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Zambia’s new finance minister, Bwalya Ng’andu, said he wants to restart discussions with the International Monetary Fund about a bailout loan and that the government may delay the start of a controversial sales tax.
“I will be quite keen to get us talking and see whether we can get the program,” the 64-year-old said Monday in Lusaka after being sworn in to replace Margaret Mwanakatwe, who President Edgar Lungu fired the night before. “At least we can get to some point where we are discussing constructively. There are things on our side that we need to do. Fiscal health is part of what we need to do to be able to re-engage.”
Investors have reacted positively to Ng’andu’s appointment, with Zambia’s Eurobonds soaring. The price of its $750 million of securities due in September 2022 rose 5.2%, the most in more than three years, to 70 cents on the dollar, equating to a yield of 18.6%.
Ng’andu’s promotion comes as the government tries to revive an economy growing at the slowest pace in more than two decades, after a slump in the price of copper, Zambia’s main export, and numerous disputes with miners. He will need to soothe investor concerns that Zambia may default on its debts unless it gets a bailout from the IMF or negotiates easier terms on loans from China.
Zambia’s efforts since 2016 to secure a $1.3 billion loan from the Washington-based lender have been stalled by concerns over its borrowing plans. The fund’s resident representative left the country in August and hasn’t been replaced.
Ng’andu, who was previously a deputy governor at the central bank, said it might not be “prudent” to implement the sales tax, which mining companies has opposed, this far into the year. “We have to re-look at that and see if that’s what we want to do,” he said.