The Official Creditor Committee for Zambia, co-chaired by France and China and vice-chaired by South Africa, met on Monday, 18 July 2022 and provided financing assurances based on Zambia’s request for debt treatment under the G20 Common Framework. This unprecedented support will provide financing assurances to the International Monetary Fund (IMF) in support of Zambia’s programme under the Extended Credit Facility (ECF).
As Zambia continues to implement its ambitious reform agenda to address the economic challenges facing the country, The Government welcomes official creditors’ support that will unlock the IMF programme approval for Zambia.
The Minister of Finance and National Planning Dr. Situmbeko Musokotwane, MP., welcomed the decision of the official creditors’ committee:
“We are grateful to all our Official Creditors for considering Zambia’s request for debt restructuring. We also reiterate that Zambia remains committed to implementing the much-needed economic reforms, being transparent about our debt and ensuring fair and equitable treatment of our creditors. We will continue to work cooperatively with both official and private creditors to agree on the terms of the debt restructuring in line with the comparability of treatment principle. We are confident that together with our partners, Zambia will address the issue appropriately and with the urgency needed to help get the economy back on a sustainable growth trajectory.” We also undertake to carry out the necessary reforms that will ensure that we meet our obligations post the restructuring.”
Background
On 3rd December 2021, the Government reached an IMF Staff-Level-Agreement that envisages the provision of c. US$1.34 billion under an Extended Credit Facility (ECF) programme over the next three years. The IMF programme will provide much-needed fiscal space, help Zambia achieve an orderly and comprehensive debt restructuring and anchor Zambia’s reform agenda which is based on four pillars: economic transformation and job creation, human and social development, environmental sustainability, and good governance.
Once the IMF programme is in place, Zambia will also be able to proceed with negotiations on debt restructuring parameters with both official and private creditors on terms compatible with the DSA.