Zambia seeks IMF flexibility in quest for $188 million facility, as negotiations with creditors drag

Zambia has resolved to lobby for flexibility from the International Monetary Fund (IMF) to release the US$188 million tranche distribution following challenges it is currently having with official creditors for debt relief.

Zambia is currently experiencing technicalities accessing the US$188 million distribution from the IMF which is the next tranche of the agreed amount under the Fund programme, said Finance and National Planning Minister Situmbeko Musokotwane.

Musokotwane complained about the slow progress with the official creditors to sign the Memorandum of Understanding (MoU) which is needed to access the US$188 million from the IMF.

“We were hoping that money to be released and approved by now but we are experiencing technicalities getting that money because we have not yet signed the MoU with our official creditors.

“When we went to Washington, we were lobbying, in an event that the MoU is not signed with the creditors quickly enough, there can be flexibility from the IMF to release the money as Zambia is not at fault,” he told journalists in Lusaka on Friday.

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Muskotwane explained that part of the technicalities Zambia was having with its official creditors was on the amount of debt to be written off as they were on the losing side.

He emphasised on the need for the financial assurances from the official creditors to indicate to the IMF that Zambia was being supported by other people, such as the creditors themselves.

“We are not yet there and the MoU has not yet been signed by the creditors. We are close, but not yet there. There has been slow progress with the official creditors. We were of the view that of receiving this money at the spring meetings but it did not happen.

“At the meetings, we went to lobby key members of the IMF to help us push through the agreement with creditors and signed as soon as possible,” Musokotwane said.

He mentioned that government on Tuesday met with the official creditors and agreed that it was time to move on and come to a resolution as quickly as possible.

He said another meeting with the creditors would take place soon.

Meanwhile, Musokotwane said government official met bondholders while at the meetings for debt relief.

“We met bondholders and exchanged notes and hoping to come to an agreement with them, even if it means reaching an agreement with them faster than anyone else,” he said.