Zambia welcomes progress from creditor committee towards IMF loan

LUSAKA, Zambia

Zambia on Saturday welcomed news that the country's official creditor committee had made progress on concluding debt restructuring talks, paving the way to securing $1.4 billion from the IMF.

"The official creditor committee, co-chaired by France and China and vice-chaired by South Africa, met this week and provided financing assurances based on Zambia’s request for debt treatment," said a statement from Treasury Secretary Felix Nkulukusa in the capital, Lusaka. “This unprecedented support will provide financing assurances to the IMF in support of Zambia’s program under the extended credit facility.”

Finance Minister Situmbeko Musokotwane said: "We are grateful to all our official creditors for considering Zambia’s request for debt restructuring. We also reiterate that Zambia remains committed to implementing the much-needed economic reforms, being transparent about our debt and ensuring fair and equitable treatment of our creditors."

The southern African nation is grappling with an external debt stock of over $17 billion and has gone to the IMF seeking a deal to reboot the economy and restore fiscal health.

Hakainde Hichilema, the president who took office a year ago, blamed the economic malaise on his predecessor Edgar Lungu, whose administration he accused of excessive borrowing to finance luxury consumption.

Since the new government took over office, inflation had come down from 24% to just under 10%, a result Musokotwane says is a mark of investor confidence in the country's economy under new leadership.

"We will continue to work cooperatively with both official and private creditors to agree on the terms of the debt restructuring in line with the comparability of treatment principle. We are confident that together with our partners, Zambia will address the issue appropriately and with the urgency needed to help get the economy back on a sustainable growth trajectory," he added.