dyton mupawaenda
LUSAKA. — The International Monetary Fund agreed to immediately disburse US$569,6 million to Zambia, boosting the country’s foreign-exchange reserves as it deals with its worst drought in almost 60 years.
The money includes an augmentation of US$385,7 million, the IMF said in a statement Wednesday following an executive board meeting.
The funds will assist Zambia in attaining debt and fiscal sustainability, enhancing public governance, and fostering inclusive growth to improve the livelihood of the Zambian people, the Washington-based lender said.
They’ll also help with drought relief measures.
Zambian President Hakainde Hichilema in February declared the drought a national disaster and appealed for international aid two months later, with the nation facing a US$900 million shortfall this year because of the severe weather.
The drought has stoked already high inflation, which accelerated to 14,7 percent in May, the highest rate in more than two years. It’s also hindering growth. The economy is expected to expand 2,3 percent this year — less than half the IMF’s initial forecast.
To mitigate the impact and start servicing its now restructured external loans the government plans to supplement its 2024 spending plan by 41,9 billion kwacha (US$1,6 billion).
Zambia finally ended nearly four years of default on its dollar bonds this month, when it issued two series of restructured notes that were the product of intense negotiations.
The IMF welcomed the step but urged the country to reach a timely agreement on a debt treatment with its remaining private creditors on comparable terms and in line with program parameters. “That would make Zambia’s debt sustainable on a forward-looking basis,” it said.
The government still needs to negotiate individual deals with US$3,3 billion in non-bondholder commercial creditors, the largest of which are China Development Bank together with Industrial and Commercial Bank of China. – Bloomberg
Online Reporter