By BUUMBA CHIMBULU
THERE are no secrets or hidden conditionalities that the International Monetary Fund (IMF) has demanded and only agreed measures will be carried out before and during programme implementation, Government has said.
Government and the IMF have focused on the need for the whole public sector to curtail inefficient public expenditure, including in State-Owned Enterprises (SOE’s) and agencies.
The Ministry of Finance spokesperson explained that rationalising where and how the government spent public resources was an important part of the economic transformational agenda.
In this regard, the removal of subsidies will facilitate an important shift in spending from poorly targeted subsidies towards greater investment in health, education, and the delivery of more social benefits such as:
1) Enhanced allocations for the Constituency Development Fund – meaning that more schools, desks, clinics, water bore holes, etc. will be available for rural communities;
2) Paying off all outstanding pension arrears – some beneficiaries have been waiting for several years for their retiring benefits; and,
3) Hiring of 30,000 teachers, hiring of 11, 000 health personnel, introduction of a bursary scheme and elimination of tuition fees for secondary school education, etc.
Subsidy removal is a measure that will enable realignment of public expenditure from poorly targeted choices such as fuel, to enhanced investments in health, education, and social protection, as outlined above.
The outcomes favour society’s less privileged, the Ministry of Finance has said.
Prior actions, and structural benchmarks are agreed upon with the Fund on policies and structural measures to be undertaken before and during programme implementation, the Ministry of Finance has said.
It has therefore indicated that Zambians will have to work hard at an individual level as well as collectively for successful implementation of the IMF Programme.
Zambia and the IMF last December, reached a Staff-Level Agreement (SLA) for a three-year programme under the Extended Credit Facility (ECF) for US$1.4 billion.
Government has also clarified that discussions with the IMF have not centred on identifying or earmarking any public entity for privatisation.
The Government and the Fund, instead have agreed on the need for the public sector to curtail inefficient expenditure, including among State Owned Enterprises (SOE’s).
The Government is therefore undertaking a review of all public entities to rationalise expenditure to those entities, and where necessary, implement reforms for more efficient and cost-effective service delivery.
According to the ministry, the agreement would underpin Government’s engagement with its creditors to restructure its debt. “The IMF now allows its member countries the primary responsibility for selecting, designing, and implementing policies to make the IMF-Supported Programme successful and these are agreed upon with the Fund in a Memorandum of Financial and Economic Policies.
“This has been done with a view to align the programme’s objectives and policies with the country’s economic situation and needs. Initially, the document was drafted by the IMF and the recipient country would only append the signature. This is no longer the case,” the ministry stated.
The ministry stated that qualitative and quantitative performance criteria were used to monitor programme implementation during programme reviews undertaken by the Fund in timely intervals.
