Zambia Letter of Intent, March 10, 1999--Table 1

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Table 1. Zambia: Quantitative Performance Criteria and Benchmarks During the First Year of the Three-Year Arrangement Under the Enhanced Structural Adjustment Facility, January 1, 1999–December 31, 1999
	1998 Dec. Est.	1999
		Performance criteria		Indicative targets
		End-Mar.	End-Jun.	End-Sep.	End-Dec.

	(In billions of kwacha; cumulative from January 1, 1999)
Ceiling on the increase in net domestic assets of the Bank of Zambia ^1,2	2965¹¹	-103	-73	-131	-116

Ceiling on the increase in net bank claims on government^2,3,4	557¹¹	-1	90	-43	-109

Floor on the domestic budget balance of the government ⁵	…	6	-115	-81	-44

Ceiling on the outstanding stock of domestic arrears of the government	23	20	13	6	0

	(In millions of U.S. dollars)
Floor on net international reserves of the Bank of Zambia ⁶	-1,180	-1,125	-1,131	-1,104	-1,107

Ceiling on new external payments arrears⁷	0	0	0	0	0

Ceiling on new medium- and long-term nonconcessional loans ⁸	0	0	0	0	0

Ceiling on the stock of short-term debt⁹	165	165	165	165	0

	(Numbers of employees)
Size of the public service¹⁰	119,500	117,750	116,000	114,250	112,500

	(In millions of U.S. dollars; cumulative from January 1, 1999)
Memorandum item:
Programmed balance of payments assistance	0	118.5	161.3	267.1	307.1
¹Net domestic assets are equivalent to reserve money minus net foreign assets, calculated at the end-December 1998 U.S. dollar-kwacha exchange rate (US$1=K 2,317). ²In case of a shortfall in balance of payments assistance, the ceilings on the increase in net domestic assets and net bank claims on the government will be adjusted upward by the amount of the shortfall with a maximum of US$30 million. The kwacha value of the cumulative shortfall will be calculated at the end-December 1998 U.S. dollar-kwacha exchange rate (US$1=K 2,317). ³Net bank claims include the U.S. dollar-denominated foreign exchange bridge loan of the Bank of Zambia to the government. The balance of the loan is calculated at the end-December 1998 U.S. dollar-kwacha exchange rate (US$1=K 2,317). ⁴The ceiling on the increase in net bank claims on the government will be adjusted downward by the difference between the budgetary provision of K 151 billion and the actual payments made by the government for the settlement of ZCCM's short-term debt and arrears, which is expected in the second quarter of 1999. ⁵The floor on the domestic budget balance of the goverment will be raised by the difference between the budgetary provision of K 151 billion and the actual payments made by the government for the settlement of ZCCM's short-term debt and arrears, which is expected in the second quarter of 1999. ⁶Foreign assets of the Bank of Zambia include the balance in the special Bank for International Settlements account established in accordance with the February 1996 Paris Club accord. In case of a shortfall in balance of payments assistance, the floor on net international reserves will be adjusted downward by the amount of the shortfall with a maximum of US$30 million. Net international reserves exclude a US$25 million deposit in Meridien Bank, which is under liquidation. ⁷The injunction against new external payments arrears is continuous. ⁸Loans contracted or guaranteed by the central government or the Bank of Zambia with grant elements of less than 35 percent. ⁹Includes debt contracted or guaranteed by the central government and Bank of Zambia with an original maturity of not more than one year, but excluding normal trade credits for imports. ¹⁰Measured on the basis of the payroll data of the Ministry of Finance, universities, and teaching hospitals. ¹¹ Stocks at end-1998.