Zambia urges creditors to assess debt proposals ahead of IMF deal

The logo of the International Monetary Fund (IMF) is seen outside the headquarters building in Washington, United States, September 4, 2018. REUTERS / Yuri Gripas / File Photo

LUSAKA, Dec.24 (Reuters) – Zambian Finance Minister Situmbeko Musokotwane has asked holders of his defaulting debt to quickly assess restructuring proposals that are part of a $ 1.4 billion aid deal concluded with the IMF, he said in a statement on Friday.

Musokotwane told creditors at an informal meeting that the International Monetary Fund board wanted assurances of its support before giving final approval to the deal, and urged them to quickly form a committee of creditors.

“I think the IMF will inform you of the nature and extent of debt relief expected from our creditors,” Musokotwane said, according to the statement.

Zambia and the Washington-based IMF this month reached a staff-level deal on a three-year extended credit facility, bringing the copper producer one step closer to a complete debt restructuring. Read more

Musokotwane said Thursday that Zambia plans to agree a debt restructuring plan with creditors around mid-2022. Read more

Zambia defaulted on its sovereign debt in November 2020, the first African nation to do so during the COVID-19 pandemic, after years of public borrowing pushed its debt burden above 120% of annual economic output.

The government of President Hakainde Hichilema, elected in August, began talks with the IMF in early November.

Zambia’s external debt includes around $ 3 billion in international bonds, $ 2.1 billion to multilateral lending agencies such as the IMF, and $ 3 billion to China and Chinese entities.

Reporting by Chris Mfula; Editing by Catherine Evans

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