IMF sees $6.3bn Zambia debt deal ‘imminent’
Zambia, which became Africa’s first pandemic-era sovereign defaulter in 2020, has struggled to reach a deal with creditors. Earlier this year, the IMF withheld a near-$190 million disbursement because of delays in the group agreeing to debt relief. China is by far Zambia’s biggest bilateral creditor.
The International Monetary Fund sees a deal between Zambia and its creditors as “imminent” and is hopeful it will come this week during the crisis lender’s gathering of policymakers, a top official for the institution said.
“I’m very optimistic,” Abebe Aemro Selassie, director of the fund’s Africa department, said in an interview on Monday in Marrakech, Morocco, on the sidelines of the IMF and World Bank annual meetings. “The ball is in the authorities’ court. It’s between the authorities and their creditors. They’ve told us that they’ve made very, very good progress.”
The deal would come in the form of signing a memorandum of understanding to restructure $6.3 billion of debt. The government has made slow progress in talks since June, when it reached a deal-in-principle with the committee co-led by China and France.
Read more: Zambia’s Creditor Group Sees $6.3 Billion Debt Deal in Days
The agreement would see the interest rates cut to as low as 1% and the loans only repaid in 2043, with a 40% reduction in net-present value of the debt, Bloomberg News reported last week.
Zambia, which became Africa’s first pandemic-era sovereign defaulter in 2020, has struggled to reach a deal with creditors. Earlier this year, the IMF withheld a near-$190 million disbursement because of delays in the group agreeing to debt relief. China is by far Zambia’s biggest bilateral creditor.
Source: Norvanreports
