Secretary to the Treasury Fredson Yamba says it is inevitable that Zambia should get a bail out from the International Monetary Fund.
Sources at the Ministry of Finance have revealed that the PF Government has approached the IMF seeking up to US$1 billion bailout.
At the recently held World Bank/IMF Springs Meetings, IMF Africa Director Antoinette Sayeh revealed that the proposal for an IMF programme by the Zambian Government will only be considered after the August elections.
But in a statement, Mr Yamba said “in the meantime, Government will work towards setting the stage for the necessary adjustments in electricity tariffs and fuel pump prices, while ensuring that austerity measures announced by President Lungu in November 2015 are diligently enforced.”
“With respect to Zambia going on an IMF programme, the Government is fully resolved, and as directed by Cabinet, this is inevitable.”
Mr Yamba said the austerity measures have started bearing fruit as seen in the enhanced borrowing discipline that ensures we remain within budget in our quest to finance the deficit.
He said further, the appreciation of the exchange rate attests to not only the positive impact of the measures taken by the central bank but also the fiscal consolidation measures taken by the central government.
He said at the Spring Meetings in Washington, USA, the Zambian Government and the IMF agreed to have some milestones that will eventually lead to the country getting on a programme by the fourth quarter of 2016.
“In line with the roadmap, the IMF will be provided with Zambia’s macro and fiscal plans for the 2017 Budget and the medium term, in June 2016 in line with the national budget calendar,” he said.
Mr Yamba said this is meant to pave way for their input so that once in place, the programme will not be at variance with the budget because a large portion of the programme is executed through budget implementation.
“Further, the Fund will field a mission in September 2016 to finalize budget numbers with Zambia taking into full account the adjustments that will be required for a programme. This will be followed by programme discussions in October/November 2016 with a view to have Board discussions around mid-December 2016.”
He said one key policy issue to accelerate in the coming weeks will be the tabling before Parliament, proposals on the Mineral Royalty Tax (MRT) Sliding Scale.
Mr Yamba said this is meant to have a tax regime that is responsive to changes in metal export prices.