Copper Surge to Drive Growth as Zambia Pursues New IMF Programme

Finance Minister Dr Situmbeko Musokotwane has said Zambia aims to conclude a new programme with the International Monetary Fund before the end of the year, marking the next stage in the country's recovery after emerging from sovereign debt default.

Speaking to Reuters, Dr Musokotwane said the government's wish was to have reached agreement with the Fund certainly before the year is out. The previous $1.7 billion arrangement, which underpinned Zambia's landmark debt restructuring, concluded in January.

The ambition now extends well beyond crisis management. Zambia needs to do more than simply get out of the debt crisis, he said, adding that the priority is attracting investment so that growth takes place and jobs are created. A new programme would focus on channelling capital into mining, energy and agriculture, sectors capable of generating employment for a population that has grown sevenfold since independence.

The Minister said it remained too soon for Zambia to return to international bond markets, with the government first seeking to cement its relationship with the Fund and rebuild investor confidence. An IMF staff team visited Lusaka between April and May, after which the Fund confirmed discussions had advanced and would continue following the August general election.

On the outlook, surging global copper demand and a wave of new mining investment are expected to support growth, though Dr Musokotwane acknowledged risks from fuel prices and possible drought. Demand for metals including copper is going to give Zambia a big surge in growth in the coming few years, he said.

Looking to the next administration, he identified tax reform as a priority, stressing efficiency rather than new burdens. The government has to push hard on more tax revenue collection, he said, not by imposing new taxes but by encouraging and pushing through higher efficiency.