Chisanga asks IMF to take interest in PF’s attacks on critical media

Chisanga asks IMF to take interest in PF’s attacks on critical media

By Mbita Bwali

THE success of any economic recovery programme will crucially depend on a free press, says Pamela Chisanga.

And finance minister Felix Mutati last Friday left the packed audience at the EAZ public discussion without a clear roadmap on Zambia’s engagement with the IMF on an economic recovery programme

Meanwhile, IMF resident representative Dr Alfredo Baldini urged the government not be afraid of engaging the Fund over an economic recovery programme.

During an Economics Association of Zambia public discussion on Zambia’s engagement of the International Monetary Fund programme for an economic recovery programme, Chisanga, a seasoned civil rights campaigner, said the country’s economic woes could only be resolved if the bad governance record was reversed.

“We are in a coma but if we must implement these measures [economic recovery measures], we must implement them gradually. We should be able to phase them over a long period of time,” Chisanga, who currently is Water Aid Zambia country representative, said.

She said the country could not divorce current economic woes from waning governance credentials shown by the regime’s insatiate attacks on independent media.

“For some of these things to be able to happen is that we must not run away from the issue or the question of good governance. We are in the current crisis because of not having good governance, particularly having a government that is responsive to the demands of citizens and even indeed accountable to its citizens,” Chisanga said.

“For these measures to work, the IMF must also be interested in supporting reforms in areas around governance so that we can have an accountable government that will be able to deliver on some of these measures. One of the things we have seen over the last few years is challenges around freedom of the media. You may ask; what does this have to do with the IMF? For us as citizens to stay informed, to be engaged, to have this interaction we are having go beyond this room, we need an effective media platform and so having media or the press that is free is critical for the success of this programme and this is one of the things that we would like to see addressed going forward as part of the programme.”

Chisanga wondered why the government was becoming less inclusive in its governance style.

She regretted that civil society organizations needed to “bang doors” to be part of government’s key economic programmes.

“Yet this should be a natural process where a government should see it as its responsibility to ensure that whatever measures are being implemented in the country have the understanding of its citizens,” said Chisanga. “So, one of the things we would like to ask for is space and indeed as civil society organisations and any other actors that are interested in seeing that Zambia in whatever we do, particularly, with the IMF, we do it well and we do it in the interest of the citizens of this country.”

And Mutati said the government planned to contract US $1 billion aid programme from IMF but backtracked on his earlier commitments last year on the timeframe.

Last year, Mutati said Cabinet and other economic stakeholders would be consulted and any final agreement, if any, would be expected in the first quarter of 2017.

“When President [Edgar] Lungu addressed Parliament during the opening session, one of the key statements he said was that collective wisdom will anchor our decision-making process. And this [Friday] evening, we are witnesses to collective wisdom…there is a US $1 billion waiting to be taken by Zambia and from what I hear from all of you, under the premise of collective wisdom, should I not take that US $1 billion? Is the answer yes or no? This is collective wisdom, isn’t it? So, I am going to take the US $1 billion because that’s what collective wisdom is all about so, we help each other to manage the process,” said Mutati.

“At the end of the day, you are the ones who decide and you have decided that we collect. You take what you tell us extremely important and I am going to take these messages to President Lungu that they are saying to you President that ‘go, go, go for it’.”
Earlier, Dr Baldini said there was a lot for Zambia to benefit from an IMF programme which the Bretton Wood institution would not impose on the government.

“Don’t fear the IMF programme,” Dr Baldini said.

He said the IMF had gone through a lot of structural reforms which were more flexible and responsive to local initiatives of economic recovery unlike in the past when the Fund dictated to embattled countries key policy decisions which most often left recipients worse off.

“Now the emphasis is on the ownership of the programme; it’s your economic recovery programme; it’s your country so, we are just here to help, to provide the support; to provide assistance and provide financing assurances that would create a sort of a buffer; a safety belt on your way to recovery,” Baldini said.

He explained that the IMF was currently lending concessional loans until next year, which meant that credit disbursed to low income countries like Zambia were zero-rated until 2018 when the board could review that position.

“The lending process by the IMF is a function of the country’s quota; the Balance of Payment financing for the country to be able to pay for its imports or servicing external debts will also affect the level of finance and the capacity to pay and the strength of the policies. The stronger the commitment; the more credibility you have, the more the IMF would give to you,” Dr Baldini said.

“Now the IMF is cognizant that if you don’t [consult affected countries], it [programme] sort of backfires. It’s a long relationship [between Zambia and IMF]; we are kind of stuck with each other.”
He said Zambia had currently been hit by a credit crunch owing to government’s overreliance on Bank of Zambia to contain deteriorating economic conditions.

“Your fiscal imbalances create also tight financing conditions; markets are not willing to borrow or to lend you money at a very high risk premium. That left the monetary policy to bear the brunt of the adjustments,” said Dr Dr Baldini.

“If you saw, the Central Bank, in order to bring back the exchange rate to sustainable levels and to keep the capital inside and to fight inflation, had to engineer a very tight response. That of course was very successful but it is leaving the country with a credit crunch particularly on the private sector. The financial sector, because of the high interest rates, has triggered non-performing loans; loans that cannot be repaid or repaid with a lot of difficulties.”

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