THE International Monetary Fund (IMF) package will offer a blank cheque of incentives for all multi-nationals operating in Zambia without significant benefits to locals, says Private Sector Development Association (PSDA) chairperson Yusuf Dodia.
Mr Dodia said that would perpetuate the extraction of resources from Zambia with no substantial relief to the Zambian citizens if not properly negotiated.
Mr Dodia said in an in interview with the Daily Nation that IMF had a big influence on the conditions that their brother institution the World Bank would demand when providing funding to struggling economies.
He explained that IMF had a very strong influence on the multi-national investors such as the mining companies in terms of confidence and brokering relationships with host governments, hence the need to pay attention to prescription to be laid on the table by the mission.
“A new IMF programme in Zambia will make a field day for Western development partners and offer a blank cheque of incentives for all multi-nationals operating in Zambia, thereby perpetuating the extraction of resources from the country with no significant benefit to the Zambian citizens as was experienced with the mining Development Agreements of yesteryears.
“As patriotic Zambians, we must roll up our sleeves, stand shoulder to shoulder, and negotiate a support package that does not undermine our future,” he said.
Mr Dodia explained that Government invited the IMF to provide guidance and support for the economy to climb out of the debt trap and to strive to continue attracting financial support from the global economy, not to undermine Zambians future.
He observed that the key agenda for the IMF was likely to unbundle and privatisation of ZESCO which had been a major goal for Western development aid.
“Zambia’s prospects with a privatised and unbundled ZESCO will be unaffordable electricity prices for the majority of Zambians, the demise of the manufacturing sector and eventually an energy sector that will squeeze the life out of the economy as electricity prices will continue to rise every year due to cost reflective tariffs driven by the need to make profits,” he said.
Mr Dodia also said the IMF was expected to create the much used demand for increase in fuel prices while the world prices of oil continued to drop.
He explained that increased costs of transport in Zambia would make the economy uncompetitive in the region while causing collateral damage to the nation.
“Beyond the above measures, the IMF are likely to prescribe a ban on increased government employment, a ban on salary increments in the public sector, a tight control on government spending, a reduction on foreign travel by government officers, and possibly a devaluation of the Kwacha,” Mr Dodia said.