Washington DC, 5 September 2022 (TDI): The International Monetary Fund (IMF) has approved Zambia’s request for a $1.3 billion program. The fund will be used to enhance the Southern African country’s debt-stricken economy worsened by mismanagement and the COVID-19 pandemic.
The IMF is working with Zambia to restore macroeconomic stability and foster higher resilient, and more inclusive growth. IMF Mission Chief Allison Holland discusses the goals of the reform program.
Press release: https://t.co/7Muwylvszc
FAQ: https://t.co/y4vT48h6qs pic.twitter.com/DMGDdxpgkz— IMF Africa (@IMFAfrica) September 5, 2022
IMF’s Extended Credit Facility
The Executive Board of the International Monetary Fund (IMF) approved a 38-month arrangement under the Extended Credit Facility (ECF) for Zambia.
Zambia is dealing with the legacy of years of economic mismanagement, with an especially inefficient public investment drive. The program is based on the authorities’ homegrown economic reform plan that aims to restore macroeconomic stability. It fosters higher, more resilient, and more inclusive growth.
Zambian President Hakainde Hichilema expressed his gratitude to the international lender. He said the program will culminate in jobs, a more affordable cost of living, and enhanced development prospects.
IMF programs in Zambia will help in reestablishing sustainability through fiscal adjustment and debt restructuring. It ensures creating fiscal space for social spending to cushion the burden of adjustment, and strengthen economic governance.
In a tweet, IMF Managing Director, Kristalina Georgieva congratulated Zambian President Hakainde Hichilema, saying “we are proud to support Zambia’s homegrown reforms and actions to help build a better future for all Zambians.
Congratulations to 🇿🇲 President @HHichilema & his team on the $1.3 billion IMF program approved by the IMF Board today.
We’re proud to support Zambia’s homegrown reforms and actions to help build a better future for all Zambians. https://t.co/3bVrWF6v3x pic.twitter.com/bTlmJi6GG0
— Kristalina Georgieva (@KGeorgieva) August 31, 2022
Zambia applied to restructure its debt obligations under the G20’s Common Framework guidelines. Its quest was backed by France and China, among others.
Statement by President of Zambia
President Hichilema said that the development by IMF was a vote of confidence in his government and the people of Zambia. The IMF and the international community have recognized the progress the country has made and its commitment to reviving the economy and becoming responsible members of the family of nations.
Securing timely restructuring agreements with external creditors for Zambia will be essential for the successful implementation of the new ECF arrangement.
The IMF program will also “catalyze much-needed financial support from development partners,” enabling further disbursement of $185 million in Zambia.
