Zambia Gets $1.3 Billion In IMF Bailout

Zambia Gets $1.3 Billion In IMF Bailout

Zambia Gets $1.3 Billion In IMF Bailout

Zambia Gets $1.3 Billion In IMF Bailout

Zambia, which is heavily indebted, will receive a $1.3 billion loan from the International Monetary Fund to help it regain fiscal stability. The IMF also urged Zambia to fight corruption.

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Zambia became the first nation on the continent to default on its $17.3 billion in foreign debt in 2020, when the Covid-19 pandemic devastated Africa.

Zambia, a country rich in copper, and IMF staff reached a tentative agreement last December to offer $1.3 billion in assistance funds, but only if Zambia took real action to lower its debt burden to levels considered sustainable.

In a statement released late Wednesday, the IMF said the facility will help Lusaka’s homegrown reform plan to “restore debt sustainability, create fiscal space for much-needed social spending, and strengthen economic governance”.

Zambia Gets $1.3 Billion In IMF Bailout

The Fund said the new government of Hakainde Hichilemna which came to power a year ago, is having to tackle years of economic mismanagement.

“A substantial strengthening of fiscal controls is needed to support the fiscal adjustment, as well as address governance and corruption vulnerabilities,” said IMF managing director Kristalina Georgieva.

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The IMF statement said Zambia’s economic growth “has been too low to reduce rates of poverty, inequality, and malnutrition that are amongst the highest in the world.

“Zambia is in debt distress and needs a deep and comprehensive debt treatment to place public debt on a sustainable path”.

Zambia Gets $1.3 Billion In IMF Bailout

Since the election last year, Hichilema’s government has made progress in restoring relations with donors.

The IMF’s announcement “is a vote of confidence in your government and in the people of Zambia,” Hichilema said in a Facebook post.

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“The international community has recognized the progress we have made and our commitment to reviving our economy and become a responsible member of the family of nations,” he said.

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