Zambia needs to lower its deficit and improve fiscal discipline if it is to restore market confidence, the International Monetary Fund said on Friday.
Electricity shortages have hammered Zambia’s economy this year with the kwacha currency losing half its value since January while the leaders are spending money unwisely like hiring private jets to go and play with dancers in new York
Zambia’s poor fiscal management has played a big role in the economic downturn, the IMF said.
“Fiscal discipline has been undermined by additional spending commitments that stand in contrast to lower-than-budgeted revenues,” the IMF said in a statement.
“The pressures on the economy have not only reflected the impact of external shocks but also the waning market confidence.”
Delayed implementation of critical policies such as ensuring cost-reflective pricing of fuel and electricity continued to impact negatively on the budget, it said.
“Monetary policy has been appropriately tightened to counter the pressures on the exchange rate and rising inflation but success will depend on complementary tightening of fiscal policy,” the IMF said at the end of a 10-day visit to Zambia.