Zambia’s government has requested the International Monetary Fund (IMF) to refrain from penalizing the country if its debt restructuring plans don’t go as expected. The appeal was made as the country may not be able to sign an MOU with official creditors in time for the expected disbursement of US$188 million from the IMF. A Staff-Level Agreement has been reached between the IMF and Zambia on economic policies to conclude the first review of the Extended Credit Facility.
Zambia is currently facing a debt crisis, with an external debt burden of approximately US$12 billion. The country’s debt servicing costs have soared, causing a significant strain on its finances, and the country has struggled to access credit from international markets. In response to this crisis, the IMF approved a 38-month Extended Credit Facility (ECF) of US$1.3 billion to help stabilize Zambia’s economy.
As part of the ECF program, Zambia was required to undertake a series of economic reforms, including measures to control its public debt, reduce its fiscal deficit, and promote growth. The first review of the program was due to take place in June 2020, but it was delayed due to the COVID-19 pandemic. The review was eventually concluded last week, and the IMF announced that it had reached a Staff-Level Agreement with Zambia on economic policies.
The agreement paves the way for the disbursement of US$188 million to Zambia, subject to the completion of a memorandum of understanding (MOU) with the country’s official creditors. However, the government has expressed concerns that it may not be able to sign the MOU in time for the disbursement. If this happens, Zambia could face a penalty from the IMF, which would exacerbate the country’s already dire financial situation.
In light of these concerns, Zambia’s Minister of Finance, Dr. Situmbeko Musokotwane, has appealed to the IMF not to penalize Zambia if the debt restructuring plans don’t go as expected. Musokotwane has emphasized that the government is committed to implementing the economic reforms required under the ECF program, but the country’s debt crisis is complex and will take time to resolve fully.
The IMF has not yet responded to the government’s appeal, but it has previously indicated that it is willing to work with Zambia to address its debt crisis. In a statement last year, the IMF said that it was “committed to supporting Zambia’s efforts to address its macroeconomic challenges and reduce its debt vulnerabilities.”
The IMF’s support is crucial for Zambia, as it will help the country to access financing from other international institutions and markets. However, the government must also take decisive action to address the root causes of the country’s debt crisis, including improving the efficiency of its public finances, boosting revenue generation, and promoting private sector investment.
Sad but one cannot help to remember the confidence one showed about international connections. Umusungu temonobe.
The premise for getting the IMF loan was for realignment or reorientation of our $17 billion debt. So please don’t reign supreme and crack that whip before Zambia achieves the original intent. Meanwhile, we need that $188m to run affairs of government before we hit a deadend.
If you want other people to be lenient with their credit you must be prepared to have a human face to our debt as well. Do unto others…
He told us that his friends will give him US$25BN, where is the money???! This is the problem when you have people that can’t think properly. I doubt if they’re even representing Zambia properly when they seem to be literally crawling before the mzungu. Don’t go into negotiations fully expecting to get what you want for you might not have plan B. So you’ll begin to panic and it seems this is where the UPND are
Please we need to go to China immediately… China by 2050 is projected to overtake the USA as the number one economy in the world…that is where real growth and economic support is.
With the current status of the UPNDEAD led mis- Government and the evil IMF on the load deal, I am feeling so righteous.
Aso may the IMF deal fail. May it crumble like the tower of Babel.
May IMF go to internal h.ell. Why would this mis-Goverment begin to cherish Zambian potential and begin to think.
Mr. Fixer can you delete the IMF from your head and start to work. This mis-Government is a mess in every sector and walk of like.Turns out that without IMF he is a nobody.
With folded hands at their masters knees pleading. At home the mines belonging to masters are ripping the country off. Neo- colonialism. Slavery. Debts are contagious whether by pf, mmd, unip or upnd. Superken gave up and abandoned it. Hard.
It’s not the IMF blaming zambia for not getting into debt structuring but it’s zambians who are supposed to blame their leaders who got them into this debt in the first place.
PF left us in a real mess, cleaning up wont be that easy and i suspect UPND did not know the magnitude of the problems caused by the PF. Remain strong,resolute and focussed UPND
Wabatendekefye