By Daily Revelation Reporter
Former commerce minister Bob Sichinga has warned that Zambians should brace for more suffering as the IMF conditionalities will converge to make life unbearable for the inhabitants.
Speaking with Daily Revelation, Sichinga said by removing subsidies on agricultural production for instance, it meant that small scale farmers who produce the bulk of the maize grain will now have to pay more for the fertilizer.
“How do you reconcile that with Zambia being self sufficient in the staple food? What will be the implication of that on the production of maize, which makes Zambia self sufficient? Do they understand that? That’s what I am trying to say because the IMF deal itself, the $1.3 billion is not necessarily going to go into the development of those value chains. So that’s why I asked that does the whole government collectively, do they understand the implications of what they have agreed to?” Sichinga asked, saying on account of the removal on agricultural subsidies, the cost of production will go up and thereby pushing up the cost of mealie meal and other commodities.
Sichinga said all the harsh conditionalities will converge together to make life unbearable for the Zambians where apart from having to to with high mealie meal prices, they will also be battered with high electricity tariffs and high fuel prices.
“Any subsidy that you remove is going to impact on the cost of those commodities that are subject to those subsidies,” he said, adding that in other countries to spur production, interest rates were reduced in order to activate the recovery programme, but here it will be the opposite. “Zambians should brace for more sufferings. They will have to. There is no alternative. The most important thing is that it will become a very high cost economy…you cannot on the one hand say in the United States you should reduce cost in terms of interest rates to spur production but in Zambia you should do the opposite. What kind of economics is that?”
Sichinga said the IMF and government would argue that funds will be released to the other sectors, but questioned how much of the $1.3 billion will go for specific items of expenditure so that it can free the money which would be used for social security.
“What is social security if not to subside maize production so that the people have maize? That is what FISP was for, it was on one hand to subsidize the fertilizer so that they can grow. That is what has brought about the self sufficiency. Let me give you an example, all the maize, all of it that is produced in this country as grain is produced by the small scale farmers. I was Minister of agriculture I can tell you for certain,” Sichinga said. “So if you increase their cost, what should happen to the price that you are going to pay for that grain? It must go up. What happens to the millers, they will also increase their prices. Then what happens to the bag of mealie meal that they are going to sale to the customer? It must go up. So that’s why I said people must brace for more expensive production for either service or the commodity itself.”
Sichinga said he was not sure whether the ministers understood the implications of the conditionalities attached to the IMF deal.
He said he could not fathom the strategy the government has adopted on the same as they seem to tell Zambians on that which has been queried upon rather than them informing citizens what they have agreed on with the IMF, saying it gives him the impression that there has been no common agreement acknowledged by the ministers affected.
He wondered whether the ministers in charge of energy and agriculture were fully aware of what their ministries were supposed to do on the agreement.
Sichinga said there was a lot of information “behind the conditionalities” which was not evident immediately one read the document, particularly on the implications.
“When you say the austerity measures must be taken. How do you bring about a reconciliation between saying we must contain certain expenditure that you go and recruit teachers, you go and recruit medical personnel? What has been agreed on that? Has that been exempted because clearly that means that the cost of the human resource remuneration will have to go up. I am not saying they are not needed, please it should not be misunderstood. I am not saying they are not need,” Sichinga said. “I am just saying that from the conditionalities you have agreed have they been exempted? … Where would revenue come from that will cushion that because the IMF deal is a balance of payment.”
Sichinga asked if the ministers were also aware that companies could be privatized, adding that the country has gone back in terms of industrialization which was started under Dr Kenneth Kaunda, citing the fruit processing plant in Mwinilunga which the President went to Commission recently as having been done during the Kunda era.
“We are repeating the same process because of privatization. Poor decisions were taken at that time. Every decision you take has implications. You cannot therefore under those circumstances say the small scale farmers must pay and the mining companies must be given relief. Why? Who has got more capacity? It’s the mines,” Sichinga said, saying the KCM and Mopani issues must be handled expeditiously, but wondered why they were being offered to the same private investors.
He said the only money government gets from the mining sector was the six percent royalty tax.
“How about the rural areas? If you remove subsidies from fuel it means that the rural areas the cost of fuel in rural areas which are further away from the line of rail have got to pay more. They have to. And how do you expect them to produce because they have to have working capital for them to produce the maize?” asked Sichinga.
