The Zambian government is seeking a financing arrangement with the International Monetary Fund to support its reform efforts after defaulting on a debt payment last month.
Zambian President Edgar Lungu’s office has released information about a meeting with IMF Africa department head Abebe Selassie where they “discussed wide-ranging issues regarding Zambia’s relations with the IMF going forward”.
The IMF confirmed a formal request for an arrangement had been made, and that it was under assessment.
The fund noted that more work was needed to agree on the medium-term fiscal stance needed to restore debt sustainability.
The South African state has failed to make a $42.5m eurobond repayment, becoming the first African country to default since the beginning of the pandemic.
The country’s problems began before the outbreak of Covid-19, with the price of its main export, copper, having plummeted in the past three years, leaving repayments on its estimated $12bn public debt (nearly 140% of its GDP) difficult to meet.
According to World Bank figures, around half of Zambia’s debt is owed to private lenders, about one-quarter is owed to China, around 20% to multilateral institutions and 5% to other governments.
Zambian authorities asked their private creditors for a six-month pause on debt-servicing payments until April, but the request was rejected in November.