The International Monetary Fund (IMF) has approved an increase in financial support to the Zambian Government to help it cope with the global slowdown and financial crisis.
This follows the IMF completion of the first and second reviews of Zambia’s economic performance under the Poverty Reduction and Growth Facility (PRGF).
This is contained in a statement released by First Secretary at the Zambian Embassy in Washington DC Ben Kangwa.
Mr. Kangwa said the IMF board increased the financial support from about US$256.4 million to about US$ 329.7 million.
The completion of the combined review enables the immediate disbursement of an amount equivalent to about US$160.1 million, bringing the total disbursement to about US$ 170.6.
IMF Deputy Managing Director and Acting Chair Mr. Takatoshi Kato said in a statement released to the Zambian Embassy in Washington DC today, that Zambia’s programme implementation was adversely affected by a number of exogenous shocks.
He cited the increase in food and fuel prices in the first half of 2008 which pushed inflation above the programme target.
Mr. Kato added that a steep fall in copper prices related to the current global economic and financial crisis had severely compressed export proceeds and government revenue and that the Zambian Government responded appropriately to these shocks.
The IMF Deputy Managing Director further stated that the banking sector remained adequately capitalized and liquid but noted that continued vigilance was needed in light of the global financial crisis and pressure on the exchange rate.
Mr. Kato also said Zambia’s public debt sustainability outlook was favorable, adding that the authorities adopted a new public debt management policy and strategy to help ensure that the public debt remains sustainable.
Mr. Kato said caution will be needed in contracting new non concessional external debt.
The IMF Acting Chair said in order for the Government to improve on the reliable supply of electricity, it was important that private investment was attracted to this strategic sector.
Mr. Kato explained that determined implantation of the strategy would be essential to attract private investment and to improve the efficiency and governance of the state owned power utility.
ZANIS/PM/AM/ENDS
IMF has always extended this arm… any tangible results out of this gesture? Any targeted poverty levels been reduced?
Could the IMF to show us which countries they helped which eventually moved on to be independent of them and financially sound.
Hey!! just interested to know people on move. Is this the Ben Kangwa I know as ZNBC personality?
And we want to give money to Zimbabwe.