Zambia expects boost in investor confidence after $1.4bn IMF deal
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Loading... - Chuki Issa
- 06 Dec 2021
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Zambia under President Hakainde Hichilema, following the ouster of former leader Edgar Lungu, has been hard-pressed for external financing after it defaulted on a $42.5 million Eurobond coupon repayment at the end of last year.
Hichilema has been desperate to push through economic reforms to place Zambia’s economy on a growth trajectory after the worst effects of the pandemic, but has been hobbled by the debt default
Now, with an IMF rescue package, Zambian Finance Minister Situmbeko Musokotwane has said: “The IMF programme will provide much needed fiscal space to Zambia and anchor our domestic economic programme, which is based on four pillars.”
This follows confirmation by the IMF on Friday that it had reached a staff-level agreement with Zambia “on a three-year programme that could be supported by an arrangement under the Extended Credit Facility (ECF)” in the amount of about $1.4bn".
The agreement is pivoted on Lusaka’s plans to undertake bold and ambitious economic reforms, while the agreement at the IMF’s staff-level to advance Zambia the credit facility “is subject to IMF management and executive board approval and receipt of the necessary financing” assurances.
Further details of the facility are expected today, the IMF and the Zambian finance minister said at the weekend. Apart from this credit facility, Zambia has already drawn down about $1.2bn in its allocation under the IMF’s Special Drawing Rights framework.
“The staff-level agreement paves the way for debt restructuring talks with our creditors. Upon reaching an understanding with the creditors, including through the G20 Common Framework for Debt Treatment… we will have access to highly concessional financing from the IMF and will also be able to start accessing financial support from other multilateral and bilateral partners," said Musokotwane. Read More…
