The Zambian Government has said that it is pleased with the approval by the IMF Board of Directors of a general allocation of Special Drawing Rights (SDRs) equivalent to US$ 650 billion, for eligible member countries.
In Zambia’s case, this translates to approximately US $1.3 billion and doubles the country’s foreign exchange reserves. The decision to increase the general allocation was made by the IMF Board on 2nd August, 2021.
Yesterday, Zambia attended a virtual meeting between the IMF African department and several African countries. The virtual meeting was Chaired by ABEBE AEMRO SELASSIE, Director of the IMF African department. Zambia was represented by Secretary to the Treasury FREDSON YAMBA, Bank of Zambia Governor CHRISTOPHER MVUNGA and other Senior Government Officials.
During the meeting, modalities for disbursement and use were discussed. The SDRs will be credited to all member countries in proportion to their existing quotas. In the case of Zambia, this will translate to approximately US $1.3 billion. The amount will substantially boost the country’s foreign exchange reserves. The increase in reserves will help build external resilience and support the current relative stability in the foreign exchange market. This in turn is expected to facilitate foreign and domestic investment flows, going forward.
Commenting on the development, the Secretary to the Treasury has reiterated the Government’s commitment to utilizing the funds in accordance with prudent fiscal management principles through the consultative Medium-Term Expenditure Framework (MTEF) and the national budget. To ensure effective checks and balances, special accounting and reports on the utilization of the proceeds will also be undertaken.
Expenditure focus for the allocation will be on areas that will directly address the health and economic impacts of the COVID-19 pandemic. Elevated attention will also be directed at helping to restore livelihoods of vulnerable Zambians and limiting the negative impact of the pandemic on the economy.
The resources from the IMF will definitely assist the country to attain the aspirations of the Economic Recovery Programme and lead to economic stabilisation and positive growth. The decision of the Fund will become effective on 23rd August, 2021.
Very bad article: there is no mention of the very stringent conditions that the IMF has connected to the funds being handed over. No more subsidies for fuel and electricity, real fight to corruption, effective tax collection etc. LT why not mention this? Has huge impact on the population!
I could have predicted this, we are finished! IMF & Co are up to no good. We are being dismantled piece by piece. We just need to look at history and see the repeating patterns to work out where our country is heading. The bad seed has been sown and the vehicles of destabilisation are in motion. Now they just need a puppet to complete the puzzle.
Good
This is the reckless borrowing PF grasping at every opportunity to propagandist every interaction with Multilateral institutions. Let the money come in, but will be under a new UPND Alliance. They are better economic shepherds unlike this criminal PF organization pretending to be government.
NO ITS NOT AUTOMATIC AT ALL , WAIT AND SEE ,
THIS WAS A GENERAL MEETING WITH NO DIRECT PROMISE
OR OFFER TO ZAMBIA AT ALL
Modern day slavery….thats how they enslave you and tell you what to do
This is fantastic! Who was saying that IMF won’t help Zambia? Who was the motor mouth? Where is he now?
Zambia’s credibility as rapidly developing country has been improved a lot over the last couple of years. Gone are the days when the world doubted our leaders. President Edgar Lungu has change the image of Zambia on global platform.
I really hope, Hakainde Hichilema reads this. He will get a shock of his life. All his plans are falling apart. He had pinned his hopes on premises that IMF won’t help Zambia and he would be freely defame the country on international level. But alas! God didn’t wish that.
Where is Chibamba Kanyama, who thinks that IMF can only give money to Zambia once his preferred candidate HH is in power?
@Future Zed, I could have predicted your reaction too! The frustration is just because, IMF helped the country under the leadership of President Edgar Chagwa Lungu. Don’t you know that Hakainde Hichilema too had plants to get financial aid from the same IMF, which you are accusing of dismantling Zambia piece by piece? I can understand your problem.
@No Corruption Zambia Your acidity seems to have shot up with this article. Give me your address, will send a good antacid. You need it desperately.
Even God has decided to blow up HH’s plans. I am so happy to read this!
Mr President, this is the outcome of your statesmanship. We are so fortunate to have you in State House. I can’t imagine what Hakainde Hichilema would have done to this great country!
As expected, the UPND surrogates have started criticising this too. They can’t digest anything good happening with the nation.
Zambia’s credibility has certainly been improved. The world is coming forward to help.
The good days are ahead, under the leadership of Edgar Chagwa Lungu.
The beggars are up celebrating without shame when they are defaulters of debt repayments.
Typical Zambian and African mentality…celebrating a begging bowl being filled….and fighting for who’s a better begger between HH and Edward chagwa lungu….and the money you’re all celebrating about will end up in Tasila’s bank account and she’ll finish all her building projects
I don’t know what the excitement is about. This SDR is a general allocation to all IMF member states carried out periodically – especially when there is a crisis (like the current pandemic) to supplement member countries reserves using the collective strength of the funds membership (190 countries or so) The SDR’s are not a currency in themselves but may be exchanged for useable currencies. Some richer countries may not even take them up. This is not the same as a bilateral agreement for a loan (like the extended credit facility that Zambia has been negotiating) where the countries must agree on a path of economic reforms or financial prudence.
Approval to recieve funds is one thing and physically receiving the funds is another.
You do realize this is more debt, right? Only if managed properly could this be helpful. We have seen the mismanagement of all loans by the current government. I wonder why anyone would think this would be any different.
This is a relief package if l understand better and enhances the reserves and obviously creates further resilience to the economic fundamentals except the disbursement are controlled to meet the guidelines related to the challenges brought about the covid. This is a welcome move as it put the country on the path for economic recovery.
Ati approval to receive is one thing and actual receiving is another so in short you’re saying this is a promisery note? No it’s not the allocation has been done and member states are free to draw to the extent of the allocation except utilisation of the allocated funds must meet the relief guidelines as provided.
* with effect from 23th August
What are Special Drawing Rights? If the learned Dr Mushota could explain this to me. Thank you
We must understand. It’s a special drawing rights (SDR) component which all IMF members are entitled to. There is interest to be paid, by the way, depending on how you handle the holding and periodically exchange the asset for real currency. This is not the same as the credit facility for a country that has fiscal structural issues, balance of payment problems etc. and where they have to adhere to conditions and make sure they have certain things in place before they can get it. Zambia has failed to secure this second element so far.