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IMF Boss "Confident" on Zambia Debt Restructuring

FILE: International Monetary Fund (IMF) Managing Director Kristalina Georgieva attends a news conference following a meeting at the Federal Chancellery in Berlin. Taken Nov.29, 2022.

IMF chief Kristalina Georgieva said on Tuesday she was "confident" an agreement to restructure Zambia's debt was within reach after engaging with China and other creditors.

Georgieva, who was in the debt-ridden southern African nation this week, said a deal was in everyone's interest as otherwise Zambia was not in a position to start paying what it owed.

"I am confident that the creditors will reach agreement," the International Monetary Fund head told a press conference in Lusaka.

"It is clear from my visit that Zambia is doing its part, so I strongly encourage creditors to move forward."

As the Covid-19 pandemic battered Africa in 2020, Zambia became the first country on the continent to default on its foreign debt -- estimated at $17.3 billion.

It has sought help through a G20 mechanism, but implementation has been slow, with the United States accusing China -- the main creditor to many African nations -- of dragging its feet.

US Treasury Secretary Janet Yellen, who was also visiting the country this week, said on Monday restructuring Zambia's debt was a "top priority".

Since the 2021 election of businessman-turned politician President Hakainde Hichilema, the country has made progress in restoring relations with donors.

Last year, the IMF approved a $1.3 billion loan to help Zambia restore fiscal stability.

Georgieva said the IMF was impressed with the improvements Zambia was making in the use of public resources, saying as a result of prudent expenditure, the copper-rich nation was "redirecting" its funds "to much-needed spending on education and health".

"Zambia is making tremendous progress on reforms, at what is a particularly challenging time for the world economy" Georgieva said.