Zambia’s new government should urgently take steps to restore fiscal and debt stability in the face of the difficult macroeconomic challenges facing the country, the International Monetary Fund said on Monday.In a statement at the end of a virtual staff visit to Zambia, an IMF team said the government of recently elected President Hakainde Hichilema should speed up its reform priorities that focus on restoring macroeconomic stability, re-establishing fiscal and debt sustainability, generating growth, and improving human development.
“In light of the deeply challenging macro-economic environment that prevails, the new administration faces an urgent need to take steps to restore sustainability while protecting the vulnerable and creating more inclusive growth,” said the IMF team that was led by the Bretton Woods institution’s mission head to Lusaka, Allison Holland.
The virtual visit, which took place from September 27 to October 1, came in the wake of last month’s meetings between Hichilema and IMF and World Bank officials on the sidelines of the United Nations General Assembly in the United States as the southern African nation sought to secure a lending programme to help it emerge from a debt crisis.
In November 2020, Zambia became the first African country to default on its sovereign debt during the COVID-19 pandemic after failing to keep up with payments on nearly US$13 billion of international debt.
About a quarter of this debt is held by either China or Chinese entities via deals shrouded in secrecy clauses, complicating negotiations for IMF relief.