• The Creditors Committee has given assurances to the country and the IMF of their position.
• This is a positive development towards our debt restructuring process as a country.
• The agreement with the Creditors was a pre-condition by the IMF for us to access the IMF bailout package of the US$1.4 billion.
An Economist says the pledge by Zambia’s Creditors to negotiate a restructuring of the country’s debt opens the way for International Monetary Fund (IMF) to approve the bailout deal at their next Board of Governors meeting.
Speaking to Money FM News, Trevor Hambayi said this is a positive development towards the country’s debt restructuring process.
He noted that the agreement with the Creditors was a pre-condition by the Fund for Zambia to access the IMF bailout package of US$1.4 billion.
“Right now the Creditors Committee has given assurances to the country and the IMF of their position that there were willing to provide the country with specific relief around the debt that the country owes. This then opens the way for the IMF to be able to approve this at their next Board of Governors meeting.”
“The key fundamental around this is that there are two things I think in the negotiations by government around the Creditors, one of the things they have been driving is the cancellation of part of the debt,” Mr. Hambayi said.
He noted that it is not going to be a very easy process as the ones that carry out debt cancellation are the members of the G20 framework, but that most of the country’s debt is commercial.
Mr. Hambayi however stated that the World Bank’s recent reclassification of Zambia to low income status from lower middle income, for the 2023 financial year puts the country in a position where it can receive debt cancellation from Creditors.
Recently, Zambia’s creditors pledged to negotiate a restructuring of the country’s debts in a move welcomed by International Monetary Fund (IMF) Managing Director Kristalina Georgieva as clearing the way for a US$1.4 billion programme.