Zambia is working on a timeline for the reform agenda it’s agreed with the International Monetary Fund, as the government of Africa’s first pandemic-era sovereign defaulter seeks to reach a deal on an economic program, the Finance Ministry said.
An accord with the Washington-based lender is crucial to the government’s plans to restructure as much as US$12.7B external debt, and the IMF has said it’s up to Zambia to implement agreed policies to pave the way for further talks.
Africa’s second-biggest copper producer wants to use the Group of 20’s Common Framework to restructure its debt, which requires an IMF program to be in place.
“Zambia and the IMF have reached a broad agreement on the macroeconomic parameters, fiscal targets, policy objectives and a reform agenda,” the Finance Ministry said in reply to emailed questions on Friday. “The government of Zambia is currently in the process of finalizing the time frame for implementation of the agreed reform agenda while ensuring that Zambia’s development objectives are met and social protection for the most vulnerable is secured.”
Parliament and the cabinet dissolved Friday ahead of general elections scheduled for Aug. 12, making it difficult to resume talks with the IMF until after a new government is formed. Most analysts, including Barclays Plc economist Michael Kafe, don’t see a deal happening until after the polls.
Still, the government will continue working toward an agreement, it said.
“Given that a broad agreement on the policy package has been reached with the IMF and it was largely based on the Economic Recovery Program approved by the cabinet in 2020, Zambia has already started implementing these reforms and the work will continue irrespective of the parliamentary timeline,” the Finance Ministry said. “We are committed to securing an IMF program as a requisite to return our country to sustainable debt levels and ensure a solid foundation for a prompt and inclusive economic recovery.”