Zambia has suspended new non-concessional borrowing to slow down the pace of debt accumulation as it seeks support from the International Monetary Fund (IMF), Finance Minister Felix Mutati told parliament.
Zambia and the IMF agreed in October to chart a new path towards debt sustainability after the IMF delayed the conclusion of talks with Africa’s second-biggest copper producer, saying it was at high risk of debt distress.
Zambia’s publicly guaranteed debt rose to 60 percent at end of 2016 from 36 percent of GDP at the end of 2014.
Mutati told parliament late on Wednesday all commercial contracts that require debt financing should only be signed with approval from the Treasury.
The government was also implementing new revenue mobilisation measures such automation and appointment of tax collection agents, he said.
“With these measures (the) government has continued to engage the IMF,” Mutati said, without giving a timeframe on when the negotiations were likely to be concluded.
Mutati said the conclusion of talks with the IMF was expected to enhance foreign exchange flows from the private sector and reduce negative sentiment among investors.
Zambia’s central bank governor said on Wednesday the delay in reaching a conclusion for an aid programme with the IMF was putting pressure on the kwacha.
Reporting by Chris Mfula; Editing by James Macharia