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Zambia, IMF reach broad agreement on macroeconomic parameters

• The two parties agreed that Zambia and IMF will continue policy talks.
• Significant progress was made in detailing policy reform agenda to restore public finance and debt sustainability.
• Zambia requested a formal IMF programme under the Extended Credit Facility window in November 2020

Secretary to the Treasury says the Ministry of Finance and International Monetary Fund (IMF) have reached a broad agreement on the macroeconomic parameters, fiscal targets and policy objectives.
In a statement, Fredson Yamba said this follows continued discussions during April to May in a second virtual mission on a potential IMF programme in view of progressing Extended Credit Facility (ECF) discussions, led by Minister of Finance Dr. Bwalya Ng’andu, and an IMF delegation, led by David Robinson.
Mr. Yamba stated that significant progress was made in detailing the policy reform agenda to restore public finance and debt sustainability, while at the same time securing Zambia’s development objectives, and ensuring social protection for the most vulnerable.
He revealed that during the virtual discussions, the two parties agreed that Zambia and the IMF will continue policy talks at the appropriate time to finalize the timeline for implementation of the agreed reform package for the adoption of the Extended Credit Facility supported programme.
“A team from the Ministry of Finance of Zambia, led by the Minister of Finance Dr Bwalya Ng’andu, and an IMF delegation, led by Mr. David Robinson, continued discussions during April-May in a second virtual mission on a potential IMF programme in view of progressing Extended Credit Facility (ECF) discussions.”
“In the meantime, the broad agreement obtained on macroeconomic parameters and fiscal targets will allow the authorities to progress in the technical preparation of debt restructuring talks in the context of the Common Framework as well as with the commercial creditors,” Mr. Yamba said.
And Dr Bwalya Ng’andu thanked the IMF for the productive engagement, stating that the country is looking forward to continuing discussions on the policy package implementation to ensure Zambia’s return to growth and debt sustainability.
“The reform path is clear. We are committed to securing an IMF programme which would support Zambia’s structural reform efforts to strengthen our response to the shocks caused by the Covid-19 pandemic and to ensure a solid foundation for a prompt and inclusive economic recovery. The Zambian authorities express their gratitude to the IMF for the constructive, fruitful and forthright engagement,” Dr. Ng’andu stated.
Zambia requested a formal IMF programme under the Extended Credit Facility (ECF) window in November 2020 and launched its Economic Recovery Programme 2020 – 2023 in December 2020 in order to stabilize the economy severely hit by the Covid-19 pandemic.
The Ministry of Finance continues its engagement with creditors, and in late January, Zambia requested a debt treatment under the Common Framework agreed by the G20 and Paris Club members, which the Ministry hopes will contribute to its goal of restoring Zambia’s public debt sustainability.

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