Thu, 21 Sep 2017 12:27:16 +0000
By Martin Akende
ZAMBIA does not need the International Monetary Fund (IMF) package because the country has survived the 1st half of 2017 the first year of the Zambia Plus 2017-2019 Economic Recovery Plan with declining donor aid, says Zambia Institute for Policy Analysis Senior Research Fellow Caesar Cheelo.
Mr. Cheelo said Zambia needed a deliberate economic programme “recovery”, vs. “stability” to re-establish robust growth in the medium term.
He observed that Zambia had survived the first half of 2017 without the bailout package, hence signalling that the economy could recover without the IMF bailout package.
Mr. Cheelo noted the IMF will not make any significant change to the internal challenges the country was facing but will only act as an accountability mechanism for automatic checks and balances on government.
He was speaking at the Center for Trade Policy and Development Discussion on whether Zambia Needs IMF Bailout Package or Not.
He said what government needed to do was to deal with wasteful expenditure and economically restructure of the economy.
“The reason why Zambia wants the IMF is to offer technical support on macroeconomic policy design and implementation e.g., setting benchmarks/targets,” said Mr. Cheelo.
Meanwhile Mr. Cheelo questioned why the IMF was not quick to discourage electricity subsidy to mining companies despite discouraging fuel, electricity & agriculture subsidies.
He said for example the IMF was quick to discourage windfall taxes, recommend settlement of VAT refund arrears to mines, discourage import duties on copper concentrate; discourage fuel, electricity and agriculture subsidies, etc.
He further pointed out that the IMF’s main interest was a stable fiscal regime to safeguard global financial system.
However Mr. Cheelo said Zambia wanted the package for activities such as balance of payment and to be on an interest-free loan in comparison (domestic and external) borrowing costs that were high.
