By Chibamba Kanyama
MY POSITION ON ZIM IMF ‘BAILOUT’
There is an assertion that Zimbabwe has gone on board with the IMF without getting funding from the Fund. The conclusion is that Zambia just needs IMF technical support without getting its money as we are well capable of redeeming our economic fortunes.
In order to help government have an objective decision on the matter going forward, i submit as follows:
First, as I responded to that viewpoint in the post it appeared, Zimbabwe has been looking for a financial bail-out from IMF for many years now. I was among those who listened to the opposition party team in DC led by the late Morgan Tsvangirai in 2015 who came to lobby against such funding, fearing it would strengthen the Mugabe regime. The problem with ZIM is it owes a number of International Financial Institutions (IFIs) including the WB (but very small to IMF). IMF has been ready to support Zim on condition (1) these outstanding loans with other IFIs are restructured (2) Zimbabwe puts its house in order ie Reserve Bank still printing ‘money’! The new move is simply to prepare Zimbabwe for an IMF financial package because the problems were allowed to deteriorate to levels the IMF Board cannot easily approve a financial package. Simply put, doctors will move on sight, clean up the wounds before they determine the actual dosage. In short, should ZIM successfully cleanup, with the help of IMF technocrats, it will receive IMF funding because that is the intention. If that happens, the ZIM economy will be restored to its former glory, and will outperform us significantly. IMF programmes run three years and then the local technocrats take over the wheels.
Second, I reiterate my position that it is presently hard for Zambia to stabilize its economy without IMF support beyond the Article IV consultations. Even without a programme, IMF has been here annually giving us advice (including the Zambia Plus Economic Stabilisation Programme which in effect is a product of IMF Article IV). Why have we veered off this great strategy?
Treating our own problem has been made difficult because of our existing international exposure to Eurobonds. The moment you get into that territory, you need an IMF ‘vaccine’ to help you out. Perhaps its high time EAZ or another organization put an evening debate on the matter and I want to speak.