Zambia says IMF programme needed for orderly debt restructuring.

Written by on May 7, 2022

Zambia Finance Minister Situmbeko Musokotwane on Friday said an orderly debt restructuring process for Zambia would be hard to achieve without an IMF programme.

The minister also confirmed that China and bondholders would join in the negotiations.

Musokotwane told journalists he expected an International Monetary Fund programme to be concluded by the end of June, and the World Bank has also committed to providing financial resources to the country once the IMF deal was agreed.

In 2020, Zambia became the first country to default in the pandemic era, struggling with a debt burden of almost 32 billion dollars, around 120 per cent of its gross domestic product.

The country’s creditors must now sit down together to agree on the debt relief they will offer, Musokotwane said.

The Group of 20 leading economies set up a new debt negotiation process, the Common Framework, in 2020 in response to the coronavirus pandemic, to bring in creditor countries, including China, and the Paris Club forum of major lender nations.

Zambia needs to reach an agreement on making its debt sustainable with official creditors through this process in order to unlock IMF funding.

Seun Fakorede

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