IMF bailout in sight - EAZ

With the IMF and Zambia reaching a broad agreement on the nature and cause of the underlying macroeconomic imbalances, the Economics Association of Zambia (EAZ) expressed confidence that the country would be granted the RCF.

EAZ National Secretary, Mutisunge Zulu, said it was likely that the RCF would be the first facility and eventually an extended credit facility

“Should the ECF be granted then balance of payment support will help with the currency woes in extended backlogs the red metal producer faces.

“It has become unbearable to do business in Zambia because private sector players just cannot get dollars from banks because of the foreign currency liquidity crunch,” Mr Zulu said in an interview.

Mr Zulu pointed out that the acknowledgement. that Zambia’s fiscals had become frailer and that Covid-19 had not made fiscal policy management any easier was a good signal for the country.

“One can tell from the tone that there is empathy from the IMF team shaped by pandemic strains which has constrained the authorities from taking action such as price adjustments in the energy sector to align to global fundamentals as a buffer for citizenry to minimise shock impacts.

“It is clear that further engagement through discussions are still ongoing but we remain optimistic that there is light at the end of the tunnel,” he said.

Mr Zulu also said an IMF package would boost investor confidence which Zambia bears the brunt of many investors on the fence or have chosen to explore other less risky regions.

In a statement, the IMF staff expressed gratitude to the Zambian authorities for the constructive, determined and frank discussions.