IMF conditions stiff for Zambia – BoZ

By BUUMBA CHIMBULU
ZAMBIA has not been benefiting from financial advantages of being a member of the International Monetary Fund (IMF) because of the stiff conditions which are attached to the assistance.
Over the years, Zambia’s growth has been shrinking and is not benefiting from financial advantages provided by the IMF because of stiff conditions.
Bank of Zambia (BoZ) Governor, Denney Kalyalya, said this at the Monetary Policy Committee briefing in Lusaka on Wednesday.
Dr Kalyalya said all IMF facilities provided support to a country which had sustainable debt situation or at least must have a creditable plan to guarantee sustainable levels.
“This is what the Minister of Finance has been saying that we need to work on getting debt to sustainable levels. That is a key requirement for us to be able to work and get the balance of payment support,” Dr Kalyalya said.
He said it was unfortunate that the international financial architectures such as the World Bank and the African Development Bank (AfDB) all looked up to the assessment of the IMF in giving the balance of payment support.
For example, Dr Kalyalya said, if the IMF did not endorse the macroeconomic framework, it would not provide the balance of payment support, equally AfDB would not.
“These are the rules that we set up which are very unfair and you see one would have thought that when a country is in problems that is when you get assistance.
“Unfortunately, that is not how international financial architectures work, you are expected to be strong enough so that the support you are being given can be put to a purpose for which you have got it for,” Dr Kalyalya said.
Dr Kalyalya feared that if the debt was unsustainable, the funds could be used for other activities other than the one applied for.
Meanwhile, Dr Kalyalya stressed that it was about time Zambia realised its place on the global setting and play accordingly.
He said Zambia was not fully taking advantage of its position on the IMF considering that it held the third spot in the Southern African region.
“Zambia as a member of the IMF, we have a quota there which is close to 490 million SDRs and our quota is quite big actually for our size, we are not flexing our muscle fully.
“When we joined the IMF in 1965, our economy was relatively strong so in the Southern African region in terms of size Zambia is third only to South Africa and Angola,” Dr Kalyalya said.