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IMF makes headway in talks with Zambia
Zambia’s negotiations with the International Monetary Fund is progressing. The Southern African nation is requesting for support under the IMF’s Extended Credit Facility. Over 3 billion dollars in Eurobonds debt and a further 3 billion dollars owed to China. These are just some of challenges at stake as both parties ready for more talks in the weeks ahead.
The IMF wants Zambia to come clear on its debt and implement austerity measures. The southern African copper producer became the continent’s first pandemic-era sovereign default after missing a coupon payment on a dollar bond in November.
The IMF said work towards implementing fiscal reforms to correct large fiscal imbalances, ramping up revenues and improving governance was still needed. However, in a separate statement on Thursday, Zambia’s finance minister Bwalya Ng’andu said his government was committed to securing an IMF programme.
Creditors welcomed the announcement but were cautious about the speed of progress ahead.
In more than three weeks of talks, the IMF said discussions covered recent economic developments, the near-term macroeconomic challenges, and policy options to return Zambia to a sustainable macroeconomic position over the medium-term.
Zambia’s debt load was considered unsustainable even before the pandemic. That debt includes around $3 billion in outstanding Eurobonds and another $3 billion owed to China and Chinese entities. Tensions between those two groups of creditors have so far stymied attempts to restructure Zambia’s debt.
Lusaka-based economist, Chibamba Kanyama tells Business Africa that: ‘’The progress itself will be much, much clearer after the technical team from the International Monetary Fund has helped our own team here to resolve some of those issues, so that there’s much more clarity on the actual physical objectives that the government hopes to attend to. So I’m supposing that the final information will only come after the elections in August.’’