Zambia To Continue Talks With IMF

The International Monetary Fund (IMF) said on Thursday that it will continue debt relief discussions with Zambia, observing that a significant number of challenges still remain to reforming the country’s finances.

The fund has been in talks with the Zambian government for three weeks now, however it says that work is still needed towards correcting large fiscal imbalances, ramping up revenues and improving governance. 

“Significant progress has been made and discussions are expected to continue in the next few weeks, following additional technical work on the appropriate policy package,” the IMF said in a statement. 

Zambia’s PF government has had a long and difficult history with the IMF, forcing it to remove its representative to the country in 2018. Dialogue resumed in February 2021 after Zambia officially defaulted on its foreign debts the previous November, making it the only African country to do so during the coronavirus pandemic. 

Zambia’s debt load was considered unstable even before the pandemic, with $3bn in outstanding Eurobonds and a further $3bn owed to China and Chinese entities. Tensions between these two groups of creditors have severely undermined efforts to restructure Zambia’s debts. 

In a separate statement on Thursday, Finance Minister Bwalya Ng’andu said the government remained committed to securing an IMF programme.

“We value the work we have embarked on with the IMF and will pursue our discussions on detailed policy measures to return our economy and public finances to a sustainable trajectory,” he said.

In late 2020 Zambia’s overall foreign debts - including those owned by state entities - totalled some $18.5 billion, or 104% of the country’s GDP. Debt has risen exponentially during President Lungu’s time in office, doubling from $4.8 billion in 2014 to $11.2 billion in 2019.