Zambia: 2019 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Zambia

August 2, 2019

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Zambia: 2019 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Zambia, (USA: International Monetary Fund, 2019) accessed November 23, 2024

Summary

This 2019 Article IV Consultation with Zambia highlights that the development strategy has targeted a rapid scale-up of public investment to address infrastructure needs. Recent efforts to adjust the fiscal stance have delivered some improvement in revenues; however, deficits have continued to rise following faster-than-budgeted execution of foreign-financed capital spending. With the anticipated growth dividend yet to materialize, the debt burden has risen sharply, resulting in currency weakness and rising local borrowing costs that have further pushed up the interest bill. A large, frontloaded, and sustained fiscal effort is needed to bring debt down to safer levels. This should include a moratorium on contracting new external non-concessional borrowing, steps to raise revenues, halt the build-up of domestic expenditure arrears, and to better prioritize public investment projects. Decisive steps forward to build confidence and deliver meaningful fiscal adjustment will be essential. Appropriately tight monetary policy also has a role to play in securing stability. Reserves should be replenished over the medium term. Steady attention to the business environment is also needed to support private investment going forward.

Subject: Arrears, Expenditure, External debt, Public debt, Public investment and public-private partnerships (PPP), Public investment spending

Keywords: Arrears, Arrears to Belgium, Balance of payments estimate, CR, Debt vulnerability, Deficit, East Africa, Global, Infrastructure investment, ISCR, Public investment spending, Southern Africa, Staff appraisal

Publication Details

Pages:

107
Volume:

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DOI:

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Issue:

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Series:

Country Report No. 2019/263
Stock No:

1ZMBEA2019002
ISBN:

9781513509884
ISSN:

1934-7685

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