Debt-ridden Zambia has gotten a $1.3 billion loan bailout from the International Monetary Fund (IMF) in a bid to help restore fiscal stability.
The IMF however urged the country’ government officials to fight corruption to the barest minimum.
Clariform reports that In 2020, Zambia became the first country in Africa to default on its foreign debt which is estimated at $17.3 billion as the Covid-19 pandemic battered Africa.
We recall that Zambia clinched a tentative agreement with IMF in December 2021 to provide $1.3 billion in support funds, but on the condition that it took credible steps to reducing its debt load to a sustainable level.
According to a statement released late Wednesday, IMF said the bailout fund help the country “restore debt sustainability, create fiscal space for much-needed social spending, and strengthen economic governance”.
The new government of Zambia which assumed power a year ago has been having severe challenges tackling the unstainable loan issue as well as mismanagement issues created by previous governments.
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According to Kristalina Georgieva, IMF managing director, “A substantial strengthening of fiscal controls is needed to support the fiscal adjustment, as well as address governance and corruption vulnerabilities.”
In the statement by the IMF managing director, it was said that Zambia’s economic growth “has been too low to reduce rates of poverty, inequality, and malnutrition that are amongst the highest in the world.
“Zambia is in debt distress and needs a deep and comprehensive debt treatment to place public debt on a sustainable path”.
Since the election last year, Hichilema’s government has made progress in restoring relations with donors.
Addressing Zambians about the loan bailout via a Facebook post, President Hichilema said, “The IMF’s announcement “is a vote of confidence in your government and in the people of Zambia.”
“The international community has recognised the progress we have made and our commitment to reviving our economy and become a responsible member of the family of nations.”
