Zambia Signs Debt Deal With Creditors, IMF’s Georgieva Says
Thursday, October 12, 2023 05:20 PM
By Taonga Mitimingi and Ekow Dontoh
(Bloomberg) –Zambia signed a long-awaited agreement to reorganize its loans with official creditors, co-led by China and France, International Monetary Fund Managing Director Kristalina Georgieva said Thursday.
The breakthrough finalizes a $6.3 billion deal it reached with them in principle in June, paving the way for the disbursement of another portion of a $1.3 billion IMF extended credit facility.
“We have seen Zambia proving that debt should be restructured and ladies and gentlemen an MOU, memorandum of understanding of Zambia creditors, has been finally signed,” Georgieva said on a panel discussion in Marrakech, Morocco during the annual IMF and World Bank meetings. “A round of applause for Zambia.”
The country, which became Africa’s first pandemic-era sovereign defaulter in November 2020, still must sign bilateral agreements with each creditor.
Africa’s second-largest copper producer has yet to conclude restructuring talks with commercial creditors that include holders of $3 billion in eurobonds. They have been awaiting the finalization of the memorandum of understanding before proceeding with their own reorganization, which must be on at-least-as-favorable terms.
Governments of lower-income countries struggling to service their loans have been watching Zambia’s debt restructuring closely, as it’s seen to set a precedent for how deals under the Common Framework might look as China works with traditional creditors of the Paris Club to treat debts. The agreement may mean other nations that follow could reach quicker conclusions.