Africa-Press – Zambia. The Ministry of Finance and National Planning Situmbeko Musokotwane has said that the new reform programme that the new Dawn government has embarked on will encompass fixing inefficient supply chains in the energy sector and remove excesses in the Farmer Input Support Programme (FISP) that have negatively impacted on the fiscal position of the country.
Speaking at a joint press briefing this afternoon with the International Monetary Fund (IMF) team led by Ms Allison Holland, Mission Chief for Zambia, Dr Musokotwane said that the reforms will also have to reform the electricity sub-sector by migrating to cost-reflective tariffs to attract investment.
The Minister said that the 2022 national budget has no provision for subsidies on fuel and electricity and that government spends over $67 million monthly to subsidize the cost of fuel, before adding that Zambia currently owes about $480 million for unpaid fuel supplied which has been inherited by the UPND administration.
The Minister said that the rationalization of these expenditures will free up more resources that will be channeled to the poor and vulnerable in society through the social cash transfer programme.
The Minister further said that the resources freed up will also enable the Government to effectively provide free education, free and proper medical care for our people, as well as scale-up youth and women empowerment programmes, and with these interventions, the Government will be able to once again start talking about inclusive growth where no single person will be left behind.
The Minister was also quick to point out that reaching a staff-level agreement is not an end in itself, but paves the way for debt restructuring engagement with Zambia’s creditors, following which Zambia’s application for an Extended Credit Facility will be considered by the IMF Executive Board.
The Minister said that the Debt Sustainability Analysis (DSA) exercise, undertaken during technical discussions with the Fund over the past few weeks provides the basis for our engagement with creditors and that DSA will help to define the quantum of support that Zambia will require from the creditors.
The Minister further said that, with the support of financial and legal advisors, Zambia will immediately commence engagements with creditors on public debt restructuring.
“It is my hope and expectation that we will make progress on these discussion in the coming few weeks. Our commitment is to ensure equitable treatment of all creditors, ” the Minister said before appealing to all of Zambia’s ceditors to come forth and join creditor groups and engagement with his team.
The Minister said that once the Government concludes with the creditors and Zambia will successfully get on a formal programme with the IMF, and will start accessing budget support from multilateral and bilateral partners, adding that this will support our macroeconomic conditions and boost investor confidence.
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