|Mr Mutati (Second left) with IMF officials after a meeting|
By Paul Shalala
Zambia has commenced talks with the International Monetary Fund (IMF) to find ways in which the Bretton Woods institution can help the southern African country emerge stronger from its current economic challenges.
The country is the world’s third largest producer of copper after Chile and the Democratic Republic of Congo.
The newly sworn in Finance Minister Felix Mutati is in Washington attending the annual meetings of the IMF and World Bank.
Today, Mr Mutati held closed door meetings with IMF officials and discussed Zambia’s economic recovery programme which he is championing.
“The minister said the country had a huge financing gap that was negatively impacting the country’s inflation rate worsened by low copper prices adding that the banking sector was currently holding up to 10 percent of bad debt. The Minister said the government would announce the economic recovery program in the coming budget,” reads part of a statement issued by Zambia’s embassy in Washington after the Minister’s closed door meeting.
A few days ago, Ministry of Finance Spokesperson Chileshe Kandeta announced that a team of IMF officials will be in the country this month to meet various stakeholders ahead of an expected financial bailout.
Zambia is heavily reliant on copper sales and the drop in its price has reduced the country’s revenue and increased in inflation.
A few months ago, the Chinese owned Baluba mine in Luanshya was placed on care and maintenance, sending 1,600 workers on forced leave.
Last month, African Rainbow Minerals which holds 40% shares in Chililabombwe-based Lubambe mine, announced that it was selling its stake due to low copper prices.
With this in mind, Mr Mutati, who is barely a month in office, has come up with an economic recovery plan which he hopes will resuscitate the economy.
The plan includes removing subsidies on a number of products in the coming years.