Kampala, Uganda I HABARI DAILY I The International Monetary Fund (IMF) is preparing to unveil a $1.3 billion three-year aid plan, which Zambia obtained in 2022.
This follows the country’s recent success in having its debt, which amounts to $32.8 billion, restructured. Zambia defaulted on its $18.6-billion foreign debt in 2020 at the height of the COVID-19 pandemic.
This is a win for President Hakainde Hichilema, which came at the peak of a two-day summit in Paris hosted by French President Emmanuel Macron.
According to a statement issued by the Presidency, the agreement was a milestone in the country’s journey towards economic recovery and growth.
Negotiations on debt restructuring had stumbled over differences between creditors, with the United States accusing China – the biggest single lender – of delaying an agreement.
Zambia is Africa’s biggest copper producer, with a population of nearly 20 million people.
It ran up huge debts under former president Edgar Lungu, who was criticised for borrowing huge sums to finance infrastructure projects during his six years in power before he lost elections in 2021.
Economists pointed out that the deal is likely to ease economic pressure on Zambia and improve living conditions for many people.
The agreement, however, only covers $6.3 billion of bilateral debt, of which $4.1 billion is owed to China. It doesn’t cover the debt owed to the World Bank and multilateral development banks.
Private creditors, who are owed $6.8 billion, will have to take the same route if the country is to obtain tangible relief.
The country’s total debt at the end of 2022 amounted to $32.8 billion, including the $18.6 billion owed to foreign lenders, according to finance ministry figures
