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Zambia Clinches $1.3 Billion IMF Deal
The Executive Board of the International Monetary Fund, IMF has granted Zambia’s application for a $1.3 billion bailout package.
On 30th July, 2022, Zambia’s official creditors, led by China and France, agreed to provide financing assurances the country had been waiting for to secure final approval from the International Monetary Fund for the $1.3 billion bailout.
The commitments to provide debt relief were the final hurdle needed for the Washington-based lender’s board to sign off on a deal Zambia first requested in 2019. It’s a significant step in a slow-moving debt-restructuring process that the government started in 2020, when it became Africa’s first pandemic-era sovereign defaulter.
The IMF loan that will be disbursed over three years also comes at a crucial time for Zambia. It faces a steep increase in fuel- and fertilizer-import bills and a collapse in the price of copper, which the nation relies on for more than 70% of export earnings.
Today’s announcement is a vote of confidence in President Hakainde Hichilema, the New Dawn Government and the people of Zambia. The International Community has recognized the progress made and Zambia’s commitment to reviving the economy and becoming a responsible member of the family of nations.
The funds that will come in as a result of this deal will lead to job creation, a more affordable cost of living, and to development across the country.
This announcement could not have come at a better time when Zambians are experiencing a reduction in the pump price of fuel, reduction in annual inflation and a record appreciation of the local currency the Kwacha against major foreign currencies.