In the News
Zambia secures emergency support from the IMF
Having come to the aid of Sri Lanka, the IMF has turned its attention to bailing out Zambia, a country with a financial crisis of its own, and similarly high debt levels.
Indeed, such has been the size of its debt repayments that public spending has fallen by nearly 20% between 2019 and 2021, a clear indication of the opportunity cost of debt.
The IMF is working with Zambia to restore macroeconomic stability and foster higher, resilient, and more inclusive growth - this short IMF video clip provides some background.
According to the IMF report
"Growth (in Zambia) has been too low to reduce rates of poverty, inequality, and malnutrition that are among the highest in the world. Zambia is in debt distress and needs a deep and comprehensive debt treatment to place public debt on a sustainable path.”
"Zambia’s program incorporates protection for the most vulnerable by providing access to free education for all and increasing spending on health and education, including hiring over 41,000 additional health and education workers."
Many students will be studying Zambia as part of their growth and development economics this year. It is a country heavily dependent on extraction and exporting of copper. Bur as with many countries experiencing the natural resource curse, simply extracting resources from beneath the ground is no guarantee of turning this into wealth built on improving human capital and successfully diversifying a narrow export base. Zambia has been highly dependent on external finance from China.