Debt-ridden Zambia seeking IMF financing

Heavily indebted Zambia has lodged a request for funding for reforms from the International Monetary Fund (IMF), the Fund said on Tuesday, December 8.

The announcement came as President Edgar Lungu’s office confirmed he had met with the visiting head of the IMF’s Africa Department, Abebe Aemro Selassie.

“Zambian authorities have formally requested a financing arrangement…to support their reform efforts,” the IMF said in a statement, adding that it was reviewing the request.

Zambia’s external debt has surged to nearly $12 billion this year.

In September, the government of the copper-rich country requested a 6-month deferral on interest payments for 3 commercial eurobonds worth $3 billion.

But it missed the $42.5-million interest payment due on one bond on October 14, prompting ratings agency S&P to declare the country in default.

A month later, a grace period ended for payment on a $750-million eurobond due to expire in 2022.

Failure to honor its obligations could see it officially declared in default, becoming Africa’s first economy to default during the coronavirus pandemic. – Rappler.com