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The International Monetary Fund (IMF) has said that the Zambian economy is showing resilience despite the remaining challenging economic conditions.
IMF Communications Director, Julie Kozak, noted that the challenging economic conditions were also putting pressure on the external balance, exchange rate and increasing inflation.
During a media briefing in Washington on Friday, Kozak, said that the real Gross Domestic Product (GDP) growth was now projected at 4.3 percent in 2023 and 4.7 percent in 2024.
“The staff level agreement on the second review of the program was reached on November 20th,” she added.
Kozak stated that the agreement shows that Zambia’s performance under the program remains satisfactory with a significant fiscal effort undertaken in 2023.
She said Zambia’s performance under the program, the agreement in principle with official creditors on the Memorandum of Understanding (MOU), and the authority’s good faith efforts to reach agreement with private creditors, are sufficient.
“They are sufficient to bring this review to our Board towards the end of December, and approval of the review by the IMF’s Executive Board would give Zambia access to $184 million in financing under the program,” Kozak stated.
She indicated that on this, the IMF staff had assessed that the proposal that was negotiated between Zambia and the bondholders would be consistent with the Debt Sustainability Analysis, and the program parameters.
Kozak said this was provided that the MOU with the Official Creditor Committees (OCC) would remain valid.
“The latter included the requirement that the OCC would assess that the bondholder proposal would meet comparability of treatment,” she stated.
Kozak added that the other way, was that the authorities would further revise the proposal until the OCC assesses that the comparability of treatment requirements were met.
She said to just step back and remind the IMF-supported programme determines the overall financing envelope needed to restore debt sustainability but it does not assess comparability of treatment.
“It was the OCC, on November 20th, that assessed that comparability of treatment was not met, and as planned, in the MOU,” Kozak stated.
She indicated that the authorities were now further revising the proposal to ensure that the OCC assesses that the comparability of treatment requirements were met.
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