According to Zambia’s finance minister Situmbeko Musokotwane, Zambia expects to agree a debt restructuring plan with creditors around the middle of 2022 after reaching a preliminary understanding for a programme with the International Monetary Fund (IMF).
Zambia suffered its debt burden above 120% of annual economic output in November 2020 after years of chronic government over-borrowing forced its debt burden to double.
The International Monetary Fund and Zambia reached a staff level agreement this month on a $1.4 billion, three-year extended credit facility, bringing the heavily enforcing copper producer one step closer to a comprehensive debt reduction.
Musokotwane said Zambia’s economy was in debt distress and the relative stability that it had experienced in the past few months was because most creditors had allowed it to default.
Zambia’s external debt includes about $3bn in international bonds, $2.1bn to multilateral lending agencies such as the IMF and another $3bn to China and Chinese entities.