IMF Sees Zambia Program Deal Possible Before August
**Deal will be key to planned debt restructuring talks
The International Monetary Fund still hopes to reach a deal with Zambia before elections in August on an economic program that will form the basis of the nation’s planned debt restructuring. The nation’s dollar bonds rose.
Talks that began last year are continuing, and the Washington-based lender aims to conclude them “in the next few weeks,” Africa Director Abebe Aemro Selassie said in an interview.
“I hope we can move forward by reaching agreements, and get broad endorsements of political leaders,” he said. “But that will depend on agreeing on the parameters of the program, and we are not just there yet.”
The timeline is tight. While the polls that will probably be closely contested are set for Aug. 12, the constitution stipulates that parliament, and by extension President Edgar Lungu’s cabinet, must dissolve about three months before that, suggesting a deal may need to be agreed by May 14.
Zambia’s $1 billion of Eurobonds due 2024 extended gains on Thursday, rising by as much as 1.6% to 59.14 cents on the dollar, the highest in more than a year.
Africa’s second-biggest copper producer last year became the continent’s first pandemic-era defaulter. External commercial creditors, including those holding the nation’s $3 billion of Eurobonds, want the government to reach a deal with the IMF, which they will then base their restructuring talks on.
Most observers only see it possible for the IMF to come to an agreement with the government once the elections, in which the ruling party’s Lungu will seek to win a second five-year term, are out of the way.