(Reuters) – The International Monetary Fund expects to disburse the next tranche of its $1.3 billion financing program with Zambia “soon”, the managing director of the fund said.
The southern African nation, which was the major sovereign casualty of the COVID-19 pandemic and has been in default since 2020, is seeking to overhaul its debt in a slow process and it secured the IMF funding last August.
“What we are waiting is creditors of Zambia to agree on a path forward… We expect to be able to disburse for Zambia very soon,” Kristalina Georgieva told reporters in the Kenyan capital.
Zambia sent a debt restructuring proposal to its official creditors last month and Georgieva said they are set to meet next week to consider the proposal.
Ghana and Ethiopia have also sought to restructure their debts and Georgieva said the processes have been delayed by a “cacophony” caused by the diversification of creditors in recent years.
China is the largest bilateral creditor for many African nations including Zambia.
“The Chinese premier and former premier confirmed that Chinese were committed to debt resolution for Zambia when I met them,” Georgieva said.
Some 19 out of 35 sub-Saharan African nations are at or close to the risk of debt distress, Georgieva said, citing the impact of the pandemic, Russia’s war in Ukraine, high interest rates and weaker currencies.
But she ruled out the risk of Kenya slipping into default, despite acute pressure on its finances by rising debt repayment obligations.
“Kenya is definitely not among them,” she said, citing a sustainable debt load and solid hard currency reserves.