LUSAKA (Reuters) - The International Monetary Fund (IMF) has agreed to give Zambia a $79.2 million loan over the next three years to help it fight poverty and sustain economic growth, it said on Thursday. The IMF said the approval of the new Poverty Reduction and Growth Facility (PRGF) followed Zambia's strong economic performance since the completion of the last PRGF in September 2007. "The authorities remain committed to maintaining macroeconomic policies and pursuing structural reforms to sustain high economic growth, further reduce poverty, diversify the economy, and preserve macroeconomic stability and debt sustainability," it said in a statement. Zambia expects its economy to grow by 7 percent this year, rising to 10 percent in 2010. The PRGF, IMF's concessional facility for low-income countries, lends at an annual interest rate of 0.5 percent and its loans are repayable over 10 years, with a five-and-half year grace period on the principal payments. The IMF urged Zambia to strengthen its debt management to ensure that new borrowing did not push the country back into deep debt, after its debt was written off. "The programme envisages a cautious policy on foreign borrowing, emphasising concessional loans and close monitoring of external borrowing by public enterprises," it said. The new higher taxes for the mining sector would provide substantial resources for infrastructure development and social spending but IMF warned Zambia not to scare away the mining investors. "In implementing the new regime, the authorities are encouraged that the attractiveness of investment in the mining sector is preserved," it said. The fund said prudent monetary policy had helped Zambia keep inflation low and urged the country to maintain its flexible exchange rate system. | 
