Minister of Finance Margaret Mwanakatwe
Minister of Finance Margaret Mwanakatwe

Finance Minister Margaret Mwanakatwe said she’s in talks with the International Monetary Fund about securing a financial package and has taken the necessary steps to ensure the southern African nation qualifies for support.

“I would want to see a program with the IMF, I think it would be good for us,” Mwanakatwe said in an interview in Cape Town on Tuesday.

“I would love to see something in place by the end of the year. That is why we put in place various measures to ensure that we have a way forward that is sustainable debt-wise.”

Zambia’s efforts since 2016 to secure a $1.3 billion loan from the Washington-based lender have been stalled by concerns over its borrowing plans.

While the yield on the government’s $1 billion of notes maturing in 2024 has dropped 275 basis points this year to 13.02 percent, its spread over U.S.

Treasuries remains the highest in emerging markets among countries that aren’t in default.

MF officials visited Zambia in November and are due to return in March for three weeks, where the package will be on the agenda, according to Mwanakatwe.

She ruled out any possibility of Zambia defaulting on its foreign debt.

“At that meeting we hope we can come to a meeting of minds as to what exactly they would require from us in order to engage for a program,” she said.

*Other highlights from the interview:*

-The minister expects Zambia’s economy to grow at least 4 percent this year. Industries being targeted for growth include mining, energy and agriculture.

-Gross domestic product is being re-based for the first time since 2010, and could show the economy is significantly larger than the data currently reflects. The review of the data is about 30 percent complete.

-The government intends abolishing value-added tax from April 1 and replacing it with a sales tax, which will be easier to collect. “We will be advocating for a lower rate of sales tax than the current VAT rate of 16 percent,” Mwanakatwe said.

“We have gone through the draft of the law. We want to start engaging with the public in February, with a view to getting comments so that that we can get a final document that I can take to cabinet and to parliament.”

Bloomberg

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22 COMMENTS

  1. That’s what your predecessor said. That’s what you have been saying about the national airline too. Learn from your past mistakes, that you are not capable of keeping the promises/targets that you set. Don’t tell us your targets. Just surprise us like Booooooooom! the IMF deal is sealed!

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    • Maggie, are you aware that Dora Siliya will still come out and say GRZ is in the dark about the IMF target and has no information whatsoever as cabinet has not even met over the issue …

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    • These foooools are like a client who goes to the bank asking for a loan when he has denied first time around but continues with reckless spending without sorting out credit rating.

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    • Debt/kaloba for balance of payment is NOT the right medication for zambia’s economic mess.
      We’ve been down this IMF road with KK+UNIP & FTJ’s MMD, it ended up very painful for the masses.
      Key is to stop corruption & financial indiscipline like sending 25 pipo to receive 4 decommissioned fire trucks or buying private jets, limousines for Lungu.

      No country has ever developed through debt or ridiculous taxes.

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  2. IMF conditions are known by everyone.Simply deal with the rampant corruption and pilferage of state resources.
    However ,the PF itself is the embodiment of corruption and a cancer to the Zambian economy. Chemotherapy(IMF loan) will not help but complete surgical removal of the cancerous tumor(in 2021).
    For now lets hope Zambia can stay alive in ICU until 2021.The cancer might start spreading.

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  3. Few months ago the nation was told talks with IMF are on going. We reminded clueless PF that talks died with removal of Mutati, we were labelled names and names – humble pie.
    We told PF they are thieves, called us names and names, now Chitotela the thief is depiction of the entire PF as thies led by Edigar Chagwa Lungu. You still call us names – humble pie, eat it.

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  4. ‘Zambia is not defaulting on its foreign debt.’

    Enough said. PF, Support maintained. On IMF, they are on the rampage causing trouble before elections, I reckon…….maybe unfair!!!!!

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  5. Why do we need this bail out after all the loans we have acquired from China? A criminal, a minister was found with suitcases full of ill gotten dollars, pounds and Chinese currency, you think you can hoodwink the Brent hood group to give you more dollars to squander? Forget about this money and concentrate on the fight against corruption because that is were most of the money is going. Mutati came up with Zambia + fimofimo economic gibberish wherever that came from and lamentably failed. We nee a finance minister whose vocabulary should be centered on fighting corruption, weeding out unwanted elements, reducing on government expenditure and downsizing on a bloated government full of cadres. Too much beer is not good for your madam sober up for once.

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  6. I just can’t stand this organisation called IMF and I hate to see them anywhere near my beloved country the same way you do not want to see a child molester near your children.

    We’re even better off getting a deal from China because though it may also come with certain strings attached, it will not keep us under the hook of perpetual borrowing where IMF wants us to be.

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    • If you are serious about not wanting the IMF tell your President and his ministers to STOP STEALING. Period.

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  7. An IMF financial package is not necessary just close the wastage,theft and abuses.The GDP rebasing is just an excuse to borrow even more and nope,the GDP can’t be significantly larger given the sustained low growth over the years.

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  8. Clueless grandma. Whats certain to happen before the end of the year is that our indebtedness to the Chinese will have risen by minimum 30%. IMF will agree to send a team which you will host using our money and agree nothing with you after that.

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  9. Astounding being ridiculed in spending $500k to go and see 2nd hand fire trucks, 10 times more the value of these same trucks and you go begging the IMF for a bailout ???

    We hope the IMF read Zambian news and see how rich we are……we don’t need that bailout if we can spend like that.

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  10. Commenting with ignorance is horrible.

    China with its huge reserves is the biggest borrower from Bretton Woods. Why?

    Coz debt and financing is the smart way of managing economic affairs. Those who don’t borrow and lend when it’s ripe lose out. Zambia lent Zimbabwe smartly as a result.

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  11. Please ZAMBIA when will you start taking things in your own hands??? Not Always begging, borrowing, asking for help. GET UP AND DOOOOO It!!

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