Zambia aims to secure IMF loan

Zambia expects to host a mission of the IMF before the end of 2017 and hopes to have a $1.3bn loan deal in place in early 2018, treasury secretary Fredson Yamba said on Tuesday.

Zambia expected to host a mission of the IMF before the end of 2017 and hoped to have a $1.3bn loan deal in place in early 2018, treasury secretary Fredson Yamba said on Tuesday.

Speaking on the sidelines of a mining conference, Yamba said Zambia was on a mission to reduce debt and would consider additional borrowing to plug financing gaps only if terms were favourable.

“Come 2018, we must have a final [IMF] programme. It has taken a long time because the parameters have been changing,” Yamba said, adding the IMF wanted the government to provide more details on debt stock, creditors and servicing costs.

“Our debt has accelerated too much. They wanted us to come up with action plans,” he said.

Zambia and the IMF agreed in October to chart a new path towards debt sustainability after the IMF delayed the conclusion of talks, saying it was at high risk of debt distress.

The finance ministry said in 2016 that almost 20% of GDP was being spent on debt servicing. Part of Zambia’s debt problem stems from $2.8bn in eurobonds, issued in 2012-15.

Yamba said that the government would “operationalise” a planned sinking fund in 2017, aiming to accumulate cash for repayments. It was also looking at refinancing, which might include swapping bonds for longer-dated issues.