Following confirmation that Zambia will be pursuing an IMF loan by the Ministry of finance through the 2022 national budget presentation on 29th October, 2021, the Fight Inequality Alliance Zambia embarked on research to determine the potential impact of an IMF loan on poverty, inequality and Zambia’s future at large. On 3 December 2021, the IMF announced that it had reached a Staff Level Agreement with the Government on a USD1.4 billion IMF program, over three years. It is still unclear how the funds will be disbursed, or the conditionalities imposed.
In light of this, the alliance has since launched the report titled 'Options for equitable economic growth and development in Zambia'. The Fight Inequality Alliance Zambia is of the strong view that, while it is necessary to restructure Zambia’s debt and bring the economy back to its feet, it is important that the government does not take a route that will be the most detrimental to the majority poor Zambians and subject them to extreme levels of poverty as well as widen the inequality gap further.
The IMF and Zambia have had a long relationship with IMF Balance Of Payments (BOP) support rising to prominence during the economic crisis of the late 1980s and 1990s. History shows that the IMF support to Zambia, particularly in the 1980s and 1990s, has been disastrous for the country’s growth and development aspirations.
It's therefore puzzling to see why the Zambian government would once again consider taking this very route and bring devastating consequences to the majority poor Zambians.
According to the evidence in the study, if the Zambian government insists on this path, the next couple of years in Zambia will be very difficult for the majority of the country’s population, especially for the poorest Zambians. As evidenced from the past, the burden of these neoliberal economic policies will fall on the poor while the benefits accrue to a small elite that is well positioned with capital and connections to lobby for favourable economic policies. The puzzling reductions in corporate income tax and favourable tax treatment provided to the mining houses in light of the need to “tighten our belts” is an example of what we need to expect as Zambians. All things considered, this will result in an increase in poverty and inequality in the country as already evidenced by the already skyrocketing prices of food and other commodities.
The Fight Inequality Alliance Zambia is of the view that while Zambia needs to recover from the current debt crisis, it is not necessary to sacrifice the majority of poor Zambians when there are other alternatives to the IMF loan that would be better for Fighting inequality in Zambia. Guided by our ambitions and our undying courage to see the end of Inequality, We as Fight Inequality Alliance Zambia, fully attached to the realities of the citizens of our country affected most by inequality, Recognize the damage that Inequality has done and the extent it has gone to undermine the dignity of our people, we therefore recommend a people’s economic recovery by way of the following:
The future that Zambians want and need is a more equal and just society. An IMF loan that punishes the poor and further enriches the wealthiest among us will take us backwards. We need a fresh approach and fresh ideas. The government should give Zambians an opportunity to participate in this important decision, both through our representatives in parliament and through wide consultations with ordinary citizens. The lack of transparency that has gone with this process so far does not inspire confidence and trust at all.
All in all, we are convinced that a decade of austerity measures would spell disaster for the vast majority of Zambians. This is evidenced by history and we do not need to experiment with it at the expense of the majority of Zambians who do not have access to free amenities.We have plenty of alternatives to borrowing from the IMF as a country. Instead of insisting on a failed ideology that has impoverished us before, we can and we must do better.It is therefore our hope that the report will be well utilized for referral purposes by those in authority to find better ways of recovering from the debt crisis while reducing inequality and other social challenges that widely affect our marginalized citizenry.
The Fight Inequality Alliance Zambia is a movement uniting a wide range of grassroots/rural groups, civil society organisations (CSOs), activists, artists, women and youth groups to collectively fight inequality in Zambia. FIA Zambia is countering the excessive concentration of power and wealth in the hands of a small elite and achieving a just, equal and sustainable Zambia. The Alliance works by linking the intersecting struggles against inequalities of gender and economic status. This work is led and defined by affected people, never “on behalf of others,” and is rooted in the values of the Alliance. We recognise that the growing gap between the rich and the poor adversely undermines access to social services and the protection of fundamental