The view from Zambia - Clare Chobela Mukupa

By: Fight Inequality

Clare is giving testimony on Wednesday 11 October, 09:30-15:30 Casablanca Time at the Peoples’ Alternative Global Tribunal on the IMF and World Bank in Marrakech, Morocco. Watch live via Facebook.

Zambia’s relationship with the International Monetary Fund (IMF) and World Bank dates back to 1956 and 1965, respectively, and the government's current engagement is not new. The country embarked on a so-called Structural Adjustment Programme (SAP) in 1991, following the transition to multi-party democracy. The stated goals of these reforms were to stabilise the economy, promote economic growth, and create employment, but the situation remained the same for the underprivileged. In 2021, we saw the re-engagement to IMF funding equivalent to the Structural Adjustment.

The IMF and World Bank policies have increased inequality, exploitation, subordination, and marginalisation due to the harsh economic conditions associated with their programmes. Due to their aversion to subsidies and tight fiscal policy prescription, in Zambia, the situation is widening the gap between the rich and poor as poverty increases. This is so pronounced in rural areas where extracts of natural resources by private investors exploit the masses in the name of industrialization. Foreign investors act with impunity in exploiting and displacing local people to foster the so-called ‘Foreign Direct Investment’ championed by the IMF.

The IMF conditions and credit have brought negative impacts in many ways. It is acceptable for a country to borrow for development and empowerment but not for consumption. The debt has increased poverty and inequality. The reforms have led to low agricultural productivity, job losses, cuts to social programs, and rising prices for essential goods and services (monthly hiking of fuel, food pricing, electricity, transport, and production) costs among others. The people are suffering due to the high cost of living. The unstable prices have affected the purchasing power of the local currency. People are failing to feed themselves. A bag of mealie meal and other daily essentials have become so dear to purchase for the masses in Zambia. As a smallholder farmer myself, agricultural inputs have become unattainable. This has made the rural dwellers more miserable, which has caused immense suffering for the vulnerable. Poverty is real in Zambia. The IMF and World Bank must not just massage poor people's challenges but address their root causes efficiently and effectively. Removing subsidies on agricultural inputs and the liberalisation of agricultural markets have made it more difficult for smallholder farmers to compete. This has led to a decline in agricultural productivity, increased food insecurity, and foreign debt. Zambia’s foreign debt increase has brought about harmful austerity measures that have been undertaken, hence, it has lowered household income levels. 

Rural women have been particularly hard hit by the negative impacts of this debt. As a smallholder farmer working with rural women every day, I know that poverty is absolute and rife. We may be far from the city, but hey, we have lost jobs, seen our income decline, and faced increased burdens in providing for our families. The cuts to social programs have also disproportionately impacted rural women, as they are more likely to rely on these programs for essential services such as healthcare and education. The prices of cotton and soya dropping have negatively affected us as rural women. The underdevelopment of the agricultural sector has also hurt rural women, as they are more likely to be involved in agriculture than men. Removing subsidies on agricultural inputs has made it more difficult for us to afford the inputs we need to produce food, and the liberalization of agricultural markets has made it more difficult for us to sell our products at a profitable price. The IMF has failed to deliver on its economic growth and prosperity promises for the vulnerable Zambian. Instead, they have led to increased poverty, inequality, and under development. Rural women have been particularly hard hit by the negative impacts of these reforms, as seen by the amount of lending for farmers and the government's non-caring approach to addressing the buying price of cotton and soya.

Let me close by calling on the IMF and World Bank to:

1. Cancel Zambia’s debt.
2. Stop imposing conditionalities on their loans that require countries to implement harmful austerity measures and allow countries to avail friendly payment plans.
3. Support alternative development policies that are focused on reducing poverty and inequality, and promoting sustainable economic development which is based on consultative approaches.
4. Support rural development and agriculture. This could include providing subsidies for agricultural inputs and improving access to markets.
5. Increase funding for social programs such as healthcare and education.
6. Support policies that promote gender equality and women’s empowerment.

The Zambian government must be deliberate on its borrowing and the conditions it agrees to be set and put people first.

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