29 October 2009
THE International Monetary Fund (IMF) has urged the Government to cut the public sector wage bill to free up some funds for social sector spending which will enhance economic diversification and poverty reduction.
Concluding the two-week mission to Lusaka yesterday, IMF chief for Africa, George Tsibouris said the huge public sector wage bill was one of the challenges the Zambian Government needed to urgently address.
Mr Tsibouris said in a statement that there was need to increase funding to the social sector to support the economic diversification and measures aimed at poverty reduction.
Mr Tsibouris led the mission's visit to Lusaka from October 15 to 28 to conduct the discussion in the article of agreement and for the third review of Poverty Reduction and Growth Facility (PRGF)
Mr Tsibouris said following the IMF meetings with Government officials and other stakeholders, an understanding on the macro-economic and structural policies for 2010 had been reached.
"Against the background of the global economic crisis, the Zambian economy has shown considerable resilience and economic growth is now expected to exceed five per cent in 2009.
"Inflation is moderating, assisted by a softening of food pricess and a limited reversal of the earlier depreciation of the Kwacha, the revised inflation target of 12 per cent by end 2009 is well within reach," he said.
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