By CHILA NAMAIKO –
FINANCE Minister Felix Mutati has said Zambia is making tremendous social and economic progress to engage the International Monetary Fund (IMF) and that the risk remaining is on the external side.
Mr Mutati also said the Government had designed a time-specific arrears-dismantling strategy which included measures that would stop accumulation of new arrears.
Meanwhile, the minister said the Gross Domestic Product (GDP) was this year projected to rise to 4.3 per cent against the initial forecast of 3.4 per cent.
He told Parliament yesterday that, based on the need to support the external sector, increase market confidence, enhance investment flows and leverage more resources from cooperating partners, the Government had engaged the IMF on a possible programme.

He said in a ministerial statement on the state of the economy and the Government’s engagement of IMF that from May 29 to June 10, this year, the Government held meetings with the institution.
“Mr Speaker, during these meetings, the Government and the Fund agreed on remaining actions needed to reach staff-level agreement on a programme that could be supported under the IMF’s Extended Credit Facility,” he said.
Mr Mutati said, when the agreed required actions were implemented in the next few weeks, the programme could be presented to the Board in August this year.
He said the major matters requiring to be addressed for Zambia to proceed to conclusion related to higher than projected budget deficits, accumulations of arrears and increase in debt levels.
He reaffirmed that the Government was working on policy and structural measures aimed at mitigating challenges such as reforms in the energy and agriculture.
The Government was also scaling up the social protection programmes and in a few months, the Government would be presenting before the House the 2018 national Budget.
He urged stakeholders to take an interest in the Budget formulation in line with the nation’s Values and Principles to sustain financial needs using domestic resource mobilisation.
To ensure continued debt sustainability, the Government had finalised a Medium Term Debt Strategy that provided a framework for prudent debt management.
He said the Government would continue to implement structural reforms to strengthen public finance management to support fiscal prudence to stimulate inclusive growth.
On the medium term outlook, Mr Mutati said growth would be driven by agriculture, energy, mining, construction and manufacturing sectors, and the exchange rate stability would be sustained while inflation was projected to be within the target range of six to eight per cent.
The stability of the currency was on account of improved supply of foreign exchange, better outlook of copper prices and positive market sentiment.
He said the country’s account deficit narrowed to US$257.1 million in the first quarter of this year from a deficit of US$574.7 million in the fourth quarter of last year.
On the foreign reserves, as of last month, it was pegged at US$2.4billion, which translated to about 3.3 months of import cover.
Mr Mutati said Zambia was a member of the IMF and could access the resources, hence the Government being resolute and was happy with steady progress being recorded because.
He was responding to Patriotic Front Chilubi Member of Parliament Rosario Fundanga, who wanted to know why Government could not find other alternatives apart from the IMF.