The International Monetary Fund (IMF) approved a 38-month arrangement with Zambia to restructure the massive debt that has destroyed the economy of the southern African nation. The IMF program aims to restore Zambia’s macroeconomic stability and foster higher resilient and inclusive growth. The Extended Credit Facility (ECF) loan is worth SDR 978.2 million (approximately US $1.3 billion, or 100 percent of the quota). The decision of the Executive Board will allow for an immediate disbursement of SDR 139.88 million (approximately US$185 million).
Zambia has been dealing with the consequences of years of economic mishandling. The country’s debt distress requires a thorough and all-encompassing treatment to put public debt on a sustainable path, especially with the inefficient public investment drive. The government’s program, supported by the Extended Credit Facility (ECF) arrangement to get this debt, will advance the government’s in-house reform strategy to strengthen economic governance, restore debt sustainability, and create fiscal space for crucial social spending. The Bank Of Zambia’s work to reduce the country’s inflation and preserve financial stability will be aided by this loan, said IMF Managing Director Kristalina Georgieva.
