STATEMENT BY THE SECRETARY TO THE TREASURY, FREDSON YAMBA ON THE IMF VISIT TO ZAMBIA
Members of the press
During the period 11 – 20 November 2015, the Zambian Authorities hosted an IMF Staff visit to Zambia. The main objective of the visit was to review recent economic developments and share views on appropriate policy measures to address the current macroeconomic challenges.
Ladies and Gentlemen
The Government shares the views of the Mission and fully acknowledges that fiscal consolidation is paramount in ensuring sustained macroeconomic stability, growth and poverty reduction. The Zambian Government recognizes that risks remain and mainly relate to the need to contain fiscal pressures, particularly those related to the following:
1) costs related to electricity imports should weather conditions continue to be adverse;
2) attainment of cost reflective fuel pricing, following the steep deprecation of the Kwacha;
3) increased spending on subsidies partly due to the depreciation of the Kwacha; and
4) the need to complete ongoing infrastructure projects.
Members of the press
The Government further takes cognizance of the fact that fiscal consolidation is inevitable to support the attainment of monetary policy objectives. In this vein, Government will ensure that:
1) It re-aligns expenditures to counter some of the pressures outlined above. This is in view of the limited scope for new revenue measures and the challenges in the mining sector; and
2) It limits its borrowing in the domestic market with the objective of addressing imbalances in parameters such as lending rates and availability of credit to the private sector.
Government will also regularly review budget implementation with the objective of taking other corrective policy actions. The Zambian Government will undertake consultations to define the forms of further engagement with the Fund.
The Government would like to thank the Mission Chief, Mr. Tsidi Tsikata and his team for the fruitful discussions during the visit. Special thanks also go to Ms. Chileshe Kapwepwe, Executive Director, Africa Group I Constituency, for her supportive role during the visit.
Ladies and Gentlemen, I thank you.