The International Monetary Fund (IMF) on Friday said it held talks with Zambian authorities over the possibility of an aid programme for the country.
The IMF Mission Chief, Tsidi Tsikata, said in Lusaka that IMF had a range of facilities available for the southern African country.
“We have held fruitful discussions with Zambian authorities and made progress toward reaching understanding on an economic programme that could be supported by IMF arrangement.
“I think there are facilities that Zambia can access,” Tsikata said but did not elaborate.
He added that “we have agreed to continue discussions at the forthcoming Spring meetings of the IMF and World Bank in Washington D.C. next month.”
The IMF said it backed Zambia’s fiscal consolidation measures outlined in its 2017 budget, and said it expected the country’s economy would grow by 3.5 per cent this year from 3.0 per cent last year.
The Secretary to the Treasury, Fredson Yamba, said that the government aimed to reduce the overall budget deficit and stimulate private sector borrowing.
Zambia has said it expects to agree a deal with the IMF in the first half of this year.
The IMF’s comments were positive said Razia Khan, Standard Chartered Bank chief economist for Africa.
“Markets however are eager to know how quickly Zambia might move to a funded programme,” Khan said. ”
“Still, it’s good that the IMF has come out to endorse fiscal and monetary policy choices.”
Zambia started talks with the IMF in March 2016 about a potential aid package after agreeing that the budget deficit was not sustainable.
The government hopes to conclude a programme with the IMF in the first quarter of next year.
