THE International Monetary Fund (IMF) says programme discussions on an Extended Credit Facility requested by the Zambian authorities will be expected to continue once key policy measures have been undertaken.
Responding to a press query on whether the IMF bailout package would be expected before next month’s general elections, IMF spokesperson Gerry Rice said discussions would continue once key policy measures were taken by the government.
“The authorities have requested Fund support for their economic programme to restore macroeconomic stability. Programme discussions on an Extended Credit Facility (ECF) took place in February-March and in April-May, and are expected to continue once key policy measures are taken by the authorities,” Rice said.
He further welcomed government’s commitment to finding a consensual and collaborative resolution to the debt sustainability issues Zambia was currently facing.
“Public debt is unsustainable. We welcome the authorities’ commitment to finding a consensual and collaborative resolution to the debt sustainability issues Zambia is currently facing. The authorities announced on February 5, 2021 that they applied for a debt treatment under the G20 Common Framework. Discussions are expected to take time, given the diverse creditor base,” said Rice.
Earlier this year, the IMF staff team led by David Robinson held Virtual Meetings from February 11 to March 3 to discuss the Zambian government’s request for support under the IMF’s Extended Credit Facility.
IMF staff also held meetings with Bank of Zambia (BoZ) governor Christopher Mvunga, senior government and BoZ officials, members of the Budget and Public Accounts Committees of Parliament, among other stakeholders.
According to a statement, IMF staff team leader David Robinson stated that while there was broad agreement on the nature and cause of the country’s underlying macroeconomic imbalances, discussions on the Zambian government’s request for a Fund-backed Extended Credit Facility were expected to continue following additional work required on the appropriate policy package.
“Broad agreement was reached on the nature and cause of the underlying macroeconomic imbalances. Resolving the macroeconomic challenges will require navigating the need to continue to support the population and the economy through the pandemic in a constrained fiscal environment, while setting the stage for a sustained recovery as the impact of COVID-19 eases and macroeconomic imbalances are resolved,” Robinson said in a statement availed by the Fund’s press officer Lucie Mboto Fouda.
“The recent sharp increase in copper prices should also provide additional resources to help smooth the adjustment. Significant progress has been made and discussions are expected to continue in the next few weeks, following additional technical work on the appropriate policy package.”