Zam­bia and Zim­babwe ex­tracts of IMF press brief­ing

Zambian Business Times - - FRONT PAGE -

There's a cou­ple of ques­tions on­line re­lat­ing to Africa, and I want to take those. One is on Zam­bia, and one is on Zim­babwe. (Gerry Rice speak­ing).

On Zam­bia, the ques­tion is from Bloomberg, Matthew Hill also Matthew Lee, and re­lates -- it's a very long ...

There's a cou­ple of ques­tions on­line re­lat­ing to Africa, and I want to take those. One is on Zam­bia, and one is on Zim­babwe. (Gerry Rice speak­ing).

On Zam­bia, the ques­tion is from Bloomberg, Matthew Hill also Matthew Lee, and re­lates -it's a very long ques­tion -- but it re­lates to: re­ports that the gov­ern­ment has pro­vided the IMF with all the in­for­ma­tion needed for the purposes of reen­gag­ing with the pro­gram. Zam­bia hopes the pro­gram can be taken to IMF's Board in Septem­ber. Ba­si­cally the ques­tion is: what's the sta­tus? Is that true?

To which I can say, again, on Zam­bia, dis­cus­sions on a pos­si­ble Fund-sup­ported pro­gram have been sus­pended be­cause the author­ity's bor­row­ing plans com­pro­mised the coun­try's debt sus­tain­abil­ity and, in our view, un­der­mine its macroe­co­nomic sta­bil­ity.

So on June 14, 2018, they au­thor­i­ties in­deed an­nounced a set of mea­sures aimed at ad­dress­ing these debt sus­tain­abil­ity con­cerns. The Fund has not yet re­ceived the specifics of the author­ity's new debt plans, nor the re­vised bud­get num­bers, that in­clude the im­pact of the re­cently-an­nounced con­sol­i­da­tion mea­sures.

There­fore, it's pre­ma­ture to dis­cuss the ap­pro­pri­ate­ness, the fit­ness, for any po­ten­tial reen­gage­ment re­gard­ing a pro­gram dis­cus­sion, which is con­sis­tent with the state­ment we had is­sued ear­lier this year.

That's on Zam­bia. There's a ques­tion on Zim­babwe. Again, this is from Matthew Lee. "Can you con­firm that the coun­try has re­paid its over­due obli­ga­tions to the IMF's Poverty Re­duc­tion Growth Trust, us­ing its SDR hold­ings? When and sep­a­rately what the IMF views as pos­si­ble next steps."

So, I can con­firm that Zim­babwe cleared its over­due fi­nan­cial obli­ga­tions to the poverty re­duc­tion and growth trust, and that hap­pened in Oc­to­ber 2016. Con­se­quently, our Ex­ec­u­tive Board lifted the re­me­dial mea­sures re­lat­ing to a dec­la­ra­tion of non-co­op­er­a­tion, the re­stric­tion on TA pro­vi­sion, and in­el­i­gi­bil­ity of Zim­babwe to our Poverty Re­duc­tion and Growth Trust.

How­ever, and again we've said this be­fore here. To ben­e­fit from Fund Pro­gram, from Fund fi­nanc­ing, Zim­babwe would need to clear its ar­rears to other in­sti­tu­tions, in­clud­ing the African De­vel­op­ment Bank, The World Bank and Euro­pean In­vest­ment Bank. It will need to achieve the com­mit­ment of debt treat­ment by bi­lat­eral cred­i­tors, and have in a place a com­pre­hen­sive and co­her­ent macroe­co­nomic pol­icy frame­work, in­clud­ing the strong pro­gram of fis­cal ad­just­ment and struc­tural re­forms.

Go­ing for­ward, we con­tinue our dis­cus­sions with the gov­ern­ment of Zim­babwe, and we con­tinue to pro­vide pol­icy ad­vice, and tech­ni­cal as­sis­tance. So, you know, the IMF's en­gage­ment with Zim­babwe in that re­spect is on­go­ing, it con­tin­ues.

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