MINISTER of Science and Technology Felix Mutati says without the IMF deal, the debt restructuring that is critical to rebuilding the economy will not happen.
And Mutati says the IMF deal is good because it no longer comes with foreign conditionalities as it is designed in Zambia and is therefore based on domestic economic policies.
Mutati was speaking to journalists after presenting a K12 million award fund to 21 groups of innovators under the National Science and Technology Council and the National Technology Business Centre to undertake different innovative projects in Heath, Energy, Agriculture, Food, Aquaculture and Mining.
He said without the IMF, Zambia would continue to be in a default position which would further erode investor confidence.
“One of the issues that continues to make headlines is the IMF and I want to make it clear that number one, Zambia is the third largest shareholder is Sub-Saharan Africa according to the ranking of IMF and therefore sits at the high table where the various rules are made. Number two is the fact that we no longer have conditions; the deal with IMF is based on domestic, economic policies and in short, the deal is made in Zambia and not made in Washington DC. And to emphasise this point, one of the key pillars is that we have shifted from consumption expenditure through elimination of subsides to investing in people and the example of this investing in people are one, in the budget of 2022 in the Ministry of Science and Technology, for example, the aggregate funds dedicated to providing grants to scientist researchers and innovators has moved from K11.7 million last year to 27 million this year. This is significant in the support particularly start-ups, researchers and developers of scientific solutions,” he said.
“Without IMF deal the debt restructuring that is critical to rebuilding the economy will not happen. Therefore, Zambia will continue been in a default position which will not only erode investor confidence but will destabilise our macro-economic fundamentals such the exchange rate, inflation and interest rates.”
Mutati insisted that Zambia owned the programme.
“The IMF package comes with financing of up to $1.6 billion to support the financing gap in the 2022 budget. This financing is at a highly concession rate of below one per cent with a moratorium of at least three years. The package also unlocks budget support and other donor financing in particular from the World Bank the African development bank and other bilateral partners. We own the program as Zambia we are responsible for its implantation, we are committed to ensure that this program succeeds in our efforts to rebuild the economy, to creates jobs and deliver a better livelihood for our people as promised,” he said.
And speaking during the event at Mulungushi International Conference Centre earlier, Mutati said Zambia was capable of finding solutions to its problems.
“I am persuaded that all the problems that we have in this country can be solved by ourselves. We have that capacity and we have to demonstrate to world, to Africa that Zambia here we come, that through science, through research, technology and through innovation, we are making that difference that matters. And as I walked here today, somebody says ‘you need IMF’, I said ‘no I am going to a forum where we are dealing with solutions which includes with economic recovery. And how do we achieve that economic recovery? It is straight forward. First is that is that Zambia is the third largest shareholder in Subsaharan Africa by the ranking of IMF so we are big boys, we sit at the table where the rules are made, just like you are big boys and girls,” he said.
“Number two is that the IMF deal is based on domestic economic policies and I want you to understand and how this audience fits into these domestic policies. Number one, my director here has told you that because of the deal, we will be able to increase in 2022 moving from approximately K12 million to K 26.7 million to support you by way of grants and that is what is called domestic policy, isn’t it. Domestic policy means that through that the skills development funds, this year alone it will be boosted by K200 million. That is what domestic policy means. Also, domestic policy means that under the small medium enterprises through the empowerment process we are going to have K350 million that is what domestic policy means. So when you government says they are moving away from consumption expenditure such as subsidy to investing in people, it means that we are investing in you to make a difference in innovation.”
He said Zambia was moving from consumption to investing in its citizens through science, research and technology.
“So we are moving from consumption to investing in the people of Zambia through science, research technology and innovations instead of focusing on consumption expenditure so we are eliminating subsidy so you go and tell them that they are benefits in eliminating subsidies because we are now going to rebuild the economy, you are now going to create jobs and better the lives of the people of Zambia,” said Mutati.