JOHANNESBURG, South Africa
The International Monetary Fund's board on Wednesday approved an immediate $187 million loan payout to Zambia and said the country was revising a restructuring proposal for $3 billion of bonds that official creditors had rejected last month.
It will be the third payout
under the southern African country's $1.3 billion Extended Credit Facility
arrangement approved in August 2022.
One of the African continent's
largest copper producers, Zambia defaulted on its debts three years ago during
the COVID-19 pandemic, and its restructuring efforts have been beset by delays.
Zambia suffered a major
setback in November when its official creditors rejected a preliminary
restructuring deal with bondholders over whether it offered comparable debt
relief to what they had agreed to.
The IMF's mission chief for
Zambia, Mercedes Vera Martin, told reporters on a conference call that the
conditions under which "comparability of treatment" would be met were
still under deliberation by Zambia's Official Creditor Committee (OCC).
In a question-and-answer
document posted on its website, the IMF said Zambian authorities were further
revising their Eurobond restructuring proposal to meet comparability of
treatment requirements, which are defined by official creditors.
"While significant
progress has been achieved, some adjustments still need to be made until both
program parameters and comparability of treatment, as required by official
bilateral creditors, are met," the IMF said in the document.
Western officials in the past
have accused China of holding up the restructuring process, something Beijing
consistently denied, while international bondholders complained about being
shut out of negotiations.
"It is good that the OCC
can voice their concerns about meeting comparability of treatment," said
the IMF's Martin.
But, she said, the protracted
restructuring negotiations were taking a toll on Zambia's economic recovery,
after it was hit by the pandemic and the default. Its kwacha currency ZMW= has
depreciated sharply against the dollar and inflation ZMCPIY=ECI has risen in
recent months.
Zambia's government said the
IMF board approval of the next loan payout was an endorsement of its reforms
and said it would boost investor confidence.
No comments:
Post a Comment