By BUUMBA CHIMBULU
THE US$1.4 billion International Monetary Fund (IMF) Staff Level Agreement awarded to Zambia has led to the oversubscription in bond issuance powered by inflows from non-resident investors.
This is according to Bernadette Deka-Zulu, PMRC Executive Director who acknowledged that this agreement was based on Zambia’s plans to undertake bold and ambitious economic reforms.
On the 3rd of December 2021, the Zambian Government reached a Staff-Level Agreement on a programme under the IMF’s Extended Credit Facility (ECF) that envisages the provision of financial support of US$1.4 billion over three years.
Ms Deka-Zulu in her comments on the agreement said it has led to the oversubscription in bond issuance powered by inflows from non-resident investors.
“The announcement of the Staff Level Agreement has led to the oversubscription in bond issuance powered by inflows from non-resident investors making purchases of Government securities, subsequently leading to an improvement in the availability of foreign exchange,” she said in a statement.
She also said the US$1.3 billion Special Drawing Rights (SDR) package from the IMF received in August this year provided Zambia with liquidity resulting in a sharp appreciation of the kwacha after months of depreciation.
“With the SDR came an increase in the country’s foreign reserves which have helped build external resilience and supported relative stability in the foreign exchange market thereby facilitating foreign and domestic investment flows,” Ms Deka-Zulu said.
Meanwhile, Ms Deka-Zulu said successful implementation of the 2022 budget would require consistency in the demonstrated goodwill towards its execution as it presents an opportunity for growth and development through a people centred strategy.
She said this would require a paradigm shift in the mind-set of all stakeholders, in order to deliver development through economic growth, job creation and good governance.
On the 29th of October 2021, Finance and National Planning Minister, Situmbeko Musokotwane unveiled a K172.9 billion national budget for 2022 under the theme “Growth, Jobs and Taking Development Closer to the People.”
Ms Deka-Zulu stressed that successful implementation would need Government to expedite domestic resource mobilisation, engage cooperating and development partners for supplementary funding to key economic sectors such as Agriculture and Tourism.
“This budget presents a great opportunity for growth and development through a people centred strategy,” she said.
US$1.4bn IMF deal boosts bond auction
