LUSAKA (Reuters) – Zambia’s finance minister Situmbeko Musokotwane has asked holders of its defaulted debt to quickly evaluate restructuring proposals that are part of a $1.4 billion aid deal agreed with the IMF, he said in a statement on Friday.
Musokotwane told creditors during an informal meeting that the board of the International Monetary Fund wanted assurances they were supportive before it would give final approval for the deal, and urged them to quickly form a creditor committee.
“I believe that the IMF will inform you of the nature and extent of the debt relief expected from our creditors,” Musokotwane said, according to the statement.
Zambia and the Washington-based IMF this month reached a staff level agreement on a three-year extended credit facility, bringing the copper producer one step closer to a comprehensive debt overhaul.
Musokotwane said on Thursday that Zambia expects to agree a debt restructuring plan with creditors in around mid-2022.
Zambia defaulted on its sovereign debt in November 2020, the first African nation to do so during the COVID-19 pandemic, after years of government borrowing pushed its debt burden above 120% of annual economic output.
The government of President Hakainde Hichilema, who was elected in August, started talks with the IMF in early November.
Zambia’s external debt includes around $3 billion in international bonds, $2.1 billion to multilateral lending agencies such as the IMF and another $3 billion to China and Chinese entities.
(Reporting by Chris Mfula; Editing by Catherine Evans)
