Global Policy Forum

By Chama Nsabika

THE International Monetary Fund (IMF) does not "give" funds, Jubilee-Zambia policy analyst Jack Zulu has cautioned.

Zulu was commenting on reports in some sections of the media that the IMF had given US $317 million for Zambia to access under the poverty reduction and growth facility (PRGF).

The IMF last week approved the funds of which US $167 million was for balance of payments support with US $62 million approved for immediate disbursement. The remaining US $150 million is meant for extension of interim assistance under the highly indebted poor countries (HIPC) initiative.

Zulu has warned that the continued pouring in of loans in the name of "support" by international financial institutions would land Zambia into more serious financial distress. He stressed that the IMF does not "give" but lends out funds and this had repercussions on the country's financial stability especially in a situation where the level of indebtedness has been rising.

At the time of budget presentation on March 1, Zambia's total external debt stock stood at US $7.3 billion an increase of US $1 million in one year. Zulu said while they appreciated that external assistance, Zambians should be very critical on the nature of assistance being rendered. "Zambia is in very serious economic, social and financial situations and loans are not the best way out of these problems," said Zulu. He said Jubilee-Zambia believed that what Zambia needed now were grants, proper management of resources and good leadership that would ensure both human and capital resources were effectively used for development of the country.

"The country is now moving in a vicious loan cycle with no hope of ever breaking the chain," he stressed. He said no country had ever developed from loans as conditions attached to them were usually adverse, hence, tended to militate against meaningful national development. Zulu has also called on the IMF to critically analyse its assistance to Zambia and explain how the Zambian people stood to benefit from these loans when future generations were being committed to debts they never incurred.

He said through the work of Jubilee-Zambia, it had become increasingly evident and clear that assistance in form of loans was bringing more harm than benefit to the country. He said both government and the IMF perfectly knew that Zambia had no capacity to pay those loans tomorrow or in the near future yet they did not seem to pay particular attention to future implications of these loans.

"We would like to remind government that it is borrowing today because some people borrowed in the past but failed to pay," Zulu said.

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