According to an International Monetary Fund (IMF) August 2022 press release, the Fund’s Executive Board recently approved a 38-month SDR 978.2 million (US$1.3 billion) Extended Credit Facility (ECF) arrangement for Zambia. The ECF was approved to help the country improve its economic stability and promote sustainable development.
High poverty in Zambia
“Zambia continues to face profound challenges reflected in high poverty levels and low growth. The ECF-supported program aims to restore macroeconomic stability and foster higher, more resilient, and more inclusive growth. Restoring fiscal sustainability will require a sustained fiscal adjustment. The authorities’ adjustment plans appropriately focus on eliminating regressive fuel subsidies, enhancing the efficiency of the agricultural subsidy program, and reducing inefficient public investment,” said Ms. Kristalina Georgieva, IMF Managing Director.
Reduce corruption and strengthen transparency
The success of this new initiative depends in part on the country’s progress in good governance and the fight against corruption:
“A substantial strengthening of fiscal controls is needed to support the fiscal adjustment, as well as address governance and corruption vulnerabilities. Public investment management and procurement practices need to be strengthened to ensure transparency and the efficient use of scarce resources. It will also be important to bolster the framework for monitoring fiscal risks, particularly those related to large state-owned enterprises,” said the IMF.
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