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Govt lobbies IMF for resident rep to speed up bailout talksBy Natasha Sakala on 8 Oct 2019
The Ministry of Finance has said it is currently in talks with the International Monetary Fund (IMF) on the possibility of having a resident representative in the country soon to ease bailout talks with the Fund.
And the ministry says government is looking forward to the completion of the constitution amendment process so that the loans and guarantees Act can be enacted.
Meanwhile, the UN has welcomed efforts being made to increase social sector spending despite fiscal constraints the country is currently facing.
Making a presentation at the Zambia Institute for Policy Analysis and Research (ZIPAR) budget analysis under the theme ‘Nurturing the Seeds of Growth’, Ministry of Finance acting permanent secretary Ireen Habasimbi Habasimbi said it was critical for Zambia to have an IMF resident representative to aid the talks that could put Zambia on a sustainable macroeconomic path.
“So looking forward, we are working as a country to continue engaging with the IMF but first we have to look at which sustainable path we are going to follow otherwise we have not thrown away the idea of engaging with the IMF. In fact, immediately…two days into the office, the minister wrote to the IMF to get an update in terms of what is happening to having a resident representative into the country and we have been talking with the IMF to see how best we are going to do this because it’s critical that we have a resident representative and he is going to be a middle person for us to see how we are going to build on a sustainable macroeconomic path; that we will be able to engage with the IMF as we are going for the IMF, World Bank meeting. That’s one of the issues that the minister will be able to chat with our colleagues in the IMF,” Habasimbi noted.
“I think that as a country, IMF is critical from three perspectives. First, it provides signals to the investors, it leverages us to have access to other resources in terms of financing and also it gives us an opportunity for us to have a cross-check in what government is implementing. So those are the critical factors that we really need IMF [for]. Moving forward, yes IMF, Zambia is a member of the IMF and it will continue being a member of the IMF but in terms of coming to a programme, I think it’s a decision that we have to agree upon in terms finding a sustainable macroeconomic path which will be able to agree as a government. Of course, we will start as a government to develop that sustainable path and also as well with the IMF, that’s the path which is sustainable. For your own information, the IMF now is not the IMF then, the IMF first waits on the country to decide on which path they should follow and which path will not hurt the people and that is the reason why when we were trying to get on a programme from 2017…we came up with our home grown programme points to ensure that whatever we want to do is dependent on what we can do as a country.”
And Habasimbi noted that the process of enacting the piece of legislation is in process but awaiting the Constitution Amendment Bill Number 10 to be enacted into law.
“For the planning and budgeting Act, and the loans and guarantees Act, the processes within have already began but what is really holding up these legislations is the Constitution. For some of the provisions in the loans and guarantee act are contradicting what is in the constitution. We need to amend the Constitution before we can move forward. Unless the amendment of the Constitution is done, then there won’t be a loans and guarantees Act. We know that this is a pertinent piece of legislation that needs to be done and government is really looking forward that the process of the Constitution amendment is concluded as soon as possible so that we will be able to address some of the issues,” explained Habasimbi.
“The other issue that the presenter raised is the slow implementation of reforms, such as the loans and guarantee Act, the ZPPA Act and the planning and budget Act. For the ZPPA Act, we have made a lot of progress and as at yesterday (Wednesday), we received some different comments from different stakeholders and we are sending [them] to the Ministry of Justice to go and now start the processes before we send to parliament.”
And UN resident coordinator Dr Coumba Mar Gardio, in a speech read on her behalf by UNICEF representative Noala Skinner, welcomed efforts being made to increase social sector spending despite fiscal constraints.
“With a clear understanding of the government’s current budgetary constraints, and the negative climatic conditions this year, we welcome the efforts being made to increase social sector spending, even as we note that such spending has been reduced as an overall percentage of the budget. We also welcome the emphasis placed in the budget statement on the importance of continued investment in the health sector and the need and intentional allocation to ensure adequate medicines for all health facilities. We also support the emphasis on investments in education and human capital development. I know we all agree on the importance of translating formal budget allocations into disbursements, which of course is key to ensuring that allocations become real investments, giving real results and impact on sustainable human development,” said Dr Gardio.
Meanwhile, ZIPAR senior research fellow Shebo Nalishebo highlighted some of the issues that can be improved upon as the budget is discussed pending approval.
“The 2020 Budget seeks to position Zambia for growth through stimulation of the domestic economy. It articulates a range of macroeconomic, fiscal and debt management, sectoral growth, climate change and social sector policies, strategies and interventions for stimulating growth while protecting the social sector (though the ideal of ‘leaving no one behind’ is lost). The seeds for growth in 2020 have been identified. Now Zambia will have to pay keen attention to planting and nurturing the seeds, it will have to: mind the critical gaps and potential implementation and management slippages of the recent past, the heavy debt overhang, which threatens to trample all over the growth, the increasing vagaries of climate change, and the weak record of past protection of the social sectors,” said Nalishebo.
About Natasha Sakala
Natasha Sakala draws inspiration from people who stand up for what is right. She is very versatile and likes to bring out issues as they are.
Email: natasha [at] diggers [dot] news
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