Zambia clinches US$1.4bn IMF deal
By VITA BANDA
MINISTER of Finance Situmbeko Musokotwane has announced that the government and the International Monetary Fund (IMF) mission to Zambia have reached a staff level agreement on a program under the IMF’s credit facility (ECF) that envisages provisions of financial support of US$1.4 billion over the next three years.
Dr Musokotwane told journalists at a press briefing yesterday that this will be in addition to the US$1.3 billion special drawing rights (SDR) allocation that was received in August 2021.
He added, “the staff level agreement was one of the immediate objectives of the new dawn government and a directive from his Excellency Mr. Hakainde Hichilema that the ministry should finalise negotiations with the fund that had protracted for years within the shortest possible time.”
Dr Musokotwane further said the IMF programme will provide the much needed fiscal space to Zambia and anchor the domestic economic programme which is based on economic transformation and job creation, human and social development, environment sustainability and good governance.
“As a result of the policies underpinning the IMF programme, the government will be able to prioritize human development and meet critical government programs including social sector spending in health and education,” he said.
The Finance Minister added that the policy package also reflects government’s objectives such as provision of bursaries and meal allowances to vulnerable students as well as the implementation of the decentralized programs under the Constituency Development Fund(CDF).
“We have engaged in many months of rigorous discussions and consultations to agree on an economic and financial policy package that will help us restore debt sustainability, build a productive and resilient economy and sustain the livelihoods of our people,” he explained.
Dr Musokotwane further said the staff-level agreement paves the way for debt restructuring talks with creditors.
He added that upon reaching an understanding with the creditors including the G20 common framework for debt treatment, the IMF board will consider Zambia’s application for the ECF programme.
Dr Musokotwane further explained that “upon board approval, we will have access to highly concessional financing from the IMF and will also be able to start accessing financial support from other multilateral and bilateral partners.”
The minister added that having a programme in place will boost investor confidence and move the economy towards a sustainable economic growth trajectory.
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