Johannesburg – Zambia will start talks on a lending programme with the IMF in November, the government said on Tuesday, almost a year after it became the first African country to default on foreign debt during the COVID-19 pandemic.
After a team from the IMF concluded a virtual visit to Zambia last Friday, the fund urged Lusaka to focus on fiscal and debt sustainability and generate inclusive growth.
“We now look forward to hold programme discussions with the IMF in the next few weeks,” Finance Minister Situmbeko Musokotwane said in a statement.
In a separate statement late on Monday, the IMF said the talks had provided the fund with a better understanding of reform priorities at Africa’s second largest copper producer.
“In light of the deeply challenging macro-economic environment that prevails, the new administration faces an urgent need to take steps to restore sustainability, while protecting the vulnerable and creating more inclusive growth,” Allison Holland, the IMF’s mission chief for Zambia, said after virtual meetings with Zambian authorities.
Zambia ongoing debt restructuring has become a test case of Western multilateral efforts to make the debt of developing countries more transparent.
Recently-elected President Hakainde Hichilema said last week he hoped recent talks with the IMF and World Bank had restored the country’s credibility with borrowers.
A quarter of Zambia’s debt is held by either China or Chinese entities via deals shrouded in secrecy clauses, making negotiations for IMF relief difficult.The country’s dollar bonds and kwacha currency have rallied on hopes that the new administration will bring an end to Zambia’s debt woes. – Reuters