IMF rewards Zambia US$561bn over economic reform programme
THE Bank of Zambia (BoZ) is carrying out a countrywide sensitisation programmes on the Export Proceeds Tracking Framework that came into effect on January 1, 2024.
Under this Framework, all export earnings are required to be reflected in an account at a bank domiciled locally.
This is according to the central bank Governor, Dr Denny Kalyalya, on Friday at a symposium on the 2023 Budget Performance and Economic Developments.
The e-BoP Monitoring System was launched in December 2019 to enhance the compilation of external sector statistics.
This, Dr Kalyalya said, had now been fully operationalised through the implementation of the Export Proceeds Tracking Framework
Dr Kalyalya that came into effect on January 1, 2024, as announced in the 2024b budget speech.
“The bank is currently undertaking countrywide sensitisation programmes on the Framework. “The bank is in the process of sensitising all stakeholders to ensure the success of the Framework” he said.
Dr Kalyalya explained that exporters would retain full rights and control to use the funds as they deem fit as long as they comply with the Anti-Money Laundering, Combating the Financing of Terrorism & Countering Proliferation Financing (AML/CFT/CPF) obligations as had been the case under the current foreign exchange arrangement.
“In line with the Bank of Zambia Act, 2022, the bank has issued directives compelling all exporters to route export earnings through a domestic bank account,” he said.
Meanwhile, Dr Kalyalya said the financial performance and condition of the banking sector was satisfactory at the end of 2023.
He attributed this performance to strong capital adequacy position and earnings performance.
“The banking sector remained stable and resilient, with primary and total capital adequacy ratios maintained above 20.0 percent throughout 2023, compared to the minimum prudential requirements of 5.0 percent and 10.0 percent for primary and total regulatory capital ratios, respectively.
“Asset quality also remained satisfactory as the proportion of non-performing loans to gross loans (NPL ratio) was consistently below the prudential benchmark of 10.0 percent. The ratio of NPLs in the banking sector to gross loans stood at 4.2 percent at end-December 2023,” Dr Kalyalya said.
ZAMBIA has so far drawn US$561 million from the International Monetary Fund (IMF) as a result of implementing the Economic Reform Programme.
This is out of the US$1.3 billion expected to flow to Zambia during the implementation phase of the programme, according to the Finance and National Planning Minister, Dr Situmbeko Musokotwane.
Dr Musokotwane indicated that the release of the money from the IMF also triggered other support mechanisms, especially from the World Bank where Zambia got a grant amounting to US$125 million.
He said the next performance would be assessed sometime in the middle of the year.
The minister said in Lusaka at a symposium on the 2023 Budget Performance and Economic Developments.
“Another important milestone for last year is that the country continued to successfully implement the Economic Reform Programme that we are undertaking together with the IMF.
“As a result of that, more disbursements were made, with the latest being in December where we received US$187m from the World Bank, bringing the total cumulative receipts from the IMF to US$561m out of the US$1.3bn that is expected to flow to us during this period of the programme,” Dr Musokotwane said.
At the same symposium, Secretary to the Treasury, Felix Nkulukusa, expressed confidence that the restoration of macroeconomic stability of the economy would be realised through the country’s commitment and diligence towards meeting all structural benchmarks agreed upon in a timely manner.
Mr Nkulukusa said this was being supported by the IMF programme and subsequent assistance from the World Bank and other cooperating partners.
Government, he said, would also remain resolute in our determination to achieve macroeconomic stability as outlined in the Eighth National Development Plan (8NDP), despite the challenging global environment.
“Lastly but not the least, we remain dedicated to providing regular updates on the national budget execution to ensure transparency, accountability, credibility, and foster utmost public trust,” Mr Nkulukusa said.