ECONOMIC LITERACY ALERT
Read this carefully before you embarrass yourself online. I have just seen this headline implying there’s something suspicious or contradictory about Zambia receiving a $1.7 billion IMF loan while holding $6.5 billion in foreign exchange reserves. This is either deliberate dishonesty or breathtaking economic ignorance. Either way, it needs to be called out.
FOREIGN EXCHANGE RESERVES and IMF LOANS are not the same thing and serve completely different purposes.
Foreign Exchange Reserves are a country’s savings held by the central bank. They back the currency, facilitate imports, stabilize exchange rates, and protect against external shocks. You DO NOT raid your reserves to pay government bills. That would be like telling someone with savings in the bank to never take a mortgage because “you already have money.” It’s a false equivalence and frankly, it’s dangerous thinking.
An IMF Programme is a structured financial and policy support arrangement. Zambia’s $1.7 billion IMF ECF programme is tied to specific fiscal reforms, debt restructuring, and budget support. It comes with conditions that FORCE discipline and accountability in government spending. It also unlocks access to other bilateral and multilateral financing. You don’t just “use your reserves” instead. These are fundamentally different instruments.
In fact, MAINTAINING and GROWING reserves while accessing structured IMF support is a sign of ECONOMIC COMPETENCE, not contradiction. It means Zambia is rebuilding its buffers AND restructuring its fiscal framework AT THE SAME TIME.
For context, countries like South Africa, Egypt, Kenya, and Indonesia have ALL held significant reserves while simultaneously running IMF programmes. This is standard macroeconomic management. This is not a scandal. This is how sovereign finance works.
What IS scandalous is that some of the “educated” people whose job is to inform the public are instead spreading financial confusion that fuels misplaced outrage and economic illiteracy.
Zambia deserves better. Our discourse deserves better. If you’re going to comment on macroeconomics, please at the very minimum understand the difference between a central bank balance sheet and a government budget.
The ignorance on display today is not just embarrassing. It is dangerous.
Saviour Chishimba
President
United Progressive People (UPP)
UPND Alliance Partner