By MAIMBO MWEEMBA
Economist and Financial analyst Mutisunge Zulu says that the 2022 National Budget will be presented in a very interesting time were the Country has debt, Coronavirus and debt restructuring issues to address.
Mr Zulu said that the peoples’ expectations are high as they wait to see allocations to vital Ministries such as the Ministry of Health which has been greatly affected by the Covid-19 pandemic.
Mr Zulu said that the new regime’s budget for 2022 will not likely be able to address these expectations.
He said that it will not be fair for the new government to be judged based on the 2022 budget as it was impossible for them to start restructuring a new budget overnight.
And Mr Zulu said things like lower taxes cannot happen overnight but a little bit of slack on pay as you earn might be possible, but that will have to be compensated.
He said Zambia has skipped coupons on its dollar bonds and there is freeze on servicing debt hence the default rated on foreign currency side.
“Those advocates for IMF deal understand why we need the deal so bad, creditors have made it very clear that in the absence of the IMF deal it will be very difficult to restructure debt, restructuring of debt includes even the coupons that were not paid, at no condition, so for those schools of thought that feel we do not need the IMF deal, they should know it will actually take a lot of time to restore fiscal fitness in the absence of the IMF deal.
And my views are that half of the people that argue against the IMF deal do not fully understand all the moving parts involved, there is 750,000,000 US dollars’ worth of a 2022 bond which is barely 11 months from now, that is falling due, so assuming we do not get the debt restructure where will the money to service that maturing bond come from,” he said.
Mr Zulu said the country does not need an IMF deal for the 1.3 or the 1.7 billion dollars because Zambia’s problems are more than that but it is with the positive externalities that comes with the IMF deal to encourage investors come on board.
He said for as long as the country does not restructure its debt it will to be default rated.
Mr Zulu urged Zambians to stop focusing on conditionality’s that are perceived to surround the IMF deal.
