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IMF says to help Zambia after elections

Xinhua, April 18, 2016 Adjust font size:

The International Monetary Fund (IMF) said it will only be able to enter into an economic and reform program with Zambia after the southern African nation holds elections in August this year, local media reported on Monday.

IMF Director of the African Department Antoinette Sayeh said Zambia has approached the financial institution for a bailout to be in the region of 1 billion U.S. dollars mainly for balance of payment, according to the Lusaka Times.

But the official told reporters on the sidelines of the Springs Meetings at the IMF headquarters in Washington DC that the financial institution does not see the full preparation of the program until the fourth quarter of 2016.

Zambia will hold general elections on August 11.

"Zambia has also indicated to us that they would certainly be interested in discussing and pursuing an IMF support program and we remain open to beginning those discussions. Of course, and we have in the context of these Spring Meetings had our usual discussions that we do with all country authorities including Zambia," she is quoted saying.

Zambian President Edgar Lungu had hoped that the IMF program would kick-in as early as April but his team of technocrats proposed that the tough austerity measures that come in with the program could be implemented after the elections.

An IMF mission visited Zambia last month.

Meanwhile, the IMF has expressed concern over Zambia's appetite to borrow from the international market.

The IMF official said the financial institution was concerned about "too much borrowing" by Zambia which is being done at high interest rates.

Zambia has issued three Eurobonds since 2012.

"The proceeds of those bonds were used to finance some infrastructure, but also to cover the regular budget deficit including current expenditure and in light of the expense of that financing that was certainly not the best use of very expensive financing," she added.

The IMF has since advised authorities in Zambia to put in place measures to reign in the huge fiscal deficit that is underpinning that borrowing and to adjust spending patterns. Endit