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Economists differ over Zambia’s IMF deal

Economic Analyst Trevor Hambayi has commended government for its commitment in ensuring that the country clinches the $1.3 billion International Monetary Fund (IMF) bailout loan.

Yesterday IMF Managing Director, Kristalina Georgieva announced that the IMF Board had approved Zambia’s $1.3 billion IMF programme which will run for a period of three years.

In an interview with Lusaka Star, Hambayi said the approved IMF deal will serve as a catalyst for Zambia’s debt restructuring process.

” The IMF deal will help with balance of payment and give the country enough space to build capacity in the economy,” Hambayi said.

He said securing the IMF deal will allow government to channel its resources towards economic recovery and poverty reduction among other issues affecting the country.

”The IMF deal will catalyze Zambia’s potential for bilateral support from the G20 and Paris Club member countries such as China,” Hambayi added.

Meanwhile, Economist Dr. Grieve Chelwa says that the $ 1.3 billion IMF package is not the best solution to Zambia’s debt restructuring.

Chelwa said no African country that has previously acquired bailout loans from the IMF can currently boast of having an improved economy.

” Even several years from now, only the capitalists and the elites will be the ones to benefit from this IMF bailout and not the ordinary Zambians,” he added.

Chelwa, who is Director of Research at the US’s Institute on Race, Power and Political Economy, said government should have instead organized an elite team to negotiate with Zambia’s creditors. 

According to official government data, Zambia’s external debt stood at $17.27 billion in 2021.

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