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.

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.

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.