July 2017: President Edgar Lungu says with much bravado that if the IMF thinks he has gone astray by invoking Article 31 of the Constitution to “restore order” in the country, then they “can go”, he had no problems letting go of negotiations for aid with the IMF in order to safeguard the peace of the country if the Bretton Woods institution was uncomfortable with the measures his government had taken. This was the time that he declared a Threatened State of Emergency after someone burnt down City Market.
August 2018: Drama with IMF. Government asks the IMF to withdraw the Resident Representative, Alfredo Baldini, because government doesn’t like his position on Zambia.
November 2018: President Lungu tells a conference organised by the World Bank that “Zambia will remain steadfast in ensuring that its debt remains sustainable and does not compromise the country’s sovereignty. Zambia is committed to improving the transparency of its debt management and will ensure that debt levels remain sustainable. This country is implementing bold measures to ensure that we achieve debt and fiscal sustainability.”
President Lungu adds: “My government is ready to heed advice from donors and will ensure that it takes out only concessional and low-interest loans.”
July 2019: President Lungu during talks with Turkish President Tayyip Erdogan:
“A Turkish company has expressed interest in refinancing Zambia’s $750 million Eurobond due in 2022. The firm will send representatives to Zambia in September to discuss details of refinancing. We urge you to take keen interest in this matter and encourage the company to pursue this deal without hesitation,” Lungu told Erdogan.
Today is May, 2020… not much not much!
Then enter the three Finance musketeers: Felix Mutati, Hon. Margaret Mwanakatwe and Hon. Dr. Bwalya Ng’andu.
Felix Mutati – February 2017:
At an Economic Association of Zambia discussion forum, Mr Mutati says the Zambian government is proceeding with a homegrown economic recovery programme and that everyone, including the IMF, will have to fit into it. Mutati goes on to explain that the Zambian government has already kick-started the implementation of a homegrown economic recovery programme called Zambia Plus, adding that the IMF will have to fit into that. “This is a home grown economic recovery programme and the rest of you, including the IMF, will have to fit into our programme. We will tell them (IMF) ‘we don’t need you’ if they don’t fit in.” Mutati stressed that government is also committed to fiscal discipline and realigning its expenditure to the key priorities.
November 2018: Mutati is fired as Minister of Finance. (Fast forward to April 2020, Mutati is among the ex-ministers pushing for an IMF programme as the only way out)
Hon. Margaret Mwanakatwe:
February 2019: Mwanakatwe says she is targeting to secure an IMF economic bailout package by the end of the year. “I would want to see a programme with the IMF; I think it would be good for us. I would love to see something in place by the end of the year. That is why we put in place various measures to ensure that we have a way forward that is sustainable debt-wise.”
April 2019: Margaret Mwanakatwe escalates her IMF ambition and describes the spring meetings of the IMF and the World Bank in Washington DC, as a success. She says the meetings with the IMF, the World Bank, were “very insightful and further strengthened the country’s cooperation with both multilateral and bilateral partners.”
May 2019: Margaret announces that Cabinet has approved an indefinite stop to contraction of new non-concessional loans owing to the current high levels of debt service in the three years compared to 2018. She says: “this is not business as usual” and that “tough times call for tough measures”. She directs the cancellation of some signed but undisbursed loans.
She announces: “Cabinet has decided as follows: 1) Reaffirmed to indefinitely postpone the contraction of all new non-concessional loans in the intervening period; 2) To cancel some signed but undisbursed loans; 3) Increase the control and management of disbursements on foreign financed loans; and, 4) Reduce the deficit to induce lending to the private sector. Minister of Finance directed to present to Cabinet a list of loans to be considered for cancellation, postponement and slowdown for consideration.
July 2019: Margaret is fired as Minister of Finance, leaving absolutely no progress on her IMF dream.
Hon. Dr. Bwalya Ng’andu:
October 2019: Speaking during an investor’s forum in Washington DC, U.S.A, Dr Ng’andu explains that the upward movement of external debt figures over the last fiscal quarters mainly reflected new expenses from the already contracted and existing loans. Dr Ng’andu assures the investors that government is in the process of developing a Eurobond refinancing strategy that will be published once Cabinet approves.
February 2020: On engagement with the IMF and other Cooperating Partners, Dr Ng’andu says: “The last formal meetings between the Government and the International Monetary Fund were held in Lusaka from 13th to 19th November, 2019. The IMF Mission was in the country at the invitation of Government to discuss recent economic developments and the economic outlook for 2020 and the medium term. Based on the outcome of the mission in November and the debt and fiscal measures I just alluded to, Government will work with the IMF to define a working relationship with them and determine the nature of its support to the Government.”
Dr Ng’andu adds: “We have written and advised the Fund of the measures that Government is undertaking to address debt sustainability. The next engagement with the Fund will be held from 18th March to 1st April, 2020. As Government, we will ensure that we implement the debt management measures as directed by Cabinet. Through implementation of the measures that I have outlined, we shall return the country to debt sustainability and get the economy on the path to recovery. The measures and policies are sound and should have the support of the Zambian people. What is required is effective and sustained implementation. We are therefore all called to action.”
April 2020: Malanji writes Chinese Ambassador to Zambia, asking him to expedite the disbursement of loans for the construction of the FTJ Chiluba university in Mansa and Kasama. Asked to explain this Cabinet decision, Dr Ng’andu says he is not aware of the letter, but his office approved, signed the loan.
In the end, Zambia and its government authorities are here and there, but heading nowhere.
And here we are today, not much, not much!