FINANCE Minister Situmbeko Musokotwane says the absence of financial assurance from Zambia’s official creditors is slowing progress to conclude onward discussions with the International Monetary Fund (IMF) to unlock a US$1.4 billion bailout package.
After meeting on Monday, this week, Zambia’s creditors were expected to commit to debt relief on Wednesday or Thursday.
In an interview yesterday, Dr Musokotwane said he was optimistic of a positive outcome.
Dr Musokotwane said the Government had done everything needed to get the financial assurances.
“We cannot get into an IMF programme without a financial assurance from the creditors..assurance to restructure Zambia’s debt that is sustainable so this is what we are now waiting to hear whether that assurance is now available or if we have to meet them again.
“We are very hopeful that the assurance will come through, because we have done everything we have done everything on our side of what is needed to get the assurance. So we have done everything. The creditors met on Monday so we are hopeful that they will release it this week either way,” Dr Musokotwane said.
He said he was also confident based on recent statements from the IMF and the World Bank on urging creditors to assist Zambia.
Meanwhile, Zambia’s creditors were expected to commit to debt relief on Wednesday or Thursday, two sources familiar with the situation said, as the country and its lenders seek to end a drawn-out restructuring process, reports REUTERS.
After meeting on Monday, Zambia’s bilateral creditors agreed to release a statement on their position sufficient for the IMF board to sign off on a $1.4 billion three-year program, the sources said.
The creditors are due to release a positive statement, a third source said, without providing further details.
In 2020, Zambia became the first African country to default on its debts in the pandemic era, struggling with external debts that reached $17.27 billion at the end of last year, according to government data.
“The president is eager to see that Zambia’s debt issue is quickly resolved and is happy that progress is being made,” presidential spokesman Anthony Bwalya told Reuters on Wednesday, without giving details.
“I’m hopeful that Zambia may be able to get debt relief in the next few days,” World Bank President David Malpass told Bloomberg TV on Tuesday. “There was just a creditors meeting yesterday so that gives some sign of hope.”
Zambia reached a staff level agreement with the IMF on the $1.4 billion extended credit facility in December, But would not get the money until it agreed with its creditors to reduce the debt to sustainable levels.
The first creditor meeting was held in June, after Zambia’s government complained of delays to the restructuring, which is taking place under the Common Framework, a debt relief process launched in 2020 by the Group of 20 major economies that is yet to show results.
Chad’s Common Framework creditor committee met last week and Ethiopia’s on Tuesday, with the IMF calling on the lenders to reach agreements quickly.