THE World Bank has indicated to Zambia that effective next year, it will not offer any budget support to the country following its graduation from lower income nation to a lower middle income status, says the Deputy Minister of Finance Miles Sampa.
Mr Sampa said the government has since engaged the World Bank for financial support through the International Development Association (IDA) that provides interest-free loans to governments of the poorest countries, adding that despite Zambia graduating to a lower middle income country, poverty levels are still high.
“We are still a country that requires some levels of grants, and we are engaging the World Bank on those levels. We can only uplift the lives of people from poverty from grants and not loans,” he said.
In an interview, Mr Sampa said following Zambia’s graduation from a lower income country to a lower middle income nation, it is no longer entitled to aid related to poverty reduction.
And Mr Sampa said Government is also finalising a programme with the International Monetary Fund (IMF) on how the country will relate with the fund to be concluded before the end of the year.
Zambia’s three year Extended Credit Facility arrangement which was approved in June 2008 by the IMF came to an end in June 2011 and Government has been studying the options available for future IMF support.
Meanwhile, Government says there is need to reform the public sector, the Farmer Input Support Programme (FISP) and maize marketing to avoid budget deficit and borrowing.
The IMF fiscal monitor report 2012 launched in Tokyo at the IMF and World Bank Group annual meeting notes that Zambia’s deficit is likely to rise this year due in part to lower copper prices, along with higher public wages and delays in subsidy reforms.
Mr Sampa said the issue of subsidies is very sentimental to Zambia.
“Subsidies are targeted towards the FISP and maize marketing subsidies. We can’t have it both ways, if we continue subsidising maize, we have no choice, the budget deficit will increase and it will mean we will have to borrow to meet the expenditure of our budget,” he said.
He said there is need for Zambia as a country to be bold, bite the bullet by reforming the maize input and marketing system.
“Government is clear; we don t want wastage of resources through subsidies. It’s not subsidy which is the problem but the manner in which it’s managed,” he said.
Mr Sampa said the system is not working well and has become a huge cost on the budget.
“Zambians don’t want to get back to the HIPC (Highly Indebted Poor Countries initiative) days and equally, they don’t want to be wasting money by programmes that do not benefit the intended beneficiaries,” he said.
He said subsidies for the vulnerable small scale farmers are welcome but pointed out that in most cases the resources do not end up to the right people.
On public wages, Mr Sampa said there is need to structure the civil service so that it becomes efficient.
Commenting on the IMF calls for governments to reform the financial sector, Mr Sampa said Zambia is a step ahead of the Fund’s programme citing recapitalisation of banks.
“What the IMF is calling for in terms of reforms in the banking sector, Zambia is one step ahead and I recommend the governor.
The central bank has taken precaution in the financial sector,” he said.”
[Zambia Daily mail]
Tui Solveleko. It’s good we have graduated. We’ll need start leaving without the so called loans where we can!
Yes dont give a poor man fish.Teach him how to fish.High time this donor dependence stopped
Good for Zambia!! No need to be feed lyonse!!
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I feel discouraged. I’ve laglery stuck to the letter of Lenten practices, but I haven’t put my heart and soul into it daily. I feel very out of sorts about Lent this year. I don’t do any additional special prayer or meditation, though I’ve started leading the kids in routine morning prayer in the car en route to school each day. It wasn’t motivated just by Lent. I don’t plan on stopping with Easter. I go to Stations weekly and have taken the kids to a Stations they can do.
Are you sure we are going to sustain ourselves ? Already there is this eurobond that has come on shore.
This a good development, now the govt needs to come up with measure to stop the culture of borrowing every now and then. It is high we stood on our own feet and be self reliant. Despite those borrowings the effect have not been felt by a common man no wander the poverty levels are still high. You cannot rid poverty in a country through borrowing. The world bank and rest of the borrowing institutions have never developed any country or improved any economy through their huge loans that attract huge interests. SO we must just come up with our measures to get out this poverty. We have enough resources in the country, we just need to work hard and plan.
Funny that Sampa is crying to be called poor. Its high time we raised resources from alternative sources. The IMF and World bank have been calling upon the govt to raise more revenue from the mines. Other copper producers like Chile have windfall tax and the IMF have been telling you Sampa and colleagues to do the same here but it seems you have your own ideas. I dont want us to regret not having raised money the day the copper price will go down. Can you tax these mines please?
We dont need to be given everytime!! Thats why we have forbia………we have always been berging and hence no respect we receive.Its good for Zambia.
This comes with huge responsibility bit also with a measure of respect in the internationasl community as people who are able to look after themselves!!
Long overdue indeed. Wonder why it has taken them this long. If people can lend your money on the market with on funny conditions attached, why do you want to keep talking to the world bank as though you are a failed state?
watch out for windfall tax. it is coming soon. you might resist now but due to the gap created by this withdraw it is necessary to re-introduce it.
This is what the MMD was working at and they tried to that extent of moving from lower income to lower middle income. Now these Jerabos have come into power and they donot know what to do. They want to continue borrowing,, ba Mailos Sample naimwe you should grow. Zambia started growing but now I can see Zambia becoming short.
Drop of budgetary support means it even more incumbent upon us to be more deft in managing our budget and economy.Voting some bloke who’s not well schooled in the intricacies of global finance is off the table since there’s no safety parachute anymore.
This is good news, it has come at a right time. World bank knows that this is the most corrupt government in the history of Zambia and even when they are given money it wont be guaranteed the money will be used for intended purpose.. THANK YOU WORLD BANK, THANK YOU
a man shall not always stay in his parents house till he ages or dies. Much as these guys heve been willing to assist us with grants I am sure they also want to stop and see us fend for ourselves. It’s high time we did that
Zambia is paying what it sowed. How can we survive on loans? What has got the lower price of copper to do? When the price of copper was high who benefited? The so called investors. So lets increase or reintroduce windfall tax than going begging in the corridors of the IMF. Politicians think twice.
When HH was saying lets try and revenue from the mining sector, the PIG and its supporters were up in arms. Now that there is withdrawal from the world bank, most of the bilateral donors will follow suit which will create a big hole in the budget. Obvious the SNDP had forecast some level of aid to achieve and we need to quickly plug in the holes in the tax system. one way would be to reduces some of these taxes to reduce corruption. For example duty and other taxes for imported motor vehicles add to 96 percent. that is daylight robbery and this rate would have been ok if we had a car industry we were protecting and if people had access to credit to buy the vehicles. Can the Minister of finance do something on this
The IMF acknowledges MMD government moved Zambia from category of lower income nations (HIPIC) to middle income nation status. The challenge is how PF govt can sustain the status quo. This sounds contrary to what Summer Kabimba says that MMD did nothing while in govt. The confident approach to negotiate with IMF by Miles Sampa was crafted on the intellect goodwill of MMD finance minister Dr Musokotwane. The economic growth Zambia attained is from MMD govt. PF need to consult with MMD former ministers in handling options being studied by govt resulting from IMF decisions. To ignore this advice is being unpatriotic to Zambia.
WEll done world bank!
The country is crippled with corruption, you have men, who are only men because of what is between their trunks, but act like Divas, genetically corrupt.
I have said this, and I will say again the country is got to be led by either a woman or a whiteman because like Liberia they will be less corruption, less favours, less under the deal tables, because by virtue of having a blackman the bottomline line is corruption will exist such is the genetic make up of an AFrican man.
just stating what i have led to believe. Zambians as a group are nice people but Men are backwards
I have had terrible encounters with Zambian men in the past who have undermined me ignored me and have never respected me like people here in Scotland even when I am black, why?
Thanks
It depends on the kind of men you went out with, or it could be that you didn’t have confidence back then.
Of-course you dont have respect for men because being a man yourself, zed men have no room for homoz like you. Respect zed-men who dont take sh*t , get your sex orientation right then you will start thinking straight you faggot
It is not too late for Zambians to take a ‘u-turn’. Zambians are not wholly dependent on wages like their wealthy neighbours (South Africans. Notice that, this is not to suggest that Zambians have no potential, however, the underlying argument is that Zambians have access to land unlike South Africans whose subsistence agriculture was obliterated by the former masters. This is a sector in which the Zambian govt. can demostrate/exercise its superiority over other governments in the region. If Zambians are to be lifted out of abject poverty, then agricultural projects are the solutions. Viva HH, UNPD.
The Zambian govt. should subsidise its subsistence farmers across the wideth and lengthy of the country and this is a sector which has the potential to elevate itself to a level of commercial agriculture. The general self-defeating internalisation that the agricultural driven economy is predominantly a Tonga oriented knowledge is exactly what is arresting progress among the majority Zambians, hence some are even proud of their new found homelands such as those who are not welcome in Europe or be it the US itself. Viva the UNPD, HH. Sata, please, we ask you not neglect the agricultural sector. We know you can feed the entire region. Viva HH, Viva Sata, Viva PF, Viva HHHHHH
Sampa has actually subtly indicated that the subsidies are going. Wait and see how poverty will grow in the rural areas. The chaps in town do not grow any food, but they are the ones that determine the fate of all of us. We shall soon go back to yellow GMO maize, just wait. When Mwanawasa brought back subsidies, he had the inkling of what he was doing, himself being a farmer and RB continued. Now we are going back to Chiluba’s and Sata’s Chitemene system. Zambia, o my Zambia, what have we done?
that is good news. squeez the cobra like mbigu wamthaarika. we want quees for fuel . we want drug shortages and food . we want riots
Very ok, we just need proper financial control and have inovative minds. No corruption. At times its not government to blame but individual workers. The salaries of Zambians in the civil service compare with those in Kenya well (with Zambian teachers getting more than Kenyan teachers) but Kenyans work harder. God bless.
Hahaha when PF was in opposition, they said the graduation to middle income was just an MMD thing to win elections… i guess reality is different from perception.
Did you hear that?
The IMF fiscal monitor report 2012 …. notes that Zambia’s deficit is likely to rise this year due in part to lower copper prices, along with higher public wages and delays in subsidy reforms.
And yet the PF govt, even before they settled down in office had to award themselves very hefty salaries.
You also notice that Sampa only talked about the subsidies to poor rural farmers and not the high public wage!. The poor farmers cannot defend themselves. That is what we are talking about. How about talking about the increase to 30 bags of fertliser? That was a campaign message? Somebody??
Not too fast naimwe , by next year we might be back in ‘low income’ , wait for this status to be established first before making such moves.
Anyway, eurobond kaloba will sustatin us if things turn sour in the short term……
Big question is whether zambia has the adroitness required to pull off an economic “coming of age” now that WB tutelage and sustenance is to end?After the debacles of Zambia airways,zamtel and other mismanaged entities that question leaves one to say we’re not of age yet.Watch this space bcoz without WB we will stumble badly economically.
Yes, that is exactly what Zambians should associate themselves with, not what they can associate themselves with. Notice that the element of ‘can’ is nolonger applicable, therefore take cognisance of this. Now that it is written all over, profitable and archievable projects should be given first priority. Achievement in this respect should be economic achievements followed by social achievements and status achievements should not be entertained. Zambia has tremendous quantities of water compared to any country, especially in the SADC region, thus Zambia can turn its great advantegous position into reality.HHHH
huge mining wealth and poverty.. its the paradoxe
we all know where is the money… lack of political will to hunt those looters
even PF eats from looters’ hands
—
According to NGOs in its pilot audit by Grant Thornton, Zambia and Econ Poyry, Zambia lost an estimated income of USD 175 million in tax revenue between 2003 and 2008 from tax avoidance practices’ by Glencore AG International owned Mopani Copper Mines.
Copper from Mopani is sold under a contract with copper in one instance being sold at 25 per cent of official prices at LME. In other words, they are not paying taxes over 75% of the copper sold to Glencore.
ZCCM-ih may probably be losing USD 50 million annually on dividend payments from its 10% stake in Mopani Copper Mines according to Action Aid
In all this, my biggest fear and worry is the poor farmers in the rural areas. No one speaks for them. When they stop growing the maize, we shall start eating yellow GMO maize. The last time we had this was when Chiluba was in power and you know who else was there. Brace yourselves Zambians, this time next year GOD forbid, we may have yellow maize from USA.
Subsidizing the poor farmers is a must. Never even temper with it. Zambia is now food secure coz of the subsidized inputs. Recall how in the Chiluba time when the agricultural sector was left to the private sector how we suffered eating yellow maize from USA, and we lost respect.
What is needed is to subsidize the very poor farmers and not these thieves who get the inputs. Please ACC have a hand in the way the Inputs are distributed. The other thing is that be wary of the IMF, they never want Zambians to enjoy life. Let them stop and it will give us encouragement to steer our development ourselves.
I was promised 15 bags of fertiliser by the Serpent Cobra Ukwa Sata CNP and am waiting for my bags. So what is Mileage Sampa talking about? Payani Farmer-PF will never finish the race because Serpent Cobra Ukwa Sata CNP cheated alot and he has now faced the realite of education in politics. He thought he was in his village as headman were u can promise anything forgetting that Zambia is a country. Will wait to what happens without WB support starting next year.
Anyone recall the PF sycophants’ comments on the budget? Chikwanda claimed that it was proper and the PF androids went into chants of “pro poor”? How could this be when the poverty stricken rural dwellers have been short changed? Sata and Chikwanda don’t know anything about farming. I doubt they even know where the food they eat comes from. Their age mates from the political sector live on farms. They and their Kaunda live in the suburbs. Wonder why Kaunda was a failure agriculture wise?
Self destruction mode, a hungry man is an angry man.
It is unfortunate that, we have this Paya Farmer government at this crucial time. We need think tanks in economics now than ever before and I am worried because I can not see this in the PF, it does not inspire me. Our people will die or hunger and simple diseases very soon.
About time please World Bank close the down behind you… what’s the point of singing about GDP when the major contributors of that figure take everything out and only pay the wage bill. Time to end this dependence syndrome and work with what you have got.. time to start leaving within your means..
The Zambian govt. should invest in technological innovations such as affordable irrigation systems accessible to low income end-users such as the majority rural dwellers. Very handful countries in Africa have really taken great strides in investing in subsistence farming and those who did so achieved unmatched successes e.g. the once rich super rich Zimbabwe. It is not sophisticated to initiate non-stop produce of agriculture products, it is an idea which demands right agricultural policies from the central govt. so as to trickle down both correct policies & incentives to masses in rural areas. Viva HHHH, Viva SATA.
This is not an opportunity which should be expolited through speeches laced with political motives or personal rationales designed to defeat the potential which most hardworking rural Zambians have. So many countries outside our continent are very successful in subsistence agriculture which is resposible for massive job creations and it contributes to massive govts revenues. Most of these educated rural dwellers will see no need to migrate or relocate to urban areas so as to seek employment opportunities. People are without jobs or any means to generate income because they are not sensetised about agricultural practices, yet they have access to land. Viva HH, via Sata, UNDP.
Zambians should be aware that the only country which can present a challenge, is South Africa. However, even if South Africa is a wealth nation, Zambia has factors which favours its impending dominace in respect to agriculture. Labour is very expensive in S.Africa whereas in Zambia it is not. Further, Zambia has tremendous fresh water resources unlike S.A. which has abundance of salty water. And Zambians are richer than my own people due to easy accessibility to fertile soil which we do not have in S.Africa. The most important factor is the labour issue because Zambians can lower prices of agricultural products as much as they want. Viva HH, UNPD. Viva Sata.
Thank you World Bank. The Government and the ones to follow must now get creative and imaginative.
We have so much learning and experience that we have not put to good use. Let us now rise to the challenge and manage to deal with poverty through serious and tangible development.
In fact, the World Bank was never created to really transform peripheral countries into semi-peripheral or core countries and, this latest development should not be treated as a shock but a reminder that debt enslaves any society or persons. Zambians should emergy as fortunate strong innovative people read to face the tasks of adding developmental layers on top of what the previous regime left. The agricultural sector should be the area of immediate concern, followed by the mining sector, service industry and the tourism sector. These areas will be the drivers of Zambia’s economy coupled with technological advancements. Viva HH,UNPD, viva SATA.
Removing subsidies on agriculture is not the solution to your huge budget deficit. The budget is just not operationalised in its preparation. Gone are the days when the budget relied on forecasts. Agricultural subsidy will ensure food security and the war between US and Europe is on this very issue of agro subsidy. If wealthy nations continue to subsidise their agro sector, how about the so called low medium countries with poverty levels all the way up to their neck. It will be sucidal to do away with subsidies. Zambia, should now start looking at such factors as broadening the tax base and also putting in place prudent tax mechanism to ensure that they collect what is a fair tax from international investors. Diversify your export and maximize utilisation of natural resources.
Reliable sources have really confirmed that
madam Luo is frustrated due to her
demotion that has led to her being in
charge of witch doctors, makishi/nyau &
denying her international trips because it is
almost impossible for her to go out for
tours or accompany the president.