Africa’s second largest copper hotspot Zambia is ending 2021 with a plethora of positives ranging from a stronger confidence standing in the international market to attainment of a landmark target, consensus with the International Monetary Fund (IMF) Staff Mission team on a $1.4 billion Extended Credit Facility (ECF). This follows 22 months of deliberations when the Southern African nation made a formal application to the lender for a fully funded program yet the last 3 months (post August) have seen strategic meetings leading to an accelerated attainment of an agreement.
“The most critical part of what we did to get to this point is that we are a credible government. The previous government was not credible enough for the IMF hence non committal by the lender,” MinFin Head Dr. Situmbeko Musokotwane said in an interview on Diamond TV on 15 December. This time we are a credible and committed government, he said.
Zambia’s Head of State and Chief Investment Officer Hakainde Hichilema alongside the Minister of Finance Dr. Musokotwane courted multilateral chiefs Kristalina Georgeiva (IMF Managing Director) and David Malpas (World Bank Head) in Washington in August this year after his debut appearance at the United Nations General Assembly in New York.
In the labyrinth of a debt restructure and efforts to restore fiscal fitness, the red metal producer seeks to rebound growth to celebrated highs of above 7%. The IMF package is set to open up Zambia to greater investments flows from private sector players and donors who earlier had negative stereotypes around bad governance and an excessive debt quagmire in the red metal producer.
”In the last 10 years Zambia has had no key mines opened while it’s neighbor the Democratic Republic of Congo has recorded 16 mines in Kolwezi,” Dr. Musokotwane said.
The ECF will disbursed over a 3 year period and will be hinged on three (4) key pillars namely economic development and job creation, environmental sustainability, human and social development and good governance.
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