LUSAKA,- The International Monetary Fund (IMF) announced on Wednesday that its executive board has completed a third review of Zambia’s Extended Credit Facility (ECF) and approved an immediate disbursement of approximately $569.6 million.
Additionally, the board has approved an increase in financial support from $1.3 billion to $1.7 billion to assist the southern African country in responding to a severe drought that has caused significant crop losses and affected power generation.
In a statement, IMF Deputy Managing Director Antoinette Sayeh commended Zambian authorities for their progress on economic and structural reforms while also addressing the humanitarian challenges posed by the drought.
“Going ahead, coordinated macroeconomic policies, continued efforts to restore fiscal and debt sustainability, and consistent reform implementation will be key to addressing the impact of the drought, preserving macroeconomic stability, and bolstering growth,” Sayeh emphasized.
Zambia, rich in copper, recently emerged from default after a protracted debt-restructuring process that lasted over three-and-a-half years. This drawn-out process served as a cautionary example for the G20’s Common Framework mechanism, which aims to help low-income countries manage unsustainable debt burdens. The lengthy debt rework has deterred investment, constrained economic growth, and impacted local financial markets.
Last week, Zambia’s finance minister requested parliamentary approval for additional spending of 41.9 billion kwacha ($1.65 billion) to help repay external debt and address the effects of the drought.
Source: Reuters
