By Chris Mfula
LUSAKA (Reuters) – Zambia’s official creditors, including China, are moving closer to signing a memorandum of understanding in May for the country’s debt relief, which will This is a crucial step needed to pave the way for more IMF funding, sources told Reuters. A sovereign casualty in the COVID- era of the pandemic, despite slow progress in reforming its debt burden. According to government data, Zambia’s total external debt at the end of the year was .6 billion – 2022, with China being its largest bilateral creditor.
The IMF expects official creditors meeting on Tuesday to outline in a memorandum of understanding (MOU) with the government how they intend to proceed under the 13 million dollars 38 month plan.
“Progress has been made and the next meeting will be in two or three weeks and a memorandum of understanding is expected to be signed,” said one of the people, who asked not to be named.
During a staff visit that concluded in early April, the government and the fund reached a tentative agreement on the first review of the program, but the executive committee will need to sign off on the agreement before the funds can be deployed.
“Agreement was reached on almost all issues blocking progress and a memorandum of understanding could be signed next month,” the second source said.
Debt relief can take many forms, such as a term extension, payment grace period, or lower interest rates.
Zambia wants over $8bn in debt relief through restructuring widely seen as key test case of G19 common framework tool Beijing is willing to undertake Its losses on loans to poorer countries.