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Interest rates worry Mutati

MUTATI

KALONDE NYATI, Lusaka
MINISTER of Finance Felix Mutati says Zambia’s economy has shown signs of stability but is concerned that bank interest rates remain high.
Mr Mutati has also bemoaned limited access to finance, which is negatively affecting the growth of the private sector.
He said Zambia would take full charge of the International Monetary Fund (IMF) programme to ensure it was in line with the country’s economic recovery plan.
Speaking at the Economics Association of Zambia (EAZ) public discussion on ‘IMF Recovery Programme: Lessons from the Past for the Future’, Mr Mutati said the country endured high inflation, volatilities in the exchange rates but had begun witnessing stability by December last year although high interest rates continued to characterise the economy.
He said favourable interest rates would boost private sector growth and the economy as a whole.
Mr Mutati said as Zambia planned to undertake the IMF programme, Government would ensure that it is in total control of the programme.
“Government will be in charge of the programme once it is in place. IMF needs to fit into our recovery plan. Otherwise, we will tell them we do not need them.
“Our recovery should be our driving force,” he said.
Mr Mutati said Government would also ensure consistency in its policies to ensure effective implementation of the recovery programme.
He also said Government would revise the Public Finance Act to include the prosecution of abusers of public finance.
Mr Mutati said Government collected K3.4 billion in taxes in January.
At the same occasion, IMF country representative Alfredo Baldini urged the government to ensure credible fiscal consolidation to achieve public debt sustainability.
“Domestic revenue mobilisation, expenditure prioritisation and commitment control, clear arrears while avoiding new ones increase spending on social protection programmes will be key in Zambia’s recovery programme,” he said.
Mr Baldini also said the IMF’S role was to help countries build strong institutions and skills to formulate and implement sound macro-economic and financial policies contrary to assertions that the Fund imposes conditions on countries seeking assistance.

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