Announcement of Interim Meeting of the Consultative Group for the Republic of Zambia on December 18 , 1985

FOR IMMEDIATE RELEASE INTERNATIONAL Mo· FTARY World Bank 1818 H St reet, N.W ., W as hington, D.C. 20433 , U.S.A.• Telephone : (202) 477-1234 JOINT LI::!":,ill'i .....,,,. .t ..... :q 'J .. 'r\ ..., "'t;" - BANK PRE SS RELEASE Decembe r 18 , 1985 INTERIM MEETING OF THE CONSULTATIVE GROUP FOR THE REPUBLIC OF ZAMBIA An interim meeting of the Consultative Group for Zambia was held in Paris on December 17, 1985 under the Chairmanship of Mr. Jochen Kraske, Director Country Programs, World Bank. The Zambian Delegation was led by The Honourable Mr. L.J. Mwananshiku, Minister of Finance and the National Commission for Development Planning, and included The Honourable Dr. Henry K. Matipa, Ambassador to France, and Mr. David Phiri, Governor of the Bank of Zambia. The meeting reviewed the current economic situation and prospects of the Zambian economy, focusing primarily on developments since the meeting this past June. Most of the discussion centered on the institutional and policy reforms introduced by the Government to stabilize and restore growth to the economy.. The Group endorsed the Government's reform program and applauded its steadfastness and courage in implementing a number of very difficult economic measures. The meeting agreed that extraordinary financial assistance was required to stabilize the economy and expedite the recovery and diversification required for the country's long term economic health. The importance of comprehensive debt relief and restoring Zambia's access to IMF resources was stressed as being vital to resolving the present financial crisis. The discussion of the Government ' s reform program concentrated on the recently introduced foreign exchange auction system and the related trade liberalization measures adopted since the previous meeting. These measures were recognized as vital to a resolution of Zambia's financial and e conomic di f ficulties. Early experience with the auction was seen as positive. The members agreed that the reform program, if supported by the necessary financial resources, would bring about the structural adjustments needed in the economy over the long run, while relieving the immediate financial constraint. Attending t he meeting were delegat ions representing Canada, Finland, France , the Federal Republic of Germany, Ireland, Italy, Japan, the Netherlands , Norway, Sweden, Switzerland , the United Kingdom, the United States, the Af rican Development Bank, the Commission of the European Economic Communit ies, the European Investment Bank, the International Fund for Agricultural Develo pment, the International Monetary Fund, the Opec Fund for ,D evelopment, the Saudi Fund for Development, and the United Nations Development Programme. Observers from the Development Assistance Committee, Organization for Economic Cooperation and Development were also present.  - 2 - The Group agreed that external commitments of about $400 million per annum were needed for the next few years to assist Zambia with the adjustment program. Because of the worsening financial situation however, a higher proportion of this assistance was now required on a quick- disbursing basis. The Group reaffirmed its commitment to support the Government of Zambia. Members outlined their past and new commitments of aid, which showed that in 1986 this target was attainable. It was agreed to convene again in mid-1986.