Economic Think Tank Nods MinFins IMF Bailout Package Forecast
The Economic Association of Zambia have welcomed the forecast target by Zambia’s Minister of Finance to conclude the bailout package deal with the IMF by year end. Speaking in an interview with Diamond Television, Association National Secretary, Mutisunge Zulu welcomed the move citing that it would serve as a defacto guarantor for investment flows especially for players that have been sitting on the fence.
“An IMF package gives investors some level of comfort to allow flows into a nation they give assistance,” Zulu said. The delay in closing the deal caused asset sell off pressure and has caused some pockets such as fund managers to sit on the fence or prefer to lock up liquidity in other assets. Flows are now being seen into Zambia will appetite for its dollar and kwacha bonds rising steadily, he said.
The misconception many have about the bailout package is that Zambia is targeting US$1.3billion. The actuality is that the monetary benefit is for balance of payment support but the Association is more interested in the positive externalities the package comes with such as an upsurge in investment flows as was seen in Ghana a nation with very similar fundamentals to Zambia ranging from currency to dollar bonds issued.
National Secretary – Mutisunge Zulu
The Association believes the MinFin has done a lot of work in the 2 year period such as completion of the Debt Sustainability Analysis (DSA), successful strengthening of the Public Finance Management (PFM) Act of 2018 whose operationalisation has been evidenced by the cracking of the whip on perpetrators and austerity measure implementation.