By Chris Mfula and Rachel Savage
LUSAKA (Reuters) – The International Monetary Fund (IMF) has yet to finish a health check of Zambia’s debt that is necessary to strike a restructuring deal with creditors after more data was requested from the government, the treasury secretary said.
Zambia became the first pandemic-era sovereign default in late 2020 and is struggling with a debt burden of more than 120% of gross domestic product (GDP).
It is seeking IMF support and is considered a crucial test case for a new debt restructuring mechanism – known as the Common Framework – backed by the Group of 20 major economies.
Zambian Finance Minister Situmbeko Musokotwane told Reuters this month that he expected the Debt Sustainability Analysis (DSA) to be finalised by the end of the month and a formal IMF agreement by May, a timetable that analysts deemed ambitious.
The DSA is “not yet completed,” Secretary to the Treasury Felix Nkulukusa told Reuters.
“We did our part, so it’s the IMF checking it … to see whether what we are assuming makes sense or it doesn’t make sense and what other issues should come in before it is shared with the creditors.”
Zambia successfully negotiated a staff level deal for a $1.4 billion three-year extended credit facility with the IMF in December. That programme must now be approved by the Fund’s Executive Board.
“Staff are in the process of finalizing the joint IMF-World Bank debt sustainability analysis for Zambia,” an IMF spokesperson said by email.
Nkulukusa said that Zambia had initially submitted “numbers up to September with estimates up to December” but had now submitted up to date figures as requested by the IMF.
(Reporting by Chris Mfula and Rachel Savage in London. Editing by Joe Bavier and Elaine Hardcastle)
