What IMF said after visiting Zambia
An International Monetary Fund (IMF) mission visited Lusaka February 17–March 2, 2010 to conduct discussions for the fourth review under the Extended Credit Facility (formerly the Poverty Reduction and Growth Facility). The mission had fruitful discussions with Hon. Situmbeko Musokotwane, Minister of Finance and National Planning; Dr. Caleb Fundanga, Governor of the Bank of Zambia; and other senior officials, as well as with representatives of the business community, civil society, and Zambia’s cooperating partner
At the conclusion of the mission in Lusaka, Mr. George Tsibouris, mission chief for Zambia, released the following statement:
“The Zambian economy has been holding up well, despite the sharp decline in copper prices in 2008 and early 2009. Growth exceeded 6 percent in 2009, boosted by a significant increase in copper output, a bumper crop, and continued strong construction activity. Inflation has been below 10 percent since December 2009, helped by the bumper crop. In the wake of the global financial crisis, tighter lending standards have led to a marked slowdown in credit to the private sector and in broad money growth. As a result, market interest rates have dropped sharply in recent months. A sharp decline in imports and a recovery of copper prices led to a narrowing of the current account deficit.
“The government is to be commended for its handling of fiscal policy in 2009.The overall budget deficit in 2009 was in line with expectations. Additional domestic financing compensated for lower tax revenues and allowed capital spending to be implemented as envisaged in the budget.
“The economic outlook is positive. Copper prices have strengthened significantly relative to the lows experienced in late 2008. Zambia’s international reserves are higher than they have been in almost four decades (at 4 months of prospective imports), thanks in part to the recent SDR allocation from the IMF. Growth is projected in the range of 6 percent and inflation is targeted to moderate further to 8 percent by the end of 2010. Credit to the private sector should pick up, as broad-based economic activity gains strength. The budget for 2010 maintains an appropriately supportive stance. The main risks in the period ahead include possible adverse developments in world copper and oil prices, and aid inflows.
“Looking forward, the key challenge will be to create fiscal space to allow for an increase in priority expenditures, while preserving macroeconomic stability and debt sustainability. Enhanced tax collections, including from the mining sector, will be critical for providing space for increased capital and social spending. This will also require measures to enhance the efficiency of current spending, to ensure that the wage bill does not end up displacing other high priority needs, and to avoid subsidizing fuel products. The continued implementation of the multi-year tariff adjustment framework should help ensure a sustainable and reliable electricity supply in the years ahead.
“The mission will continue its work in Washington, D.C., in close consultation with the Zambian authorities, with a view to taking the fourth review under the ECF arrangement to the IMF’s Executive Board at the earliest opportunity.”
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atleast someone is reporting objectively. the foolish POST should learn from this.
Intesrestine reading. Frankly speaking Zambia is doimg something right. What is needed in my view is consolidate this gains with particular emphasis on tax collection, service delivery and passing on the benfits to the general population
Thanx, Lopa. Happy Women’s Day too.
The observations from the IMF are spot on in terms of the parameters they use to access an economy. Usually its in three main areas, monetary policy, fiscal policy and economic policy. Put simply they look to BOZ, ZRA and Ministry of Finance..and remember I have said “PUT SIMPLY”.
Taking these three main policy areas the Government of the day then pieces together a ‘contractual’ document called the Letter of Intent..ie what we as a people intend to do to augment these three areas and so the story begins..when the blue eyed boys with their computers arrive from DC they are armed with one big thing DATA..ie numbers of actual, percieved and potential occurances..they match this against what you said you would do and what you have done…and trouble for most governments start..
But remember closely attached to this is another group of lads/lasses called WB..it is through this window that the other concerns enter the deabte..corruption, governance etc etc..
What is lacking now in zed is from someone an ingenious Cabinet that can translate this postiveness to real growth so that it can affect the livelihood of 10 million zambians of which 80% are actually poor…do we have what it takes? Your guess is as good as mine.Otherwise I wonder what people in shangombo, isoka, vubwi, solwezi etc would say if we translate the statement above into the local languages…
ZWA FA well said about comparators…Happy International Womens Day everyone…
Kapolo you sound heavily delusional on your Katolika. IMF is katolika, Zambia is run by katolika…could the air we breath be katolika as well?
Katolika is less than 1% in japan, Korea, less than 5% in the USA and yet these countries are developed.The opposite is Brazil and Phillipines (developing countries)where they are 99%, even there the presidents are free to rebuke them when they go wrong.
Ok. After all is said and sabailadi, we all know that IMF is ITALY and ITALY is KATOLIKA(CATHOLIC). So watch your steps MMD Cadres. You can touch other Churches in Zambaia but when you start touching KATOLIKA you start playing with fire you can not quench. Honestly, KATOLIKA is what sustains our small economy. The timely message to MMD Cadres is that KATOLIKA is not Chinese. KATOLIKA is higher than the GREAT WALL.Touch KATOLIKA Head of Zambia and you will be insulting what feeds you. Mind you KATOLIKA is staying here. Cho Cho Lees are in transit. Mark my word. You cant insult what feeds you. You can insult the Pact but not KATOLIKA. Understand IMF what really is before you touch KATOLIKA.
Ok,good few steps, and thats when we want to usher in another thief of FTJ’s pedigree?
WRONG NO – where do you get your information from? Eritrea is one of the poorest countries on mother earth and to even refer to it in the way you give it as an example is mind-boggling. Eritrea is said to exist on loans and the earnings of the diaspora (from Eritreans living outside Eritrea). Compare Zambia’s GNI per capita of US$900 to Eritrea’s US$300. I know what you were trying to say but please to make our arguments more sophisticated let’s compare ourselves to countries that are doing better than us, and so far on the African continent, after having travelled around quite a bit, there is just probably 2 or 3 countries that we can compare ourselves to – that includes South Africa and probably the rest from the northern Arab countries. The best way to grow is to compare ourselves with countries that are ahead rather than comparing ourselves to countries that we infact help with aid.
These criminals are up to no good. They can only sustain themselves by milling and ruining our hard fought economy. Countries that have parted away company with them are doing fine economically. A good example is Eritria.
Sometimes your IMF love it when a leader of a country is a weakling and big time beggar. It is the only way to perpetuate the relevance of IMF.
Indeed, that is from IMF point of view. So what does this mean? I ask coz we are struglling with issues of corruption ( in broad daylight). Does this mean someone is keeping their books well or everything in our country is economically sound and we should not worry anymore about anyone going hungry, not having clean and safe water? Dont mean to be critical but seriously seek an independent opinion on Zam Economy-IMF performance.
Bet this is not about political parties but economic performance. And why would a respectable leader not see it that way? HELP PLIZ.
They don’t reason what can you expect from the bath tub people?
so what have the pf cadres got to say now????