ZIPAR urges Govt to resume IMF talks

ZIPAR Research Fellow, Caesar Cheelo

The Zambia Institute for Policy Analysis and Research (ZIPAR) has urged the Government to resume negotiations with the International Monetary Fund (IMF) for a possible financial support package, saying the country needs the package like yesterday.

And the institute has recommended that the Government continues with fiscal consolidation steering Zambia back toward a state of “medium risk of debt distress”.

Speaking during a press briefing in Lusaka, ZIPAR Research Fellow, Caesar Cheelo is advising the government to stick to the national budget if the country is to service the current debts without fail.

Mr. Cheelo has also advised the government to undertake in-depth and comprehensive studies to understand the size, nature and short, medium and long-term implications of the mounting Chinese debt.

He says the government ought to know the transactional benefits of the Chinese financing offer to the Zambian economy when the bulk goes through Chinese financial intermediaries to largely Chinese contractors.

Mr. Cheelo adds that the government should consider fostering fundamental political and social changes to the current economic philosophy, to move away from persistent fiscal expansion.

The ZIPAR Research Fellow further recommends that government introduces explicit quantitative fiscal rules or long-lasting, legally binding, quantitative constraints or restrictions on budgetary aggregates which should be developed in consultation with local institutions like ZIPAR.

ZIPAR Executive Director, Dr. Pamela Kabaso

Speaking at the same briefing, ZIPAR Executive Director, Dr. Pamela Kabaso expressed concern that Zambia spends about 20 percent of its total national budget towards debt servicing.

Dr. Kabaso says with the two Eurobonds that are expected to mature soon, it is imperative that the government devises measures of ensuring that the country is not stressed economically.