Zambia: Request for Three-Year Arrangement Under the Poverty Reduction and Growth Facility-Staff Report; Staff Statement; Press Release; and Statement by the Executive Director for Zambia
IMF Staff Country Reports
Discussions on a new Poverty Reduction and Growth Facility (PRGF) arrangement were held in Zambia from April 13 to 23, 2004 and concluded in Washington in late April. The staff team met with Mr. Magande, Minister of Finance and National Planning, Mr. Kalyalya, Deputy Governor of the Bank of Zambia (BoZ), other senior officials, representatives of the private sector and civil society, and members of the diplomatic and donor community. The staff team comprised Mr. Andrews (head), Mr. Thugge, Mr.
... assina, Mr. Bagattini (all AFR), Mr. Staines (PDR), Mr. Baldini (FAD), and Mr. Kakoza (Resident Representative). The mission worked closely with World Bank staff. Zambia's last PRGF arrangement expired in March 2003. The Board concluded the 2003 Article IV consultation on April 7, 2004. After consideration of a new three-year PRGF arrangement was precluded by a large projected budget overrun, the authorities requested a staff-monitored program (SMP) covering the period July-December 2003. Performance under the SMP was not satisfactory, and the SMP was extended to June 2004. Through end March, performance under the SMP was strong. The staff will report on performance through April and May (based on preliminary data) at the time of the board meeting. Zambia is requesting a three-year arrangement under the PRGF in an amount of SDR 220.095 million (45 percent of quota) to support the program, in the attached letter of intent and memorandum of economic and financial policies (MEFP). The government has also prepared a progress report on the implementation of its poverty reduction strategy paper (PRSP). A joint staff assessment (JSA) concluded that the strategy continues to provide a credible framework for Fund and World Bank concessional assistance, and recommends the Executive Boards of the World Bank and the Fund support this conclusion. Since his election in 2001, President Mwanawasa has increased his slim majority in parliament by appointing opposition members to cabinet and winning by-elections. The government's anticorruption campaign has resulted in former President Chiluba facing court charges of corruption and misuse of public resources.