Business

Safety net measures vital, says IMF

KALONDE NYATI, Lusaka
THE International Monetary Fund (IMF) says safety net measures will minimise the impact of the removal of subsidies on the poor.
This follows the Zambian government’s announcement that it intends to undertake austerity measures in a quest to rescue the economy.
Newly-appointed IMF director for the African department Abebe Aemro Selassie said while subsidies are regressive as they take up a lot of budgetary allocation, Government should ensure that adjustments are supported by safety nets that will cushion the impact.
Social safety net programmes are targeted to poor and vulnerable households which help protect families from the impact of economic shocks, natural disasters, and other crises.
Minister of Finance Felix Mutati announced that Government intends to remove subsidies on electricity and fuel to rescue the economy and narrow the budget deficit projected to hit 12 percent by the end of the year, and also said the move will be done over a period of time to minimise the impact.
Mr Selassie said with Zambia being severely hit by the decline of copper prices on the global market, fiscal adjustments are necessary going forward.

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