An aid package promised to Zambia will be withheld until the government explains how it will offset its $120-million budget deficit, International Monetary Fund (IMF) officials said on Thursday.
The $100-million in aid will only be given to the southern African country when it reveals details of plans to correct the deficit, Zambia’s IMF representative, Mark Ellyne told the Zambian National Broadcasting Corporation.
”The IMF can only release the $100-million that was pledged at the last consultative Group meeting for balance of payments support if government can explain the cause of the overrun,” he said.
The government’s attempts to reduce the deficit by cutting the salaries of President Levy Mwanawasa and top lawmakers by 30% is not enough, Ellyne said.
He said the deficit resulted mainly from generous housing allowances given to government officials.
”Government will not spare any effort to consult all relevant stakeholders in addressing this problem,” said Finance Minister George Kunda.
He said a delegation, including Commerce Minister Dipak Patel, the deputy governor of the Bank of Zambia, Denny Kalyalya and the secretary to the treasury, Situmbeko Musokotwane are currently in Washington for talks with the IMF. – Sapa-AP