IMF ready to bail out Zambia

IMF Mission to Zambia

THE International Monetary Fund (IMFI is more than ready to give Zambia financial assistance to help mend its battered economy in the wake of global economic meltdown, says its head of Africa department Antoinette Sayeh.
Ms Sayeh said Zambia was another country struggling with rising cost of servicing dollar debt after halving in the value of her currency this year but had chosen no to ask the IMF for financial assistance.
“If Zambia feels that it can benefit from fund financial assistance, we stand ready to look at that,” said Ms Sayeh.
The IMF has said that this year’s slump in commodity prices and the end of a flood of cheap dollars has pegged back African growth to its weakest in six years, adding that things could get worse if the glaobal economy continued to flounder.
The fund has singled out Ghana, Zambia and South Africa as being the hardest hit in Sub-Saharan Africa as the countries were also suffering from weak minerals prices, power shortages and difficult financing conditions.


She was commenting on the latest African Economic Outlook report titled “Dealing with Gathering Clouds who has pointed out that the poorest continent was likely to grow 3.75percent this year and 4.25 per cent next year, a big drop from the years before and after the 2008/2009 financial crisis.
“The strongest growth momentum evident in the region in recent years has dissipated. With the possibility that the external environment might turn even less favourable, risks to this outlook remain on the downside,” says the report.
But Ms Sayeh said with commodities revenues forecast to remain depressed for several years, governments have to work quickly to diversify revenue resources by improving domestic tax collection.
“Mobilizing more revenues is an urgent matter-as being more exacting in choosing expenditure. It’s a difficult patch but definitely think that countries can move out of the very difficult terrain and grow more robustly,” she said
Public debt levels have been rising, in part because of access since 2007 to international capital markets.
“But governments need to be ‘very careful’ in how they manag3ed dollar financing to ensure it is invested wisely,” she said
She said some government such as Ghana have been accused of frittering away Eurobond revenues on State salaries, adding however that Accra was doping “reasonably well” in its efforts to curb public spending under a US$918 million IMF programmed agreed in April.