IMF stigma


WE HAVE nothing against politicians politicking, but we have everything against misleading statements made by politicians which are meant to gain political mileage from misleading statements on technical economic issues with the intention of undermining the national economy.

The attack of the International Monetary Fund programme which the Government intends to pursue is one such misrepresentation which should be corrected.

Zambia is a full member of the IMF and has every right to seek support and assistance in time of crisis and economic uncertainty.  Therefore, it is unfortunate, unfair and downright disingenuous to demonise Governments effort because of the stigma that attaches to IMF programmes.

As an organization the IMF has the global role of promoting economic stability by assisting countries navigate through situations that threaten economic and financial crises, large swings in economic activity, high inflation, and excessive volatility in foreign exchange and financial markets.

Seeking IMF assistance does not signify failure; it represents an initiative to stave off a crisis that could easily discourage investment, impede economic growth and hurt living standards of the people.

There is no doubt that a combination of factors have worked to create an economic crisis in Zambia and these include the weather, that has reduced electricity generation, meaning that resources that would have been directed to development are now being used to pay for the huge imports of electricity that must keep the wheels of industry turning.

More importantly the rout of commodity prices has brought most mining countries to their knees. Not even the oil producing countries have been spared.

Nigeria, the continents largest economy, has not been spared. None other than the managing director of the IMF, Christine Lagarde, has asked Nigeria and Nigerians to brace up for harder times, following the massive fall in the price of oil globally.

She advised Nigerians that it is imperative for the federal government to broaden the countrys tax base against the backdrop that Nigeria has the lowest VAT rate on the African continent.

Such advice does not mean failure, it simply means that the IMF as a global organisation has an overview, expertise and resources to tide over a country in crisis.

It is the duty of the IMF to advise member countries on economic and financial policies that promote stability, reduce vulnerability to crises, and encourage sustained growth and high living standards. It does this by monitoring global economic trends and developments that affect the health of the international monetary and financial system and promotes dialogue among member countries on the regional and global consequences of their policies.

The problem of politicians discussing the economy is that they do not offer and indeed cannot offer solutions to the circumstances that create the crisis such as the weather and decline in global commodity prices.

These events are as cyclical as they are unpredictable. The last IMF programme for Zambia was preceded by a similar collapse of copper prices and a global economic malaise.

Neither Zambia nor any other country can insulate itself from the effects of global economic trends and any suggestions to this effect are empty polemics.

Categorized | Editorial

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