IMF package

Finance Minister Alexander Chikwanda
Finance Minister Alexander Chikwanda

IT had to take the entire International Monetary Fund to clarify that the Zambian Government had not turned down a

US$ 1billion aid programme offered during a recent mission visit to Zambia.
Persistent reports have suggested that President Lungu refused to sign up to the deal as he feared the austerity measures would make the PF very unpopular heading into an election year.
Speaking in Washington the IMF Director of Communications Gerry Rice has confirmed that the Zambian Government did not and has not made any request for a programme from the fund.
It is a fact that, at the invitation of the Government, an IMF staff team visited Zambia last month to review recent economic developments and agreed to remain closely engaged after Government undertook to conduct internal consultations and take necessary measures.
There is therefore no basis for the report that the IMF proposed a billion dollar facility which the President turned down allegedly because the Government could not commit to drastic reductions in expenditure, particularly on road construction, general infrastructure spending, increase in electricity tariffs, elimination in fuel subsidy and ban on non-essential foreign travel.
To make the story sound even more credible, the Minister of Finance Mr Chikwanda was reportedly left frustrated and contemplated resigning which forced President Lungu to u-turn and announce a raft of austerity measures at his first news conference and that his administration was still keeping the door open for the IMF to return in March next year.
This story comes soon after a previous story that President Lungu had intimated his intention to drop Mr Chikwanda had it not been for Paramount Chief Chitimukulu, who protested the intention.
Instead of appreciating the need for a unity of purpose to overcome the economic challenges the country is facing, there appears to be a determined and aggressive campaign to undermine the many efforts being made to stabilise the economy.
Little mention is made of the statement by Secretary to the Treasury Fredson Yamba, made soon after the IMF team visited Zambia where he acknowledged that the Zambian Government appreciated the need to contain fiscal pressures, particularly those related to the costs of electricity imports and the attainment of cost reflective fuel pricing, following the steep deprecation of the Kwacha.
Government, he said, planned to ensure the re-alignment of expenditures to counter some of the pressures, limit its borrowing in the domestic market and regularly review budget implementation with the objective of taking other corrective policy actions.
The rumours that have been doing the rounds since the International Monetary Fund (IMF) team visited Zambia last month to review recent economic developments are therefore totally misconceived with the intention of showing policy inertia on the part of Government.
This is the reason why we welcome the IMF statement.