May 1, 2004

ZAMBIA: On the way back on IMF programme, Finance Minister says

Zambia's chances of getting back on the International Monetary Fund (IMF)'s Poverty Reduction and Growth Facility (PRGF) in June appear bright after the country met key targets under the Staff Monitored Programme (SMP) between January and March 2004, Finance Minister Ng'andu Magande announced. Following an IMF mission to Zambia, the country could get back on the IMF programme if it maintained the same performance to the end of this month, the minister emphasised. "During the same period, all the key structural reform measures envisaged during this period were broadly implemented as planned," he added. The SMP aims to achieve a substantial improvement in Government's overall fiscal position by reducing Government's domestic borrowing and the growth of domestic debt. The SMP also seeks to advance the pace of structural reforms, particularly in the areas of public expenditure management and financial sector development plan. Mr Magande said the 2004 national Budget was in line with the understandings reached during earlier discussions with the IMF staff and provided a basis for the year's macro-economic programmes. He said subject to continued satisfactory performance under the SMP, the objective of having a new three-year PRGF arranged would be attained next month.

The IMF suspended its programme with Zambia in June last year because of fiscal laxity after the Budget deficit widened to 5.1 per cent of Gross Domestic Product (GDP) from a planned 1.55 per cent of the country's real GDP which stands at US$3.5 billion. The SMP, which should have covered the period June to December 2003 was consequently extended to June 2004 to allow for improved track record policy implementation. Satisfactory performance under the extended SMP is essential before Zambia obtains a new three-year arrangement under PRGF. (The Times of Zambia, Ndola)

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