IMF praises, warns Zambia

IMF managing director Rodrigo de Rato said the improvement in the country’s economy was largely a result of the country’s efforts and commitment to bring about a change. De Rato made the comments during a courtesy call on President Levy Mwanawasa at State House. He hailed the Zambian government over what he termed sustained progress in the stability and growth of the economy. De Rato said while there had been progress attained, more still remained to be done to have a meaningful impact on the high levels of poverty and ultimately benefit the Zambians. He called for a strong ownership by the Zambians of the economic programmes that were being implemented in the country if they were to be a success. The IMF executive said his first visit to Zambia, and his fourth to sub-Saharan Africa, was focused on sharing the Multilateral Debt Relief Initiative including the IMF’s Medium Term Strategy Review. He urged President Mwanawasa and his government to take advantage of the opportunities that had brightened following the debt relief Zambia had been given after attaining the Highly Indebted Poor Countries initiative. While appreciating the southern African country’s qualification for the massive debt write-off, he noted that the challenge was now the effective and prudent use of resources freed after the debt forgiveness. De Rato said there was need for the government to be transparent and accountable in the use of resources, a measure he said was key to sustained development. He advised that higher levels of economic growth were still needed for Zambia to raise the standard of living of its people and further called for increased funding towards access to quality education and health, especially in the fight against HIV/Aids. De Rato pledged the Fund’s support to the positive strides the government was making in trying to develop the economy. President Mwanawasa, however, reserved his statement to the IMF in a closed door session with the visiting delegation. De Rato also met the Zambia business community and donors who shared their experiences over economic policies. Among the issues tabled was the effect of the aid flows, which are expected to further increase, on the business community. Exporters have been complaining about the appreciation of the kwacha, which has been bolstered further by the increased availability of the US dollar. Besides participating in the roundtable meeting devoted to the Multilateral Debt Relief Initiative (MDRI), de Rato’s visit was also part of the Fund’s top management’s effort to visit as many member states as possible and have a first-hand account of what was on the ground. The aim of the roundtable would be to discuss the challenges that these countries face in making use of donor resources, especially the 100 percent debt relief extended by the Fund under the MRDI to 19 countries, of which 13 are in sub-Saharan Africa.

March 2006
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