Zambia, IMF reach consensus on financing program

Zambian President Edgar Lungu on Thursday revealed that the government has made great progress and reached consensus on key areas of a financing program with the International Monetary Fund (IMF).

In April, the Zambian government announced it would seek an aid program from the IMF which was expected to be finalized by the end of this year. The IMF was expected to provide up to 1.2 billion U.S. dollars.

But the talks were temporarily halted until after the general elections held last week. Among some of the conditions for the financing program include removal or reductions of energy and agricultural subsidies.

Fuel and power subsidies alone could cost the government 660 million dollars, according to the IMF.

Lungu said during a meeting with 70 business executives in Lusaka, the country's capital, on Thursday that all components of the IMF program will be mutually agreed, a statement released by presidential spokesperson Amos Chanda said.

The Zambian leader also hinted at a rapid but progressive migration to a cost-reflective tariff structure in the electricity and fuel sectors and the restructuring of an agriculture support program under which government provides subsidies for seed and fertilizer to smallholder farmers.

Lungu, who was declared winner of last Thursday's election, has promised the business community of broad policy measures to accelerate economic growth and control spending during his next five years in office.

Lungu said he aims to create a more stable and predictable open market environment which will involve increased consultations with the business community.

"I have five years now which is sufficient time to take more decisive action. I will take measures to grow the economy and control expenditure. Some measures will be painful but they yield results and by 2021, people will reward us for having taken such action," he said. Endit