Zambia’s new finance minister believes obtaining an IMF loan is ‘critical’

Listen to this Article Now

Musokotwane, Zambia’s new finance minister, said in an interview that an agreement on a lending programme with the International Monetary Fund (IMF) was crucial because it would provide creditors confidence and provide the government with more affordable and longer-term funding options for the country. After being named by newly-elected President Hakainde Hichilema, Musokotwane now has the onerous challenge of rescuing South Africa from its debt problem. He has committed to give priority to discussions with the IMF.

Zulu told Zambian official television ZNBC in an interview on Sunday he was hopeful the country would receive an IMF loan by the end of the year and restructure its debt afterward. As of next year, the government is expected to repay a $750 million Eurobond, but they claim they cannot do so.

“We don’t have the money to pay back. This is why it is important that we get on (an) IMF (programme) so that we can re-arrange not to pay next year. I am 100% confident that it will be done,” he said.

With its $3bn Eurobond debt and practically all of its foreign debt due in November, Zambia, Africa’s second largest copper producer, became Africa’s first sovereign defaulter since the epidemic. In his former role as Zambia’s finance minister from 2008 to 2011, Musokotwane oversaw the implementation of Zambia’s last economic plan with the IMF, which was ended just before he took up his current position in the country. To do so, he must revive an economy that contracted by 3% last year, is saddled with roughly $13bn in foreign debt, and is experiencing a spike in inflation. Zambia’s dollar bonds and kwacha currency have surged after Hichilema’s overwhelming election victory over President Edgar Lungu this month, on hopes the new administration will bring a quick resolution to the country’s debt issues.