Lusaka – Zambia is set to receive a significant financial boost from the International Monetary Fund (IMF) as it moves forward with its economic reforms. The country reached a Staff-Level Agreement (SLA) with the IMF, which could unlock a $184 million tranche under the Extended Credit Facility (ECF) program after the second review. This development, announced today by the Finance Ministry, is subject to final approval by the IMF’s Executive Board.
The incoming funds are part of the K1.4 billion ECF program launched in August 2022, which is designed to enhance macroeconomic stability and credit stability in Zambia. The program outlines the country’s commitment to fiscal discipline, improved revenue collection and fiscal governance reforms that are essential for financing critical sectors such as health care and punishment.
Finance Minister Dr. Situmbeko Musokotwene stressed that the IMF program is critical to reducing poverty and establishing the foundation for inclusive economic development. The agreement reflects Zambia’s determination to revitalize its economy while ensuring credit stability and supporting vulnerable populations within an inclusive development framework.
The ECF program has set objectives for fiscal reform, poverty alleviation, corruption mitigation and close creditor consultation to align debt restructuring with IMF standards. This recent milestone follows an initial review in April 2023, which released $188 million in support of Zambia’s reform-driven journey.
Treasury Secretary Felix Nkulukusa commended the IMF’s support for Zambia’s restructuring efforts aimed at promoting the Sustainable Development Goals. The SLA aims to consolidate the economic reforms underway since last year, including measures to increase revenue collection and enforce fiscal discipline.
The expected financial injection from the IMF is expected to further these efforts, which is an important step towards achieving Zambia’s economic goals and increasing investor confidence in the country’s reform agenda.
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