By BUUMBA CHIMBULU
CURRENT economic and social hardships will be prolonged for generations to come if Zambia does not clinch a deal with the International Monetary Fund (IMF) for a programme.
Zambia at this point must ensure it clinches a deal with the IMF without fail as it is needed to avoid prolonged hardships, according to the Bank of Zambia (BoZ) Governor, Denny Kalyalya.
“At the point we are, it is a must that we must get this [IMF deal] otherwise the hardships will prolong for generation. Already there is suffering that we have endured. We can have some pain but we have an opportunity, why should we not get this?
“Many of the countries that we look up to that they have succeeded have IMF programmes, World Bank programmes. Zambia is a bonafide member of the IMF,” Dr Kalyalya said this week when announcing the monetary policy rate which has been adjusted upwards.
Dr Kalyalaya stressed that securing a funded IMF programme was also key to minimise the adverse effects of domestic financing on the credit market and management of sustainable external debt levels. He explained that the IMF money was just a small component as there was more that came along with having an IMF programme.
“That is why a lot of effort is being put now to seal that deal. The benefits are real and not imaginary.”
Dr Kalyalya expressed confidence that the IMF programme was an avenue which Government had seen could deliver.
He recalled that Zambia started talking about the IMF programme as far back as 2015 when the fund sent a team to come and assess what was happening in the country.
At that time, he explained, the team had warned that things would get worse but mentioned that the country became resilient.
Dr Kalyalya said Zambia had therefore since 2016 been negotiating an IMF programme but unable to close it until now.
“So this has lingered, each passing year, those things that we needed to do at that time are eating into us until we got to a point where Covid-19 came in and then our resources were not enough to meet our requirements
“So how do we do that? we have to make these adjustments and having the IMF on board opens gateways to other support that we have not been getting,” he stated.