The International Monetary Fund (IMF) on Thursday urged default-stricken Zambia to strike a debt restructuring deal with its international creditors as soon as possible and will make a formal assessment of its predicament in spring next year.
Zambia defaulted on its sovereign debt in 2020. In August, it won IMF approval for a $1.3 billion, three-year loan programme to help it restructure debts that the government said were $14.87 billion at the end of June 2022.
“We discussed progress on debt restructuring talks, noting the ongoing discussions with creditors on resolving technical issues,” the IMF’s Zambia mission chief Allison Holland said after concluding a week-long trip to the country on Wednesday.
“Achieving timely restructuring agreements with external creditors is essential to secure the expected benefits of the Fund-supported program,” she said.
Zambia’s largest bilateral creditor China is seeking “clarifications” on IMF assumptions on which the debt restructuring is based, Zambia’s Finance Minister Situmbeko Musokotwane said in an interview at last week’s Reuters NEXT conference.
He also said the government was pushing hard to finish its debt restructuring in the first quarter of 2023.
Holland also pointed to, “the authorities’ promising progress in meeting key commitments under the (current) Fund-supported programme.”
