ZAMBIA’S Finance Minister Situmbeko Musokotwane said on Friday he expected the country to reach full agreement with the IMF in the middle of this year, after reaching a staff-level agreement for a $1.4bn support plan in December.
Zambia, one of the world’s largest copper producers, became Africa’s first pandemic-era sovereign defaulter last November after years of chronic government overborrowing from international institutions drove its debt burden above 120 percent of annual economic output.
The government of President Hakainde Hichilema, who was elected in August, had started talks with the IMF in early November.
‘The IMF programme will provide much needed fiscal space to Zambia and anchor our domestic economic programme,’ Musokotwane said in a statement in November.
In late October, Zambia promised to slash its budget deficit and curb borrowing in a bid to secure IMF support, as well as reduce spending on politically-sensitive subsidies – such as on power, fuel and farming – likely to have been one of the fund’s key demands.
Zambia’s external debt includes around $3bn in international bonds, $2.1bn to multilateral lending agencies such as the IMF and another $3bn to China and Chinese entities.
‘We are well on the way of solving this issue of unsustainable debt. We expect full agreement with the IMF sometime in the middle of 2022,’ Musokotwane said at a meeting with bankers.
