The Independent Uganda: You get the Truth we Pay the Price
– ‘Undermining its macroeconomic stability’ –
Zambia had been expecting to secure a $1.3 billion loan from the International Monetary Fund (IMF) this year, but the Washington-based lender is unhappy with the country’s borrowing plans.
The IMF’s representative to Zambia, Boileau Loko, said officials “continue to compromise the country’s debt sustainability and risk undermining its macroeconomic stability”.
Allegations that the country has not openly disclosed its external debt burden have undermined investor confidence and driven up borrowing cots, according to London-based BMI Research.
“With the spectre of ‘hidden debt’ a continued concern for regional investors after the 2016 hidden debt crisis in Mozambique, and in the continued absence of a deal with the IMF, we believe borrowing costs are likely to remain elevated,” said BMI in a note on Friday.
It added that the situation heightened the risk of Zambia needing to extend the repayment period for its loans.
After posting average annual growth rates of more than 10 percent in the 2000s, growth has slowed significantly in recent years due to falling copper prices.
But Mwanakatwe, the finance minister, has forecast growth will accelerate to four percent in 2018 as copper prices begin to recover.
