Finance Minister Felix Mutati has revealed that Zambia is planning to reach an aid deal for as much as $1.6 billion with the International Monetary Fund by the end of April.
“At the moment we know that we can get up to $1.6 billion — if you ask me, I’d go for the maximum,” he said in an interview.
“Hopefully the program can be presented to the board sometime end of June, beginning of July.”
Mr Mutati said Zambia still needs to clarify to the IMF how it will pay off about $1.8 billion the government owes in arrears.
He spoke before flying to the U.S. to attend the IMF and World Bank Spring Meetings that begin April 21.
Zambia has been talking about getting IMF aid since 2014, but resisted after two presidential elections since then made the required reforms politically unattractive.
The country’s fiscal deficit has risen, foreign-exchange reserves have declined, and economic growth is near the lowest since 1998, spurring the need for a program with the IMF.
Zambia’s debt has also been climbing, putting pressure on the Treasury.
Mr. Mutati said external debt has increased to $6.9 billion, that is more than double the level in 2012.
“Total government debt is about $10 billion, which is “pretty high,” he said.
Last week, Information Minister Kampamba Mulenga said cabinet agreed that the government conclude negotiations with the IMF.
Mrs. Mulenga said it considers a package as “necessary” for Zambia’s economic recovery.
The government has sold $3 billion in Eurobonds, the most recent being $1.25 billion in 2015. It is “not in a hurry” to issue another, and won’t do so this year, said Mutati.
Yields on the country’s three dollar bonds fell, with the rate on the $1 billion of debt due in April 2024 declining 14 basis points, the most since March 16, to 7.92 percent by 5:45 p.m. in Lusaka on Tuesday.
The yield on the 2022 bond dropped 13 basis points.