On Wednesday, 20 December, the executive board of the International Monetary Fund (IMF) promptly approved a $187m loan payout to Zambia. This move follows the institution’s second review of the 38-month extended credit facility arrangement with the country.
IMF approves an immediate $187m loan payout for Zambia while revising restructuring proposals
This is the third loan payout under Zambia’s $1.3bn extended credit facility, which the IMF approved in August 2022. The African country backslid on its debt approximately three years ago when the pandemic ruined its restructuring plans.
Reportedly, the country hit a major roadblock with its creditors in November. The lenders questioned the comparable debt relief in terms of the applicable agreements. Reuters reported that Mercedes Vera Martin, the IMF’s mission chief for Zambia, said the conditions for comparable treatment are still being considered by the country’s official creditor committee.
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Supporting Zambia’s in-house 8th National Development Plan, the IMF indicated that these funds help to solidify macroeconomic stability, debt, and fiscal sustainability and improve the livelihood of people by bracing economic health. Additionally, this global organisation motivated its action by saying it reached a memorandum of understanding with Zambia in October that reflects the June 2023 debt treatment agreement, which aligns with the relevant programme scopes.
Zambia is one of the leading copper producers in Africa. This trading commodity features prominently in industrial applications, especially in developing economies that need infrastructure and expansions. On its website, the IMF commented:
While significant progress has been achieved, some adjustments still need to be made until both program parameters and comparability of treatment as required by official bilateral creditors are met.
