IMF Deal Will Boost Economy – Tax Alliance

The Zambia Tax Platform – an alliance of civil society organisations which provides critical analysis of Zambia’s public finances – has predicted that the staff-level deal which the government signed with the International Monetary Fund (IMF) in December will provide a significant boost to the country’s economy. 

The alliance’s coordinator, Ibrahim Kamara, said the $1.4 billion deal will be massively beneficial in helping to restructure and refinance Zambia’s debts.

Mr Kamara also said that the agreement will boost investor confidence and that lenders will feel more inclined to inject money into Zambia’s economy if the government has the support of the IMF.

Speaking at a training session for the national Debt Justice Campaign movement in Lusaka, Mr Kamara explained that, “a staff-level agreement  will go a long way to renew the confidence of lenders and even commercial banks will be able to start lending to borrowers, hence growing the economy”.

Last month, Finance Minister Situmbeko Musokotwane said the government was confident it could secure a full debt restructuring package with the IMF by May. This marks a significant turnaround from the previous Patriotic Front administration, which kicked the IMF out of Zambia in 2017 before racking up debts valued at 120% of the country’s GDP.

The New Dawn government has been in close communication with lenders in order to devise a plan to bring Zambia’s debts under control and set the country back on the path to financial prosperity.

The plan is already showing signs of success, with the Bank of Zambia last month predicting strong economic growth for 2022 and a further lowering of inflation, helping more families to get jobs and afford basic necessities.