IMF “hopeful” that Zambia can Reach Agreement with Debt Creditors by Thursday

Abebe Selassie, the Africa Director of the International Monetary Fund (IMF), announced on Monday that he was “hopeful” Zambia and its debt creditors would confirm an official and finalised debt restructuring deal by Thursday.

“We're very hopeful that the authorities and the creditors will be in a position to make an announcement very, very soon,” the Africa Director observed in an interview with Reuters during the IMF and World Bank annual meetings in Marrakech.

“They've told us that there's been very strong progress, that they're in the last stage of finalising things.”

Under the previous Patriotic Front government, Zambia became the first African nation to default on its sovereign debt in 2020. Ever since, its debt restructuring under the G20's Common Framework procedure has been thwarted by delays.

Following the election of President Hakainde Hichilema, the restructuring process has been all but completed. In June an agreement was settled to restructure $6.3 billion in debt owed to international governments, including China and some members of the Paris Club of creditor nations. To certify the deal, Zambia must now sign a memorandum of understanding (MoU) with these official creditors.

Finance Minister Situmbeko Musokotwane has said he expects this MoU to be “finalised and executed before the end of the year.”

In the past week, international bondholders officially began debt talks with the Zambian government, signifying a key moment in the progression of restructuring more than $3 billion of overseas bonds.