Updated: February 26, 2021
The economy of Zambia has weakened due to a “difficult fiscal position” as well as a “severe drought”, the International Monetary Fund said on Wednesday.
An IMF staff team led by Dhaneshwar Ghura visited Lusaka November 13–19, 2019, to discuss recent economic developments in Zambia as well as its economic outlook for 2020 and the medium term.
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At the end of the visit, IMF team said the weakened economy has resulted in projected growth slowing to below 2 percent and an increased risk of food insecurity.
“Discussions covered both near and medium-term policy options to address these challenges, including the main elements of the draft 2020 budget being currently debated in Parliament,” said Dhaneshwar Ghura.
“In line with the 2019 Article IV consultation, IMF staff stressed the need for a large, front-loaded and sustained fiscal adjustment that would help set debt on a downward path and reduce domestic arrears. Spending commitments should also be prioritized in order to meet key development priorities including supporting vulnerable populations.
“The IMF staff met with H.E. President Lungu, Minister of Finance Bwalya Ng’andu, Bank of Zambia Governor Denny Kalyalya, other senior government and Bank of Zambia officials; and representatives of the private sector, civil society organizations, and Zambia’s development partners.
“The staff wishes to express its gratitude to the Zambian authorities and the various stakeholders for the constructive spirit in which all discussions were held.”