IMF Supports Zambia Economic Reform with $1.3bn – Official
The International Monetary Fund, IMF, said so far, the fund has extended about $1.3 billion to support Zambia’s economic reform, details from an official statement revealed.
The authority in Zambia embarked on reforms after failure to meet obligations owe to creditors. Faced with weak macroeconomic conditions, total public debt rose significantly in the past years with debt service costs eclipsing the country’s fiscal revenue.
Speaking to Members of the Financial Community, Ms. Kristalina Georgieva, IMF Chief said, “The Zambian authorities have been implementing an ambitious economic reform program supported by the IMF, which aims to restore fiscal and debt sustainability, create fiscal space for much-needed social spending, and strengthen economic governance and transparency.”
According to Georgieva, Zambia’s economic reform program is supported by an SDR 978.2 million or about US$1.3 billion, 38-month Extended Credit Facility arrangement, approved by the IMF’s Executive Board on August 31, 2022, and by assistance from multilateral and bilateral institutions.
In October 2023, Zambia agreed on a memorandum of understanding with the Official Creditors Committee (OCC) under the Group of Twenty (G20) Common Framework that would deliver a debt treatment by official creditors aimed at restoring debt sustainability consistent with IMF program parameters.
“Building on this progress, and following several months of constructive discussions, the agreement reached between the Zambian authorities and the Steering Committee of the Ad Hoc Creditor Committee of holders of Zambia’s Eurobonds marks a significant step forward”, IMF Managing Director told the financial community.
“The terms of this agreement have been assessed by the Fund staff as being in line with the parameters of the IMF-supported program taking into account the confirmation by the OCC to the IMF and to the Authorities that the agreed terms are consistent with the comparability of treatment among creditors.
“Together with the full implementation of the IMF-supported program, the successful implementation of this agreement will provide significant external debt service relief and further contribute to Zambia’s efforts to restore debt sustainability.
“To capitalize on this momentum, rapid completion of the debt operation with high participation would be vital for the success of the program. In parallel, the authorities continue to advance discussions with other external private creditors on a comparable treatment.
“This collective effort is key to supporting the success of Zambia’s debt restructuring efforts under the G20 Common Framework.
“The Zambian authorities are aware of the challenges ahead and have reaffirmed their determination to persevere with their reform agenda and put the economy on a path of sustained and high growth.
The continued support from international financial institutions and other official creditors, together with the participation of bondholders in the proposed bond exchange, is necessary to underpin the success of these reform efforts.”, Georgieva said. #IMF Supports Zambia Economic Reform with $1.3bn – Official
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