Journal Issue

Press releases

International Monetary Fund. External Relations Dept.
Published Date:
January 1999
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Republic of Yemen: ESAF and EFF

The IMF has approved loans and credits totaling SDR 47 million (about $64 million) to support the Republic of Yemen’s second annual programs under the Enhanced Structural Adjustment Facility (ESAF) and Extended Fund Facility (EFF). Of the total, SDR 36 million (about $49 million) is available under the ESAF, and SDR 11 million (about $15 million) is provided under the EFF.

The latest disbursements are from a three-year loan and credit package totaling the equivalent of SDR 370.7 million (about $506 million) that was approved for Yemen on October 29, 1997 (see Press Release No. 97/49, IMF Survey, November 17, 1997, page 363). Of that total, SDR 264.8 million (about $362 million) represents commitments under the ESAF, and SDR 105.9 million (about $145 million), under the EFF. Two ESAF disbursements totaling SDR 88 million (about $120 million) have been made, and two EFF loans, amounting to SDR 18 million (about $25 million), have also been disbursed.

Medium-term strategy and 1999 program

The fall in oil prices reinforced Yemen’s commitment to the medium-term strategy pursued since 1995, with its emphasis on financial discipline and market-oriented reforms to encourage private non-oil-sector growth while protecting health and education expenditure and social safety net outlays. In line with this medium-term strategy, the weight of adjustment will be on fiscal policy in 1999. With some improvement in private savings expected from ongoing financial sector reform, a reduction in the external current account deficit by about 2.5 percent of GDP is targeted. Monetary policy will aim at an inflation rate of about 9 percent, including the effects of increases in wheat and flour prices.

Structural reforms

Yemen has already begun the next phase of a broad structural reform program, with key steps taken early in 1999 and many additional measures aimed at further developing the market-oriented regulatory and legal frameworks needed to attract domestic and external investment, and to stimulate economic growth, on the agenda for the remainder of the year. Structural reforms already taken, or expected, in 1999 include deepening civil service reforms central to the implementation of the remainder of the program; additional income tax and sales tax reform; financial sector measures, including a significant strengthening of bank supervision; customs reform; privatization of public enterprises; elimination of import bans; pension reform; creation of the Aden free trade zone; and judicial reform.

Addressing social needs

The government will continue to increase the provision and targeting of social assistance programs in Yemen. To mitigate the impact of subsidy cuts on the poorest segments of the population, direct assistance through the government’s Social Welfare Fund will be strengthened. Budget expenditure on social needs, including health, education, and welfare, is targeted to increase from less than 7 percent of GDP in 1997 to close to 12 percent over the medium-term.

Yemen’s membership in the IMF dates from May 22, 1990; its quota is SDR 243.5 million (about $333 million); and its outstanding use of IMF credit currently totals SDR 238 million (about $326 million).

Republic of Yemen: Selected economic indicators
(Percent change)
Real GDP8.
Consumer prices
(12-month change, end of period)62.527.36.311.19.2
(percent of GDP)
Overall fiscal balance (cash basis)-3.2-1.6-0.9-6.0-4.0
Current account balance4.02.00.4-5.2-2.7
(months of imports)
Gross official international reserves3.
Data: Yemeni authorities and IMF staff estimates
Data: Yemeni authorities and IMF staff estimates

Zambia: ESAF

The IMF has approved a three-year arrangement for Zambia under the Enhanced Structural Adjustment Facility (ESAF), equivalent to SDR 254.5 million (about $349 million) to support the government’s 1999/2001 economic and financial program. The first annual loan of SDR 40 million (about $55 million) is available in four equal installments, the first of which will be available on March 31, 1999.

Program for 1999

The government’s objectives for the 1999 economic and financial program are to achieve real GDP growth of 4 percent, reduce inflation to 15 percent, and strengthen gross reserves to the equivalent of 1½ months of imports. The principal structural reforms in 1999 relate to privatization, public service reform, and a strengthening of the banking system.

In line with the medium-term objectives, the fiscal program for 1999 aims at reducing the overall budget deficit to 3 percent of GDP. Total expenditures (excluding the contingency reserve) are budgeted to increase to 29 percent of GDP.

Structural reforms

The government will increase reforms in the areas of privatization, public service, and monetary and banking supervision.

The damaging impact on Zambia’s economy from delays faced in the privatization of the Zambia Consolidated Copper Mines has amply demonstrated the need for a rapid completion of this process. The program also envisages further progress on the divestiture of large state-owned enterprises in the nonmining sector.

The government is also committed to implementing a comprehensive public service reform in the 1999 program. At the same time, the government intends to continue the reorganization of ministries.

Social issues

Poverty remains a most pressing problem in Zambia. The World Bank is supporting the government’s effort to reform the Public Welfare Assistance Scheme, with the aim of making the scheme more community-based. The government is also seeking to alleviate poverty by reorienting public expenditure toward the social sectors, primarily health and education.

Zambia joined the IMF on September 23,1965. Its quota is SDR 489.1 million (about $670 million) and its outstanding use of IMF resources currently totals SDR 843 million (about $1.2 billion).

Zambia: Selected economic indicators
Real GDP6.63.3-
Consumer prices (end of period)35.218.630.615.08.04.0
(percent of GDP)
Overall balance, cash basis-2.6-1.9-4.3-3.2-1.3-1.2
Current account balance3-3.7-6.2-8.0-8.8-10.7-8.3
(months of imports of goods and services)
Gross official reserves1.



U.S. dollar-GDP calculated on the basis of changes in real GDP and U.S. GDP deflator (base year = 1998).

Data: Zambian authorities and IMF staff estimates and projections



U.S. dollar-GDP calculated on the basis of changes in real GDP and U.S. GDP deflator (base year = 1998).

Data: Zambian authorities and IMF staff estimates and projections

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