The International Monetary Fund (IMF) is to release about 126,3 million US dollar to Zambia, following completion of the first economic performance review under a three-year Poverty Reduction and Growth Facility (PRGF).
Zambia was put back on the PRGF in June this year, after being suspended because it overshot the 2003 budget by Kwacha 610 billion (about 130 million dollar). The PRGF is the IMFs concessional loan facility to low-income countries.
The June decision brought the aid-dependent country a step closer to reaching the Highly Indebted Poor Countries (HIPC) Completion Point, now expected to be achieved, at the earliest, in March/April 2005.
Deputy managing director and acting chair of the IMF, Takatoshi Kato, said after the decision to release the funds on Thursday: – Zambias economic performance continued to strengthen in 2004. This performance is particularly encouraging against the backdrop of the economic decline in the preceding two decades.
He added: -However, Zambia still faces significant challenges. Growth is still not strong enough to make large inroads into widespread poverty, and inflation is too high, even though progress was made in this area in 2004.
Kato noted that, based on performance through the end of 2004, Zambia could reach the HIPC completion point by the second PRGF review in March/April next year, “provided that performance under the PRGF-supported programme remains strong”
– In particular, it will be important that the authorities make further progress in strengthening public expenditure management, to help ensure that debt relief is used effectively, stated he.
Kilde: FN-bureauet IRINnews
