Discussions on Zambia’s IMF Extended Credit Facility request on going

 Discussions on Zambia’s IMF Extended Credit Facility request on going

Discussions on Zambia’s IMF Extended Credit Facility request on going.

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INTERNATIONAL Monetary Fund (IMF) says discussions for Zambia’s requests for an Extended Credit Facility (ECF) are underway after a notable progress was made in detailing the key policy measures to address the imbalances currently facing the southern African country.

According IMF, the ECF supports countries’ economic programs aimed at moving toward a stable and sustainable macroeconomic position consistent with strong and durable poverty reduction and growth.

“Where are we on Zambia? Again, they have requested a financing arrangement with the IMF to support their reform efforts. And we had discussions with the Zambian authorities earlier this year and they continued through this month and that would be a request for an extended credit facility, which you asked about,” IMF Director of Communication Gerry Rice said in a recent press briefing.

Access to ECF financing is determined on a case-by-case basis, taking into account the country’s balance of payments need, the strength of its economic program and capacity to repay the Fund.

Rice said there was broad agreement on the macroeconomic framework and notable progress was made in detailing the key policy measures to address the imbalances currently facing Zambia and to enable a return to sustained growth with adding this is important to enhanced fiscal space for social and development spending.

“That said, key challenges remain including to implement reforms to correct current large fiscal imbalances, increasing revenues to provide the needed fiscal space to achieve those development objectives that I mentioned including through debt and expenditure transparency and halting the incurrence of domestic arrears. And, again, I want to emphasize, ensuring that the social protection scheme is fully funded with timely payments,” Rice said.

Rice highlighted that Zambian authorities have reaffirmed their unrelenting commitment to reforms as such the Bretton woods institutions is continuing discussions towards an ECF program as key measures are taken.

“And, of course, the timing as to when those measures are taken is, as always, in the hands of the authorities, in the hands of the Zambian government. And just to tie it up on the common framework, Zambia has expressed its interest in the common framework. And to the best of my knowledge, those discussions are continuing,” Rice said.

According to IMF staff team led by David Robinson held virtual meetings during February 11–March 3 this year to discuss Zambia’s request for support under the IMF’s ECF found out the weak economy and increased spending—both on emergency COVID related needs as well as agricultural subsidies—the fiscal deficit widened further largely financed from domestic source.

Fidelity Hamilton Mhlanga

Fidelity Hamilton Mhlanga has been writing finance and business news over the past 5 years. He earned a BSC in Media and Society Studies and Masters of Development Studies from Midlands State University, in Zimbabwe. He follows mining, insurance, banking and energy stories. He is passionate about development and growth.

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