• Login
NORVANREPORTS.COM |  Business News, Insurance, Taxation, Oil & Gas, Maritime News, Ghana, Africa, World
  • Home
  • News
    • General
    • Political
  • Economy
  • Business
    • Agribusiness
    • Aviation
    • Banking & Finance
    • Energy
    • Insurance
    • Manufacturing
    • Markets
    • Maritime
    • Real Estate
    • Tourism
    • Transport
  • Technology
    • Telecom
    • Cyber-security
    • Cryptocurrency
    • Tech-guide
    • Social Media
  • Features
    • Interviews
    • Opinions
  • Reports
    • Banking/Finance
    • Insurance
    • Budgets
    • GDP
    • Inflation
    • Central Bank
    • Sec/Gse
  • Lifestyle
    • Sports
    • Entertainment
    • Travel
    • Environment
    • Weather
  • NRTV
    • Audio
    • Video
No Result
View All Result
No Result
View All Result
NORVANREPORTS.COM |  Business News, Insurance, Taxation, Oil & Gas, Maritime News, Ghana, Africa, World
No Result
View All Result
Home Economy

Zambia risks climbing the list of IMF addicts

5 years ago
in Economy, highlights, Home, home-news, latest News
2 min read
0 0
0
91
VIEWS
Share on FacebookShare on TwitterShare on Linkedin

Zambia risks joining the long-term list of African countries hooked on juice from the International Monetary Fund (IMF).

The fund is assessing how it could support Zambian reform efforts through a possible funding program. That follows a government request for a financing agreement and a December visit from IMF officials to Lusaka.

“Recipients of the IMF’s largesse rarely follow the script,” says Steve Hanke, professor of applied economics at Johns Hopkins University and an emerging market currency expert.

“In the long run, most IMF programmes fail because the conditionalities attached to the programmes have dull teeth.”

Hanke cites research from Harvard University’s Robert Barro that a higher IMF loan participation rate tends to reduce economic growth and that IMF lending lowers investment.

Worse still, countries that participate in IMF programs tend to keep coming back. “The IMF programs don’t provide cures but create addicts,” says Hanke.

If there is an IMF programme for Zambia, Hanke expects to see the normal pattern of positive hype accompanying a liquidity injection. The longer-term reality is that “most IMF programmes fail, and the recipients return again in a few years and pass the begging bowl with great frequency.”

Data on the history of IMF lending compiled by Hanke shows a pattern of recidivism.

RelatedPosts

African Airlines Record 9.4% Growth In Air Cargo Demand In July 2025 – IATA

South African President Ramaphosa Launches G20 Taskforce to Tackle Global Wealth Inequality Amid US Absence

Burkina Faso’s Nationalization Rattles West Africa’s Gold Sector

  • As of July 2019, only 13 out of the 146 countries to have entered into an IMF lending arrangement had done so only a single time.
  • 56 countries have needed at least 10 IMF arrangements, including Zambia with 12.
  • 13 countries have turned to the IMF 20 times or more.
  • The pattern of recidivism is deeply engrained in Africa. Of the 40 countries with the most IMF arrangements, sixteen are African. The continent’s leaders are Liberia on 21, Morocco on 20 and Kenya on 19.
Politically toxic

Following Zambia’s eurobond default in November, some analysts have welcomed the formal request for an IMF financing arrangement.

Irmgard Erasmus, senior financial economist at NKC African Economics in Cape Town, writes that a first tranche of IMF finance is likely to be disbursed in the first quarter of 2021, provided the government accepts IMF consolidation targets.

This, argues Erasmus, would need a deviation for the “populistic” path taken by the Lungu administration in the run-up to elections in August.

  • The IMF is likely to insist on wage and subsidy reform, and greater transparency on public sector debt, Erasmus writes.
  • A financing agreement would be “a pivotal step towards a less-acrimonious bond swap negotiations process.”
  • NKC’s central assumption is that the government will agree to IMF reforms. This, NKC says, will play a role in relieving tensions between creditors and “crowding-in additional support from international stakeholders.”

Others point to the political costs any such process would involve. Debt relief under the G20’s Common Framework for Debt Treatments would require an IMF-World Bank Debt Sustainability Analysis. That would be a “politically toxic” step ahead of elections, says Nick Branson, director of Gondwana Risk in London.

  • “The ruling Patriotic Front has yet to demonstrate the political will required to tackle the debt crisis, and is unlikely to change course now, irrespective of discussions with the IMF,” he says.
  • Branson points out that President Lungu has failed to address the nation on Zambia’s default.
  • Electoral considerations mean the IMF is unlikely to secure the level of buy-in it needs to carry out a comprehensive audit of Zambia’s debts, he adds.
  • Bondholders, Branson says, cannot expect meaningful negotiations until the next government assumes office in the second half of next year.
Bottom line

Without political will in Lusaka to achieve reform, help from the IMF will become part of the problem rather than part of the solution.

Source: theafricareport
Via: norvanreports
Tags: debt sustainability analysisIMFIMF addictPresident LunguProfessor Steve HanksZambia
No Result
View All Result

Highlights

Experts Talk BoG’s New Currency Controls & Crackdown on NPLs on NorvanReports’ X Space Discussions Tonight

Piastri Claims Pole Position in Thrilling Dutch Grand Prix Qualifying

US Open: Osaka, Alcaraz, Djokovic Shine as Gauff Joins Them in Last 16

Morocco Beat Madagascar to Secure Historic Third CHAN Title

$41bn Reserves vs Empty Pockets: When Will Relief Come For Nigerians?

Africa Emerges as Manufacturing Haven Amid US–India Trade Tensions

Trending

Aviation

African Airlines Record 9.4% Growth In Air Cargo Demand In July 2025 – IATA

August 31, 2025

African Airlines Record 9.4% Growth In Air Cargo Demand In July 2025 – IATA African airlines saw...

South African President Ramaphosa Launches G20 Taskforce to Tackle Global Wealth Inequality Amid US Absence

August 31, 2025

Burkina Faso’s Nationalization Rattles West Africa’s Gold Sector

August 31, 2025

Experts Talk BoG’s New Currency Controls & Crackdown on NPLs on NorvanReports’ X Space Discussions Tonight

August 31, 2025

Piastri Claims Pole Position in Thrilling Dutch Grand Prix Qualifying

August 31, 2025

Who we are?

NORVANREPORTS.COM |  Business News, Insurance, Taxation, Oil & Gas, Maritime News, Ghana, Africa, World

NorvanReports is a unique data, business, and financial portal aimed at providing accurate, impartial reporting of business news on Ghana, Africa, and around the world from a truly independent reporting and analysis point of view.

© 2020 Norvanreports – credible news platform.
L: Hse #4 3rd Okle Link, Baatsonaa – Accra-Ghana T:+233-(0)26 451 1013 E: news@norvanreports.com info@norvanreports.com
All rights reserved we display professionalism at all stages of publications

No Result
View All Result
  • Home
  • Business
    • Agribusiness
    • Aviation
    • Energy
    • Insurance
    • Manufacturing
    • Real Estate
    • Maritime
    • Tourism
    • Transport
    • Banking & Finance
    • Trade
    • Markets
  • Economy
  • Reports
  • Technology
    • Cryptocurrency
    • Cyber-security
    • Social Media
    • Tech-guide
    • Telecom
  • Features
    • Interviews
    • Opinions
  • Lifestyle
    • Entertainment
    • Sports
    • Travel
    • Environment
    • Weather
  • NRTV
    • Audio
    • Video

Welcome Back!

Login to your account below

Forgotten Password?

Create New Account!

Fill the forms bellow to register

All fields are required. Log In

Retrieve your password

Please enter your username or email address to reset your password.

Log In
NORVANREPORTS.COM | Business News, Insurance, Taxation, Oil & Gas, Maritime News, Ghana, Africa, World
This website uses cookies. By continuing to use this website you are giving consent to cookies being used. Visit our Privacy and Cookie Policy.
We use cookies to ensure that we give you the best experience on our website. If you continue to use this site we will assume that you are happy with it.