(MENAFN- IANS) Lusaka, Aug 6 (IANS) The Zambian government on Tuesday defended its decision to apply for an extension of its International Monetary Fund (IMF) Extended Credit Facility (ECF) program.

Minister of Finance and National Planning Situmbeko Musokotwane said the extension is necessary to consolidate and maintain the economic confidence that the country has achieved following the successful implementation of the program, Xinhua news agency reported.

He noted that the program has not only boosted investor confidence but also reassured creditors of the country's economic direction.

"After debt restructuring, we are seeing creditors bringing back funds in the form of lending to the private sector. We are also seeing renewed interest in government securities," Musokotwane said during a press briefing.

While acknowledging the government's ongoing fiscal prudence, Musokotwane emphasised that extending the IMF program will provide further advantages.

He added that the extension will attract more financial support from cooperating partners.

The government, he said, needs approximately $145 million in donor support for next year.

Musokotwane warned that Zambia risks losing some of this donor support if the IMF program ends, which further justifies the government's decision to seek an extension.

He also highlighted that the IMF program has been beneficial, helping the country increase its international reserves and allowing the government to channel funds into key sectors such as social services.

In late July, the Cabinet authorized the finance minister to apply for a 12-month extension of the IMF program. The current program, approved in August 2022, is scheduled to conclude in October this year.

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