The International Monetary Fund plans to come to Zambia in January to start talks about a new loan programme for Africa’s top copper producer, the Fund said on Tuesday.
The IMF said Zambia’s economy is projected to expand six percent this year as copper production increases, and inflation is now 7.1 percent year-on-year, close to last year’s level.
But copper prices have fallen and the government’s spending is much higher than planned in its budget, while revenue is below target.
Zambia now only has enough reserves to cover less than three months’ worth of imports, below the ratio the IMF typically considers adequate to protect a country in case of shocks.
[pullquote]Zambia now only has enough reserves to cover less than three months worth of imports[/pullquote]
“A further build-up of reserves from the current level… is needed in light of risks stemming from a potentially deteriorating external environment,” John Wakeman-Linn, the IMF’s mission leader, said in a statement after visiting Zambia this week.
The mission came to Zambia for the IMF’s regular analysis of its economy, known as an Article 4.
The government has spent money on fuel subsidies, a September wage hike for civil servants, and paying for the debt and operations of the Food Reserve Agency, which purchases food from farmers in disadvantaged parts of the country for prices usually higher than those in the market.
The IMF said Zambia’s budget deficit this year should now reach about 8.5 percent of GDP, above the five percent target.
Investors have become more interested in fast-growing Zambia in recent years, and the country’s debut $750-million bond issue last year was 15 times oversubscribed.
However, the bonds for B-plus-rated Zambia have performed poorly this year. Investors have become more reluctant to take on the biggest risks as the US Federal Reserve is planning to scale back its bond-buying programme, which had boosted risky assets.
Source: Reuters
No, please not another loan.
If the load is the infrastructure development – roads, universities, hospitals, schools, houses, etc, then it is very much welcome. Zambia will never be the same again
If the loan is the infrastructure development – roads, universities, hospitals, schools, houses, etc, then it is very much welcome. Zambia will never be the same again
@Action Man
I agree but the govt has to be a prudent manager of finances and the PF govt is far from that.
it is true pf is a failed project H.H.was right,Loans loans for how long.
“$750-million bond issue last year was 15 times oversubscribed”, what is the meaning of this statement?
Every loan Zambia gets should be based on a concrete plan for how it will be used and re payed. Let’s not get meaningless indebtedness.
I believe it means that the international market offered to buy 15 times more debt than the $750 million put up by Zambia (….which in truth I thought was 750 million euros, not dollars).
You are right there should be a concrete plan (…PF and plans, huh?), but in this case the article is not talking about how the money would be used or repaid.
A black man never seems to learn.
Zambia is finished!
We shall auction muchinga province when the lenders knock in our door! this sata with his popularlist policies is taking this country into the stone age ,that’s why its important to have someone with at least a diploma as head if the executive not this CNP.
after spending years running away from IMF, here we are again. Budget deficit, 8.5% double the projected amount by his honour Mr. Chikwanda. Am tired mwandini and I would really love comments from PF supporters explaining how we got to this point and the justification of borrowing more. Didn’t we at one point in the recent past have some sort of surplus and where infrastructure like hospitals and schools were being built while subsidies were still in place and mealie meal cost about K30 and the dollar was at K3.5 and the government respected the rule of law and let opposition parties hold meetings while also not meddling in chiefs affairs?. This party needs to go, theres no two ways about it.
IMF Loans are never easy to pay back. In my opinion we have enough resources in our country that we need to control and manage effectively to even have surplace cash in our reserves.
Government needs to have 50% Shares in all mining companies then we should be fine.
Hugo shavez (MHSRIP ) did it and it worked.
can sam one pilish translet this ekonomic languajee to normal standard flee languajee which puwa me ken understand. what dash it mini?
Are you a member of the cabinet or the beloved leader himself?
‘Oversubscribed’ means that when they were issuing (selling for the first time) the bonds, more people wanted to buy more bonds than were available, so some missed out.
What do you think the people who missed out will do when they start trading in the market? They’ll probably buy them and push the price up, so being ‘oversubscribed’, or better, ‘heavily oversubscribed’ is a good thing in the short term for those investors who did get some of the securities.
These madalas will leave the country in serious financial problems!
PF dont contract unnecessary debts. Get debts which are able to help build the economy and not stealing like the MMD did. We refuse boldly debts meant for consumption…amen.
Peace and Prosperity to Mother Zambia.
How much money did MMD leave in the nation’s coffers you re.tard? Surely where has all the money that MMD left disappeared to and you talk about MMD stealing? You definitely hate the truth which is simply that your pa fipuba have lamentably failed. You will find that the correct phrase is ‘truth hurts’ not ‘truth hates’ you ignorant Muchingan kolwe.
Any such associations with IMF (Inslavement Money Funder – sic) is evil. Look at the youtube syrianGirlPartisan, you will learn why Syria hates IMF, or is it the other way round? We the people should be mobilized against such loans. Alternatively. we may learn from our first President the reasons for cutting ties with the IMF during a part of his rule. Usury practiced by IMF is one of the things Hitler did not like.
The money for construction of a house for a sitting president,cctv salary increment for ministers should be revoked.
As well as the fat Kasebanya’s slush fund.
No, stay away from IMF. Imf will not save Zambia, the world bank will not save Zambia salvetion is within
Give us–Give us—Give us when can you do something on your own???????????
The IMF should not allow an irresponsible grouping of people to borrow from them as doing so will hold the genuine Zambian citizens hostage to a debt intended to benefit a few corrupt individuals. This country does not need to borrow from anyone, after-all North-Western Province is able to finance this country adequately.
We do not want to be HIPC again. Any loans advanced to this country will have to be repaid by 2016, otherwise the individuals appending their signatures to the loan application, will be the ones personally to repay it.
reserves have fallen to less than 3 months imports cover.and the solution ,more debt right?how bloody intelligent you IMF.please dont come,we dont need you and you are not welcome
IMF is BAD – do not let them sell Zambia for $1.00
Modern day slavery – IMF – they want our Copper, crop, and all minerals and raw materials and have us dying on the jobs like these poor people from Nepal. Govt should stay away from IMF and World Bank. These institutions caused the credit crunch.
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So sad that people from poor countries are dying for peanuts – no pay, no place to sleep – just flith.