Instructions for Contributors at Cambridge Journals Online. A key objective of the authorities reform program, supported by the Fund, is to gradually increase the level and quality of social spending to reduce poverty and inequality, as well as improve access to basic social services, especially in rural areas. Our Standards: The Thomson Reuters Trust Principles. Some cookies allow third parties to tailor the ads you see when you visit our site and other third party websites. Approval by the IMF's Executive Board will unlock an immediate disbursement of about $185 million, the Fund said. To read the full press release, click here. 294 0 obj <> endobj But positive changes are happening. Browse an unrivalled portfolio of real-time and historical market data and insights from worldwide sources and experts. For terms and use, please refer to our Terms and Conditions THE IMF AND ZAMBIA: THE CONTRADICTIONS OF EXCHANGE RATE AUCTIONING AND DE-SUBSIDIZATION OF AGRICULTURE HANS-OTTO SANO ON 1 MAY 1987, President Kaunda of Zambia announced the abolition of weekly exchange rate auctioning and with that the termination of the IMF-Zambian agreement on economic crisis management which had been in operation since 1984. IMF Executive Board Approves New Extended Credit Facility (ECF) Arrangement for Zambia. Reuters provides business, financial, national and international news to professionals via desktop terminals, the world's media organizations, industry events and directly to consumers. An IMF spokesperson didn't immediately reply to a request for comment. Further details on the agreement will be released on Monday.". 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. In late October, Zambia promised to slash its budget deficit and curb borrowing in a bid to secure IMF support, as well as reduce spending on politically-sensitive subsidies - such as on power, fuel and farming - likely to have been one of the fund's key demands. In 2020, Zambia became the first African country in the pandemic era to default. This item is part of a JSTOR Collection. Read answers to key questions regarding Zambia and the IMF. Economic growth has been weak, and the number of Zambians living in poverty has increased. 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 International Monetary Fund and Zambia on Friday reached a staff level agreement on a $1.4 billion, three-year extended credit facility, which could bring the heavily indebted country one step . Political resistance to International Monetary Fund (IMF) reform in developing countries has become a major obstacle to reform implementation. Zambia's finance ministry said it would provide more details on the IMF agreement in a joint briefing with the fund on Monday. be possible., Phone:+1 202 623-7100Email: MEDIA@IMF.org. y/_>,9'YC\v.QHG?$ '~H#Do!E*)4RpIK)L8hlE>aUM:nbZo:ZV(Ho"M z$(O J]"mi7RzZ^$KAp_Ih=P;$M$URep$74S;gN67f )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. Press Releases. 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). Aug 31 (Reuters) - Zambia won International Monetary Fund approval for a $1.3 billion, 38-month loan program on Wednesday, a crucial step in the southern African country's quest to. Cambridge University Press is committed by its charter to disseminate knowledge as widely as possible across the globe. leadership at the central bank of Zambia, an IMF spokesman made the A final report will be published by the end of the year. Monetary policy, Please address any questions about this title to publications@imf.org. Zambia's government is taking bold and decisive actions to get its economy back on track, and the IMF stands with them. Zambia's creditors led by China and France pledged in late July to negotiate a restructuring of the country's debts, a move that IMF Managing Director Kristalina Georgieva had welcomed as "clearing the way" for the new Fund program. In parallel, Zambia will initiate specific discussions with private creditors on how comparability of treatment, a requirement of the Common Framework that will be further described in the MoU, might be achieved. hk\EJ}V3FH`>c@S]cZ=>6C+3Y6)MAy6it&wF)bL}ATERU&? %iU(Y uhT7-_kPM\9wDjURQiM& ~RfRTFMF1fZF,$cV[h&}5}nhCU._P^>[+CksGN}_:|}~ey}yu},[?f/h:J{gU?Uc>v=>G? at this critical time when economic stability is threatened by the COVID-19 endstream endobj startxref To complement the authorities strong reform program a comprehensive debt treatment under the G20 Common Framework is needed to restore debt sustainability. By clicking 'Agree', you agree to these uses of cookies. 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. 319 0 obj <>/Filter/FlateDecode/ID[<7DD3E7EE36B0404187C48248C938A277><4C612687BFA5CC49891050832E753309>]/Index[294 66]/Info 293 0 R/Length 118/Prev 481112/Root 295 0 R/Size 360/Type/XRef/W[1 3 1]>>stream "The ECF-supported program aims to restore macroeconomic stability and foster higher, more resilient, and more inclusive growth.". Spending will be more tightly controlled, with the determined implementation of public procurement rules and regulations central to ensuring value for money and the transparent use of public resources. Build the strongest argument relying on authoritative content, attorney-editor expertise, and industry defining technology. What are the next steps in the debt restructuring process? Browse an unrivalled portfolio of real-time and historical market data and insights from worldwide sources and experts. Build the strongest argument relying on authoritative content, attorney-editor expertise, and industry defining technology. 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. Our Standards: The Thomson Reuters Trust Principles. 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. The IMF program aims to restore Zambia's macroeconomic stability through fiscal adjustment and debt restructuring and strengthening economic governance. economic growth and much needed improvements in living standards will not Reuters, the news and media division of Thomson Reuters, is the worlds largest multimedia news provider, reaching billions of people worldwide every day. 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. See here for a complete list of exchanges and delays. The most comprehensive solution to manage all your complex and ever-expanding tax and compliance needs. FOR IMMEDIATE RELEASE 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. "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. The most comprehensive solution to manage all your complex and ever-expanding tax and compliance needs. See here for a complete list of exchanges and delays. "The staff-level agreement is subject to IMF Management and Executive Board approval and receipt of the necessary financing assurances. Access unmatched financial data, news and content in a highly-customised workflow experience on desktop, web and mobile. 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 is imperative that central Zambia before the end of the previous Governors mandate. 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. These efforts will restore the credibility of the budget, improve the efficiency of public expenditures, and halt the accumulation of arrears, thereby supporting private sector-led growth. The overall objective of the debt restructuring is to: i)Bring the risk of debt distress to moderate over the medium term. 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. All quotes delayed a minimum of 15 minutes. 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. 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. Editorial policy avoids commitment to any political viewpoint or ideology, but aims at a fair examination of controversial issues in order to promote a deeper understanding of what is happening in Africa today. Based on the preliminary findings of this mission, staff will prepare a report that, subject to management approval, will be presented to the IMF's Executive Board for discussion and decision. At the end of the mission, Ms. Holland issued the following statement: The IMF team reached a staff-level agreement with the authorities of Zambia on a three-year program supported by an arrangement under the Extended Credit Facility (ECF) in the amount of about SDR 980 million or $1.4 billion. Exclusive news, data and analytics for financial market professionals. All rights reserved. See here for a complete list of exchanges and delays. increased independence of central banks. What are the goals of Zambias Extended Credit Facility (ECF) program? 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. Reporting by Jorgelina do Rosario and David Lawder; Additional reporting by Rodrigo Campos; Editing by Richard Pullin, Stephen Coates and Lincoln Feast. The authorities reform program should support a return to price stability over the medium term., In light of unsustainable public debt, the authorities reform efforts will need to be supported by a comprehensive debt restructuring. banks operational independence and credibility is maintained, particularly The industry leader for online information for tax, accounting and finance professionals. We use cookies (and equivalent technologies) to collect and analyse information on site's performance and to enable the site to function. 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. We are proud to partner with Zambia on this journey, said Allison Holland, Zambias Mission Chief at the IMF. It is one of three African countries, along with Chad and Ethiopia, that have sought restructuring under a G20 common debt restructuring framework. %%EOF INTRODUCTION The acceptance of International Monetary Fund (IMF) conditionality often has extreme political consequences for the reform-minded governments of developing countries. A drought in 2019 and the COVID-19 pandemic exacerbated the acute economic and social challenges facing the country, with poverty, inequality, and malnutrition rates amongst the highest in the world. 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. recent years has greatly relied on the much-improved effectiveness and The authorities have emphasized a zero-tolerance approach to corruption. How much debt relief does Zambia need? 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. The views expressed in this statement are those of the IMF staff and do not necessarily represent the views of the IMFs Executive Board. Zambia won International Monetary Fund board approval for a $1.3 billion support package, an important step toward the nation restructuring its debt and a boost for the global effort to help. End-of-Mission press releases include statements of IMF staff teams that convey preliminary findings after a visit to a country. pandemic. For more information, visit http://journals.cambridge.org. January 24, 2023. per capita by about a quarter. 2022 International Monetary Fund. Washington, DC: "In response to media inquiry regarding the recently announced change in leadership at the central bank of Zambia, an IMF spokesman made the following statement: "We note the change in leadership announced over the weekend at the Bank of Zambia before the end of the previous Governor's mandate. 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) Reuters, the news and media division of Thomson Reuters, is the worlds largest multimedia news provider, reaching billions of people worldwide every day. "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. Spending on social protection is projected to more than double from 0.7 percent of GDP in 2020 to 1.6 percent by 2025 (around the average for sub-Saharan African countries). The economic program aims to restore macroeconomic stability and foster higher, more resilient, and inclusive growth. The restructuring of its external debt, which amounted to more than $17 billion at the end of 2021, is seen by many analysts as a test case for the region. 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. Living standards for most of the population have deteriorated sharply, with falling real wages and a drop in G.D.P. Access unmatched financial data, news and content in a highly-customised workflow experience on desktop, web and mobile. It is anchored on cutting back inefficient public investment, eliminating regressive fuel subsidies, and reforming the agricultural subsidy program by reducing procurement costs. 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. All Rights Reserved. For countries with weak debt-carrying capacity like Zambia, this level is 84 percent. All quotes delayed a minimum of 15 minutes. The board meeting comes after Africa's second-biggest copper producer clinched a deal with bilateral creditors such as China and the Paris Club to rework about $6.3 billion of overseas debt. hbbd```b``^"-A$W`RLHX`v 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 . Browse an unrivalled portfolio of real-time and historical market data and insights from worldwide sources and experts. All rights reserved. Once an agreement that meets these goals is in place, Zambia would have secured cash flow relief through 2031, as well as seeing a significant cut in the economic burden (or present value) of its debt, debt sustainability would be restored and no additional rounds of restructuring would be needed. ]7W@kEo4 |@e&2g4U8? Reuters provides business, financial, national and international news to professionals via desktop terminals, the world's media organizations, industry events and directly to consumers. United Nations' Secretary-General Antnio Guterres condemned the air strike that reportedly killed at least 22 people in Sudan on Saturday, according to a statement released by a spokesperson early on Sunday. Spending on education and health care will go up, and more of Zambia's most vulnerable people will get money through the social cash transfer program. 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. Build the strongest argument relying on authoritative content, attorney-editor expertise, and industry defining technology. See here for a complete list of exchanges and delays. 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. endstream endobj 295 0 obj <><><>]/OFF[]/Order[]/RBGroups[]>>/OCGs[321 0 R]>>/Pages 292 0 R/StructTreeRoot 120 0 R/Type/Catalog>> endobj 296 0 obj <>/MediaBox[0 0 612 792]/Parent 292 0 R/Resources<>/Font<>/ProcSet[/PDF/Text/ImageC]/XObject<>>>/Rotate 0/Tabs/S/Type/Page>> endobj 297 0 obj <>stream However, Zambia also needs a deep debt restructuring. At the same time, the gap between the high- and low-income groups has probably 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. 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). The country will have access to around $188 million after the review is completed. ii)Ensure the Fund-program is fully financed. The 38-month, $1.3 billion ECF-supported program is based on the Zambian authorities homegrown economic reform plan. (iii)strengthening governance and reducing the risk of corruption, including by improving public financial management. 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. Screen for heightened risk individual and entities globally to help uncover hidden risks in business relationships and human networks. The Journal of Modern African Studies The war in Ukraine has increased prices of fuel and fertilizer, amplifying pressures further. 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. What actions are being taken to restore debt sustainability? It's also crucial that the government spends every kwacha well. [1/2]The International Monetary Fund logo is seen at IMF headquarters in Washington, U.S., October 14, 2017. The IMF Press Center is a password-protected site for working journalists. 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. The government of President Hakainde Hichilema, who was elected in August, had started talks with the IMF in early November. The expected large, upfront fiscal adjustment envisages an important shift in spending, away from inefficient public investment and poorly targeted subsidies, towards greater investment in health and education and the delivery of more social benefits. 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. Zambia, one of the world's largest copper producers, became Africa's first pandemic-era sovereign defaulter last November after years of chronic government overborrowing from international institutions drove its debt burden above 120% of annual economic output. Implications of I.M.F. Without credible institutions and sound policies, sustained s?- P the IMF walked with Zambia throughout the journey. Belgian Ryanair pilots will go on strike on July 15 and 16 in demand of higher wages and better working conditions, their union told Belgian broadcaster VRT on Friday. Getting approval from the IMF for a programme is a key step for countries in the debt restructuring process. Washington, DC: LUSAKA, Dec 3 (Reuters) - 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 closer to a comprehensive debt overhaul. Zambia is in a debt crisis. August 24, 2020. REUTERS/Yuri Gripas/. 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. ,lN"H2`q )) Q`H3be`bd` Sign up to receive free e-mail notices when new series and/or country items are posted on the IMF website. following statement: We note the change in leadership announced over the weekend at the Bank of The authorities are undertaking a sustained fiscal adjustment by reducing inefficient spending and raising domestic revenues. Exclusive news, data and analytics for financial market professionals, Reporting by Jorgelina do Rosario, editing by Rodrigo Campos and Chizu Nomiyama, Italy lifts its 10-year ban on Libyan civil aviation over Italian airspace, UN secretary-general condemns air strike that killed at least 22 people in Sudan, Central African Republic says Wagner troop movement is rotation not departure, South Africa complete travelling squad for New Zealand showdown, Australia PM's Germany, NATO trip to focus on trade, security, India to hold trade deal talks with UK, European nations on July 10-11, Turkey aims to ensure fiscal discipline and lower budget deficit, finance minister says, Russian federation council speaker to visit China, Xinhua reports. The IMF Press Center is a password-protected site for working journalists. The conditions are incredible, unbelievable, and. 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. 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. All quotes delayed a minimum of 15 minutes. 1986 Cambridge University Press IMF Statement on Zambia. The IMF Press Center is a password-protected site for working journalists. That's where the G20 initiative to restructure debt comes in. 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 industry leader for online information for tax, accounting and finance professionals. 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. How will the program promote transparency and help fight corruption? 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. Screen for heightened risk individual and entities globally to help uncover hidden risks in business relationships and human networks. IMF CONDITIONS (MAKE AN EFFORT to download the full document and read the contents carefully). There is a long road to recovery, but with the backing of the international community, Zambia can get back on track and create a thriving economy that works for every Zambian. Statement by IMF Managing Director Kristalina Georgieva at the Conclusion of Her Visit to Zambia. Free Download. 2022 International Monetary Fund. 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.
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