By Jane Chanda
Economist Shenford Siamutwa says Zambia’s impending exit from the IMF program next year is a “risky gamble” that could have far-reaching consequences for the economy.
He said Zambia was not ready to exit the IMF program due to declining Real GDP growth and investor confidence.
In an interview with Daily Revelation yesterday, Siamutwa noted that “a shrinking economy, coupled with the adverse effects of load shedding, has eroded investor confidence, making it difficult for the economy to attract foreign investment.”
He warned that if the money was not coming into the country from outside for investment, it meant that the economy was stunted, leading to increased cost of living, doing business, and general price levels, ultimately resulting in economic collapse.
“The problem is not the IMF program itself, but rather the lack of priority sound macroeconomic management of public resources,” Siamutwa said. “Zambia has been blessed with abundant mineral resources, but we have failed to manage them effectively, leading to a vicious cycle of dependence on foreign aid.”
Siamutwa also highlighted the potential benefits of exiting the IMF program, including increased fiscal independence and policy autonomy, reduced debt servicing pressure, and freed-up resources for development.
However, he said this required sustained economic reforms and prudent management of debt and financial stability.
“Zambia needs to get its house in order before exiting the IMF program,” Siamutwa said. “We need to address the structural issues in our economy, such as the high debt levels, low revenue collection, and inefficient public expenditure.”
He added that without a well-crafted strategy, exiting the IMF program would be like taking 10 steps forward and 15 backwards.
“The government must prioritise economic reforms and ensure that the economy is stable before making any moves to exit the IMF program,” Siamutwa said. “We cannot afford to gamble with the economy, especially when the risks are so high.”
He noted that the long-term success of Zambia’s economic independence depends on our ability to manage our resources effectively and maintain fiscal discipline.
Siamutwa further added that the current load shedding crisis was a symptom of a larger problem – the lack of investment in critical infrastructure.
He said that Zambia needed to invest in renewable energy sources and improve the efficiency of our power generation and distribution systems.
“Ultimately, Zambia’s economic future depends on our ability to think critically and manage our resources effectively,” said Siamutwa. “We must prioritize economic reforms and ensure that the economy is stable before making any moves to exit the IMF program. Anything less would be a risky gamble with our economic future.”
