Political resistance to International Monetary Fund (IMF) reform in developing countries has become a major obstacle to reform implementation. Is another debt restructuring needed after the program ends. Use the free Adobe Acrobat Reader to view this PDF file Summary: Zambia is dealing with large fiscal and external imbalances resulting from years of economic mismanagement, especially an overly ambitious public investment drive that did not yield any significant boost to growth or revenues. The IMF said the loan also will catalyze much-needed financial support from development partners and donor countries. But positive changes are happening. ]7W@kEo4 |@e&2g4U8? To close the balance of payments financing gap, the authorities are seeking cash flow relief from the debt restructuring amounting to $8.4 billion during the program period (2022-25). 1986 Cambridge University Press Access unmatched financial data, news and content in a highly-customised workflow experience on desktop, web and mobile. Staff would like to express their gratitude to the Zambian authorities for their open, committed and constructive engagement., Phone:+1 202 623-7100Email: MEDIA@IMF.org. 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The International Monetary Fund executive board will meet on July 12 to complete the first review of its $1.3 billion extended fund facility (EFF) programme for Zambia, according to people with . The Zambian authorities have committed to an ambitious economic reform program to address the severe economic and social challenges facing the country. Implications of I.M.F. Washington, DC: In parallel, Zambia will initiate specific discussions with private creditors on how comparability of treatment, a requirement of the Common Framework that will be further described in the MoU, might be achieved. Monetary policy, Please address any questions about this title to publications@imf.org. August 31, 2022 The IMF Board approves SDR 978.2 million (about US$1.3 billion) 38-month ECF arrangement for Zambia to help restore macroeconomic stability and foster higher, more resilient, and more inclusive growth. To entrench medium-term fiscal sustainability steps are also being taken to strengthen economic governance and public financial management, together with debt management and debt transparency. INTRODUCTION The acceptance of International Monetary Fund (IMF) conditionality often has extreme political consequences for the reform-minded governments of developing countries. Sign up to receive free e-mail notices when new series and/or country items are posted on the IMF website. The conditions are incredible, unbelievable, and. 2022 International Monetary Fund. The board meeting comes after Africa's second-biggest copper producer clinched a deal with bilateral creditors such as China and the Paris Club to rework about $6.3 billion of overseas debt. Browse an unrivalled portfolio of real-time and historical market data and insights from worldwide sources and experts. Access unmatched financial data, news and content in a highly-customised workflow experience on desktop, web and mobile. Georgieva said in a Twitter message the Zambia loan approval was a "major milestone" for the long-stalled G20 effort, showing that it can deliver results for other debt-burdened countries. For countries with weak debt-carrying capacity like Zambia, this level is 84 percent. Exclusive news, data and analytics for financial market professionals, Reporting by Jorgelina do Rosario, editing by Rodrigo Campos and Chizu Nomiyama, Italy lifts its 10-year ban on Libyan civil aviation over Italian airspace, UN secretary-general condemns air strike that killed at least 22 people in Sudan, Central African Republic says Wagner troop movement is rotation not departure, South Africa complete travelling squad for New Zealand showdown, Australia PM's Germany, NATO trip to focus on trade, security, India to hold trade deal talks with UK, European nations on July 10-11, Turkey aims to ensure fiscal discipline and lower budget deficit, finance minister says, Russian federation council speaker to visit China, Xinhua reports. See here for a complete list of exchanges and delays. "The macroeconomic stability that most developing countries have enjoyed in 2023 International Monetary Fund. China's on the move again, economic outlook brightens, Japan's biggest banks to raise housing loan rates after BOJ's policy tweak, Japan's tourism restart stirs hope of service-sector recovery -PMI, South Korea's Sept inflation slows but tightening bias seen intact, Belgian Ryanair pilots plan strike in summer holiday period, Ontario plans more nuclear reactors to meet rising electricity demand, Mercedes-Benz picks Tesla's charging standard for North America EVs from 2025, Tesla rolls out customer referral incentive globally as EV price war heats up, UAW wants EPA to soften vehicle emissions plan. Spending on education and health care will go up, and more of Zambia's most vulnerable people will get money through the social cash transfer program. The journal also includes an invaluable book review section. By clicking 'Agree', you agree to these uses of cookies. The country will have access to around $188 million after the review is completed. Our Standards: The Thomson Reuters Trust Principles. The overall objective of the debt restructuring is to: i)Bring the risk of debt distress to moderate over the medium term. Will the delivery of key social programs like free education be impacted? At the same time, the gap between the high- and low-income groups has probably Economic growth has been weak, and the number of Zambians living in poverty has increased. hbbd```b``^"-A$W`RLHX`v At the same time, with support from Fund capacity development, the authorities are strengthening accountability and transparency, particularly around the use of public resources. Cambridge University Press is committed by its charter to disseminate knowledge as widely as possible across the globe. See here for a complete list of exchanges and delays. In response to media inquiry regarding the recently announced change in The staff-level agreement is subject to IMF Management and Executive Board approval and receipt of the necessary financing assurances. At the conclusion of the mission, Mr. Porter issued the following statement: "I am pleased to announce that the IMF team has reached a staff-level agreement with the Pakistani authorities on a nine-month Stand-by Arrangement (SBA) in the amount of SDR2,250 million (about $3 billion or 111 percent of Pakistan's IMF quota). The IMF Executive Board has approved a three year 1.3 billion US dollar program to support the government's reform efforts under this program to help bring public debt back under control, Zambia's government aims to cut wasteful spending or spending that doesn't help the poor, such as fuel subsidies. IMF Executive Board Approves New Extended Credit Facility (ECF) Arrangement for Zambia. It is intended not only for students and academic specialists, but also for general readers and practitioners with a concern for modern Africa, living and working both inside and outside the continent. The Fund-supported program incorporates providing access to free education for all and a much-needed increase in spending on health and education, including hiring over 41,000 additional health and education workers. Editorial policy avoids commitment to any political viewpoint or ideology, but aims at a fair examination of controversial issues in order to promote a deeper understanding of what is happening in Africa today. All rights reserved. The industry leader for online information for tax, accounting and finance professionals. The IMF Executive Board has approved a three year 1.3 billion US dollar program to support the government's reform efforts under this program to help bring public debt back under control, Zambia's government aims to cut wasteful spending or spending that doesn't help the poor, such as fuel subsidies. IMF Members' Quotas and Voting Power, and Board of Governors, IMF Regional Office for Asia and the Pacific, IMF Capacity Development Office in Thailand (CDOT), IMF Regional Office in Central America, Panama, and the Dominican Republic, High-Level Summary Technical Assistance Reports, Financial Sector Assessment Program (FSAP), Currency Composition of Official Foreign Exchange Reserves. Investors welcome the news, which lifted the country's hard currency bonds, which jumped as much as 1.3 cents to trade between 75-78 cents in the dollar, Tradeweb data showed. The industry leader for online information for tax, accounting and finance professionals. To support the authoritys efforts to strengthen governance and reduce corruption a comprehensive governance assessment will be undertaken with support from IMF staff. The IMF team reached a staff-level agreement with the Zambian authorities on a new arrangement under the Extended Credit Facility (ECF) for 2022-2025 to help restore macroeconomic stability and provide the foundation for an inclusive economic recovery. United Nations' Secretary-General Antnio Guterres condemned the air strike that reportedly killed at least 22 people in Sudan on Saturday, according to a statement released by a spokesperson early on Sunday. Build the strongest argument relying on authoritative content, attorney-editor expertise, and industry defining technology. Surprisingly, few analysts and observers, particularly the antiIMF proponents, have ever bother- ed to check what role the IMF programme played in assisting Zambia to establish macroeconomic stability and sustained economic growth during this period. Our Standards: The Thomson Reuters Trust Principles. Britain's BBC will face questions from the government on Sunday about its handling of an allegation that one of its star presenters paid a teenager thousands of pounds to pose for sexually explicit photos beginning when they were 17 years old. A key objective of the authorities reform program, supported by the Fund, is to gradually increase the level and quality of social spending to reduce poverty and inequality, as well as improve access to basic social services, especially in rural areas. What are the next steps in the debt restructuring process? To complement the authorities strong reform program a comprehensive debt treatment under the G20 Common Framework is needed to restore debt sustainability. A final report will be published by the end of the year. See here for a complete list of exchanges and delays. be possible., Phone:+1 202 623-7100Email: MEDIA@IMF.org. endstream endobj startxref "The staff-level agreement is subject to IMF Management and Executive Board approval and receipt of the necessary financing assurances. The domestic revenue mobilization strategy is anchored on policy changes to increase revenues from corporate income tax, VAT, and excises as well as improvements in tax administration. "This agreement is based on the authorities plans to undertake bold and ambitious economic reforms," Allison Holland, IMF mission chief for Zambia said in an emailed statement. ]__?|zyb&F?l]Gr]*Sm.S!p\2?~uy}po|v Ow5XGg_?4/\_?>_nn|76?mX^y8}x~^x#:3L'%kHP#A(Cj@<=se>>{y}rCKWWP->bP IMF Reaches Staff-Level Agreement on the First Review of the Extended Credit Facility and Conducts Discussions on the 2023 Article IV Consultation with Zambia. REUTERS/Yuri Gripas/. Strengthening governance and reducing the risk of corruption, including by improving public financial management are critical to addressing the root causes of the debt crisis faced by Zambia. Request Permissions. For terms and use, please refer to our Terms and Conditions Once an agreement that meets these goals is in place, Zambia would have secured cash flow relief through 2031, as well as seeing a significant cut in the economic burden (or present value) of its debt, debt sustainability would be restored and no additional rounds of restructuring would be needed. The Journal of Modern African Studies The authorities are undertaking a sustained fiscal adjustment by reducing inefficient spending and raising domestic revenues. The restructuring of its external debt, which amounted to more than $17 billion at the end of 2021, is seen by many analysts as a test case for the region. Exclusive news, data and analytics for financial market professionals. banks operational independence and credibility is maintained, particularly Ministry of Finance and National Planning, #mofnp, Lusaka-Zambia to OFFICIAL GROUP - Ministry of Finance & National Planning The Fund said the next step in the debt restructuring process was for Zambia's official creditor committee to agree on specific steps on how to deliver debt relief, in the form of a memorandum of understanding to be reached by the end of 2022. All rights reserved. THE IMF AND ZAMBIA: THE CONTRADICTIONS OF EXCHANGE RATE AUCTIONING AND DE-SUBSIDIZATION OF AGRICULTURE HANS-OTTO SANO ON 1 MAY 1987, President Kaunda of Zambia announced the abolition of weekly exchange rate auctioning and with that the termination of the IMF-Zambian agreement on economic crisis management which had been in operation since 1984. The authorities have emphasized a zero-tolerance approach to corruption. at this critical time when economic stability is threatened by the COVID-19 LUSAKA, Dec 3 (Reuters) - The International Monetary Fund and Zambia on Friday reached a staff level agreement on a $1.4 billion, three-year extended credit facility, which could bring the heavily indebted country one step closer to a comprehensive debt overhaul. restoring sustainability through fiscal adjustment and debt restructuring; IMF Members' Quotas and Voting Power, and Board of Governors, IMF Regional Office for Asia and the Pacific, IMF Capacity Development Office in Thailand (CDOT), IMF Regional Office in Central America, Panama, and the Dominican Republic, High-Level Summary Technical Assistance Reports, Financial Sector Assessment Program (FSAP), Currency Composition of Official Foreign Exchange Reserves, Questions and Answers on Sovereign Debt Issues, IMF Executive Board Approves New Extended Credit Facility (ECF) Arrangement for Zambia, Zambia: Request for an Arrangement Under the Extended Credit Facility-Press Release; Staff Report; Staff Supplement; Staff Statement; and Statement by the Executive Director for Zambia.

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