Zambia’s struggle with creditors not over, suffers delay in IMF extension of $188 million facility

Zambia has not yet reached any tangible resolution with its creditors, as fear grips government that it may not be able to access the US$188 million distribution from the International Monetary Fund (IMF).

Without these financial assurances from the creditors, Zambia will not access the US$188 million distribution from the IMF despite the economy picking up, the Finance and National Planning Minister, Alexander Musokotwane has said.

Musokotwane in an interview with Bloomberg on Sunday in Washington complained that the creditors must not punish Zambia by refusing to provide debt relief, saying it is unfair to penalise a country that is performing well.

Debt relief for struggling emerging market economies has been a central point of discussion at the spring meetings of the IMF and World Bank in Washington.

“I wish to tell you that as of now, we have not had a tangible result in the resolution between Zambia and our creditors. The discussions are still on going, the level of interaction has intensified in the past few weeks but of now we have not yet had any resolutions and we are waiting for that very anxiously,” Musokotwane said.

Read more: IMF says Zambia, other countries’ debt restructuring delays costly

He said government was concerned about that situation as the perquisite for getting that distribution from the IMF required Zambia’s debt stress to have reached agreement with the creditors.

“It requires that a Memorandum of Understanding with creditors giving financial assurance to be supported by the creditors. That one as we just saw a few minutes ago we have not reached that, we are waiting for the creditors to finally make the decision to give Zambia debt relief.

“As of now that has not happened and because of that there is no automatic reason to believe that the US$188 million will be released. So once again, we appeal to our creditors in the light of Zambia performing with top marks, we request or appeal to our creditors like this MoU be finalised so that we access the money,” Musokotwane said.

He complained that: “Given the position that the MoU is not signed, Zambia should not be punished. What is the point of punishing a country that is performing well? Zambia should not be punished, it must be rewarded.”

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