwii but busy chewing our 160 000KR per month. Then harrassment of investors and the pending nationalisation through INDECO (iwe george dont fool us by saying IDC). All this is making RB look like a saint and by the way all TENANTS will now pay Tax so that ZRA can know them and tax them on tuntemba earnings. More TAXES!!!
I can not see anyone in Patriotic F.ools who can understand this statement from the IMF
Hoi Polli
Do you realise that MMD was carrying out the same project you PF is doing while having US$2bn in the bank and a bumper harvest of maize… what has changed now is you doing the same thing on borrowed money, the US42bn is gone and you have no clue how to produce maize and yet you want to start Indeco… its shows the difference between RB (graduate) and Ukwa (grade 0)
@Bwalya Chiselema, I think you mean a bragging Cunnt. Don’t believe Mushota and her fake achievements. he/she is just a plant by Lusaka Times to keep bloggers commenting.
I would rather trust Mr Sata than trust IMF
Thanks
Read between the lines my dear friend and you will begin to realise that the report is talking about significant failures by the current regime to run the Zambia economy.
The free market economy that was brought in by the MMD is being eroded and a mishmash of policicies being ushered in by a government that doesn’t spell wether it is a socialist or a capitalist.
These uncertainties have discouraged investors and the risk factor of doing business in our country for foreign investors remains high currently.
This is a clever report using verbiage that can only be understood by reading between the lines but strenuously warning the Zambian public that we are headed to calamitous economical breakdown.
The government has been warned in no uncertain terms that it needs to change its stance.
@mushota i thought you said you dont trust African men are you now eating your own vomit by not trusting the whites from IMF
@Sichali,
Simply put, Zambia is in s**t!! This information from the IMF means that the rating agencies will reduce Zambia’s standings. This means that we shall be considered to be a very risky place. So interest rates will go up on all of our external debts, e.g the 750 mln euro bond. By the way, it will be difficult to borrow the planned 2.2 bln for 2014 or we can borrow but an a higher interest. Simply put, we are going back into the debt spiral that Mwanawasa/Magande has just removed us from.
Government will not have funds, so it has to cut expenditure. So forget Chalimbana University where construction works have slowed down, road construction – forget, bye election costs and other expenditre will lead to massive inflation, maening the price of mealie meal will go to 110 KR in…
Folks
This IMF report is a damning report on Zambia’s economic out look under Sata and PF,no doubt about that. The negative aspects out weigh the postive ones. Even a few postive aspects highlighted in the report are not absolute because they have a lot ifs and buts which gives warning lights to the PF to change course now and avoid their reckless spending.The report also condemns the PF ‘s monetary and fiscal policies as shambolic.
This IMF report is nothing other than a warning to the PF government to change course now or risk decimating the Zambian economy completely. If you analyse it critically you will realise that it has more of conditional statements than absolute ones. Which shows that the PF has failed to deliver on their 90 day promises.
UPND and HH camp? I am in.
how do you expect growth certainty with crop of chimbwis without a growth strategic plan in place. its try and error type of governance. its a shame indeed. we need serous leaders not these nincompoops in government
To finance the above-budget deficit, the Zambian Government has increased issuance of Treasury bills, used part of the 2012 Eurobond proceeds that had earlier been transferred to State Owned Enterprises for investments but had not yet been spent, and intend to borrow abroad via a syndicated loan,” It said……the question is has the Eurobond been spent on the intended projects?
The Washington based lender also welcomed the Pension system saying Public Service Pension Fund (PSPF)has accumulated pension arrears of an estimated 1.1 percent of GDP, and its annual funding is insufficient to prevent the accumulation of new arrears…….so the actual reason for this crap and the adjustment of the retirement age is because the gvt is broke?
@BMX. Let’s smoke out useless bloggers out of this site by such quality contribution like yours. Congratulations for raising pertinent issues. And ba UPND, dont at all times aim to sell your party and HH instead of discoursing intelligently on national matters. And for those whose only space in their little damaged brains is a bunch of insults….go away to satan your step father.
It was obvious the retirement age was increased to 65 because what do you expect when you have a leader who just wakes up and decides which project shud be implemented? *smh*
Michael’s government is broke and hence the fiscal deficit. Maybe he should not waste money he is borrowing on building stadiums in Mongu and a university with one classroom (not lecture) block in Muchinga
@Fred Mmembe. What miracle is step father going to do to construct link 8 000 plus dozens of districts plus hospitals plus hundreds of schools and a dozen universities and colleges in addition to providing running resources (teachers, lecturers, books, medicines, doctors, furniture, equipment, vehicles, repairs and maintenance, insurance, consumables, salaries, allowances, wages, fuel, oil and lubricants, stationery, leave pay, funeral grants, indeco conditions of service, provisions etc). It is IMPOSSIBLE from the current GDP tax offtake unless you can borrow helter skelter but IMF and World Bank wont allow Zambia into HIPC ever again. True.
True. Some of these projects such as creation of new districts can be avoided or deferred. He needs match whatever huge undertakings he wants to embark upon with available resources.
Oh and less unnecessary by elections
so IMF is good at prophesying at atom size economies,like that of zambia. by the way how is the economy of zambia going to grow with the same industries that export raw copper? and agriculture is in its last kicks of a dying horse. was IMF the helpers to china’s economic boom?
Still INDECO is not the answer
It pains me to see what is happening to my country.We behave as though we are still in the stone age era or medieval ages. Govt is borrowing funds to finance the building of roads in compounds!! It is a good thing in the short term but those are ‘consumption’ roads which other than beautifying the compounds,has no major economic benefit.Build more roads and feeder roads to open up far flung areas and open these places for investments.
Our govt lacks a clear roadmap on agric. The FISP is simply nothing to write home about these past 2 years.
We have a lawyer(governor) and a psychoogist (D.G.O) heading the central bank and we expect them to offer credible advice to govt without fear or favour.
I fear for the direction of this country because everyone in govt is all about with politics
The IMF must realize that our biggest deficit is not fiscal but that of ideas & vision(lack therof).Our biggest growth risk is not debt,but Sata himself.Therefore the irony in IMF’s “significant policy uncertainties” is that it all emanates from the man who is so certain of his shortsighted ways.
Plus all the PF vuvuzelas like fake analyst mhango,luapula,the scotland biatch…and more.
I foresee a lot of white elephant projects right across the country because the lenght and short of the IMF report is that we are broke. The treasury has no money to finance all these universities, stadiums, Link8000, Link400 and Pave2000, not mention the salary increments for civil servants. We have already started payments on the Euro Bond interests and in 10 years time we have to shell the whole lot $750m = K4.12tn (unrebased). Meanwhile our tax collection levels are still below par, with mining houses still getting away with their trickery and we also keep on borrowing locally through the treasury bills at great cost. wow, we are f*ck’d!
Relevant issues have been raised by the IMF that should not be brushed aside but embraced, so that our fiscal position can change. This is what we have been talking about, you don’t have to be a rocket scientist to understand that the PF have no policy statement, later on direction, that is consistent with the management of our resources. Even the IMF are lost, on what direction this country is headed, because all we hear are pronouncement without prior thought like INDECO, new stadiums, new districts, new universities etc. these unplanned undertakings have put a strain on our budget and our balance of payment are left in shambles. Let us get serious and reflect on our actions now because they will affect our future generation.
The issues that the IMF have raised and what @Bamwine baisa has raised consolidates what most people have said, that this government is a one man show. The cabinet is full of individuals who can not question the edicts of the President. All these projects boil down to money. In all this where is the Finance Minister? He is the man who needs to tell the powers that be that certain things can not go ahead due to lack of money. Unfortunately, what we have is a cabinet that will endorse anything so long as it comes from Sata whether it adds economic value or not. Look where these unplanned and unco-ordinated wishes (projects) has and is getting us to. The sad thing is that few people in PF will be concerned and want to exwrcise fisical prudence.
Its the PF’s misguided 90+ deputy ministers,new districts plus support staff,100% payrise for executive and the white elephant university projects that are sucking the titties of our treasury dry.
OK, we have heard from the objective, realistic and intelligent bloggers who understand the impact of Ukwa’s policies. Now, we would like to hear from the Sata worshipers, PF cadres and generally blind chaps. Luapula, Saulosi, Jo, Anyoko, Albert Chinyama, Chambishi, Peter, Osmore and the rest, please, the floor is open… don;t all speak at once, one at a time please….
…… and then, there was silence……….
They can’t understand the warnings from IMF,just like their master sata .but still have faith that someone from the names mentioned above will be BRAVE and MAN enough to come out and admit ,and face the reality.that will show some kind of a rare breed.
Hoping the president will take some time to analyse this IMF report.
MOFNP, BOZ, economists and accountants please help and advise the president.
Did I hear Sata has decided to come out of State House and hold a press conference on the many issues that the nation wants to hear from him? To spell out the course that this rudderless ship is headed? Nay! Its not serious enough for the PF for their leader to come out and calm the nerves and give assurance to the Zambian citizens.
The came in power with a clear goal,STEALING.
Meant,they,pf
How shall the president analyse report which he does not undertand, what miracle is he going to use ? Zambia is in deep problems under the PF government.
How shall the President analyse a report which he does not understand, what miracle is he going to use ? Zambia is in deep hardships under the PF Administration.
These IMF observations must be taken very serious. One thing is certain here, that we are not doing well as a nation. It’s not too late to reverse some pronouncements and move into the right fiscal trajectory. In situations like these firm decisions must be made divorced of politics; besides politics is just about arguments of how to do thing better based on people’s philosophies. The question that people entrusted to run our country must have at the back of their minds is, ‘how will they the remembered’ what contribution have they made to the betterment of the nation and the future generations? There are lots of learned fellas in Zambia that can offer unbiased advice; people in power must seek help and stop hiding in the name of politics and personal gain. What is the reason for…
Continued….What is the reason for personal gain when that gain will later put you in problems when your time is up? I just wonder! Or is this how we us Africans are wired in the head?
Its complicated but simple…we are on a wrong path and theres need to revisit all fiscal policies urgently!The govt is borrowing and not doing enough to address these indicators.IMF always gives financial advice.You take it or leave it.Where does INDECO fit in all this?They will borrow more and worsen the situation.Can INDECO create jobs?Yes but these will clearly be unsustained.The onus lies in empowering Zambian with business skills and then loans to create more sustainable jobs.The state must create more private Zambian owned businesses than create state owned.The State must ensure that the reserves are raised!We cant do the opposite.Why not when copper income is at its highest!A good govt. can take the advice and take Zambia to the next level.GOD BLESS ZAMBIA.
Suggest how the government will empower Zambians without being accused of this and that. You should also advise the Zambians who will be empowered not to use their little acquired wealth to become politicians but concentrate on business and become big like dangote and the like.
Zambians who are against INDECO think business is merely being suppliers and transporters. This includes complicated things like making aeroplane, cars, train, bridges and so on. If we don’t follow the path of manufacturing such things then we should forget about us being a rich country.
I salute you all Gallant bloggers.
I Watched on govt ZNBC about stalled works at Chalimbana University – reason: the govt is broke. Slowly, reality is catching up with the CNP PF govt.
Good planning is king. You can’t just wake and declare projects into existence. Only God created the world by merely speaking. Sata thinks he can just say “Let there be INDECO. And INDECO will create jobs” – then jobs are created. NO WAY.
Our economy is now in turmoil because of haste removal of subsidies, haphazard creation of districts, numerous unplanned projects meant to appease, no vision, etc.
My prayer to God is to help US ZAMBIANS re-muster our energies and come together and save our Motherland. TIME IS NOW!!!!
I don’t trust IMF chaps because they advised us to privatise every thing when they knew that not even America has every thing in private hands. My advise is that we should listen from them but not follow blindly. By the way, did they advise china also? Can those who brag that they are educated react to this article without parroting what the IMF has said.
When you build your resources and have sustainable resources, a few public interest investments would make sense. As you work hard to build wealth, it is imperative to need accountable private investments to facilitate economic growth. From the 60s to the 80s Zambia nationalised these investments leading to inept management, although we needed the socialist communist persuasion to develop a foundation of unity, that phase is no longer there.
So, these guys were elected in order to eat and feed their empty stomaches and not to provide a clear roadmap for the development of this country, the reason they just make noise everyday proclaiming about the invisible development projects they have so far undertaken since assuming power in 2011 ?
Instead of forming INDECO the state must invest in Development Bank of Zambia( DBZ).They must bring this bank to life so that it can give loans to Zambian entreprenuers to create sustainable companies and employment.These Zambian companies can operate in Zambia and abroad.This is the path to take.How do you create districts when nothing will happen there?Theres need to create an industrial base and entreprenural activities in tandem with the municipalities.Lets regenerate these cities and towns into workable municipalities and metros.The concept of a district is hard to deal with in Zambia especially that we have provinces.When we do this Zambians can do many businesses with a particular municipality base and also develop the cities/towns.GOD BLESS ZAMBIA
The biggest problem with our current leadership is lack of discipline. Our leaders are in the habit of committing the national treasury to projects that are not backed by available funds and most of the times do not even generate wealth and are not in the plan – typically you will see this when there is a by-election and there are many in the pipeline. I doubt the country has upped its revenue to support the whims of the president, the many by-elections, the blotted public service wage bill, new districts and provinces, debt servicing, duplicate ministries and actual thefts.
What is killing Zambia is this concept of a district.What is a district?Is it a City or Town?What is Lusaka District?Zambia must quickly do away with this UNIP concept and go back to Cities and Towns and run by municipalities.A district if we want it should be a group of Cities/Towns but smaller than a province.Why iam i raising this on an IMF topic?This is so because these City/Town Municipalities are the centres and bases for entreprenural and economic activities that will create sustainable jobs and create revenue for the Municipalities and the State.In so doing you will regenerate these dead Towns and Cities into life.Jobs will be created City/Town by City/Town.The ball is in our court fellow Zambians.GOD BLESS ZAMBIA.
U are spot on but most politicians resist change and most of Zambians lack exposure.ghana,Brazil,Kenya are some of the countries that have post-independence leaders.lets try new breed of leaders.
We told them you cannot do everything at the same time even if you want to impress the voters and improve their lives. For me the road projects are good for everyone and the economy. The creation of district is good vision to distribute the national cake and create business opportunities in rural areas, jobs and improve infrastructure and service delivery. I do not agree with people who say all the money should be spent in Lusaka when are we going to open up the rural areas. yes money economy is moving to rural areas. However what Govt should do is sit and have a strategic plan of these developments and priotise them and distribute them equally I do not think now we need universities in all provinces NO. Even the sixth national Development plan does not have them. THINK PF and Think long
Fellow Zambians kindly share with me your ideas and views on Zambia by sending a friendly request to me on Facebook.Send request to: Leonard Kanyangwa Kafula.In God we trust.
That is what happens when you have a president who wakes every morning pronouncing and ordering you to start projects that have not been budgeted for. They keep borrowing money from the international community yet they have no concrete policy and plan for the money. Sata is completely failing the Zambians and and dragging the country into a failed state. The next govt will have major problems to deal with after PF.
F uck me guys am yo nightmare I like it straight for long
For all their shortcomings, the IMF is worth giving an ear on this one. We need stronger economic management or we risk taking several steps backwards.
In simple terms;
– have a healthy economic a political environment
– encourage business and investment by no corruption and little red tape# in Rwanda you can set up a business in less than 30days–all legal stuff done!
-spend within your means
-direct spending at infrastructure that will help more money to be made
Sata will send a Call out to IMF head in Zambia for releasing the report to public. It is a conspiracy of the NGOs, opposition parties and their financiers to embarass the government of the republic of zambia. He shall report at Woodlands Police Station at 1030 on Monday, at the same time HH is called to report.
Planning and conscience!!!!
Ba IMF are you sure Sata can understand this???
If IMF, which is 90%interested in your money as Govt, can tell you point blank that your debt is ascending at an alarming speed, then you know that you are in real trouble. And infact, the situation is much worse than IMF puts it…
IMF & WB do not force loans or conditions on countries. We are free to reject their loans & conditions altogether. Trouble is we are simple minded people with extreme short term views. When KK borrowed from IMF/WB for his parastatals/INDECO he knew that he had to pay back only to renege/default (due to over borrowing/debt servicing burden) on the repayments in 1984, penalties started to accumulate and with nowhere else to borrow he coiled his tail & went back but the debt had swelled to 6B usd. FTJ was advised to privatise the mines as early as 1992 but because ZCCM was making money then for GRZ & BOZ was collecting ZCCM’s windfall gains directly at the Central bank FTJ did not take heed/took short term view.
Then Russia due to the collapse of USSR in 1991/end of the cold war started to privatise and offload its STOCKPILES of BASE METALS (which it kept as strategic military reserves in case of a war with the West) on the international market around 1994/5 to 2002 and all hell broke loose for the copper price the proxy of all metals. It dropped to 1500usd/ton and suddenly ZCCM then GRZ’s cash cow started to make heavy losses. 1m dollars per day it was said. FTJ had to go to IMF/WB to borrow to keep ZCCM/Zambia afloat and negotiate with buyers from a very weak position of selling an old loss making entity. Had the mines been sold earlier this would have been the investors’ problem rather than GRZ solely. We would probably have avoided the debilitating development agreements
CONTD: because we could have been negotiating from position of strength (strong copper prices). The IMF/WB young geeks are sounding the warning now. We all (including IMF/WB) cannot see what shocks that lie in the future but it is incumbent upon us/Zambians to be proactive because we will be most affected NOT the so called young inexperienced geeks at IMF/WB wont. These widening budget/fiscal deficits, excessive contraction of debt, moneyless stadia and university constructions, new districts, by elections, excessive public sector wage increases and now INDECO/parastatals (probably to be followed by re-nationalisation) are a recipe for economic ruin.
I think the advice is timely. But we should also be a little bit hesitant to embrace wholeheartedly the pontifications of institutions such as the IMF. These are the same folks (IMF) whose economic prescriptions in decades past caused so much pain in many countries around the world. Remember the “structural adjustment” programs of the 1980s?
Another thing, I really would love to know is whether the IMF or WB’s policies and recommendations have succeeded in reducing/eliminating poverty and spur economic growth anywhere. In all honest, Zambia hasn’t performed to the levels required to free its people from the shackles of poverty, joblessness, financial insecurities, and limited tax base. This is despite being under the tutorage of the IMF and its clones forever!
In fact, if we look around, Countries that have tended to “ignore” IMF or the WB recommendations seems to have done much better economically than those under the thumb of the IMF/WB. Take countries in South America today. These countries learnt a lesson in the 1980s and today keep institutions such as the IMF and WB at arm’s length. And their economies seem to have performed better than countries like Zambia. Unfortunately, it is assessments by these institutions that have so much sway on the “credit worthiness” of small economies such as ours.
Western economies are being run on massive budget deficits, in the trillions of dollars, as well. This is in order to grow their economies and create jobs for their people.
cont…
So I really don’t understand why institutions such as the IMF tend to raise such a stink when a smaller country (in terms of the economy) incurs a bit of a deficit in its budget.
YES, deficits have to always be guarded against so they don’t get out of control and in the process stunt the overall economy. But DEFICIT SDPENDING is sometimes necessary to in order to get at a specific problem for the good of LONG-TERM health of the country’s economy. Zambia, whether we like it or not, have to grow its economy quickly or we are going to have trouble soon or later with all these youths aimlessly roaming the streets. And right now the majority of our people are not in FORMAL EMPLOYMENT or BUSINESSES to positively contribute to the growth of the country’s tax base.
cont…
Neither are we growing our indigenous industries/companies to help bring on board more taxpayers. With a growing population of college graduates looking for work, govt can’t afford to be the only major employer in the country. The more reason why ideas such as INDECO (good or bad) need to be floated and debated, and see if there is something tangible in the propose to spark genuine economic growth. If we don’t take “radical” decisions to truly revolutionize the way we do things in Zambia, we will never graduate from the phenomenon of “chasing your own tail”, hence going in circles economically. As a result our economy will forever remain a ‘guinea pig’ for multinationals like the IMF.
By the way, how far has the Mongu stadium gone?
Borrowing in itself is not a problem.The problem is when you borrow to buy food,clothes,cars,pay salaries etc.When you borrow as a person,business or state you need to borrow for capital projects and machinery and setting up infrastructure.You need funding for Mega projects of which we can borrow.SATA needs to reorganise his adminstration to tackle these issues head on.The state must facilitate and not be the operater of business.Its easier for the State to stimulate,give the framework,advice,monitor and create funding.Business should be in the hands of Zambians.The state can have shares in these local firms and abroad.Iam watching the PF govt shoot itself in the foot.GOD BLESS ZAMBIA.
@PF bootlicker.You cant just build a stadium in Mongu.Mongu has never had a football club in the premier league in 50 years!These stadia are better built by the football clubs in conjunction with munincipalities,banks and the state.If the state can create the right environment it would mean all the top teams owning good stadia for football.The Cities/Towns can plan for Multipurpose stadia for athletics and other sports codes etc.You cant just put up a stadium in Mongu,Choma,Kasama or Mansa.They will be clearly unutilised or underutilised and thus wasting the tax payers money.GOD BLESS ZAMBIA.
These IMF people are very polite. Look at how they have massaged the PF failures into some unnecessary economic jargon. But the point is all too clear for all to see.
Often times on the fence and looking being taught what we ought to be doing and have done in the last decades creating capacity amongst our own instead of always waiting to hear from IMF just as qualified as our people that in its self is our making Progress is being made especially as below
“This will require mobilizing additional domestic revenue, realigning spending priorities, and creating fiscal space for infrastructure investment, while also maintaining a business environment that encourages job creation. At the same time, the targeted transformation of the Zambian economy requires fundamental administrative and institutional reforms to promote credible policy implementation, higher efficiency of public infrastructure investment, and…
The opposition pundits had acquired the reputation of being bitter, envious and dud each time they pointed out deficiencies in PF govt management of the economic system. The opposition is now being vindicated by IMF and OEDC block that there are failures in Satanomics impacting on the GDP of Zambia.
PF government will have a hard time defending their desimal, pathetic economic record compared with growth of the last 10 years under MMD with surplus K2bn. in the bank. PF know they will get a ‘kicking’ on this from opposition but PF dont even care as usual taking Zambians to be docile. The next commentary will come from Chella or Fyabukaya comedian. Does PF have any clue what they have done to Zambians in this mess?
When people who’s business is to make profits by giving loans go against themselves to advise you on wise management instead of taking advantage of the situation by lending you more then claiming your natural resources when you default, it is a sign that you are in really bad shape.
Though it may be true that the economic outlook for the country may be rough considering the massive capital projects the country has been committed to and the decisions to expand government through creation of districts and increase in civil servants salaries among others, i don’t agree with the IMF’s advice 100%. Don’t forget that the economic model that the same IMF once recommended (SAP) failed in many economies and they have not been humble enough to apologize.
Remember also that this is a bank whose objective is to make profit. Their interest is to lend to poverty stricken nations and can therefore not be our savior. Their interest is not to see us better but worse off, otherwise they don’t benefit. We therefore need to trade cautiously when dealing with the Breton wood…
Has PF run out of ideas or never had any to start with? One would have thought that these guys who claimed the ability to paddle a canoe on dry ground without the possibility of running it aground, would have little or no trouble managing an economy as small as Zambia’s! Surprisingly, they look clueless as of now! They seem headed in every direction except the right one. What has gone wrong?
Note:It warned that the Zambian economy would be highly vulnerable to negative shocks, with low international reserves and rapidly rising public debt if the needed fiscal adjustment is delayed.
Responding to the Note:
PF has come to debt Zambians for many years which shall take decades on how to rub them. I wonder people who do not see the problems which we are facing right now, despite other fake plans put in by the government, but look at poor farming, transport hikes, fuel hikes! This is an indication retrogressive government.
This is the reason why the Minister of Finance wants to resign because he has seen bad signals.
@ Theoretician
The IMF is a parasitic institution just like all the foreign investors and have no interests in the ordinary people as evidenced by the following quote:
The IMF also advised against raising the Personal Income tax free threshold, which the Government was considering, noting that the threshold is already high at 3 times the Gross National Income per capita.
The economy now is in a better shape to withstand budgetary pressures than in KK’s time. Roughly, three quarters of one percent of the budget has been financed by tax receipts over the previous 10 years and which has been roughly between 19 % and to 20 % of GDP excluding non tax revenues.What were the tax revenues in the budgets as % of GDP in the 1980s?This is the key difference.