By Staff Reporter
Former Finance minister Ng’andu Magande says it’s important that Zambians know the conditions attached to the $1.3 billion IMF package, but that it is unwise to dismiss it without knowing the full extent of the conditionalities.
Speaking with Daily Revelation, Magande said there should be more transparency in telling the Zambian people on the total conditionalities attached to the $1.3 billion deal.
He said what mattered in the scenario Zambia was in was how the subsidies were targeted, saying the subsidies could have been removed on fuel, but free education was also a subsidy for which people were benefiting, including the number of recipients of the social cash transfer.
Magande said benefits from the IMF package could be channeled towards supporting for instance farmers who want to grow soya beans and wheat with subsidised fertilizer, saying by the middle of January next year, everybody would see the benefits as the market for such produce was now on high demand following instability in the main wheat suppliers, Ukraine and Russia.
He said the wheat could in fact be sold at twice the price spent now.
“And that is why I am saying let us see these conditions. If the conditions are to do with just balancing the numbers we can work out these numbers in such a way that in the next five years when we don’t have to pay the IMF, any money that we get from the IMF we use it to import for example agricultural equipment and mining equipment for small scale miners,” Magande said. “In five years we have small scale miners who are rich and will be selling gold to the Bank of Zambia. Thn we will reduce poverty. In the next five years because of the subsidies we put on agricultural inputs for agriculture equipment, already you know there is no tax on that. So if the government was to say we are now even going to subsidise fertilizer, that for people who grow the following crops, you grow sunflower, soya beans, wheat. These are the things now that are going to be in high demand in the world because of the countries where we are getting wheat from.”
Magande said said in the next five years if the country prioritized growing crops which fetched at a good price beyond the maize he said does not fetch at a very good price, there will be more benefits accrued.
The Bank of Zambia has been writing to people to buy treasury bills from months now, Magande said that means that the government is increasing on local borrowing instead of going to the Eurobond where there will be need for foreign currency.
Magande said the people categorizing the happenings as useless were not dealing with the issues saying not every deal could be categorized as bad unless the conditions were seen.
“There is no basis without knowing the conditions for somebody to put an adjective on the package itself. The package is good yes that there is an approval but what are those conditions? If the conditions mean that when we are negotiating with creditors they only give us three years repayment then that is not good. But now we are all saying that because if the involvement of the IMF it will be a better package. What is wrong with that?” Magande asked, saying it was better to have the involvement of the IMF than negotiating directly with the holders of the Eurobond.
Magande said there was nothing wrong with having targeted subsidies if they were targeted for rights things.
“Because of what has happened in the last 10 years, there are more people who are poor now, poorer so the government has been told look after these people, if those are the only people who are going to be riding to get cash transfers, then no problem,” Magande said. “But you have heard that even civil servants who are getting salaries every month they were getting hands in there. So one of the reforms is to say you rationalise this cash transfers so that only those who need help can get. That is reform. How does that reform affect somebody like the name that you are mentioning (FDD leader Edith Nawakwi)? But it affects their relatives. It also affects other citizens. We have to be compassionate with other citizens who cants even afford to have K2 in a month.”
