Zambia may get up to $1.3 billion from the International Monetary Fund (IMF), in a three-year credit facility aimed at helping to plug a budget deficit of around 7 percent, according to Tsidi Tsikata, the IMF’s mission chief.
“We aim to reach understanding in the coming weeks that would form the basis for presenting the authorities’ request for an ECF (Extended Credit Facility) arrangement and report on the 2017 Article IV consultation to the IMF board in August 2017,” Tsikita said.
The Zambian economy has been hit hard by the steep drop in commodity prices in recent years. Africa’s second-biggest copper producer relies on the red metal for 85 percent of its exports.
The country began talks with the IMF about a potential loan package that could help address its budget deficit.
Tsikita advised Zambia to take concrete steps to achieve fiscal consolidation targets as contained in the country’s 2017 budget. These include limiting borrowing and improving revenue collection.
Meanwhile, the US Trade and Development Agency (USTDA) has approved a grant of $275 million for feasibility study and costs related to the development of a 130MW wind farm by Access Power in Zambia.
The project, which is expected to be complete in 2019, is being done in partnership with EREN Renewable Energy.