LUSAKA – The International Monetary Fund (IMF) said on Friday it held talks with Zambian authorities over the possibility of an aid programme, and said there was a range of facilities available for the southern African country.
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,” the IMF said in a statement.
“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 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 did not elaborate.
Secretary to the Treasury Fredson Yamba, said at the briefing that the government aimed to reduce the overall budget deficit and stimulate private sector borrowing.
Zambia has said it expects to agree a deal with the IMF in the first half of this year.
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.”