IMF funds Zambia's economic growth

The International Monetary Fund (IMF) executive board has approved $29.3mn disbursement for Zambia following the completion of the 6th and final review of the country’s economic performance under the auspices of the Extended Credit Facility (ECF)

 

The $29.3mn to be disbursed will sum up to $350.4mn total disbursements under the ECF.

Zambia’s three-year ECF arrangement which was approved in June 2008 is coming to an end with Government studying available opportunities for future support.

According to a statement issued by the IMF deputy managing director and acting chairman Naoyuki Shinohara, Zambia’s economy continues to gather strength and performance under the ECF –supported programmes that continue to be satisfactory.

 

Accelerated growth

The country’s growth accelerated further in 2010 while private sector credit recovered to pre-global financial crisis levels. The current account position is in surplus while international reserves are solid.

“Prospects of strong growth provide an opportunity for more rapid poverty reduction and employment creation. Enhanced access to social and economic facilities including health, water and sanitation, markets and financial services is needed, particularly in rural areas where poverty is still high,” he elaborated.

He urged Government to strengthen its debt and liquidity management capacity as it taps the sovereign bond market to finance capital spending.

Containing spending pressures, including those related to wages and maize purchases, is critical to safeguarding priority poverty-related and investment spending.

The sequential bumper harvests have revealed the limitations of the current maize pricing and marketing system.

“The Government needs to modulate its maize marketing role to minimise distortions, contain fiscal risks, and priority incentives for the private sector to succeed.”

And the World Bank says Zambia’s revenue from its vast mining sector will by 2015 increase by an additional $100mn from the current $300mn for every overall export earnings of about $5.3bn.

Outgoing country manager Dr. Kapil Kapoor said the WB has not yet projected the amount of copper that would be extracted from Zambia to generate reserves of about $500mn per annum.

 

By Nawa Mutumweno

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