12 March 2010
THE International Monetary Fund (IMF) has praised Zambia for the way it managed the economy during the global financial crisis which resulted in the country recording positive growth.
Managing director Dominique Strauss-Kahn said at State House in Lusaka yesterday that the fund was impressed with the measures that Zambia put in place to manage the crisis.
He said when he met President Rupiah Banda that the fund would continue to support Zambia's efforts to address its economic challenges and there was no reason for the fund to relax its aid to the country.
Mr Strauss-Kahn said Zambia had addressed most of the issues raised by the IMF on how to tackle the economic management.
He said most African countries had not addressed most of the issues because of lengthy legislative procedures.
Mr Strauss-Kahn said some matters still remained unattended to because of the legislation existing in most countries.
He urged President Banda to influence other leaders in Africa in addressing some of the legislation that were not favourable to economic growth.
President Banda told the IMF that Zambia had decided to turn to China for support because of the pressing need for infrastructure development at concessionary cost.
"We need financing at concessionary rates where possible to build the necessary infrastructure. This is among the reasons we have looked to China for support," the president said.
Mr Banda told Mr Strauss-Kahn that Zambia was in a hurry to deliver development for the people and would require financial assistance in many ways.
He said Zambia and the IMF had continued to work closely in defining prudent micro-economic and social policies.
The president said the Zambian economy managed to survive the global financial crisis last year due to various factors that were provided by the Government and other stakeholders.
He said while most of the economies around the world experienced a contraction, the Zambian economy grew by more than 6.0 per cent.
Other economic indicators such as inflation, interest rates, exchange rates, debt sustainability rations and others equally improved.
Mr Banda commended the IMF for its role in having Zambia's debt cancelled through the highly indebted poor countries (HIPC) initiative.
He said although the debt burden was reduced, the country still faced some challenges in terms of economic growth and poverty reduction.
The lack of sufficient infrastructure such as road and railway were also some of the challenges.
The president told the IMF managing director that before the HIPC completion point, Zambia used to access funding under the International Development Association (IDA) but the facility had since diminished.
He said the absence of the IDA had affected the extent to which Zambia could implement development projects.
The president said despite the challenges, his Government had not given up its commitment to addressing them, especially those involving infrastructure enhancement.
Mr Banda praised the IMF for the various reforms it was undertaking aimed at enhancing its governance and the economic well-being of member States.
He said the reforms were meant to make the IMF financial support more flexible and better tailored to the diverse needs of low-income countries in times of crisis.
He said the reforms would also strengthen the voice and participation of smaller economies like Zambia in decision-making.
Zambia benefited from the reforms with the augmentation of resources amounting to $260 million for 2009 and 2010 under the extended credit facility formerly called the poverty reduction and growth facility.
Mr Banda reiterated that Zambia and the IMF shared a common goal of reducing poverty through micro-economic stability.
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