By BUUMBA CHIMBULU
ZAMBIA and the IMF have reached a broad agreement on the macroeconomic parameters, fiscal targets and policy objectives, making notable progress in Zambia’s request for an Extended Credit Facility (ECF) from the Fund with the Washington based lender acknowledging the country’s efforts to address macroeconomic imbalances.
Both the Zambian government and the IMF have confirmed significant progress was made in detailing the policy reform agenda to restore public finance and debt sustainability, while at the same time securing Zambia’s development objectives, and ensuring social protection for the most vulnerable.
The IMF reported on its website while Zambia’s Secretary to the Treasury, Fredson Yamba said in a statement that, “it was jointly agreed that Zambia and the IMF will continue policy discussions at the appropriate time to finalise the timeline for implementation of the agreed reform package for the adoption of the ECF-supported programme.”
Mr Yamba said in the meantime, the broad agreement obtained on macroeconomic parameters and fiscal targets will allow the authorities to progress in the technical preparation of debt restructuring talks in the context of the Common Framework as well as with the commercial creditors.
And Zambia’s Minister of Finance, Dr Bwalya Ng’andu has thanked the IMF for the
productive engagement and look forward to continuing discussions on the policy package implementation to ensure Zambia’s return to growth and debt sustainability.
The minister said the government was committed to securing an IMF programme which would support Zambia’s structural reform efforts to strengthen our response to the shocks caused by the Covid-19 pandemic and to ensure a solid foundation for a prompt and inclusive economic recovery.
The Zambian authorities express their gratitude to the IMF for the constructive, fruitful and forthright engagement.
To stabilize the economy severely hit by the Covid-19 pandemic, Zambia requested a formal IMF programme under the Extended Credit Facility (ECF) window in November 2020 and launched its Economic Recovery Programme 2020 – 2023 in December 2020.
The Ministry of Finance continues its engagement with creditors, and in late January, Zambia requested a debt treatment under the Common Framework agreed by the G20 and Paris Club members, which the Ministry hopes will contribute to its goal of restoring Zambia’s public debt sustainability.
And according to the IMF, there was broad agreement on the macroeconomic framework between the Zambian Government and the IMF building on the earlier discussions in February-March, 2021.
“Notable progress was made in detailing the key policy measures to address the macroeconomic imbalances currently facing Zambia and to enable a return to sustained growth with enhanced fiscal space for social and development spending,” the IMF said.
“The Zambian authorities reaffirmed their continued commitment to reforms. We look forward to continuing ECF discussions as key measures are taken,” the Fund posted on their website yesterday evening.
The IMF in a statement said the mission had continued discussions with the Zambian authorities during April-May 2021 on their request for an ECF.
“Staff express their gratitude to the Zambian authorities for the constructive, determined, and frank engagement,” the Fund was.
