IMF boss final statement on Zambia

Mr. Dominique Strauss-Kahn, Managing Director of the International Monetary Fund (IMF), issued the following statement today in Lusaka at the conclusion of his visit to Zambia:

“I wish to thank President Rupiah Banda, Minister of Finance and National Planning Musokotwane; Bank of Zambia Governor Fundanga; and other senior officials. I also want to thank representatives of the university community, civil society, and professional associations for the productive discussions we had on the state of the Zambian economy and the way forward.

“I welcome the sound economic policies put in place by the Zambian authorities to deal with the global economic crisis. Thanks to these policies, the Zambian economy has proven resilient to the crisis. For 2010 and over the medium-term, growth is expected to remain strong. Inflation, having fallen to single digits, is projected to moderate further. International reserves have risen to 30-year highs owing in part to the allocation of Special Drawing Rights by the IMF.

“Zambia has made significant progress towards the attainment of the Millennium Development Goals. Indicators have been improving, while the country is on-track towards meeting its goal of universal primary education. We agreed that government revenue collections will need to be improved in order to continue to boost spending in priority sectors. Looking ahead, Zambia will need to increase fiscal space for additional outlays on infrastructure, to support diversification of the economy, and on social sector spending, to facilitate poverty reduction and support further progress towards meeting the MDGs.

“We agreed that there is some scope for non-concessional borrowing to finance the government’s share in essential infrastructure projects, particularly in electricity generation. This needs to be done in the context of a robust debt management strategy. The government’s commitment to improve aid management also was welcomed, along with closer coordination with donors, including on governance issues.

“I would like to thank President Banda and the people of Zambia for their hospitality. The IMF will continue to work closely with them and support their economic reforms and efforts to achieve sustainable growth and reduce poverty.”

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