Zambia, IMF seal agreement

Zambia and the International Monetary Fund (IMF) have agreed on a programme which will see Government start implementing some measures in the fourth quarter of this year.

Secretary to the Treasury Fredson Yamba said this following spring meetings held in Washington where some agreements were made .

Mr Yamba stated that during the meetings with IMF in March, the Fund advised Government to adhere to the provisions of the amended Constitution under which Parliamentary approval was required for any supplementation before Ministries, Province and other spending agencies could spend above their budgets.

During the visit by the IMF to the country, Government and the Fund agreed on the need for effective fiscal consolidation measures in 2016 and beyond apart from the commitment to austerity initiatives meant to deal with the current budget deficit which was a challenge.

Mr Yamba said Government was working towards setting the stage for the necessary adjustments of electricity tariffs and fuel pump prices to ensure that austerity measures announced by President Edgar Lungu in November, 2015 are diligently enforced.

He also said Government would accelerate the tabling before Parliament of the proposals on the Mineral Royalty Tax (MRT) Sliding Scale meant to create a tax regime that should be responsive to the changes in metal export prices.

Mr Yamba said the adjustments in electricity tariffs and fuel prices would bear witness that the austerity measures announced by President Lungu in November, 2015 had started bearing fruits.

He said in a statement yesterday that Government was determined to remain within the budgetary allocations in its quest to avoid a budget deficit.

Mr Yamba said the appreciation of the Kwacha was testimony to the positive impact of the measures that had been taken by the Central Bank as well as the fiscal consolidation steps by the central Government.

He said following discussions with the International Monetary Fund (IMF) in March this year in which Zambia’s macro-economic situation and the possibility of engaging the Fund in formal programmes in 2016,

“Government will be working towards setting the stage for the necessary adjustments in electricity tariffs and fuel pump prices while ensuring that austerity measures announced by President Lungu in November 2015 are diligently enforced. One policy issue to accelerate in the coming weeks will be tabling before Parliament, proposals on the Mineral Royalty Tax (MRT) Sliding Scale. This is meant to have a tax regime that is responsive to changes in the metal exports,” Mr Yamba said.

Mr Yamba said the IMF would be provided with Zambia’s macro and fiscal plans for the 2017 budget and the medium term, in June 2016 in line with the national budget calendar.

“This is meant to pave way for their input so that once in place, the programme will not be at variance with the budget because a large portion of it is executed through budget implementation,” Mr Yamba said.

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