
THE International Monetary Fund (IMF) mission says Zambia has continued to record growth in the economy on the back of prevailing high copper prices on the global market.
And the IMF has commended Zambia on the B+ rating by Fitch Rating Agency saying it will bring the country at par with rated countries that have sound economies.
The IMF team, headed by IMF division chief for African department George Tsibouris, has been in the country on its routine mission to review Zambia’s macro-economic performance.
Mr Tsibouris said Zambia has performed well with continued high prices of copper along with some improvement in other sectors such as construction and tourism.
He said this in an interview in Lusaka on March 15.
“Zambia’s economy has done quite well, both in terms of economic growth and fiscal programmes. Copper output and prices continue to be high with broad-based growth in construction and tourism,” he said.
Mr Tsibouris said the trend is expected to continue in 2011 with the outlook generally positive on account of good economic fundamentals such as low inflation rate, interest rates and stability in foreign exchange rates.
He said international reserves remain relatively strong with reserves standing at about US$2 million.
He, however, said that external factors such as increased food and fuel prices will impact on the standard of living.
Mr Tsibouris arrived in the country on March 3 and has held a series of meetings with Government, Bank of Zambia, civil society and business organisations. He is expected to issue a detailed statement on March 16.
The IMF conducted discussions for the sixth review under the Extended Credit Facility from March 3-16, 2011.
On the rating, he said the assigning of a B+ status by an independent agency is a good thing as it will enable Zambia to compare favourably with other countries that have been rated and give the country an opportunity for borrowing.
Mr Tsibouris cited countries such as Kenya, Angola and Ghana as some of the economies with sound economic standing that have a similarity with Zambia’s rating status.
He also commended Government for the intention to issue a 500 million euros bond but was quick to say that it is important to manage the money that will be raised to projects that will generate economic growth, create jobs and additional taxes.
He said there is one more independent rating agency to give its objective assessment.
“It is a good thing…I don’t think the other rating agency will be influenced by the recent rating because it is independent and as such will carry out an objective assessment,” he said.
Early this month, Zambia was rated B+ for long-term foreign and local currency Issuer Default Ratings by Fitch Ratings.
Government appointed Fitch Ratings and Standard and Poor’s rating agencies to provide an independent and prospective credit opinion on Zambia.
[Zambia Daily Mail]