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IMF PRODS ZAMBIA TO CUT EXPENDITURES

THE International Monetary Fund (IMF) has urged the Zambian government to cut expenditures as a way of reducing the swelling debt.

In a statement made available to the media following the completion of the staff visit, the IMF said there is need for a large, front-loaded and sustained fiscal adjustment that would help set debt on a downward path and reduce domestic arrears.

The IMF said Zambia’s spending commitments should also be prioritized in order to meet key development priorities including supporting vulnerable populations.

Zambia is chasing a USD $1.2 billion financial bailout package from the IMF which is intended to boost the country’s economy and further enhance its outlook on the international market.

The IMF team which was in Lusaka from November 13–19, 2019 to discuss recent economic developments and the economic outlook for 2020 and the medium term said Zambia’s macroeconomic outcomes has weakened due to difficult fiscal position combined with a severe drought which has decelerated the projected growth rate to below 2% and an increased risk of food insecurity.

“Discussions covered both near and medium-term policy options to address these challenges, including the main elements of the draft 2020 budget being currently debated in Parliament,” the statement read.

The IMF staff met with President Edgar Lungu, Minister of Finance Bwalya Ng’andu, Bank of Zambia Governor Denny Kalyalya and other senior government and Bank of Zambia officials; and representatives of the private sector, civil society organizations, and Zambia’s development partners.

With this directive coming, it is now not certain if the country will be able to access the bailout package from the institution to twitch its economy.


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IMF FINANCIAL BAILOUT PACKAGE world bank