The Zambian government and the International Monetary Fund have again failed to agree on terms of an economic reform programme which would have seen the country accessing financial assistance from the Fund.
Since 2016, Zambia has signaled intentions to get back on the IMF programme but significant progress has never been achieved.
In separate statements issued Monday evening, both the IMF and Ministry of Finance acknowledged that talks will have to continue although significant progress in policy talks has been achieved.
They both agreed that they will continue policy discussions at the appropriate time to finalise the timeline for implementation of the agreed reform package for the adoption of the ECF-supported programme.
“A team from the Ministry of Finance of Zambia, led by the Minister of Finance Dr Bwalya Ng’andu, and an IMF delegation, led by Mr. David Robinson, continued discussions during April-May in a second virtual mission on a potential IMF programme in view of progressing Extended Credit Facility (ECF) discussions. The Ministry of Finance and the IMF have reached a broad agreement on the macroeconomic parameters, fiscal targets and policy objectives,” the Ministry of Finance said.
“Significant progress was made in detailing the policy reform agenda to restore public finance and debt sustainability, while at the same time securing Zambia’s development objectives, and ensuring social protection for the most vulnerable. It was jointly agreed that Zambia and the IMF will continue policy discussions at the appropriate time to finalise the timeline for implementation of the agreed reform package for the adoption of the ECF-supported programme,” it said.
“In the meantime, the broad agreement obtained on macroeconomic parameters and fiscal targets will allow the authorities to progress in the technical preparation of debt restructuring talks in the context of the Common Framework as well as with the commercial creditors.”
Minister of Finance, Dr Bwalya Ng’andu stated: “We thank the IMF for the productive engagement and look forward to continuing discussions on the policy package implementation to ensure Zambia’s return to growth and debt sustainability. The reform path is clear. We are committed to securing an IMF programme which would support Zambia’s structural reform efforts to strengthen our response to the shocks caused by the Covid-19 pandemic and to ensure a solid foundation for a prompt and inclusive economic recovery.”
The Zambian authorities have since expressed their gratitude to the IMF for the constructive, fruitful and forthright engagement.
The IMF said in a statement that it’s mission has continued discussions with the authorities during April-May on their request for an Extended Credit Facility (ECF).
“Building on the earlier discussions in February-March, there was broad agreement on the macroeconomic framework. Notable progress was made in detailing the key policy measures to address the macroeconomic imbalances currently facing Zambia and to enable a return to sustained growth with enhanced fiscal space for social and development spending.”
It said, “The Zambian authorities reaffirmed their continued commitment to reforms. We look forward to continuing ECF discussions as key measures are taken. Staff express their gratitude to the Zambian authorities for the constructive, determined, and frank engagement.”