IMF plan will boost economy – ZIPAR

AN International Monetary Fund (IMF) economic recovery programme will help restore confidence in the Zambian economy and address challenges that have affected the economy since 2015, Zambia Institute for Policy Analysis and Research (ZIPAR) says.
ZIPAR research fellow Shebo Nalishebo said options such as the IMF programme could enhance the economic recovery plan as they would provide capital and attract private sector finance.
Last year, Government indicated that it is this year expected to start negotiations with the IMF.
Mr Nalishebo said during the American, British and German Chambers of Commerce networking breakfast on Friday that if concluded, the IMF programme will ensure implementation of policy and structural reforms, improve balance of payments and help reduce the fiscal deficit.
“This may signal confidence from cooperating partners and investors who would then come in to support Zambia’s economic recovery. It will also help restore lost confidence of the private sector and the public in general by improving budget credibility, economic and fiscal governance,” he said.
He said the development may also improve the sovereign credit rating and therefore reduce the perceived risk of default.
Mr Nalishebo also said the Zambia Plus economic recovery programme, if well implemented, offers hope for the economy.
He said setting Zambia out of the low-growth trap and on the path to economic recovery will require effective and collective policy efforts to support short-term stability and raise growth in the longer term.
“Government is walking a tight rope to economic recovery; any fiscal slippages will plunge the economy back into a downturn. We therefore need to decisively deal with the fiscal deficit and its offshoots,” he said.
Mr Nalishebo also said there is need for a systematic and comprehensive framework for paying of arrears to suppliers and contractors.
On Government’s intention to limit its role in fuel procurement to regulation only, Mr Nalishebo said adequate measures to guarantee sufficient strategic reserves to smoothen supply, should market failures or disruptions emerge, are necessary.
He, however, said disengagement remains a grey area as Government is yet to pronounce itself on the Energy Regulation Board’s new role, TAZAMA in terms of transportation and Indeni in refinery and strategic reserves.

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