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A lawmaker, Christopher Kang’ombe, has said that the US$187 million International Monetary Fund (IMF) second installment, will not increase liquidity in the foreign exchange market.
On Wednesday, the IMF disbursed US$187 million after the completion of second review of the 38-month Extended Credit Facility (ECF) arrangement for Zambia.
The Kamfinsa Member of Parliament in a statement issued in Lusaka on Thursday, noted that this was because it had other specific programmes to fund.
He said in each quarter of 2022, government spent an average of US$300 million, bringing total annual expenditure to US$1.2 billion as part of the Bank of Zambia (BoZ) role to offload dollars into the financial market.
“The kwacha still depreciated coming into the current financial year,” stated the Patriotic Front National Youth Chairperson.
He observed that the initial US$188 million from the IMF for the month of July, 2023 did not lead to the kwacha performing better.
Kang’ombe said this was because the demand for dollars kept increasing and the money had commitments attached.
“In short, we need to do more as a country to raise our own productivity levels in the economy. The aggregate demand must increase,” he emphasized.
Kango’mbe noted that in November, 2023, BoZ Governor, Dr. Denny Kalyalya, bemoaned the lack of dollars to defend the kwacha.
Read More: IMF disburses $187 million, as second review on Zambia is completed
He also canvassed the need for the mining companies to contribute a bit more in taxes to the Zambia Revenue Authority (ZRA).
He insisted that the current mining receipts were not adequate and therefore called for some upward reviews in taxes paid.
“The school of thought that we simply get more mines operating to earn more dollars is appreciated but the benefits will only come in the long run,” Kang’ombe stated.
He emphasized that setting up a mine starts with undertaking exploration, then mobilising capital and labour before the actual production starts.
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