Zambia Invites IMF to Intervene As Economy Worsens.
The Government of the Republic of Zambia has invited a team from the International Monetary Fund. The team will arrive in Zambia on Wednesday to discuss “challenges” facing Zambia, buffeted by the Kwacha’s record slump as a drought, electricity shortage and falling copper revenue weigh on government finances.
The IMF staff team will visit Zambia “at an invitation of the authorities and as part of the ongoing dialogue,” Tobias Rasmussen, the Washington-based lender’s resident representative in Lusaka, said in an e-mailed response to questions on Tuesday. It will “review recent economic developments and discuss with the authorities their policy responses to the macro-economic challenges currently facing the country,” he said.
The Kwacha weakened as much as 7.2 percent to 14.605 per dollar on Tuesday before paring losses to trade 3.5 percent weaker at 14.0923 by 5:25 p.m. in Lusaka. Kwacha has lost more than half of its value this year and may extend to decline.
The Kwacha’s collapse is stirring up a lot of anxiety with Zambia’s debt ratios, according to the World Bank. Total debt may reach 56 percent of gross domestic product by the end of the year, Gregory Smith, an economist with the Washington-based lender, said on Nov. 6, when the currency traded at 13.11 per dollar. In June, before the Kwacha’s rapid depreciation and the government ‘s third Eurobond sale, the ratio was about 32.7 percent, according to Finance Minister Alexander Chikwanda.
And in similar reports, most of Zambian business owners at Lusaka’s, Manda Hill shopping mall complained bitterly that they couldn’t pay their rentals due to high rentals and no business.
Earlier this year upon being elected President, Lungu flew to South Africa to get advice on how to improve the economy and apparently he wasted tax payers money because that trip was just a luxury trip for him which didn’t produce any results and now Lungu has further opted to invite IMF experts to advice him on how to revitalize the economy.