Zambia Opposition Leader Signals Strong Support for IMF Bailout

  • Hichilema says he will back any bail-out conditions set by IMF
  • Zambia needs competitive mine tax system, Hichilema says

Zambia’s main opposition presidential candidate, Hakainde Hichilema, said there was no doubt Africa’s second-biggest copper producer needs help from the International Monetary Fund to shore up its ailing economy and that he will support any preconditions for funding set by the Washington-based lender.

“We are singing from the same hymn sheet as the IMF,” Hichilema said in an interview in Lusaka, the capital, on Aug. 6, just five days before the southern African nation is due to hold presidential elections. “What the IMF wants, we want even more.”

Hichilema, who leads the opposition United Party for National Development, is the main challenger to President Edgar Lungu in the elections, and risk advisers Eurasia Group expect him to win. The vote comes at a time when the economic growth rate is at its lowest since 1998, inflation has accelerated to more than 20 percent and the budget deficit is running at nearly 10 percent of gross domestic product as a result of falling copper prices and years of government overspending.

While Lungu’s administration has approached the IMF for aid, the president said he’ll only accept an IMF bailout if the terms are acceptable. Hichilema said Zambia had no option but to tap the IMF for funds.

‘Broken Economy’

“The Zambian economy is structurally and fundamentally broken,” Hichilema, 54, said. “The IMF program to us in the UPND is not a matter of debate. We want to have a more prudent and stringent economic offering than even the IMF.”

Lungu beat Hichilema by less than 28,000 votes in a snap election held in January last year to replace Michael Sata, who died in office. Hichilema has vowed to fix the economy, cut waste and stamp out corruption if elected. The UPND would also focus on borrowing at lower costs from development finance institutions, rather than selling more Eurobonds, where yields have climbed to more than 10 percent, he said.

Hichilema criticized the government over an inconsistent mining tax regime, with four changes over the past five years. The most recent version, which came into effect this year, was the result of a “facade” of consulting the industry, he said.

“We recognize that capital, which is huge in the mining sector, is internationally mobile,” he said. “We need to have an internationally competitive fiscal tax regime in the mining sector so that we can attract investment.”

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