BOWMAN LUSAMBO DELIVERS AN OPEN LETTER TO IMF DEMANDING FULL DISCLOSURE OF AGREEMENT WITH ZAMBIA
In our quest for increased transparency in public engagements, this morning we delivered an Open Letter to IMF Resident Representative Preya Sharma at the IMF Country Office demanding full disclosure of the Staff Level Agreement that Zambia recently reached with the Fund.
The specific demand is that the IMF Board should not proceed to approve the agreement until full disclosure is obtained.
Below is the statement accompanying our Letter to Ms. Sharma which was copied to Finance Minister Hon. Situmbeko Musokotwane, MP and Secretary to the Treasury Mr. Felix Nkulukusa.
ZAMBIA AND THE IMF- A CALL FOR GREATER TRANSPARENCY
On December 6th 2021, the Zambian government and the International Monetary Fund announced that they had reached a staff-level agreement on a new arrangement under the Extended Credit Facility (ECF) for 2022-2025 to help restore macroeconomic stability and provide the foundation for an inclusive economic recovery.
The Extended Credit Facility is in the amount of about $1.4 billion. The IMF says the economic program aims to restore macroeconomic stability and foster higher, more resilient, and inclusive growth.
The staff-level agreement is subject to IMF Management and Executive Board approval and receipt of the necessary financing assurances.
Away from all the flowery language and gobbledygook, it is a matter of concern that the Zambian government has not taken time to fully engage the Zambian people on the true contents of this Staff Level Agreement that it has entered into with the Fund. Unlike in past economic programmes with the Fund, authorities through the Ministers of Finance were asked to submit a Letter of Intent to Washington D.C stating the country’s level of commitments. These Letters were published on the IMF website for all to see and scrutinize. Now the Fund in its own version of reforms does not demand for any Letters of Intents anymore. The Fund through the Country Office and the Mission Teams merely prescribes a set of conditions for countries to sign in documents called Staff Level Agreements. Once they are signed, then the Management and the Board in Washington merely performs a formality by officially approving these Staff Level Agreements.
With everything that has been said and the supersonic speed at which the New Dawn administration is moving to restructure state institutions, it has become imperative that we call on the IMF to release the Staff Level Agreement it entered into with the Zambian government in December. Attempts to get the government to release the full contents of this agreement have failed. In Parliament, I queried Finance Minister Hon. Situmbeko Musokotwane to lay on the floor of Parliament the Staff Level Agreement and he failed.
It now remains our solemn duty to push the IMF Country Office in Lusaka to immediately cause to publish the Staff Level Agreement entered into with the Zambian government. This should be done before the IMF Board convenes to approve the agreement. This demand is made in the interest of transparency and the need for full disclosure when engaging sovereign nations on matters that will impact directly on the lives of its people. There is a global call for transparency around loan contraction and the Fund itself at the highest level has been calling on China to disclose the terms of its loan agreements with countries like Zambia as part of debt profiling. The hypocrisy with which the IMF approaches engagements with countries like Zambia should come to an end.
The IMF should be reminded that Zambians never voted for them in the August elections. They, therefore, do not carry any mandate to prescribe the economic future for Zambians over the next five years. The UPND Manifesto which was the basis of the social contract with the Zambian people did not promise harsh conditions for getting an IMF programme and President Hichilema never said he will relinquish our economic sovereignty to the boys and girls from Washington. He told Zambians that he was a good economic manager who will fix the economy. President Hichilema told us he will use his economic management skills to engage all our creditors and secure debt restructuring in the first 30 days of his tenure. He never said he would run to Washington to help him talk to our creditors, moreover, we still have Lazard Freres, the Consultant he criticized when in opposition still offering debt advisory services.
In any case, Zambians have rejected any form of IMF conditions. The memories of the 90s Structural Adjustment Programmes are still fresh. We lost many of our people because Washington came and told us to sell off our companies indiscriminately without a fall back plan. It was during this period that Zambia’s entire industrial base which was built by President Kaunda was destroyed and has never recovered. We buried so many of our people and we are sorry this time around, our graves are full.
Today, we are more enlightened and we will not sit and watch the UPND take us down privatization 2.0.
The US$1.4 billion we are receiving from the Fund in exchange with our sovereignty is such a small amount that any pragmatic leadership can easily mop up from our domestic economy through a progressive tax regime for the mines and sealing off all channels for Illicit Financial Flows.
Since the New Dawn government has decided to work with the IMF in darkness, we ask the Fund to practice what it preaches and what it demands from China; transparency, transparency, transparency.