Africa-Press – Zambia. Former National Democratic Congress (NDC) President Dr. Chishimba Kambwili says International Monetary Fund programs should not be entertained by the Government because they do not usually favour the poor people.
Dr. Kambwili said it was shocking that the announcement of an agreement with the IMF this week came at the same time as the Government’s revelation that it was removing subsidies on electricity and fuel.
The former Minister of Information and Roan Member of Parliament during the Patriotic Front (PF) regime said the IMF program will increase poverty in the country.
Dr. Kambwili said it is automatic that an increase in fuel and electricity prices will increase the cost of living and cost of production in the country.
“The IMF bailout program is a double edged sword that can either make your country better or make your country worse. The IMF bailout is good if you are getting money to try and sort out certain urgent matters in the economy, but what matters are conditions set by the IMF. More often than not the IMF conditions will not favour the poor people,” Dr. Kambwili said on a SUN FM radio programme on Wednesday morning.
“And if the conditions do not favour the poor people the best you can do is renegotiate those conditions or find other alternatives to sort out the problem that you have in the economy. In this case it is very clear that one of the conditions the IMF has given the Zambian Government is to remove all forms of subsidies. Fuel subsidies, electricity subsidies. When Minister Msokotwane was announcing that they have reached an agreement with the IMF , that is the time he announced the removal of fuel and electricity subsidies,” he said.
“What that entails is that the fuel price will just go from about K17 per litre to about K23, K24 per litre. It means that the cost of production is going to be pushed up; the cost of transport is going to be pushed up. Equally if they remove electricity subsidies it would mean the cost of electricity will go up. If the cost of electricity will go up, the production cost for all the produce will go up, for the farmers to irrigate their land they will be paying very high electricity tariff meaning therefore the agricultural produce will be very expensive,” Dr. Kambwili said.
The PF Member said the removal of subsidies on fuel and electricity will not only affect people who drive vehicles but everyone including a child in the mother’s womb.
“When fuel is increased it affects everybody, even the child who is in the womb is affected. If the cost of food is very expensive the mother will not have enough nutrients to feed that child in the womb.”
“If you look at the average earnings of workers in Zambia, civil servants inclusive, are just plus or minus K3000 now, if the cost of fuel and electricity go up this category of workers will not be able to afford three meals in a day, they will not be able to afford basic needs. It means you are taking away the disposable income from the poor people and for those who do not work it is actually worse.”
“PF did not rush into signing the IMF deal because they were trying to renegotiate to run away from the fact that you needed to remove subsidies at once. Removing subsidies should have been gradual so that you give people breathing space as you are removing subsidies. You also increase the salaries of the workers in Government, in the mining sector and the workers all over including security guards and the house maids,” he said.
According to Finance Minister Dr. Situmbeko Msokotwane, the 2022 national budget has no provision for subsidies on fuel and electricity and that the government spends over $67 million monthly to subsidize the cost of fuel.
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