Dear Ms Kristalina Georgieva, current Managing Director and Chairwoman of the Executive Board of the International Monetary Fund (IMF),how are you? I hope your small beautiful European homeland, Bulgaria, is coping with the pandemic and the effects of Russia’s Special Military Operations in Ukraine.
It is me again, remember? I wrote you an open letter on the 14th of December, 2021, published in News Diggers, asking you as the Managing Director and Chairwoman of the Executive Board of the International Monetary Fund (IMF) to veto the removal of electricity and fuel subsidies your organisation and the government of Zambia had agreed to do, as part of the conditions for Zambia to qualify for your obnoxious programme. I warned that the removal of these subsidies was social, economic and political suicide, and certainly not in the best interests of Zambia.
I also recall that I invited you to come to Zambia and have a direct feel of the disastrous and deadly impacts of what more than 30 years of your programmes have done to the majority of Zambians, impacts which in fact resulted in the most humiliating defeat of the Patriotic Front (PF) in the 12th August, 2021 Zambian elections. Zambians voted overwhelmingly for Hakainde Hichilema and his United Party for National Development (UPND) because they were promised reductions in the cost of living and doing business.
More than three months after I published my open letter, I have not heard a word from you, Kristalina Ivanova Georgieva-Kinova. I am sad you think it is not important to respond to my letter. With what is happening in Ukraine and how all of Europe and the US have loudly and visibly positively responded to the plight of Ukrainians freeing the military violence in their country, must we assume that the poverty of almost 13,300,000 (about 70%) of Zambians, because they are in Africa and are Africans, does not rank as highly as the suffering of Ukrainians? I honestly hope not.
Believe me, there are many Zambians right now who would love to have some of the humanitarian support being given to Ukrainians as they flee their country. My government will tell you that recently, for example, there is a spike in suicides among Zambians as poverty takes its toll.
Hakainde Hichilema is reputedly a rich man. He conned Zambians into believing that he would lower the cost of living, and doing business, because he was a rich business man. It is not happening. Your organisation, Ms Kristalina Georgieva, has determined that in order for Zambia to move towards “sustainable debt management” and to meaningfully engage its creditors with your mediation, certain austerity measures including removal of subsidies and reaching certain tax collection targets are important technical milestones to be reached, to sustain the IMF programme Zambia must sign up to, with the IMF.
Please do always bear in mind that Hakainde Hichilema was elected to make life better by reducing the cost of living and doing business, not increasing both, as he is currently doing. He, himself, on many occasions, openly promised to do so, and even demonstrated how he would do it, in some cases.
Well, since they removed fuel subsidies you must know that fuel prices have steadily been increasing and pushing up the cost of all goods and services with a fuel input, as perfectly expected by any sane person. Of course, most affected are food and transport costs, two of the most common expenses of the vast majority of Zambians, the majority of whom in fact are not employed. Many Zambians still live in rural areas. Poverty, in real terms, has worsened since HH and his friends in the UPND were elected.
We are now of course told that the war in Ukraine will worsen food and fuel inflation. May I ask: will you quickly factor in these new conditions in the austerity measures your staff agreed with the Zambian government, before the deal is signed off by your Board, to reduce the suffering on Zambians? I am interested to know what austerity conditions you will vary as a result of the new global economic climate created by the war in Ukraine.
In their effort to meet the tax collection targets to be able to sustain the conditions of your IMF programme, HH and his UPND are doing everything they can to collect tax, everywhere, including removing VAT from goods previously exempted from attracting VAT. This is done retrospectively, starting from the 1st of January, 2022.
Newspaper (print and electronic) and book sales have been slapped a whooping 16% VAT. Previously they were exempted from VAT, to promote these industries and stop them from disappearing, and to support our democracy and culture.
Ms Kristalina Georgieva you will probably know that less than 25% of Zambians have access to electricity. While by January 2021 there were 16.73 million mobile connections, there were only 5.48 million internet users in the whole country! Incredibly a mere 2.60 million Zambians were using social media by January 2021, in spite of the large urban noise social media makes. These statistics are perfectly in keeping with the poor development of electricity and internet coverage in Zambia, in the past 58 years of our existence.
Imposing punitive taxes such as a punishing 16% VAT on print and electronic newspapers and books effectively threatens to shrink the very small number of Zambians who buy newspapers and books, thereby adversely harming our democracy and cultural development. Without the hard print copy of the newspaper circulating at a high rate in our impoverished communities, because VAT will make newspapers too expensive, means the majority of our people will be deprived of the information they need to make informed choices in their lives. Are you happy with this state of affairs Ms Kristalina Georgieva? Your austerity measures are directly harming our political system.
I am aware that there are sunflower oil troubles in your country, Bulgaria. Apparently, farmers and traders are holding supplies to wait for better Ukraine war driven prices for sunflower oil. Zambia is no exception – we import both inputs into production of cooking oil and cooking oil itself. To meet the tax collection targets your IMF agreed with the Zambian government, in January this year the government of Zambia removed the VAT exemption on cooking oil. Prices of cooking oil have since been rising, and with the troubles in Ukraine, the price of cooking oil will soon be out of reach for most Zambians.
Ms Kristalina Georgieva, I beg you, you don’t want Zambia to be embarrassed by having a “saladi civil war”, do you, now? You see, “saladi” (name of cooking oil in Zambia, if you do not know) is absolutely essential to all our cooking, especially relish. Without it, most relish is simply awful, you cannot eat it! HH and his friends and you and the IMF are playing with fire by making life this hard for us. We too have limits, of what we can tolerate and endure.
HH and his friends removed export duty from maize exports. They have also removed loyalty taxes from mines. Clearly, the government and yourself consciously choose to punish poor people with harsh taxes and removal of subsidies, while boosting the profits of the already rich. It has been like this from 1979, when our late president Kenneth Kaunda started flirting with your IMF: you punish the rich to make the rich richer, and sink the poor deeper, into their poverty!
Dear Ms Kristalina Georgieva, it is now my scientific view that the remotest theoretical possibility for the success of your Programmes have been wiped out by the changes currently happening to the global economy post the pandemic and the economic and financial war the US and its Western allies have unleashed on Russia. Under these changed conditions, please don’t sign off the programme! Leave my country alone.
Zambia, like all countries of the world, today needs an internally articulate autochthonous economic recovery programme to respond to the real needs of its people, not an externally driven IMF pro rich, pro finance capital programme!
I await your response.