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(TIMES) ‘IMF cash injection will boost Kwacha’

‘IMF cash injection will boost Kwacha’
By TIMES REPORTER

THE Government has said the International Monetary Fund (IMF)’s approval of financing amounting to more than US$250 million will help Zambia stabilise the Kwacha and enable businesses to plan ahead.

And the Economics Association of Zambia (EAZ) separately said the release of the money would help reduce speculation on the shortage of foreign exchange and build investor confidence in the Zambian economy as the world goes through a financial crisis.

Finance and National Planning Minister, Situmbeko Musokotwane, said the Government was happy that the IMF had already started disbursing the money.

“We are happy that the IMF has approved the $256 million and has since disbursed about $160 million. This is an indication of the partners’ commitment to seeing to it that the country’s economy improves,” he said.

Dr Musokotwane said in Lusaka yesterday that the financial assistance from the IMF would assist the country strengthen and stabilise the local currency, which had lately tumbled against the major currencies.

Dr Musokotwane said the money would also assist in the poverty reduction programmes and address other challenges the country was facing.

He explained that the fluctuation of the Kwacha was a result of the fall of copper prices on the international market and that the Government had no doubt that the situation would be reversed.

He said the Governments was ready to continue maintaining its prudent macro-economic policies and pursing structural reforms to sustain the country’s economic growth.

The minister assured that the Government would ensure that the approved funds were put to good use.

It is for this reason that the Government is moving away from dependence on copper and has identified other sectors to assist sustain the country’s economy.

Dr Musokotwane further called for participation of all Zambians and other stakeholders as the country works towards economic recovery.
He described the recently held IMF executive board meeting as a success.

He said it was during the same meeting with IMF deputy managing director and acting chair, Takatoshi Kato that it was noted that Zambia’s Poverty Reduction and Growth Facility (PRGF) Programme implementation and the recent economic performance had been adversely affected by a number of external shocks, hence the approval of the funds.

The executive board on Friday last week approved an increase by $256.4 million, to $329.7 million in financial support to Zambia under the PRGF.

The board also completed the first and second reviews of Zambia’s economic performance under the PRGF arrangement, allowing the immediate disbursement of $160.1 million and bringing total disbursements to $170.6 million.

Last year the IMF approved a three-year PRGF arrangement for Zambia in an amount equivalent to $79.2 million in support of the country’s economic policies aimed at alleviating poverty and sustaining growth.

The decision enabled Zambia to request the first disbursement of an amount equivalent to $11.3 million.

EAZ president, Mwilola Imakando, said in an interview that the release of the funding was good for business and showed that the IMF had confidence in the Zambian Government.

Zambia Association of Manufacturers president, Dev Babbar welcomed the IMF decision to approve and release the funds at a time when the global financial crisis had hit the country’s manufacturers negatively.

Labels: EAZ, IMF, INFLATION, KWACHA, SITUMBEKO MUSOKOTWANE

posted by MrK @ 2:16 PM