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Wednesday, January 26, 2022

Zambia pledges to slash deficit as it seeks IMF deal, debt restructuring

Economy Zambia pledges to slash deficit as it seeks IMF deal, debt restructuring

Finance Minister Situmbeko Musokotwane has pledged to slash the budget deficit and curb borrowing, as the government aims to agree an IMF lending programme by the end of next month and a debt restructuring early next year.

Presenting the 2022 budget to parliament, Finance Minister Situmbeko Musokotwane said the aim was to reduce the budget deficit from a projected 10.4% of gross domestic product (GDP) this year to no more than 6.7% next year.

The government is targeting economic growth of at least 3.5% in 2022 compared to 3.3% in 2021.

Zambia’s talks with the International Monetary Fund have moved quickly since President Hakainde Hichilema won a landslide election against incumbent Edgar Lungu in August and appointed experienced economist Dr. Musokotwane to rein in public finances.

“I … urge this house and the nation at large to rally together and support government to reach an agreement with the IMF by the end of November,” Dr. Musokotwane said.

“There is no option to this otherwise the debts we owe will choke this nation to a standstill,” he added, saying the aim was for a debt restructuring to be concluded in the first quarter of 2022.

In order to curtail further debt accumulation, Dr. Musokotwane said the government would not contract any external non-concessional loans, except for refinancing purposes.

Dr Musokotwane announced that the government-subsidised fuel supply chain would be restructured, he continued.

He also revealed that government planned to reintroduce the deductibility of mineral royalty payments when calculating corporate income tax – a reform long sought by mining firms in its important copper sector.

“I am certain that the world’s mining investors will be looking at Zambia afresh after today,” said Zambia’s Chamber of Mines president Godwin Beene.

“Renewed interest from investors today could lead to new mines in production over the next five to ten years, and with the right supportive policies in place, that could completely change our nation’s development trajectory.”

9 COMMENTS

  1. International Monetary Fund please take your time to Lender help at least eight months from now. Not all cylinders a firing. (Firing Order of V eight Cylinders 1-8-7-2-6-5-4-)

    Encourage this new dawn government to get parents involved in their children’s education do you know how much that can contribute to the economy. Even if parents are not educated at least 30 minutes doing homework with the children.

  2. There’s no alternative, after the detrimental borrowing from the horrible thieving Edgar China Lungu government. But it will hurt: no more fuel and energy subsidies – fuel prices will go up with 85-100%, and Zesco tariffs will double overnight. Don’t blame the UPND government, blame it on the corrupt PF leadership!

  3. Lusaka times you might be coming back to your senses by moderating f00Is like no corruption. Continue with the good work.

    The thick ones weree celebrating the budget but have no idea what imf restructure looks like. Remember 1991. You will cry just wait

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  4. “Dr Musokotwane announced that the government-subsidised fuel supply chain would be restructured, he continued.”

    In other words, higher fuel prices will ‘stimulate the economy’.

    “reintroduce the deductibility of mineral royalty payments when calculating corporate income tax”

    And give away copper for even less.

    “– a reform long sought by mining firms in its important copper sector.”

    Foreign owned mines.

  5. Ah, stup!d KZ, you are so bad that you still think that Edgar China Lungu was the best invention since sliced bread. Not realizing that the bread was green with mould. Yes, the IMF medicine will hurt. But we can only blame the criminal corrupt PF government for that, ruining the economy while enriching yourself and bringing ordinary Zambians to poverty. If ECL was president now we would be BANKRUPT!

  6. And if I were you, I would be quiet. Yes, if it would be down to me, you and all those PF criminals would be in jail by now. But that doesn’t mean it won’t happen. Get that sensitive stomach of yours used to a water-and-bread diet, because that’s all you are going to get!

  7. The IMF medicine will mean scrapping of fuel and energy subsidies, so petrol will be 85-100% more expensive, and the Zesco tariffs will double overnight. And, stup!d KZ, considering the overwhelming beating you got at the ballot box, Zambians know that it’s Edgar China Lungu who is to blame!

  8. PF ALMOST DESTROYED THIS COUNTRY AND LEFT IT IN A TERRIBLE MESS
    NOW THEY TRYING TO ADVISE THE NEW DAWN BY SAYING WE WOULD HAVE DONE THIS AND WE WOULD HAVE DONE THAT
    NO THANKS PF ZAMBIA HAS LEARNT ITS LESSON
    LET THOSE WHO FILLED THEIR POCKETS ENJOY AND LEAVE POLITICS ALONE

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