Zambia, IMF reach agreement on $187 million disbursement, additional funding sought

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ZAMBIA and the International Monetary Fund (IMF) have reached a staff-level agreement that paves the way for an immediate disbursement of $187 million.

The agreement also acknowledges Zambia’s request for additional funding to address economic challenges.

Minister of Finance and National Planning Dr Situmbeko Musokotwane says the development is a testament to Zambia’s determination to rebuild macroeconomic and debt sustainability.

Zambia and the IMF reached a Staff level agreement on economic guidelines and refinements after the third review of the Extended Credit Facility Program (ECF).

According to a statement issued by the office of the secretary to the treasury yesterday the government had requested for an additional US$388 million to maintain macroeconomic stability and support the country’s response to external shocks.

The Staff Level Agreement, subject to
approval by the IMF Executive Board, will guide programme implementation for the next 12
months and trigger the fourth disbursement of about $187 million, upon approval.

“The IMF noted that the ongoing drought has created a more challenging economic
environment and therefore commended Zambia for targeting emergency relief to the most vulnerable while sustaining fiscal consolidation efforts to restore debt sustainability, tighten monetary policy to curb inflation while maintaining exchange rate flexibility, and strive to create an environment that promotes private sector development,” read the statement.

Musokotwane thanked the IMF mission for considering the government’s request for supplementary income to address the economic stress caused by drought.

“I want to thank the IMF Mission to Zambia for completing the third programme review
which has culminated into a Staff Level Agreement for the Extended Credit Facility
Programme. I further wish to thank the Fund for considering our request for additional
financing to respond to the ongoing drought that has created a more challenging
economic environment,”said Musokotwane.

“The Staff Level Agreement is a testament to Zambia’s determination to rebuild macroeconomic and debt sustainability as well as its ongoing efforts to conclude the debt restructuring process within IMF Programme parameters. We are happy that the IMF acknowledges the efforts we are making to revitalise Zambia’s economy and achieve sustainable growth.”

By Mwaka Ndawa

Kalemba June 5, 2024.

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