The International Monetary Fund (IMF) has granted support of 1.3 billion dollars (1.3 billion euros) to Zambia as part of an agreement reached between creditors to restructure the colossal debt which has sunk the economy of the southern African country. This three-year program aims to “restore debt sustainability, create fiscal space for much-needed social spending, and strengthen economic governance”the IMF said in a statement issued late Wednesday, August 31.
In 2020, during the pandemic, Zambia became the first African country to default on its external debt estimated at $17.3 billion. The release of the IMF support program, signed in December 2021, was suspended on an agreement on the restructuring of this unsustainable debt.
“A substantial strengthening of budgetary controls is needed to support fiscal adjustment, as well as to address governance and corruption vulnerabilities”said IMF Managing Director Kristalina Georgieva.
” Progress “
Moreover, the growth “has been too low to reduce the rates of poverty, inequality and malnutrition which are among the highest in the worldunderlines the Fund. Zambia is in debt distress and needs deep and comprehensive debt treatment”.
In past negotiations, previous governments had failed to release bailouts. But since the election of President Hakainde Hichilema last year, progress has been made in restoring relations with creditors.
The Head of State welcomed the IMF’s announcement, hailing on social networks a mark of ” trust “. “The international community has recognized the progress we have made and our commitment to reviving our economy”he posted.
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