Zambia seeks more relief as debt service costs rise

Zambia’s Treasury said on Monday it saw debt service costs rising as high as US $434 million in 2001, up from a previously estimated US $387 million, and asked the IMF and World Bank for debt relief totalling US $2.83 billion. The International Monetary Fund and World Bank are due on Wednesday to announce a debt relief package for Zambia under the enhanced initiative for Highly Indebted Poor Countries (HIPC).

Finance Minister Katele Kalumba was quoted by Reuters on Monday as saying that he was optimistic Zambia would win relief because it had worked to stabilise the economy and put it on the path of growth. “I am working the telephones right now. I am still lobbying for the correct result, what we seek. But I am optimistic. I believe we are doing the right thing. The statistics that are off target, like inflation, are due to factors beyond our control,” he added.

The treasury revised the estimate for real gross domestic product growth to 2.2 percent this year from an earlier 4.0 percent, but it saw the economy expanding by 5 percent in 2001 and then levelling out at 5.5 percent in 2002 and 2003. The treasury expected overall inflation to decline to 17.6 percent next year, 10.8 percent in 2002 and then 8.3 percent in 2003.