By MAIMBOLWA MULIKELELA –
THE International Monetary Fund (IMF) will assist Zambia in developing the macroeconomic framework that supports the country’s development objectives.
IMF resident representative Tobias Rasmussen said his organisation would work closely with the Zambian Government to promote economic stability and growth.
“IMF works closely with the Zambian authorities to promote economic stability and growth. This involves assisting the Ministry of Finance and the Bank of Zambia in developing the macroeconomic framework that supports Zambia’s development objectives,” Dr Rasmussen said.
The IMF also provides technical assistance in a numbers of areas, including central banking, public financial management, tax administration, and compilation of economic statistics.
Commenting on the copper prices, Dr Rasmussen said the decline in copper prices on the international market presents a considerable challenge on Zambia’s overall export receipts and on the exchange rate.
He said with copper accounting for about three quarters of Zambia’s export, the 20 per cent fall in copper prices that has occurred over the past years has had a significant impact on the country’s overall export receipts.
Dr Rasmussen said in an interview in Lusaka that in turn, the reduced supply of foreign exchange had put pressure on the exchange rate.
“The drop in copper prices on the international market presents a considerable challenge for Zambia’s economy,” he said.
He explained that prices of commodities like copper are cyclical and subject to high volatility, saying that normally price movements do not have much of an immediate impact on the level of copper production.
But the combination of lower prices, high production costs at some Zambian mines, and the new mining tax regime has raised uncertainty about what would happen to production and investment in the copper sector.
Dr Rasmussen said this had added to pressures on the kwacha.