Zambia Set to Join Ghana and other African Countries on the IMF Borrowing List

The just concluded 2017 World Bank & IMF spring meeting (as traditional of previous ones) was not just a forum for discussions on global economic issues: it was also a platform for developing nations particularly from the African continent to consolidate on earlier financial arrangements or the negotiation of new ones with the world’s highest monetary institutions.

Apart from Ghana’s delegation to the meeting, which had the prospects of a possible request to extend the country’s credit programme with the IMF, a prospective new comer to a similar borrowing plan was the southern African country, Zambia.

The International Monetary Fund will by next month (May 2017) send a delegation to Zambia to resume discussions on an anticipated US$1.6 billion aid sought by the country’s government, following the failure to reach a deal at Washington during the spring meeting this April.

Responding to email questions earlier, Alfredo Baldini, the fund’s representative in Zambia said: “Progress was made but program discussions have not yet been concluded. The authorities and IMF staff have agreed that a mission will return to Zambia at the end of May to continue the discussions.”

The Zambian Finance Minister - Felix Mutati arrived at the World Bank & IMF spring meeting with the hope of reaching an agreement over the loan deal which is aimed at stimulating the country’s foreign exchange reserves.

The southern African country’s government had first made its intention to go into a credit deal with the IMF known in 2014, but has ever since been stocked in a series issues delaying the process.

Currently Africa’s second largest producer of Copper, Zambia, has over the past few years been locked in the battle to reduce a successive budget deficit trend, following a drop in metal prices in the global market, coming at a time of unavoidable increases in government spending..

To worsen the whole situation, a persisting power crisis has resulted in the Zambian government paying hundreds of millions of dollars for electricity imports, while economic growth fell to the lowest since 1998.

 

Reference: Bloomberg