Zambia earns IMF KUDOS for economic success

By Nawa Mutumweno, Reporting for Shout-AfricaZambia continues to score impressive economic growth on the backdrop of prevailing high copper prices on the global market, according to the International Monetary Fund (IMF).

An IMF team, headed by division chief for African department George Tsibouris was in the country recently on its routine mission to review its macro-economic performance.

Zambia has performed well with continued copper high prices in addition to some improvements in other sectors such as construction and tourism.

“The economy has done quite well, both in terms of economic growth and fiscal programmes. Copper output and prices continue to be high with broad-based growth in construction and tourism,” he pointed out.

The trend is expected to continue this year with the outlook generally positive on account of good economic fundamentals such as low inflation rate, interest rates and stability in foreign exchange rates.

Although international reserves remain relatively strong with reserves standing at about $2 billion, external factors such as increasing food and fuel prices will impact on the standard of living.

Following the team’s arrival on March 3, it has held a series of meetings with Government, Bank of Zambia (BoZ), civil society and business organizations.

The IMF conducted discussions for the sixth review under the Extended Credit Facility from March 3 – 16, 2011.

Meanwhile, the IMF has commended Zambia on the B+ rating by Fitch Rating Agency that is poised to bring the country at par with rated countries that have sound economies.

Regarding the rating, Mr Tsibouris said the assigning of a B+ status by an independent agency is a good achievement as it will enable Zambia to compare favourably with other countries that have been rated and give the country an opportunity to borrow from international creditors.

Kenya, Angola and Ghana are some of the economies with sound economic standing that have a similarity with Zambia’s rating status.

He also commended Government for the intention to issue a 500 million euros bond although he emphasized the importance to manage the money that will be raised to projects that will generate economic growth, create jobs and additional taxes. There is one more independent rating agency to offer its objective assessment.

Early in March, Zambia was rated B+ for the long-term foreign and local currency Issuer Default Ratings by Fitch Ratings.

Government appointed Fitch Ratings and Standard and Poor’s rating agencies to provide an independent and prospective credit opinion on Zambia.