IT is surprising how the new dawn administration appears to go over the moon when it contracts loans from the International Monetary Fund and its affiliate the World Bank.
It says it is a mark of approval for the government’s economic programme that it is on the right trajectory.
President Hakainde Hichilema thinks this “endorsement” marks the country’s entry into the “Champions League. His Finance and National Planning Minister Musokotwane Situmbeko agrees with him.
But they do not explain the sinister motives behind such support as Yusuf Dodia, the chairperson of the Private Sector Development Association has.
It is important that Zambians pay attention to his observations on the nature of the so-called support.
According to Mr Dodia, most Western multilateral organisations seem to want to help countries like Zambia with extending debt for selfish reasons under the pretext of good governance when the real intention is to exploit the economy of the vast resources.
Mr Dodia, in reacting to the disbursement of the US$184 million by the IMF for Zambia, argued that this was not the best solution to revamp the economy.
He argued that such support persuaded Government to postpone home-grown solutions for the economy, saying “they make us not to do the things we need to do to turn our economy round and therefore, I have mixed feelings about the support coming from the IMF.”
The approval came at a time when Zambia needs financing to sustain the progressive interventions tailored by Government to respond to the 2023/2024 drought which severely impacted hydro-dependent electricity generation and agriculture production, among others.
“One can argue that the IMF is giving Zambia support and we ought to be grateful, that is one side to it. The other side is someone is feeding you poison which is going to kill you slowly and you are supposed to be grateful for receiving that poison and that is the view I tend to take,” he said.
We agree.
As Mr Dodia explains, Zambia’s solutions to its problems did not lie in getting extended credit facilities from the IMF which added to its foreign debt, adding that “the numbers that we get are not big enough to do any meaningful economic development in the country.”
What the IMF and other bilateral donors should be doing is advising the nation how to seal the loopholes through which resources are being stolen from the country.
The mining sector is supposed to be the country’s biggest foreign exchange earner but its benefits are not trickling down to the average Zambian.
Mr Dodia aptly explained this, noting that “the mining sector in Zambia is exporting close to US$50 million a day and that money is sitting in European banks every day and IMF does not advise us to say you stop this practice.
“Make sure the export earnings come to Zambia so that the Zambian economy is recapitalised, it stimulates economic development in Zambia, brings down inflations, strengthens the Kwacha and basically goes a long way domesticating the economy by building Zambian-owned businesses which become the tax payers for tomorrow.”
But it is the mining companies that dictate the terms under which they operate in the country with support from the IMF and others.
It is a vicious circle and things must change.
