IMF endorses poverty plan

The International Monetary Fund (IMF) said on Thursday it would provide Zambia with US $317 million to support an ambitious government programme this year to reduce poverty, which afflicts around 80 percent of the country's 10 million people. The Fund's country representative, Mark Ellyne, said the aid package would include US $167 million in cash and US $150 million in debt relief under the Highly Indebted Poor Countries (HIPC) initiative. The support was partly a response to a new government strategy to fight poverty. "The IMF executive board thought the government's Poverty Reduction Strategy Paper (PRSP) was a sound document, representing a good framework for IMF support," Ellyne said. He said part of the cash component of the aid package would be pumped directly into the economy to strengthen the convertible currency reserves. "The money we put in through the PRGP [Poverty Reduction Growth Facility] and HIPC will also go to support the PSRP," he said. Zambia was one of the most prosperous countries on the continent at independence from Britain 38 years ago, when it enjoyed a per capita Gross National Product (GNP) of US $750 per year. However, decades of economic mismanagement and externally induced shocks have reduced that to around US $231 - one of the lowest in the world. An exceptionally high prevalence of HIV-infection, which afflicts about 20 percent of the population, has, meanwhile, pushed life expectancy down from a peak of over 50 years to around 37 years.