Maravi

IMF approves K261bn plan for economic growth

IMF approves K261bn plan for economic growth
By Chiwoyu Sinyangwe
Friday June 06, 2008 [04:00]

THE International Monetary Fund (IMF) has approved a US $79 million (about K261.9 billion) three-year plan to support Zambia’s efforts in poverty alleviation and sustained economic growth. According to a press statement released on Wednesday, the new Poverty Reduction and Growth Facility (PRGF) plan succeeds a previous arrangement successfully completed last year.

Following the IMF executive board's discussion, Takatoshi Kato, deputy managing director and acting chairman, commended the Zambian authorities “implementing prudent macroeconomic policies, which, in the context of high copper prices and debt relief, contributed to robust economic growth, markedly lower inflation, a reduction of poverty, and a build-up of international reserves.”

“The authorities remain committed to maintaining prudent macroeconomic policies and pursuing structural reforms to sustain high economic growth, further reduce poverty, diversify the economy and preserve macroeconomic stability and debt sustainability,” Kato said.

The statement further noted that the new PRGF arrangement would support the government's objectives of boosting economic growth and enhancing employment and income opportunities, especially for the poor, while maintaining macroeconomic stability.

The PRGF is the IMF's concessional facility for low-income countries. PRGF loans carry an annual interest rate of 0.5 per cent and are repayable over 10 years with a five-and-a-half-year grace period on principal payments.

Recently, a group of IMF executive directors that visited Zambia early this year indicated that the new financing package to replace PRGF would come with a smaller amount of money saying: “We can't give as much money as previously because we feel your economy is in a better shape than previously.”

Zambia’s previous PRGF expired at the end of September last year and the IMF indicated that the country had performed well under the financing facility that had been in place since June 2004.

The PRGF arrangement was approved on June 16, 2004 in the amount equivalent to SDR 220.1 million (approximately US$333.6 million or K1.3 trillion).
The PRGF-supported programmes are based on country-owned poverty reduction strategies adopted in a process involving civil society and development partners and articulated in the Poverty Reduction Strategy Paper (PRSP).

Labels: FUNDING, IMF, POVERTY

posted by MrK @ 3:35 AM