Finance Minister Situmbeko Musokotwane said on Friday that a debt relief arrangement with Zambia’s formal creditors was “very close to being signed.”
Zambia defaulted on its national debt in 2020, during the COVID-19 outbreak; nevertheless, the government has been unable to finalize restructuring negotiations on its $18.6 billion in international debt.
We’re getting close, but not quite there yet. During a news conference, Musokotwane said that a memorandum of agreement between official creditors and the IMF should have been achieved by now.
Debtor firms are asking. Everyone agrees that assistance will be provided; the only question is how much. According to the ministry. “They’re saying we have to understand because they’re losing money,” to paraphrase.
Sources said earlier this week that Zambia’s official creditors signing a memorandum of understanding (MoU) on debt reduction in May is a vital step for receiving further financing from the International Monetary Fund.
Despite Beijing’s vehement denials, numerous Western officials have blamed China, Zambia’s largest bilateral creditor, for stalling the restructuring process.
The MoU must describe the specific means through which official creditors seek to reduce debt in line with the conditions of a $1.3 billion, 38-month program adopted by the IMF’s board in August 2022.
The second tranche of the loan, totaling more than $188 million, is subject to IMF Executive Board approval, with the IMF indicating that it is contingent on bilateral creditors reaching an agreement on debt restructuring.
“Everyone is working hard to bring this money to you. Musokotwane voiced confidence in the IMF’s anticipated transfer of cash, adding, “I feel confident that this money will come.”
