Zambia: IMF support to bail out debt agreed by September

The IMF's financial support to Zambia to bail out a massive debt that has put the country in default should be concluded by early September, the financial institution said Wednesday.

In 2020, the southern African country became the first on the continent to default on its estimated $17.3 billion foreign debt during the pandemic.

In December, the government secured a $1.4 billion bailout from the International Monetary Fund, but the three-year agreement in principle was given in exchange for the government's commitment to undertake deep economic reforms.

"Creditors must deliberate and decide. However, we can expect this to go to the IMF board in early September," the Fund's deputy managing director Antoinette Monsio Sayeh told a news conference.

Zambia is due to start a meeting with its creditors on Thursday to begin restructuring its debt and unlocking financing.

"The good news is that all major creditors are ready to start discussions. This brings us closer to the IMF programme," Finance Minister Situmbeko Musokotwane said.

In past negotiations, previous governments have failed to unlock bailouts. However, since the election of President Hakainde Hichilema last year, progress has been made in restoring relations with creditors.