imf conditions for zambia pdf

Approval by the IMF's Executive Board will unlock an immediate disbursement of about $185 million, the Fund said. IMF CONDITIONS (MAKE AN EFFORT to download the full document and read the contents carefully). 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 shift will be underpinned by an ambitious medium-term agenda to enhance revenue mobilization through policy changes and administrative changes. 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 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. Access unmatched financial data, news and content in a highly-customised workflow experience on desktop, web and mobile. 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. Reuters, the news and media division of Thomson Reuters, is the worlds largest multimedia news provider, reaching billions of people worldwide every day. 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). per capita by about a quarter. The Bank of Zambia will continue strengthening its monetary policy framework and financial sector supervisory capacity, supported by a revision of the Bank of Zambia Act, including to ensure its operational independence. It is imperative that central Build the strongest argument relying on authoritative content, attorney-editor expertise, and industry defining technology. Aug 31 (Reuters) - Zambia won International Monetary Fund approval for a $1.3 billion, 38-month loan program on Wednesday, a crucial step in the southern African country's quest to restructure its debts and rebuild an economy ravaged by mismanagement and COVID-19. It aims to restore macroeconomic stability and foster higher, more resilient, and more inclusive growth by addressing Zambias most pressing macroeconomic challenges, namely: (i)restoring sustainability through fiscal adjustment and debt restructuring; (ii)creating room in the budget for much-needed social spending; and. increased independence of central banks. 2022 International Monetary Fund. 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. See here for a complete list of exchanges and delays. Our Standards: The Thomson Reuters Trust Principles. , . Read answers to key questions regarding Zambia and the IMF. Reporting by Jorgelina do Rosario and David Lawder; Additional reporting by Rodrigo Campos; Editing by Richard Pullin, Stephen Coates and Lincoln Feast. The war in Ukraine has increased prices of fuel and fertilizer, amplifying pressures further. "The first concrete step towards the finalisation of an IMF financial support package which has been many years in the making is indeed a very good sign that authorities provided the much-needed (and previously lacking) financing assurances," said Irmgard Erasmus, senior financial economist at Oxford Economics. xmrNv}Jk*b9Ml :+bNMlURhvE?og^,KQ-EX})Z2d{k3BUFZY(aM%Gh:{s`{?|m\WT>9{]h_lq`TZ`v0i>31R+;:YQq:tJ!Rn.DRG:%"Y~Bm "The IMF programme will provide much needed fiscal space to Zambia and anchor our domestic economic programme," Zambia Finance Minister Situmbeko Musokotwane said in a statement. August 24, 2020. 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. This item is part of a JSTOR Collection. Together with Chad and Ethiopia, Zambia is one of the three countries that have requested a restructuring of its external debt under a common framework agreed last year by China and other Group of 20 members, and the Paris Club of major creditor countries. endstream endobj startxref We welcome the authorities request for a debt treatment under the G20 Common Framework and hope that official creditors can quickly form a committee and provide financing assurances. It's also crucial that the government spends every kwacha well. All rights reserved. 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). 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. Aug 31 (Reuters) - Zambia won International Monetary Fund approval for a $1.3 billion, 38-month loan program on Wednesday, a crucial step in the southern African country's quest to. All quotes delayed a minimum of 15 minutes. These reforms seek to remedy past weaknesses in economic governance and public financial management that led to an unsustainable debt overhang. All rights reserved. New laws and regulations around government purchasing and more transparency in spending will promote accountability and let Zambians see how their taxes are being spent. 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. 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. 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. By clicking 'Agree', you agree to these uses of cookies. In response to media inquiry regarding the recently announced change in The IMF Executive Boards consideration of this agreement is subject to progress on this front. at this critical time when economic stability is threatened by the COVID-19 The next step is for the Official Creditor Committee for Zambia, under the G20 Common Framework, to agree with the authorities the specific modalities of how official creditors intend to deliver debt relief consistent with Fund-program parameters in the form of a Memorandum of Understanding (MoU). Free Download. Zambia before the end of the previous Governors mandate. The IMF's transparency policy allows for the deletion of market-sensitive information and premature disclosure of the authorities' policy intentions in published staff reports and other documents. At their request, a comprehensive IMF-staff supported governance diagnostic assessment was launched in January 2022 to identify the main governance weaknesses and risks of corruption, as well as specific measures to address them. The $1.3 billion 38-month program is based on Zambia homegrown economic reform plan and will help restore macroeconomic stability and foster higher, more resilient, and more inclusive growth in the country by addressing Zambias most pressing macroeconomic challenges, namely; restoring sustainability through fiscal adjustment and debt restructuring, creating room in the budget for much-needed social spending, and strengthening governance and reducing the risk of corruption, including by improving public financial management. [1/2]The International Monetary Fund logo is seen at IMF headquarters in Washington, U.S., October 14, 2017. (iii)strengthening governance and reducing the risk of corruption, including by improving public financial management. Getting approval from the IMF for a programme is a key step for countries in the debt restructuring process. Without credible institutions and sound policies, sustained 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. 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. Browse an unrivalled portfolio of real-time and historical market data and insights from worldwide sources and experts. 359 0 obj <>stream 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. See here for a complete list of exchanges and delays. April 6, 2023. Achieving this goal also implies the restructuring would need to bring the present value of external debt-to-exports ratio to a level consistent with substantial space to absorb shocks by 2027. Further details on the agreement will be released on Monday.". However, Zambia also needs a deep debt restructuring. Access unmatched financial data, news and content in a highly-customised workflow experience on desktop, web and mobile. 2023 International Monetary Fund. hbbd```b``^"-A$W`RLHX`v 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. Cambridge University Press is committed by its charter to disseminate knowledge as widely as possible across the globe. Screen for heightened risk individual and entities globally to help uncover hidden risks in business relationships and human networks. The economic program aims to restore macroeconomic stability and foster higher, more resilient, and inclusive growth. IMF's Work on Zambia Fraudulent Scam Emails Using the Name of the IMF Departmental Papers on Africa Back to Top At a Glance Current IMF membership: 190 countries Zambia joined the Fund on September 23, 1965; Article VIII Total Quotas: 978.2 Million (As of April 30, 2016) Significant improvements in debt management and transparency are also being implemented. ]7W@kEo4 |@e&2g4U8? 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Zambia's government is taking bold and decisive actions to get its economy back on track, and the IMF stands with them. 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. The IMF had reached a staff-level agreement with Zambia last December for up to $1.4 billion loan, but it was contingent upon Zambia's ability to reduce debt to levels the Fund deems sustainable. be possible., Phone:+1 202 623-7100Email: MEDIA@IMF.org. INTRODUCTION The acceptance of International Monetary Fund (IMF) conditionality often has extreme political consequences for the reform-minded governments of developing countries. Cambridge Journals publishes over 250 peer-reviewed academic journals across a wide range of subject areas, in print and online. We use cookies (and equivalent technologies) to collect and analyse information on site's performance and to enable the site to function. The industry leader for online information for tax, accounting and finance professionals. Cambridge University Press (www.cambridge.org) is the publishing division of the University of Cambridge, one of the worlds leading research institutions and winner of 81 Nobel Prizes. 2022 International Monetary Fund. What are the goals of Zambias Extended Credit Facility (ECF) program? The IMF said the loan also will catalyze much-needed financial support from development partners and donor countries. Reuters provides business, financial, national and international news to professionals via desktop terminals, the world's media organizations, industry events and directly to consumers. Its main emphasis is on current issues in African politics, economies, societies and international relations. They will also underpin the authorities efforts to rebuild the economy, including to boost economic resilience in the face of the ongoing COVID-19 pandemic and climate vulnerabilities. )2. "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. Request Permissions. Zambia is in a debt crisis. The governments ambitious reform program, supported by the IMF, seeks to restore fiscal and debt sustainability, create fiscal space for much needed social spending, and strengthen economic governance and transparency. For countries with weak debt-carrying capacity like Zambia, this level is 84 percent. Will the delivery of key social programs like free education be impacted? following statement: We note the change in leadership announced over the weekend at the Bank of The staff-level agreement is subject to IMF Management and Executive Board approval and receipt of the necessary financing assurances. The conditions are incredible, unbelievable, and. We support the authorities efforts to maintain a constructive engagement with private creditors to help secure a deal on comparable terms to official creditors. This will free up some fiscal space to increase social spending to ease transition burdens on the most vulnerable, she said. Together with the fiscal adjustment, Zambia needs a deep and comprehensive debt treatment under the G20 Common Framework to place public debt on a sustainable path in the medium-term. ZAMBIA Joint World Bank-IMF Debt Sustainability Analysis August 2019 Prepared jointly by the staffs of the International Development Association (IDA) and the International Monetary Fund (IMF) Approved by Marcello Estevo (IDA) and David Robinson and Martin Sommer (IMF) The journal also includes an invaluable book review section. International organization Measures to support the most vulnerable include increasing the number of recipients of the Social Cash Transfer to 994,000an almost 50 percent increase over 2019 recipientsand the monthly benefit increased from 90 to 110 kwacha, with World Bank support. Reuters, the news and media division of Thomson Reuters, is the worlds largest multimedia news provider, reaching billions of people worldwide every day. %PDF-1.7 % The Journal of Modern African Studies offers a quarterly survey of developments in modern African politics and society. At the same time, the gap between the high- and low-income groups has probably The Journal of Modern African Studies January 24, 2023. Some cookies allow third parties to tailor the ads you see when you visit our site and other third party websites. Local commentators tend to look for Sign up to receive free e-mail notices when new series and/or country items are posted on the IMF website. The Zambian case, in which the roots of resistance to reform were present in a "developmentalist" model long before the arrival of the IMF, suggests that the current analysis of political "will . Instructions for Contributors at Cambridge Journals Online. The IMF said in a statement that the new Extended Credit Facility arrangement would provide total funding of 978.2 million Special Drawing Rights - about $1.3 billion at current exchange rates - equivalent to 100% of Zambia's Fund quota, or shareholding. It publishes over 2,500 books a year for distribution in more than 200 countries. This includes a new debt management bill, new public procurement regulations, strengthened commitment controls of budget resources, and additional transparency in the agricultural input subsidy program. 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 . All rights reserved. Washington, DC December 6, 2021: An International Monetary Fund (IMF) team led by Ms. Allison Holland, Mission Chief for Zambia, conducted a virtual mission with the Zambian authorities during November 4 Dec 2, 2021, to discuss a program to be supported by the IMFs Extended Credit Facility (ECF) arrangement. The government of President Hakainde Hichilema, who was elected in August, had started talks with the IMF in early November. How will the program protect societys most vulnerable? We are proud to partner with Zambia on this journey, said Allison Holland, Zambias Mission Chief at the IMF. To remove any hurdles to the timely completion of the review, Zambia needs official creditors to move forward and reach agreement on a debt treatment in line with the financing assurances they provided in July 2022. Many of these journals are the leading academic publications in their fields and together they form one of the most valuable and comprehensive bodies of research available today. This requires bringing the debt service-to-revenue ratio to 14 percent by 2025, (from 61 percent now) and maintaining it at this level (on average) for the remainder of the 10-year horizon (2026-2031). The IMF Board approved a new Extended Credit Facility (ECF) arrangement for Zambia today, Wednesday August 31st, 2022. Sufficient progress on this front will be needed before the staff-level agreement can be presented to the IMF Executive Board for approval., IMF staff held meetings with Finance Minister Situmbeko Musokotwane, Bank of Zambia Governor, Denny Kalyalya, and senior government and Bank of Zambia officials. The IMF Press Center is a password-protected site for working journalists. The most comprehensive solution to manage all your complex and ever-expanding tax and compliance needs. banks operational independence and credibility is maintained, particularly Political resistance to International Monetary Fund (IMF) reform in developing countries has become a major obstacle to reform implementation. All Rights Reserved. Screen for heightened risk individual and entities globally to help uncover hidden risks in business relationships and human networks. Zambia will have access to about US$188 million in financing once the review is approved by IMF Management and formally completed by the IMF Executive Board. LONDON, June 28 (Reuters) - The International Monetary Fund executive board will meet on July 12 to complete the first review of its $1.3 billion extended fund facility (EFF) programme for Zambia, according to people with direct knowledge of the matter. hk\EJ}V3FH`>c@S]cZ=>6C+3Y6)MAy6it&wF)bL}ATERU&? %iU(Y uhT7-_kPM\9wDjURQiM& ~RfRTFMF1fZF,$cV[h&}5}nhCU._P^>[+CksGN}_:|}~ey}yu},[?f/h:J{gU?Uc>v=>G? The Zambian authorities have committed to an ambitious economic reform program to address the severe economic and social challenges facing the country. s?- P 2022 International Monetary Fund. The views expressed in this statement are those of the IMF staff and do not necessarily represent the views of the IMFs Executive Board. pandemic. Reuters, the news and media division of Thomson Reuters, is the worlds largest multimedia news provider, reaching billions of people worldwide every day. Zambia's external debt includes around $3 billion in international bonds, $2.1 billion to multilateral lending agencies such as the IMF and another $3 billion to China and Chinese entities. 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. At their request, a comprehensive IMF-staff supported governance diagnostic assessment was launched in January 2022 to identify the main governance weaknesses and risks of corruption, as well as specific measures to address them.

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