ARE WE IN CHARGE OF OUR COUNTRY OR IS IT IMF?
The International Monetary Fund (IMF) conducted a staff visit between October 2-15, 2024, according to the Bloomberg article published on October 17, 2024.
Prior to the IMF visit, our very own Minister of Finance, Dr Situmbeko Musokotwane, delivered a 2025 Budget speech on behalf of the President of the Republic of Zambia to Parliament. During the budget speech, no mention was made about the state of our economic growth in 2024. By inference, Dr Musokotwane maintained the 2.3% GDP growth projection. In addition, he promised a bullish growth estimate of 6.6% in 2025. Literally, all economic commentators have expressed significant reservations on whether this is a practical target. Similarly, the 3 million tonnes copper production by 2031 has been questioned by many commentators, but the government has insisted that this is achievable.
Come October 17, 2024, the IMF has issued a statement downgrading the GDP 2024 outlook to 1.2%.
We need serious introspection on whether this country is in safe hands. Do you mean the Ministry of Finance and the Bank of Zambia, which conducts its own internal estimates, did not foresee and factor this GDP downgrading in the 2025 budget? No mention of this critically important downturn in our economic fortunes was mentioned in the budget speech. How is that so that if we have economic experts starting from the Minister of Finance, the Bank of Zambia Governor and their entire technical staff miss this? We can only conclude that they were aware but decided to pay a blind eye in order to paint a Rossy picture for political expediency.
This undermines the credibility of data presented by government controlled institutions. Can we even now believe the inflation numbers produced by the Zamstats? Not too long ago, a reknowned US professor had indicated that our true inflation rate is around 24%.
Now that the IMF has announced the projected GDP growth at 1.2%. What is the government number? Or will the government simply revise their estimates to 1.2% because IMF has said it? Did we surely have to wait for IMF and not mention the GDP downgrade in the 2025 budget? In terms of budgeting, 2024 is the base year for building the 2025 budget. By implication, if the base year is inaccurate, then the 2025 numbers will also be inaccurate.
We as SP questioned whether the effect of the drought had been factored in the 2024 GDP growth estimates and generously downgraded the growth to 1.7%.
It is extremely worrying that we have to wait for IMF to tell us what our growth prospects look like when we are the ones managing our economy. Note that the budget was presented at the end of September 2024, and the IMF review was conducted 2-15 October 2 – 15, 2024. So, nothing much changed between these two events for Dr Musokotwane not to have foreseen this and presented it during his budget speech.
This is as clear as day light that we have a failed government, which we can not entrust to superintend over our economic affairs. Most importantly, one is now forced to doubt the economic data churned by this government.
Fred M’membe
President of the Socialist Party