THE International Monetary Fund (IMF) has announced that Zambia has requested support under the G20 Debt Service Standstill Initiative in a bid to help provide temporary fiscal space this year.
This comes after the conclusion of virtual talks between IMF and Zambia to discuss Zambia’s request for emergency support under the Rapid Credit Facility.
In a statement, team leader Dhaneshwar observed that fiscal pressures in Zambia had increased due to low revenue collections and higher spending needs, hence the requested support from the G20 Debt Service Standstill Initiative.
“The social and macroeconomic impact of the COVID-19 shock, on top of a severe drought last year, will be heavy. Growth is forecast at around ‑5 per cent in 2020, substantially lower than envisaged at the beginning of the year, and the number of people living in extreme poverty is expected to increase. Fiscal pressures in 2020 have increased due to significantly lower revenue collections and higher spending needs. Zambia has requested support under the G20 Debt Service Standstill Initiative, which would provide temporary fiscal space this year,” stated Ghura.
“Discussions covered both near and medium-term policies to address these challenges and the underlying macroeconomic vulnerabilities, including the main elements of the revised 2020 budget, with a focus on spending for the COVID-19 health, social and economic response. Discussions will continue as the authorities determine their policies and priorities in the formulation of the revised 2020 budget, as well as the medium-term fiscal stance needed to restore debt sustainability, revive growth and lower poverty.”
IMF staff held virtual meetings with Finance Minister Dr Bwalya Ng’andu, Bank of Zambia (BoZ) governor Dr Denny Kalyalya, senior government and BoZ officials and the private sector.
The discussions, which took place from June 22-July 10, covered the authorities’ response to the COVID-19 pandemic, recent economic developments, the economic outlook and policies for 2020 and the medium-term.
