The International Monetary Fund sees a deal between Zambia and its creditors as “imminent” and is hopeful it will come this week during the crisis lender’s gathering of policymakers, a top official for the institution said.
“I’m very optimistic,” Abebe Aemro Selassie, director of the fund’s Africa department, said in an interview on Monday in Marrakech, Morocco, on the sidelines of the IMF and World Bank annual meetings.
“The ball is in the authorities’ court. It’s between the authorities and their creditors. They’ve told us that they’ve made very, very good progress.”
The deal would come in the form of signing a memorandum of understanding to restructure $6.3 billion of debt.
The government has made slow progress in talks since June, when it reached a deal-in-principle with the committee co-led by China and France.
The agreement would see the interest rates cut to as low as 1% and the loans only repaid in 2043, with a 40% reduction in net-present value of the debt, Bloomberg News reported last week.
Zambia, which became Africa’s first pandemic-era sovereign defaulter in 2020, has struggled to reach a deal with creditors.
Earlier this year, the IMF withheld a near-$190 million disbursement because of delays in the group agreeing to debt relief.
China is by far Zambia’s biggest bilateral creditor.
Zambia’s international bondholders formally started debt talks with the government this week, according to three sources, a key step to restructure more than $3 billion of overseas bonds.
A group of the country’s biggest private creditors has entered into a restricted period, which means they temporarily cannot trade the country’s notes in exchange for non-public information, the sources added, asking not to be named because the discussions were private.
The non-disclosure agreements(NDA) would be still in place next week, one of the sources added, when Zambia officials and creditors are set to meet in person during the World Bank and International Monetary Fund annual meetings in Marrakech.
The Zambia Finance Ministry declined to comment.
Zambia is also expected to sign a memorandum of understanding (MOU) with bilateral creditors such as China and the Paris Club to rework about $6.3 billion of debt.
The country is still in default after becoming the first African nation to suspend debt payments during the 2020 COVID-19 crisis.
Zambia has three outstanding dollar bonds maturing in 2022 , 2024 and 2027 , trading at 51-56 cents on the dollar.
Amia Capital, Amundi, BlueBay Asset Management, Farallon Capital Management and Greylock Capital are on the steering committee of the creditor group that holds around 45% of Zambia’s total outstanding international bonds.
The sources declined to comment how long the restriction period would last.
Creditors were discussing mechanisms that would revamp payments through higher coupons, shorter debt maturities or a combination of both, one of the sources said.
At the end of 2022, Zambia’s debt to international bondholders was $3.5 billion, including $520 million interest in arrears.
The deal with official creditors already includes a mechanism to accelerate loan repayments and raise interest if Zambia’s capacity changes from the current “weak” to “medium” following a joint International Monetary Fund (IMF) and World Bank assessment in 2026.
The IMF said in July that the country is expected to reach a debt restructuring deal with its international bondholders by the time the Washington-based lender undergoes a second review of its rescue loan programme with the country later this year.
“They have told us that they have made progress”
On July 24 2023, there was dancing and jubilation at the sausage Airport when the great leader, author of the Book of Lies was returning from France. There was colorful dancing but what was that dancing all about? What HH did was go meet with the creditors and have a boardroom agreement without anything signed. Today we are still where we were two years ago when it comes to debt. When it comes to the cost of living, it is clear what year a Zambian will chose if time traveling was offered.
Look what’s happening to Argentina…don’t Mess with the IMF….are you ZAMBIA CANT RAISE 6 BILLION DOLLARS ON ITS OWN TILL 2043
The International Monetary Fund sees a deal between Zambia and its creditors as “imminent”
So what are haters above talking about………??
We’re not haters we’re interested and therefore affected. You are the hater because you put Upnd first and Zambia a distant third.
We all know you are a tribal supremacists who thinks zambia belongs to one tribe……..
And a tonga should not rule over you…….
Try again in 2031……..
I think even 2H is beginning to understand what we have been telling him all along. These thieves are pushing us to accept their complicated debt structure and then force the country into a default at some calculated point in time. By then 2H would have been replaced and if the replacement does not conform to their liking, they would trigger the clause which would put us back into high indebtedness. vicious circle. Keep these harvesters out of the loop. Their job is to exchange debts with resources using complicated calculations which our leaders don’t understand. They will even event terms just to add to the confusion.
Why did you get their money to start with? After the first bond was issued and the money released, the PF government celebrated like crazy until they were reminded that it was debt and required a solid plan to pay it back.
HH and UPND is not the corrupt PF gang with no financial displine what so ever…….
@ Future Zed
Just be careful Spaka might insult you….ok look at the time frame 2023…that’s 20 years from now….so IMF is trying to enslave Zambia forever and by that time HH wont probably be alive…If i was HH i should have told IMF thanks but no thanks
No need to insult future zed…….
He has not insulted me………
Losers keep crying so when 2026 comes around no tears are left
# Spaka A tonga should not rule over you…….
In your pea brain only… any tribe can give us a president and that president should be mindful that Zambia is not his or her back yard garden.