Newly appointed Minister of Finance, Situmbeko Musokotwane says government intends to roll out the International Monetary Fund (IMF) programme as a strategy to dismantle the huge debt that the country has amassed in the last 10 years.
Dr Musokotwane said government is considering getting creditors to agree on stretching the initial period of repayment, as a way of mitigating the country’s debt crisis.
The Minister of Finance said the IMF programme, therefore, becomes a critical link to give confidence to the lenders who need an independent institution that will monitor what government is doing.
During ZNBC’s Sunday Interview programme last evening, monitored by ZANIS, Dr Musokotwane, disclosed that the IMF will also provide a longer and cheaper credit to Zambia.
“Yes it makes sense to get credit from the IMF because financing will come in cheaper and we will be able to assure the creditors and investors who would like to invest in Zambia as the IMF will give them confidence,” he added.
Dr Musokotwane stated that the social economic pressures that the country is currently experiencing, is as a result of excessive debt, a situation which urgently needs to be addressed.
“For every kwacha of the revenue that was collected, it was only used to pay salaries for service workers and paying back loans. The money spent in debt servicing is in dollars and led to the shortage in dollars that is why the price of the dollars escalated,” he explained.
Meanwhile, Economist Yusuf Dodia suggests that government must try and utilise the readily available resources in the county to pay back the loans.
In an interview with ZANIS in Lusaka today, Mr Dodia said it is not sustainable to get more debt when the country is in a debt crisis.
He said government must consider growing the economy based on exports such as copper and timber, as opposed to getting more loans.
“Currently, we are exporting about 40 million dollars of copper a week. The loan from the IMF is equivalent to one month’s copper exports,” he said.