Zambia's central bank chief said on Tuesday the country needs cheaper loans from the International Monetary Fund (IMF) to help revive an economy hit by falling revenue from copper exports. Western donors have frozen some aid for the Health Ministry over concerns the government has slackened in the fight against corruption.
Bank of Zambia Governor Caleb Fundanga said there was a need now for cheaper loans from the IMF, which recently provided financial support to help Africa's largest copper producer to stabilise its exchange rate and to boost reserves. Fundanga said Zambia would conclude discussions with the Fund on Wednesday on prospects of additional financing under the IMF's three-year poverty reduction growth facility (PRGF).
"We need to have access to less expensive resources from the IMF in the PRGF nature. If that is done we will find ourselves in a stronger position," state radio ZNBC quoted Fundanga as saying during a meeting with IMF officials in Lusaka. The IMF officials are in Zambia to conduct a mid-term economic review, which forms part of the lending criteria to the southern Africa country.
PRGF loans carry an annual interest rate of 0.5 percent and are repayable over 10 years with a five-and-a-half-year grace period on principal payments, according to the IMF. In May, the IMF approved a $256.4 million financing package for Zambia and released $160.1 million to help the country overcome the effects of the global financial crisis.
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