The International Monetary Fund says challenges brought about by Zambia’s debt and how to dismantle domestic arrears are making it difficult for the country to conclude a deal with the Fund.
IMF Spokesman Gerry Rice told a news conference from Washington that key challenges in moving the talks forward include how to implement reforms to deal with huge fiscal deficit.
Dr Rice however admitted that broad consensus has been agreed and that the Zambian government knows what it should do to move forward.
“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,” Dr Rice said.
He added, “And, again, I want to emphasize, ensuring that the social protection scheme is fully funded with timely payments.”
“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,” Dr Rice said.
“What I can tell you is that 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 ?? and this is important for us, enhanced fiscal space for social and development spending.”
The IMF Spokesman noted that the Zambian authorities have reaffirmed their continued commitment to reforms adding that Fund looks forward to continuing those discussions towards an Extended Credit Facility 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,” he stated.
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.
GOVERNOR
Last week, Bank of Zambia Governor Christopher Mvunga said that Zambia was close to reaching a deal with the International Monetary Fund that will be crucial to restoring macroeconomic stability.
“We couldn’t have gotten any closer with the IMF as we are today,” Mr. Mvunga told reporters on Wednesday, adding that he couldn’t provide a time-line for when the government might reach an agreement with the fund.
“We are very optimistic. It’s progressing pretty well.”
An IMF deal would also help create fiscal space, as would a one-off allocation of special drawing rights by the lender to help countries fight the coronavirus pandemic, Mr. Mvunga said.
The IMF said it was up to Zambia to implement agreed policies to pave the way for further talks.
That dealt a blow to hopes for an agreement before general elections in August, as parliament and cabinet were dissolved last week, and implementing some of the reforms, especially cutting back on energy and farm subsidies, may prove unpopular ahead of what will probably be a closely contested vote.
Africa’s first pandemic-era sovereign defaulter is seeking to reach a deal on an economic program with the Washington-based lender that’s crucial to the government’s plans to restructure as much as $12.7 billion of external debt and boost foreign-exchange reserves.
Zambian international reserves of $1.2 billion at end-March are close to record lows and the kwacha has consistently depreciated against the dollar, making it the second-worst performing sub-Saharan Africa currency tracked by Bloomberg over the past 12 months.
The depreciation has contributed to inflation surging to a five-year high to average 22.2% in the first quarter, compared with 17.6% in the three months through December.
While the central bank expects price growth to ease faster than previously expected, “it’s way outside our target range and it’s a serious concern,” Mr. Mvunga said.
Annual inflation will average 21.9% in 2021 and 16.7% next year, according to forecasts from the Bank of Zambia, which targets price growth at 6% to 8%.
Many, including Simon Quijano-Evans, chief economist at Gemcorp Capital LLP in London, expect Zambia to only conclude a deal after a new government is formed.
The government has been talking about an IMF program for seven years with no concrete results yet.
“So many finance ministers have attempted to push for IMF loan program in the past, in vain,” Quijano-Evans said Thursday in an emailed note.
“A loan program agreement just ahead of the August elections would thus come as one of the biggest surprises in emerging markets.”
Not what PF govern government wants IMF to say, really. They seem to be singing from a different hymn book. What PF wanted IMF to say was that this is global and that everyone is borrowing and covid 19 is to blame.
FORGET THIS ISSUE FOR NOW LET THE NEW GOVERNMENT AFTER AUGUST RESOLVE THIS OBSCENE STATE OF AFFAIRS
WE HAVE BEEN HOODWINKED FOR TO LONG
AND THAT DOESNT INCLUDE THE UN DECLOSURED CH1N-ESE AGREEMENTS
It’s fine …we have a lot of minerals ..
It doesn’t make sense for a country to brag about the so called infrastructure development yet has defaulted twice so far on the loan repayments
Zambia wake up iwe! so these loan sharks who’s job is to sell highly indebted countries more debt are saying our debt is too high for them to sell us more debt? They want to put conditions which will slow down our development, consolidate our current debt and then compound the interest to ensure we never recover in exchange to our resources. They can keep their fake dollars and we will keep our copper and gold given to us for free by God. I hope we have a team of intellectuals looking at this deal because IMF are up to no good.
Zambia wake up iwe! so these loan sh@rk5 who’s job is to sell highly indebted countries more debt are saying our debt is too high for them to sell us more debt? They want to put conditions which will slow down our development, consolidate our current debt and then compound the interest to ensure we never recover in exchange to our resources. They can keep their f@ke dollars and we will keep our copper and gold given to us for free by God. I hope we have a team of intellectuals looking at this deal because IMF are up to no good.
LT stop moderating comments which are trying to speak out against these thieves.
They want to put conditions which will slow down our development, consolidate our current debt and then compound the interest to ensure we never recover in exchange to our resources. They can keep their f@ke dollars and we will keep our copper and gold given to us for free by God. I hope we have a team of intellectuals looking at this deal because IMF are up to no good.
IMF is just being diplomatic. There is no way the Fund can sign a deal with the ECL Regime with 2 months b4 the August 12 Elections. Besides the Fund questions ECL’s poor record on macroeconomic management of the Zambian Economy. The Fiscal deficit is widening as ECL is dishing out Money to buy votes in this Election Season. It’s only a New Govt which will be able to negotiate a Cash Bailout Package with IMF. Should ECL and PF retain Power that Cash Bailout to Zambia will remain elusive. The writing is on the wall.
Now we know IMF uses Bloomberg to speculate and feed the world lies to leverage on deals. They know too well that there is a world recession is looming due to COVID an yet they single us out with scaremongering comments such as “Africa’s first pandemic-era sovereign defaulter” Who did we default against? can GRZ please tell the nation? We need to keep these guys close to our chest because they don’t mean well.
IMF wants Zambia to:
1. Increase fuel prices which have not been hiked for 2 years.
2. Do away with FISP, to abandon support for farmers.
3. Increase tax collection.
The Fund is capitalistic and such requires elaborate time and is only feasibly workable in September. But it’s all too wrong to make us believe that change of government will make Fund proposals attractive to Zambians.
It will be difficult to get any package from IMF until after next govt in short after elections. In the meantime lets just continue with our suffering and no one should cheat us. There is no way discussions can be held without a minister of finance in office.
Always remember ITS IMF who needs Zambia more than we need them. Why you think they are still trying their utmost to get us to borrow from them? ? If Zambia was such a high risk borrower they would have simply said no and left it at that. Remember imf rely on interest to survive so they need countries to borrow. We don’t need them and we not desperate hahaha
DO SOME BLOGGERS HERE HAVE ANY FINACIAL ACCUMEN AT ALL ???
56 YEARS INTO INDEPENDENCE AND STILL STRUGGLING !!!
DOESNT THAT IN ITSELF SAY SOMETHING
WAKE UP PEOPLE ITS NOT US BUT THE MONEY GRABBING GOVERNMENTS WE VOTE IN
FORWARD ZAMBIA !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
THE 1D10-T K Z IS SPROUTING HIS MOUTH OFF AGAIN
ITS NOT THE IMF SEEKING THE LOAN ITS ZAMBIA CRYING FOR ONE
IMF DO NOT SOLICIT COUNTRIES FULL STOP
IF THIS CHAP IS SO CLEVER WHY DOES HE CHASE THE IMF
THANK GOD AUGUST IS NEAR AND WE CAN SAY BYE BYE IWE
THE 1-D-1-0-T K- Z IS POURING GARBAGE From HIS MOUTH AGAIN
ITS NOT THE IMF SEEKING THE LOAN ITS ZAMBIA CRYING FOR ONE
IMF DO NOT SOLICIT COUNTRIES FULL STOP
IF THIS CHAP IS SO CLEVER WHY DOES HE CHASE THE IMF
THANK GOD AUGUST IS NEAR AND WE CAN SAY BYE BYE IWE
LT SUCKS HOPEFULLY THEY TOO GO IN AUGUST
THE SEWERAGE DEPTARTMENT IS OVER FLOWING AGAIN
ITS NOT THE IMF SEEKING THE LOAN ITS ZAMBIA CRYING FOR ONE
IMF DO NOT SOLICIT COUNTRIES FULL STOP
IF THIS CHAP IS SO CLEVER WHY DOESN’T HE CHASE THE IMF
THANK GOD AUGUST IS NEAR AND WE CAN SAY BYE BYE IWE
This is like reading a snake oil salesman’s report. They string you along for ages before they ask for your credit card details. Here, we should just be told kuti there is opaqueness ongoing pa nkongole so optimistically na ma elections coming up tizaulula posacedwa apa. Basi. Then you will be saddled with a new loan that will prolong misery. Ni tiye nayo… Damned if you do, damned if you don’t is Zambia’s lot.
Challenging times ahead of a new govt after Aug 12. IMF proposal of cutting down farm subsidies & energy will breakdown the backbone of Zambia’s economic activity which is at a core of the country economic productivity
RECOVERY IS ALWAYS PAINFUL AND A PAIN WE MUST BARE
OUR FAULT REALLY FOR MAKING OUR GOVERNMENTS GODS AND NOT OUR CIVIL SERVANTS
It is actually govt wanting IMF bailout and not the other way round. The earlier we get some deal, the better for our economy. Let’s not play politics anymore. Let’s find solutions to reverse the downward trend all of us in the spirit of One Zambia One Nation One People.
Shocking I know but for once I agree with KZ. Zambians are so naive to think organisations such as IMF care about us. Name at least 1 country which IMF policies have worked a treat?
FutureZed NONSENSE BANKS CARE ABOUT NO ONE THEY ARE LENDING INSTITIONS AS IS THE IMF
YOU WANT BUCKS FOR FREE ??? NO WAY….. YOU HAVE TO PAY THE INTEREST .. IF YOU DONT LIKE THE TERMS YOU HAVE A CHANCE TO WALK AWAY
BUT WE DONT AND CRY LATER >> OUR FAULT >> I BET EVENTUALLY WE CRY FOR FORGIVENESS AND DEBT WRITEOFF
HOW STUPID IS STUPID
The IMF in effect is meant to rain down on Zambia austerity measures. The policy shift devotion is to minimise budget deficit, shrink spending and cut public consumption. Should this be done in tandem with elections? Who DOSE THAT? Government has already restructured the debt due 2024. That’s why Fitch upwardly, positively, rated Zambia. What other commitment do opponents want grz to make?
K-Z is paid to talk s-h1t all the time
This technique of making it look like they have the solution to all our problems is really interesting. When in fact the solution lies within ourselves. Wake up Zambians!
Most commentators here do not know that Zambia is a bona fide member of the IMF. The IMF is not ‘them’, it is us. We have agreed and signed up to the rules and principles by which the IMF disburses financial assistance. Zambia contributes capital subscription as one of the 190 member countries. So, stop thinking that the IMF is out to get us. The IMF wants simple TRANSPARENCY. Right now the IMF believes that Zambia is hiding debt. Listen to what he said, ‘Debt and expenditure transparency and halting the incurrence of domestic arrears.’ The Zambian government has not been transparent to the IMF as well as to the Zambian citizens themselves! The PF is dishing out money like confetti but its government is failing to pay doctors.
@Tikki, what planet are you from? Can you tell us what is more valuable? Printed fake dollar handouts or God’s money in a form of copper, gold etc? Stop being brainwashed. Why are they not leaving us alone then? They got kicked out of Tanzania and that country is doing just fine. IMF need us more than we need them. Let them go and help the Americans who have the largest debt on this planet. Oh sorry…IMF are Americans dah.
“Those who mine (our minerals) get richer while we, the owners of the land, get poorer. It’s finish. I’m going to Kolwezi to talk to the miners because I want to see clearly. I want the DRC to develop. It is not normal that this soil which allows the others to get rich misses the schools, the hospitals, the roads and that its population is in misery. This is not normal. I would like to know those who keep the DRC in poverty. And I hear to see if they will continue to do their “dirty” work “, hammered Felix Tshisekedi. Here pa ZED, IMF want to continue its ‘dirty work’. Wake up Zambians! Copper, cobalt, silver prices are skyrocketing, hence the IMF interest Pa ZED. They see hope in UPND.
We are very quick to forensically break apart our own government for transparency but fall short in doing the same for institutions such as IMF. How transparent are these organisations when it comes to dealing with less sophisticated countries like Zambia? Why do they always show up just before elections?
Results of RECKLESS borrowing and on commercial terms, who does that. Even in a home, do you borrow to an extent that you choke yourself.
Really laughable…as if the situation has changed 3 years on.
Lungu is a montery delinquent, a tarven lawyer…..
He thinks like sata , that borrowed money is mana from heaven for Zambians…….
The problem he now faces is , his thugs are used of free handouts………costs running into the millions of dollars per month…..
If he cuts those free handout , he knows he is in trouble….
Its delay tactic waiting for 12 August results
GARLIC YOUR BREATH SMELLS VAMOOS
ALL THE MOANING LETS GO BACK TO COMMUNISM AS SOCIALIST IDEOLOGY
THAT SHOULD MAKE ALL HAPPY
Zambia is currently like an alcoholic who keeps asking for money to buy his drink so he can cure his habit… it is folly to lend money to a govt that assumes handouts in the form of bribes to voters is empowerment.
Before he became President did Edgar Lungu create any wealth either for himself or for the people of Chawama? Instead, we have a record of him pinching a widow’s Ngwees. His excuse was, ‘I thought it was my money!’ Now, he still thinks that the money at Bank of Zambia is his as well. Why don’t Zambians ask just such simple questions when they vote? some people were Lab assistants but after a short stint in government, they are richer than their former bosses in the labs. HH should never promise not to arrest these thieves. He should promise what Kagame says, ‘Fair trial.’
If this IMF proves to be a problem why can’t we just send the former special advisor to the President on politics maybe kuti aya baponona chapwa
Anglo.. RST … Mwanseni .. CBC.. OK Bazaars … ZNWC … ZR a shell of itself .. zamtel Limping
We do have the minerals we dont have the brains !!!
WELL I MEAN THOSE CAPABLE DONT STAND A CHANCE ONE HAS TO BE A CADRE
IMF will only show up after elections. This is a roundabout way of saying that lol. Less debt is actually a blessing. If the IMF can force Zambia to pay back on three loans. It bods well for the nation and its future. Press PF because a lot of their officials and political players are crooks or just dwanzy.
““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,” Dr Rice said.”
Say what?
So you PF 1diot$ want to say all the negative economic indicators,the IMF and Fitch Ratings have all been lying about Zambia’s poor economic situation? GRZ’s own poor economic reports and independent analysts can’t all tell a lie in tandem .