An Economist says the US$190 million International Monetary Fund (IMF) support package is too small to have a meaningful impact on Zambia’s current economic challenges.
Zambia expects a US$190 million IMF disbursement, pending board approval of the latest Extended Credit Facility reviews.
Speaking in an interview with Money News, Dr. Esther Banda, said the amount is insignificant given the high cost of living, rising poverty levels, and ongoing economic pressures.
“When you look at the economic challenges Zambia is facing, US$190 million is not substantial enough for people to really feel the impact,” she noted.
Dr. Banda further observed that the timing of the support is problematic as the country heads into an election year, which is usually associated with increased public spending, thereby making it even harder to measure the real impact of the IMF funds.
She stressed that Zambia’s continued reliance on IMF support programmes reflects deeper structural problems in the country’s economic management.
Dr. Banda explained that IMF support programmes are designed to assist governments in allocating resources toward key social sectors such as health and education.
She noted that the funds are mainly meant to support primary healthcare, procurement of medicines, and education related services.
“These support programmes are meant for socioeconomic support, money that should go to education, health, and primary healthcare services,” Dr. Banda stated.
Dr. Banda argued that channeling the funds into the energy sector would have yielded better long term results, citing load shedding as a major constraint on economic growth.
She added that borrowing for consumption without addressing productivity challenges is not sustainable.
“What could have been better is channeling these resources into the energy sector because that is where the country is facing a serious crisis,” she stressed.
Dr. Banda also expressed concern over Zambia’s repeated requests for IMF programme extensions, stating that this shows a lack of homegrown solutions, stating that a country rich in natural resources, particularly copper, should not struggle to mobilize domestic revenue.
“For a country that is among the top five copper producers in the world, going to the IMF for a US$190 million extension is very saddening,” Dr. Banda added.
She urged government to ensure that the funds are used strictly for their intended purposes, including health, education, social cash transfers, good governance, and anti corruption efforts,emphasizing the need for Zambia to eventually reduce its dependence on IMF support.
