IMF, Govt agree on key objectives

Sat, 25 Mar 2017 09:25:35 +0000

THE International Monetary Fund (IMF) has concluded its visit to Zambia with agreement on key objectives, targets and policies, mostly drawn from the Government’s Economic Programme.

And Government has emphasised that there was no arm twisting during the discussions.

The parties have, however, agreed to continue discussions at the forthcoming Spring Meetings of the IMF and World Bank in Washington D.C next month.

The IMF mission led by Tsidi Tsikata was in Zambia from the 9th to 24th March, 2017 and held wide-ranging discussions with a broad range of stakeholders on topics such as reforming subsidies in the agriculture and energy sectors, and policies needed to diversify Zambia’s exports.

Mr Tsikata told the media at a briefing in Lusaka yesterday that there was a broad agreement on key objectives which were mostly drawn from the Government’s economic recovery plan.

He, however, said further engagement was needed on details of measures and reforms to achieve fiscal consolidation targets while protecting social spending and clearing stock arrears.

“The mission held wide-ranging discussions with a broad range of stakeholders. Topics of discussion included Zambia’s experience under the past IMF-supported programme, and policies needed to diversify Zambia’s exports, job creation and make the economy more resilient to shocks,” he said.

He also projected Zambia’s real Gross Domestic Product (GDP) growth to improve by 3.5 percent this year.

Mr Tsikata said over the medium term, realisation of Zambia’s enormous potential for achieving and sustaining high inclusive growth would depend on the continuous implementation of sound economic policies.

And Mr Tsikata said the mission welcomed the fiscal consolidation plans outlined in the 2017 national budget by Government and recent easing of monetary policy conditions.

He, however, expressed concern that expenditures outpaced revenues substantially in the first two months of 2017 with the deficit financed mostly by domestic borrowing.

Meanwhile, Secretary to the Treasury, Fredson Yamba, said the negotiations were so far a win-win situation with no arm twisting by the two sides.

“What we have done as a team is to find measures they are supposed to be undertaken and in that sense what we are creating is a win-win situation. There is no arm twisting,” he said.

Mr Yamba said Government had indicated during discussions that it had developed appropriate policy and structural reforms needed to restore macro-economic stability.

He said some of the key messages were that enhancing growth prospects, phase clearance of arrears largely related to infrastructure development and energy, while curbing accumulation of new arrears.

“We cannot continue to borrow at current levels; accrue arrears to our contractors without hurting their businesses, and continue to provide subsidies,” he said.