The International Monetary Fund (IMF) says Zambia’s new administration need to take steps to restore macroeconomic stability while protecting the vulnerable and creating more inclusive growth.
This was said after the completion of a staff visit by The IMF team, led by Allison Holland, Mission Chief for Zambia following an invitation by the new government.
The IMF team, led by Holland, held virtual meetings from September 27 to October 1, 2021.
Following the August election, the new government of Zambia invited the IMF for a virtual staff visit to share their key policies and reform measures.
The team met with Finance Minister Situmbeko Musokotwane, Acting Governor of the Central Bank Francis Chipimo as well as other senior government officials.
After the visit Holland said new government must focus on restoring macroeconomic stability.
“We welcomed the opportunity to hear an update on recent fiscal and macroeconomic developments and learn about the new authorities’ reform priorities that focus on restoring macroeconomic stability, re-establishing fiscal and debt sustainability, generating growth, and improving human development,” Holland said.
“In light of the deeply challenging macro-economic environment that prevails, the new administration faces an urgent need to take steps to restore sustainability while protecting the vulnerable and creating more inclusive growth. The discussions last week provided us with a better understanding of how the authorities’ reform priorities are informing their 2022 Budget preparations. We look forward to discussions on a Fund-supported program in the near future.”
In May this year the IMF mission had discussions with the authorities on their request for an Extended Credit Facility.
Building on the earlier discussions in February-March, there was broad agreement on the macroeconomic framework.
Notable progress was made in detailing the key policy measures to address the macroeconomic imbalances currently facing Zambia and to enable a return to sustained growth with enhanced fiscal space for social and development spending.
The Zambian authorities reaffirmed their continued commitment to reforms.
Hichilema who recently attended the U.N. General Assembly after a landslide election victory in August, beating incumbent Edgar Lungu has vowed to reduce the fiscal deficit and put Zambia’ on an economic growth trajectory.
Hichilema recently met with a European Union (EU) high powered delegation in which he emphasised that he was elected on the premise of delivering economic development, freedoms and upholding of democracy.
He also highlighted the need to fortify relations with the EU to foster trade and economic development in that country.