The Zambian Government officially launched its economic recovery program on October 20th, 2016.
The program is designed to help Zambia restore its GDP growth, currently standing at 3%, which is below the 7% levels required to reduce poverty and to drive Zambia’s development.
The program is dubbed “Zambia Plus” as “all solutions will be determined by Zambians while external partners will form the plus as we engage them to assist in this Zambian process. This includes the IMF.” Zambia’s Finance Minister Felix Mutati explained at the launch.
The program is based on 5 pillars:
- Strengthening tax policy and administration to improve revenue inflows and to shift public expenditure back to affordable levels.
- Increasing budgetary allocation to social protection including addressing the plight of pensioners.
- Improving economic and fiscal governance through strengthening of regulations and laws to ensure transparency of spending decisions.
- Improving budget credibility through better planning, adherence to expenditure plans and improvement of the quality of Government’s spending.
- Improving the country’s economic stability through easing access to credit, lowering lending rates and reducing inflation.
As part of the economic recovery program, the Government of Zambia will also:
- Prioritize the dismantling of arrears owed to contractors to help companies meet their obligations and sustain their operations.
- Put in place a clearly elaborated program to turn Zambia into an agricultural hub.
- Facilitate the access to cheaper financing for local SMEs.
“As a start, we have accessed a USD50m facility with the African Development Bank (AfDB) to be used for lending to SMEs,” Mutati noted.
He also stressed that the successful execution of Zambia’s economic recovery program will require strong domestic and external collaboration, which includes the financial and technical support of the International Monetary Fund (IMF).
An IMF team was recently on a monitoring mission to Zambia to discuss the country’s economic situation and the Government’s recovery program. “We expect them to return for program discussions later,” Mutati said.
He concluded his speech by announcing that he will be soon presenting the 2017 budget, in which he will underline in great details the measures to undertake to ensure that economic stability and growth return.