Cabinet has given a go ahead for the country to conclude negotiations for an IMF economic bailout facility that is expected to be about US$ 1.3 billion. The fund is usually spread over a period of 3 years, with annual support of about $400 million.
Fr Chiti has urged government to increase social protection expenditure to cushion the impact on poor families following the removal of subsidies.
“The economic cost of not seeking support from the IMF would be severe for Zambian households and the economy more generally. Our major concern however, on the Economic Stabilisation and Growth Programme for Zambia is that, most of the measures proposed in the four pillars of the programme are not new,” Fr Chiti said.
“So overall, the IMF bailout is welcome but the conditionality of reducing expenditure/ removal of subsidies must take into account needs of the poor. Already we have seen ZESCO increasing lifeline units from 100 to 300 units. Meaning poor people will continue paying old rates on units less than 300.”
Meanwhile, Finance Minister Felix Mutati, Minister of National Planning Lucky Mulusa and Bank of Zambia Governor Dr Denny Kalyalya are on their way to Washington DC for the IMF/World Bank Spring Meetings and to facilitate the possible conclusion and signing of the aide package for Zambia.