By BUUMBA CHIMBULU
GOVERNMENT will utilise the expected US$1.3 billion Special Drawing Rights (SDRs) in line with prudent fiscal management principles.
Secretary to the Treasury, Fredson Yamba, said this would be done through the consultative Medium-Term Expenditure Framework (MTEF) and the national budget.
This came to light yesterday when Zambia and other African countries attended a virtual meeting with the IMF African department and several African countries.
Zambia is this month expected to be allocated US$1.3 billion SDRs support from the International Monetary Fund (IMF).
The decision of the fund will become effective August 23, this year.
Mr Yamba said the resources from the IMF would assist the country to attain the aspirations of the Economic Recovery Programme and lead to economic stabilisation and positive growth.
“To ensure effective checks and balances, special accounting and reports on the utilisation of the proceeds will also be undertaken,” Mr Yamba said in a statement issued after the virtual meeting.
Mr Yamba indicated that the expected US$1.3 billion doubled the country’s foreign exchange reserves.
During the meeting, modalities for disbursement and use were discussed.
The SDRs will be credited to all member countries in proportion to their existing quotas. In the case of Zambia, this will translate to approximately US$1.3 billion.
“The increase in reserves will help build external resilience and support the current relative stability in the foreign exchange market. This in turn is expected to facilitate foreign and domestic investment flows, going forward.
“Expenditure focus for the allocation will be on areas that will directly address the health and economic impacts of the Covid-19 pandemic. Elevated attention will also be directed at helping to restore livelihoods of vulnerable Zambians and limiting the negative impact of the pandemic on the economy,” Mr Yamba said.
