IMF says Zambia’s agreement with bondholders in line with comparable treatment among creditors

The International Monetary Fund (IMF) has told the Financial Community that terms contained in the agreement reached between Zambia and its bondholders were consistent with the comparability of treatment among creditors.

According to the Fund, these terms had been assessed by the Fund staff as being in line with the parameters of its supported programme being implemented in Zambia.

The IMF Managing Director, Kristalina Georgieva, in her statement to the Financial Community on Zambia made this submission.

Kristalina noted that the successful implementation of this agreement would provide significant external debt service relief and further contribute to Zambia’s efforts to restore debt sustainability.

She told the community that this should be done together with the full implementation of the IMF-supported programme.

“To capitalise on this momentum, rapid completion of the debt operation with high participation would be vital for the success of the programme.

“In parallel, the authorities continue to advance discussions with other external private creditors on a comparable treatment. This collective effort is key to supporting the success of Zambia’s debt restructuring efforts under the G20 Common Framework,” Kristalina said.

She reminded the community that Zambia had been implementing an ambitious economic reform programme supported by the IMF.

The Managing Director explained that this was aimed at restoring fiscal and debt sustainability, create fiscal space for much-needed social spending, and strengthen economic governance and transparency.

“The Zambian authorities are aware of the challenges ahead and have reaffirmed their determination to persevere with their reform agenda and put the economy on a path of sustained and high growth.

“The continued support from international financial institutions and other official creditors, together with the participation of bondholders in the proposed bond exchange, is necessary to underpin the success of these reform efforts,” Kristalina said.

She indicated that Zambia’s economic reform programme was supported by about US$1.3 billion Special Drawing Rights (SDRs), 38-month Extended Credit Facility arrangement and by assistance from multilateral and bilateral institutions.

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