Press Release: IMF To Extend 100 Percent Debt Relief to Zambia Under the Multilateral Debt Relief Initiative

December 23, 2005

Mr. Joseph Kakoza, the IMF Resident Representative Zambia, issued the following statement on December 22 in Lusaka:

"Under the Multilateral Debt Relief Initiative, the IMF Executive Board has approved debt relief for Zambia (see Press Release No 05/286). As part of the Initiative, the IMF will provide 100 percent debt relief for Zambia on all debt incurred by Zambia to the IMF before January 1, 2005 that remains outstanding. IMF debt relief would amount to approximately US$577 million, or US$572 million excluding remaining assistance under the Heavily Indebted Poor Countries Initiative. This debt relief should become available in early January as soon as the remaining consents of the contributors to the PRGF Trust Subsidy Account have been received. The international community has made these additional resources available to help Zambia make progress toward its Millennium Development Goals (MDGs).

"Zambia has qualified for IMF debt relief because of its overall satisfactory recent macroeconomic performance, progress in poverty reduction, and improvements in public expenditure management. Zambia has enjoyed sustained robust growth, a striking turnaround in economic performance that has been underpinned by a marked improvement in public finances. Although still too high, inflation has moderated and gross international reserves are relatively low. The government has established a sound record of implementing its poverty reduction strategy. While public expenditure management systems have been improved, their planned further strengthening is crucial. Performance in these areas provides assurance that resources made available under the Multilateral Debt Relief Initiative will be used effectively."

"The IMF looks forward to working with Zambia to help it develop a strong and stable economy and to make sustained progress toward the MDGs," he said.


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