IMF confirms will loan Zambia, PF spending higher than budget, has reserves for only three months

Filed under: Main News,Statements |

Washington – The International Monetary Fund plans to come to Zambia in January to start talks about a new loan programme for Africa’s top copper producer, the Fund said on Tuesday.

The IMF said Zambia’s economy is projected to expand six percent this year as copper production increases, and inflation is now 7.1 percent year-on-year, close to last year’s level.

But copper prices have fallen and the government’s spending is much higher than planned in its budget, while revenue is below target.

Zambia now only has enough reserves to cover less than three months’ worth of imports, below the ratio the IMF typically considers adequate to protect a country in

PF Minister of Finance Alexander Chikwanda

PF Minister of Finance Alexander Chikwanda reason to look like this

case of shocks.

“A further build-up of reserves from the current level… is needed in light of risks stemming from a potentially deteriorating external environment,” John Wakeman-Linn, the IMF’s mission leader, said in a statement after visiting Zambia this week.

The mission came to Zambia for the IMF’s regular analysis of its economy, known as an Article 4.

The government has spent money on fuel subsidies, a September wage hike for civil servants, and paying for the debt and operations of the Food Reserve Agency, which purchases food from farmers in disadvantaged parts of the country for prices usually higher than those in the market.

The IMF said Zambia’s budget deficit this year should now reach about 8.5 percent of GDP, above the five percent target.

Investors have become more interested in fast-growing Zambia in recent years, and the country’s debut $750-million bond issue last year was 15 times oversubscribed.

However, the bonds for B-plus-rated Zambia have performed poorly this year. Investors have become more reluctant to take on the biggest risks as the US Federal Reserve is planning to scale back its bond-buying programme, which had boosted risky assets. – Reuters

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24 Responses to IMF confirms will loan Zambia, PF spending higher than budget, has reserves for only three months

  1. Zambia has already paid US$41.5Million in interest on the 750 million Euro Bond which this PF carelessly took.As of now,Zambia Railways and may be ZESCO have not yet touched the money allocated to them.What then is the economic benefit for this Euro Bond as compared to the whooping $41.5 million paid in interest.Since this money will be paid after 10 years in a lump sum the total interest that will be paid over the period will be $415 Million or 55.3% of the Loan.In Zambian language we call this type of interest as KALOBA!!!

    Joe - October 1, 2013
    16:24

  2. parley ili ndwiiii. ziko ingena munkongole. but u reps… u r very selfish. i wonder what campaign issues u wil raise in 2016. mushishita over!

    fm - September 28, 2013
    11:09

  3. Watchdog, your choice of pictures that are tageed to news articles … Ke! Ke! Ke! Ke! Ke! Ke! Ke! Ke!

    Manyika - September 26, 2013
    05:31

  4. FACT: No country was ever developed by the IMF. PF will rapidly downgrade Zambia from Middle Income to Zero Income, back to the dreadful 1980s, in double quick time.

    Sata Namaloya - September 25, 2013
    20:06

  5. Mwanawasa who fought for debt relief must be turning in his grave. Ooh dear Zambia.

    Jerabo - September 25, 2013
    16:47

  6. Umulilo wa kwa lesa affecting the ‘middle division of the left trigeminal nerve’. Those who understand this statement have some level of medical training.

    back to the subject, this is not a man who can care if he leaves Zambia in debt or not, I mean i dont think he cares now if he uses a condom or not at the stage he has reached.

    Tese Zono - September 25, 2013
    16:24

  7. Twapya baisa

    jimbo special - September 25, 2013
    14:43

  8. Of course IMF will always lend you money, on interest, Zambian fools. Short term solution thinkers.

    Boondocks - September 25, 2013
    14:37

  9. PLEASE WE DON’T WANT IMF TO COME IN AND MEE UP OUR COUNTRY AGAIN. WE DON’T WANT ANY LOAN FROM IMF OR ANY OTHER LENDING INSTITUTION. ZAMBIA CAN SURVIVE WITHOUT BORROWING ANY MONEY FROM ANYWHERE. WE PLEASE APPEAL TO YOU PF GOVERNMENT NEVER TO ENTER INTO SUCH AN AGREEMENT WITH IMF. ENOUGH IS ENOUGH WITH THESE DEBTS. WE WANT TO BE A NATION FREE OF DEBTS. PLEASE.

    COONDE - September 25, 2013
    14:26

    • What a great plea Coonde! But will the dinosaurs listen after all they care less knowing they are destined for extinction! I foresee more trips to IMF headquarters to acquire the loan and touting this as a plus to PF achievements for the country and never batting an eye to the accompanying prescriptions for the loan! We are paying for not ushering into government a generation abreast with world economic trends.

      FuManchu - September 26, 2013
      02:35

  10. Back to the 1980s of printing money, more money in our pockets!

    Maambamba Musaama - September 25, 2013
    13:59

  11. Yaba! Elo kulibe nako tabila… The situation will solve itself.

    M30! - September 25, 2013
    13:55

  12. THIS IS A FRIGHTENING STATISTIC, PROBABLY ONE OF THE MOST WORRISOME IN RECENT YEARS.
    25% of the politicians in this country are on medication for mental illness.

    That’s scary. It means the remaining 75% are running around untreated.

    Lorna - September 25, 2013
    13:07

    • Good one!

      Sata Namaloya - September 25, 2013
      20:02

  13. The family forest government is full of shit.

    Umkhonto We Sizwe - September 25, 2013
    11:42

  14. What a nice curio on this page, is it for sale online or just for advert.

    Advocate - September 25, 2013
    11:36

    • lol,pwahahahahahahaha……….

      sloan villager - September 25, 2013
      11:40

    • Advocate I’ll sue you for ripping my sides! Lol

      FuManchu - September 26, 2013
      02:38

  15. Look at the face of this guy. Surely do you think that this guy cares about leaving a debt free Zambia for the future generation?

    Wanzelu - September 25, 2013
    11:06

  16. Looks like an an HIV patient. Has put Zambia into more debt.

    Chibotela - September 25, 2013
    11:03

  17. With the kickbacks he got from rebasing the currency, I’m sure he can easily afford to go for plastic surgery now. Or michael can pay for him from the public purse.

    Paya Fyonse (PF) - September 25, 2013
    10:53

    • By the way have u noticed the quality of the so called new notes- shame

      Half Lozi & Half Bemba - September 25, 2013
      20:46

  18. Our Finance Minister pamenso no smile sure. This man will; likely make IMF charge us more interest because of no smailing

    P.W Botha - September 25, 2013
    10:51

  19. Zambian economy is about to collapse, Sata must be relieved of the presidency sooner than later. IMF again

    Kashimani - September 25, 2013
    10:51