By KENNEDY MUPESENI –
ZAMBIA Institute for Policy Analysis Research (ZIPAR) says Government should look to the multilateral financial institutions like the International Monetary Fund (IMF) for balance of payments financing rather than the commercial market.
Meanwhile, the institute has attributed the instability of the local currency to unbalanced economic structure.
Senior research fellow, Caesar Cheelo said Government should approach the IMF for balance of payment support unlike borrowing on the international commercial market which he said was proving to be expensive.
“Looking to the IMF for the bailout is much cheaper than borrowing on the international market especially that the country was facing challenges of the currency depreciation,” Mr Cheelo said.
Commodity prices in 2015 registered the largest decline since the economic and financial crisis of 2008.
Copper prices are estimated to have fallen from an average of US$6,829 in 2014 to $5,160 per tonne in 2015.
This outturn poses serious challenges to the growth prospects, with some mining houses reconsidering the scale of their operations and investments in light of these adverse developments.
Mr Cheelo said on Lusaka’s Hot FM special programme called ‘In-focus on Tuesday’, programme to analyse the 2016 national budget.
He said that getting financial support from the multilateral financial institutions was the best alternative adding that it would also help avoiding clouding out the private sector from accessing funds from the local commercial market.
On the Kwacha volatility, Mr Cheelo  said the depreciation of the local currency against major convertibles could not be blamed on the Bank of Zambia but entirely on the economic mismatch.
“We cannot blame the depreciation of the local currency  on the Central bank, but the challenges is  how the economy has been structured,we are importing a lot ,look at cars we drive and compared to what is produced and exported,” Mr Cheelo  said.