Zambia: IMF holds talks with Over possible aid programme.
THE International Monetary Fund (IMF) said on Friday it held talks with Zambian authorities over the possibility of an aid programme.
Adding that there was a range of facilities available for the southern African country.
But critics have vihemently argued that the country is more likely to be forced to cut spending on education and health; eliminate basic food and transportation subsidies; devalue national currencies to make exports cheaper; privatize national assets; and freeze wages. ensure debt repayment to ensure debt repayment.
Zambia began talks with the IMF in March 2016 about a potential aid package after agreeing the budget deficit was not sustainable. The government hopes to conclude a programme with the IMF in the first quarter of next year.
“We have held fruitful discussions with the Zambian authorities and made progress towards reaching understanding on an economic programme that could be supported by an IMF arrangement.
“We have agreed to continue discussions at the forthcoming Spring meetings of the IMF and World Bank in Washington D.C. next month,” the IMF disclosed in a keynote address.
The IMF said it backed Zambia’s fiscal consolidation measures outlined in its 2017 budget, and said it expected the country’s economy would grow by 3.5 percent this year from 3.0 percent last year.
“I think that there is a wide range of facilities that Zambia can access,” the IMF mission chief Tsidi Tsikata told a media briefing but he was economical with details.
Meanwhile, Secretary to the Treasury Fredson Yamba, said at the joint briefing that the government is committed to reduce the overall budget deficit and stimulate private sector borrowing.
The IMF’s comments were positive said Razia Khan, Standard Chartered Bank chief economist for Africa.
“Markets however are eager to know how quickly Zambia might move to a funded programme,” Khan said. “Still, it’s good that the IMF has come out to endorse fiscal and monetary policy choices.”
But the country’s main opposition leader Hakainde Hichilema says IMF bailout programme increase poverty, reduce countries’ ability to develop strong domestic economies and allow multinational corporations to exploit workers and the environment adding that it would stifle.
Zambia has said it expects to agree a deal with the IMF in the first half of this year.