The International Monetary Fund has revealed that it shall not disclose details of the Staff Level Agreement it entered into with the Zambian government until it is tabled before the Executive Board.
IMF Mission Chief to Zambia Allison Holland who is based at the IMF Headquarters in Washington D.C said it is not the policy of the Fund to reveal details of the Agreement ahead of a Board discussion.
Ms. Holland stated that the IMF will however reveal details of the Staff Level Agreement once it is tabled and reviewed by the IMF Executive Board.
Ms. Holland said this in a letter dated February 23rd, 2022 addressed to Kabushi Member of Parliament Bowman Lusambo in response to a letter he wrote to the IMF Country Office demanding the full disclosure of the deal before it is signed by the Board.
On January 6th, 2022, Mr. Lusambo had written to IMF Country Representative Ms. Preya Sharma demanding that the Fund makes full disclosure of the contents of the Staff Level Agreement it entered into with the Zambian government.
“On December 6th, 2021, the Zambian government and the International Monetary Fund announced that they had reached a Staff Level Agreement on a new arrangement under the Extended Credit Facility (ECF) for 2022-2025 to help restore macroeconomic stability and provide the foundation for an inclusive economic recovery.
It is exactly a month since this agreement was reached and the people of Zambia do not know of its contents. On the other hand, the Zambian authorities who have refused to disclose the full contents of the agreement have gone ahead to institute wide-ranging sector reforms with constant reference to the agreement,” Mr. Lusambo wrote.
“We believe that it is only fair that you, the instigators of this agreement release the full contents of this agreement. Globally, there is a call for greater transparency in the manner in which multilateral and bilateral loans are contracted. Your Managing Director Ms. Kristalina Georgieva is on record demanding China to disclose the terms of the loans it has been disbursing to countries such as Zambia. It, therefore, follows that you should practice what you preach by causing to publish the Staff Level Agreement and stop the hypocrisy. We demand that this is done before the IMF Board convenes to approve the agreement.”
Mr. Lusambo added, “The Fund is reminded that Zambians have rejected any conditions to be imposed as part of an economic program. The memories of the 1990s Structural Adjustment Programme which crippled our economy are still fresh and Zambia does not have any grave spaces left,” he wrote.
And in a Facebook post accompanying the Letter, Mr. Lusambo said he decided to write to the IMF in his quest for increased transparency in public engagements.
“The specific demand is that the IMF Board should not proceed to approve the agreement until full disclosure is obtained,” he said.
“On December 6th 2021, the Zambian government and the International Monetary Fund announced that they had reached a staff-level agreement on a new arrangement under the Extended Credit Facility (ECF) for 2022-2025 to help restore macroeconomic stability and provide the foundation for an inclusive economic recovery. The Extended Credit Facility is in the amount of about $1.4 billion. The IMF says the economic program aims to restore macroeconomic stability and foster higher, more resilient, and inclusive growth,” he said.
“Away from all the flowery language and gobbledygook, it is a matter of concern that the Zambian government has not taken time to fully engage the Zambian people on the true contents of this Staff Level Agreement that it has entered into with the Fund. Unlike in past economic programs with the Fund, authorities through the Ministers of Finance were asked to submit a Letter of Intent to Washington D.C stating the country’s level of commitments. These Letters were published on the IMF website for all to see and scrutinize. Now the Fund in its own version of reforms does not demand any Letters of Intents anymore. The Fund through the Country Office and the Mission Teams merely prescribes a set of conditions for countries to sign in documents called Staff Level Agreements. Once they are signed, then the Management and the Board in Washington merely performs a formality by officially approving these Staff Level Agreements.”
“With everything that has been said and the supersonic speed at which the New Dawn administration is moving to restructure state institutions, it has become imperative that we call on the IMF to release the Staff Level Agreement it entered into with the Zambian government in December. Attempts to get the government to release the full contents of this agreement have failed. In Parliament, I queried Finance Minister Hon. Situmbeko Musokotwane to lay on the floor of Parliament the Staff Level Agreement and he failed,” he stated.
Mr. Lusambo’s added, “It now remains our solemn duty to push the IMF Country Office in Lusaka to immediately cause to publish the Staff Level Agreement entered into with the Zambian government. This should be done before the IMF Board convenes to approve the agreement. This demand is made in the interest of transparency and the need for full disclosure when engaging sovereign nations on matters that will impact directly on the lives of its people.”
“There is a global call for transparency around loan contraction and the Fund itself at the highest level has been calling on China to disclose the terms of its loan agreements with countries like Zambia as part of debt profiling. The hypocrisy with which the IMF approaches engagements with countries like Zambia should come to an end.”
“The IMF should be reminded that Zambians never voted for them in the August elections. They, therefore, do not carry any mandate to prescribe the economic future for Zambians over the next five years. The UPND Manifesto which was the basis of the social contract with the Zambian people did not promise harsh conditions for getting an IMF program and President Hichilema never said he will relinquish our economic sovereignty to the boys and girls from Washington. He told Zambians that he was a good economic manager who will fix the economy.”
He added, “President Hichilema told us he will use his economic management skills to engage all our creditors and secure debt restructuring in the first 30 days of his tenure. He never said he would run to Washington to help him talk to our creditors, moreover, we still have Lazard Freres, the Consultant he criticized when in opposition still offering debt advisory services.”
“In any case, Zambians have rejected any form of IMF conditions. The memories of the 90s Structural Adjustment Programmes are still fresh. We lost many of our people because Washington came and told us to sell off our companies indiscriminately without a fallback plan. It was during this period that Zambia’s entire industrial base which was built by President Kaunda was destroyed and has never recovered. We buried so many of our people and we are sorry this time around, our graves are full.”
He said, “Today, we are more enlightened and we will not sit and watch the UPND take us down privatization 2.0. The US$1.4 billion we are receiving from the Fund in exchange for our sovereignty is such a small amount that any pragmatic leadership can easily mop up from our domestic economy through a progressive tax regime for the mines and sealing off all channels for Illicit Financial Flows. Since the New Dawn government has decided to work with the IMF in darkness, we ask the Fund to practice what it preaches and what it demands from China; transparency, transparency, transparency.”
