IMF approves $187 mn for Zambia following debt deal
The IMF board approved the second review of its loan agreement with Zambia Wednesday, unlocking almost $200 million for the country after it reached a partial deal to restructure its debt.
In a statement, the International Monetary Fund said its executive board had completed the second review under its $1.3 billion, 38-month Extended Credit Facility (ECF) Arrangement, providing the country with "immediate access" to about $187 million.
Zambia, whose total debt amounted to $32.8 billion at the end of 2022, defaulted on its $18.6 billion foreign debt in 2020 at the height of the Covid-19 pandemic.
The southern African country signed a memorandum of understanding with bilateral creditors in October on a deal to restructure its debts with countries including China, paving the way for the IMF board's approval.
In a statement, the IMF said it welcomed the October pact, along with Zambia's "good faith efforts with private creditors to reach an agreement consistent with the program's parameters and comparability of treatment."
The fund said prompt implementation of the deal and an agreement with private creditors would be critical "to restore debt sustainability over the medium term."
"Program performance has been satisfactory despite a challenging domestic and global environment," the IMF said. It added that "all but one quantitative performance criteria for the second review were met."
The IMF said Zambia's economic performance has proven to be "resilient," and that it has revised the country's 2023 economic growth outlook upwards to 4.3 percent.
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