This morning, the President of the Republic of Zambia, Hakainde Hichilema, welcomed the International Monetary Fund (IMF) Managing Director, Ms. Kristalina Georgieva, and her team to State House for a crucial meeting to discuss the economic situation of the country. During the meeting, Hichilema thanked the IMF for supporting Zambia’s home-grown economic transformation agenda and urged them and other similar institutions to do more in ensuring that their programs have an immediate impact on the people of Zambia.
“We are grateful for the support that the IMF has provided to our country in these difficult times. However, we believe that more needs to be done to ensure that our programs have a tangible and immediate impact on the lives of our people,” said President Hichilema.
The meeting focused on the need for tangible and speedy progress in resolving Zambia’s debt restructuring process in order to quickly put the country on a more sound economic footing. Ms. Georgieva commended the Zambian government’s good use of public resources in pivoting towards areas of social growth such as education. She affirmed the Fund’s commitment to the Zambian people, whom she hailed as the country’s best resource.
“The Zambian people are our country’s best resource and the IMF is committed to supporting them in any way that we can,” said Ms. Georgieva.
Ms. Georgieva was impressed with the efforts made by the Zambian government to tackle the country’s debt situation and key economic reforms, which have laid the foundation for sustainable economic growth. In December 2021, the IMF team reached a staff-level agreement with the Zambian authorities on a new arrangement under the Extended Credit Facility (ECF) for 2022-2025 in the amount of about US$1.4 billion to help restore macroeconomic stability and provide the foundation for an inclusive economic recovery.
“The Zambian government has made significant efforts to tackle the country’s debt situation and key economic reforms, which have laid the foundation for sustainable economic growth. We are pleased to have reached a staff-level agreement with the authorities on a new arrangement under the ECF for 2022-2025,” said Ms. Georgieva.
Ms. Georgieva said she is elated that Zambia has made tremendous progress towards restoring the economy supported by the IMF, which seeks to restore fiscal and debt sustainability. She also stated that the IMF is keen to continue its engagement with Zambia to generate more momentum for economic growth.
“We are thrilled to see the progress that Zambia has made towards restoring its economy, and we look forward to continuing our engagement with the country to generate more momentum for economic growth,” said Ms. Georgieva.
Meanwhile, President Hichilema said that further delay in debt restructuring may affect the gains that have been made so far and hopes that the restructuring program can be concluded before the end of the first quarter of 2023. The head of state said that the expedition of the debt restructuring program will create fiscal space for the much-needed social spending, investment, and strengthen economic governance.
“We cannot afford to delay the debt restructuring process any further. It is essential that we conclude this program as soon as possible in order to create fiscal space for the much-needed social spending, investment, and strengthen economic governance,” said President Hichilema.
In conclusion, this visit gives renewed hope for heightened collaboration between the Zambian government and the IMF and reaffirms the Fund’s confidence in Zambia’s home-grown reform agenda. The President and the Managing Director are both optimistic that the debt restructuring process will be concluded before the end of the first quarter of 2023, and with the IMF’s support, Zambia will be able to achieve sustainable economic growth and improve the lives of its people.
Meanwhile, Speaking when the IMF Managing Director paid a courtesy call at his office, Minister of Finance and National Planning Situmbeko Musokotwane said that addressing Zambia’s excessive debt has been top on the Government’s agenda.
He further said that this is why the Government is focused on pushing for debt relief.
Dr. Musokotwane further thanked the IMF for the continued support towards addressing Zambia’s debt.
In 2020, Zambia defaulted on its sovereign debt hence, becoming the first African country to do so during the COVID-19 pandemic.
In December 2021, the IMF team reached a staff-level agreement with the Zambian authorities on a new arrangement under the Extended Credit Facility -ECF- for 2022-2025 in the amount of about US$1.4 billion to help restore macroeconomic stability and provide the foundation for an inclusive economic recovery.
And in August last year, Zambia won the IMF approval for a US$1.3 billion IMF bailout package, a three-year loan programme intended to help ease pressure on its public finances while it conducts US$1.3 billion restructuring discussions, and the approval was met to also help the Zambian government to clear the outstanding debt owed to local contractors.