Q FM Africa's Modern Radio
The visiting International Monetary Fund (IMF) mission has recommended the resolute implementation of a credible package of measures to lower the fiscal deficit in order to bring stability to the economy.
Speaking during a media briefing on the conclusion of the mission to Zambia, IMF mission Chief Tsidi Tsikata notes that the Zambian economy is under stress owing to the lower copper prices, the depreciation of the kwacha among other factors, and that the pressures on the economy have not only reflected the impact of external shocks, but also waning market confidence.
Mr. Tsikata notes that though monetary policy has been appropriately tightened to counter the pressures on the exchange rate and rising inflation, success will depend on tightening of the fiscal policy.
He explains that during their visit to Zambia, the mission and the Zambian authorities reached a shared understanding on the current economic challenges and the implications of alternative policies, adding that Zambia with a record of peace and political stability remains a country with great potential to achieve strong and inclusive growth.
Mr. Tsikata further states that the authorities and the IMF staff have agreed to remain closely engaged in the period ahead.
And Secretary to the Treasury Fredson Yamba says government fully acknowledges that fiscal consolidation is paramount in ensuring sustained macroeconomic stability, growth and poverty reduction.
Mr. Yamba says government recognizes that risks remain and mainly relate to the need to contain fiscal pressures particularly those related to costs related to electricity imports incase weather conditions continue to be adverse, attainment of cost reflective fuel pricing following the steep depreciation of the kwacha, increased spending on subsidies and the need to complete ongoing infrastructure projects.
He further states that government will regularly review budget implementation with the objective of taking other collective measures.