Zambia seeks new financial arrangement with IMF

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Zambian President Edgar Chagwa Lungu sits in the Presidential Palace in Lusaka, Zambia, 20 November 2015. Photo: Bernd von Jutrczenka/dpa | usage worldwide (Photo by Bernd Von Jutrczenka/picture alliance via Getty Images)

Zambian President Edgar Lungu on Tuesday held talks with the International Monetary Fund in the hopes of reaching an agreement on how the country will manage its public debt.

According to a statement issued by the IMF, the two sides are also discussing ways the IMF can provide support to Zambia’s reform efforts as well as ways to improve relations between them.

Zambia has had a rocky relationship with the Fund under Lungu.

Last month, Zambia became Africa’s first COVID-19 era sovereign default nation after it failed to pay a 42.5 million U.S. dollars coupon on one of its Eurobonds.

The government sought broad relief from its creditors and requested Eurobond holders grant it a deferral of interest payments until April.

But bondholders rejected that request, criticizing the government for a lack of engagement and a failure to provide transparency, particularly on debt owed to other creditors, including China.

Zambia’s $3 billion in outstanding Eurobonds is not its only debt. It owes $3.5 billion in bilateral debt, $2.1 billion to multilaterals and $2.9 billion to other commercial lenders.

The Zambian economy faces severe battering which has been worsened by the COVID-19 pandemic.

 

Story compiled with assistance from Reuters and Xinhua

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