NOMSA NKANA, Lusaka
ZAMBIAâ€™S economy has sufficient structural buffers to contain the impact of the impending International Monetary Fund (IMF) bail-out programme, the Economics Association of Zambia (EAZ) has said.
EAZ president Dr Chrispin Mphuka said the economy is sufficiently structured because of being private sector-driven unlike in the 1990 era, which experienced harsh effect due to privatisation of state-owned enterprise.
â€œTherefore, the impact of the bailout programme is not expected to be as drastic as it was in the 1990s when the country was moving from a command-driven economy dominated by Government to a private-driven economy.
â€œBased on that, the effects of the bailout programme will now be far less,â€ Dr Mphuka said in an interview yesterday.
He said the IMFâ€™s primary mandate is to ensure that there is adjustment of the economy so that Zambia can service its external debt.
â€œThe biggest problem we have as a country is balance of payments. So, the first benefit we will see as a result of IMF in Zambia [is] raising of investor confidence in the country.
â€œSecondly, it will help the country develop fiscal discipline so that Government does not have balance of payment problems. So probably, in the process, we can even prepare adequately to pay the external debt,â€ he said.
Dr Mphuka, however, said Government may institute certain measures like reduced wages or wage freeze for a certain period which may negatively impact public workers in the quest to reduce budget deficit.
He urged public workers not to cry foul when such measures are instituted as the bail-out programme is unavoidable.
â€œInstead of complaining when that [bail-out] happens, they must look at it from the counter-factual stand point. What would happen if we didnâ€™t have a programme to correct the imbalance which is there now? Because if the economy starts nose-diving, weâ€™ll have bigger problems, people may even start losing jobs, so the effects may be worse without intervening now,â€ he said.
Dr Mphuka said Government should consider creating safety-nets for those that may be disadvantaged so that they donâ€™t lose out completely and create a win-win situation.
NOMSA NKANA, Lusaka