IMF absence limiting donors from helping Zambia – German Envoy

German Ambassador to Zambia Achim Burkart says the high risk of debt distress and absence of an International Monetary Fund (IMF) program has limited cooperating partners from helping Zambia.

And Ambassador Burkart has called on government to deal decisively with Zesco’s fiscal situation and publish a reform roadmap for the power utility in a bid to lessen load shedding.

Meanwhile, Ambassdor Burkart says the disastrous drought situation in Zambia is critical and requires urgent action from all stakeholders.

Speaking at the second high level policy dialogue forum on development cooperation, Wednesday, Ambassador Burkart said government should work forcefully towards an IMF programme.

“The theme for todays’ dialogue are those facing the country and requiring urgent and decisive action. His Excellency President Edgar Lungu highlighted in his National Assembly opening speech that 90.1 percent of Zambia’s annual budget was taken up by debt repayment and personnel costs, leaving less than 10 percent for investments and programme implementation. This number makes it clear why re-gaining fiscal space, controlling the debt situation is of utmost importance as the cost of debt service is crowding out resources for other priorities. That is why it is our first topic today. The high risk of debt distress and the absence of an IMF program also limits CPs’ position to support you. CPs therefore look for urgent action and would like to encourage you to work forcefully towards an IMF programme, CPs stand to ready to support you in this,” Ambassador Burkart said.

He observed that Zesco’s operations were loss-making and were adding to the high debt levels.

“Despite all the efforts to mitigate the energy crisis, load shedding has increased to more than 15 hours affecting households and small businesses who cannot afford expensive alternatives. At the same time, Zesco’s operations are loss making, adding to Zesco’s high level debt. That is why cooperating partners are calling on the government to deal decisively with Zesco’s fiscal situation and publish the reform road map for Zesco announced by the government. The recent announcement that Cabinet has approved an energy policy with among other issues – a focus on cost reflective tariffs is a positive step hopefully leading to tangible results soon,” Ambassador Burkart said.

And Ambassador Burkart called on government to mobilize resources to provide maize to all Zambians affected by the hunger crisis.

“Cooperating partners therefore call on the government of Zambia to mobilize resources at all levels of government – budget releases, releases of humanitarian maize meal as well as capacity at district levels to implement the government’s commitment to provide maize to all affected Zambians and to ensure that food supplies reach families in need,” Ambassador Burkart said.

Meanwhile, Ambassador Burkart expressed concern at government’s response to the Financial Intelligence Centre report.

“In the spirit of Sustainable Development Goals (SDGs), we all strive to realize protecting the most vulnerable Zambians is a critical task. In times of limited fiscal space, this requires prioritization of essential spending. And this means first and foremost unequivocal support for fighting corruption, strengthening responsible accountability institutions and a rigorous focus on ensuring value for money. While there are positive developments such as the PFM Act, fighting corruption remains work in progress and requires commitment from all levels of government. In this respect, the responses to the Financial Intelligence Centre (FIC) were of deep concern to us,” said Ambassodor Burkart.




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