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Alba Iulia
Wednesday, January 26, 2022

IMF confirms that Zambia loan deal is off

Headlines IMF confirms that Zambia loan deal is off

Zambian Delegation led by Finance Minister Felix Mutati at the IMF/World Bank meeting
FILE: Zambian Delegation led by Finance Minister Felix Mutati at the IMF/World Bank meeting

The International Monetary Fund has for the first time clearly stated that the much anticipated US$1.3 billion loan deal with the Zambian government has been put off.

IMF Communications Director Gerry Rice confirmed that the negotiations with the Zambian government were out on hold due to large borrowing by the PF government.

In a transcript from the press conference held on Thursday, Mr Rice said the Fund needs greater clarity on the fiscal policies and government’s borrowing plans before discussions commences.

“Where we are on Zambia is that discussions on a new arrangement were put on hold in August of this year after the authorities unveiled large borrowing plans that we believe threatened that sustainability. So during the Annual Meetings and during a follow-up set of meetings actually led by our Africa Department Director Abebe Selassie, who made a recent visit to Zambia, the authorities expressed their will for a speedy re-engagement with the Fund,” Mr. Rice said.

“Where we stand is that while progress has been made on several elements of a prospective program, the discussions will need to progress and provide greater clarity, including on fiscal policy commitments and credible borrowing plans consistent with debt sustainability,’ he said.

He continued, “So we’re just essentially waiting for further data and details on the government’s external borrowing plans, and then we would field a staff visit to update the macro framework and discuss the way forward.”

But Secretary to the Treasury Fredson Yamba this week told Reuters in London that Zambia expects to host a mission of the International Monetary Fund (IMF) before the end of the year and hopes to have a $1.3 billion loan deal in place in early 2018.

Speaking to Reuters on the sidelines of a mining conference, Yamba also said Africa’s No. 2 copper producer was on a mission to cut debt, and would consider additional borrowing to plug financing gaps only if terms were favourable.

“Come 2018, we must have a final (IMF) programme. It has taken a long time because the parameters have been changing,” Yamba said, adding the IMF wanted the government to provide more details on debt stock, creditors and servicing costs.

“Our debt has accelerated too much. They wanted us to come up with action plans,” he said.

Zambia and the IMF agreed in October to chart a new path towards debt sustainability after the IMF delayed the conclusion of talks, saying it was at high risk of debt distress. The finance minister said last year that almost 20 percent of gross domestic product was being spent on debt servicing.

Asked if a deal could be reached in early 2018, Mr. Yamba replied in the affirmative.

Part of Zambia’s debt problem stems from $2.8 billion in Eurobonds, issued from 2012 to 2015. Yamba said the government would “operationalise” a planned sinking fund next year, aiming to accumulate cash for repayments, but was also looking at refinancing.

This may include swapping existing bonds for longer-dated issues, Mr. Yamba said, detailing plans earlier outlined by finance minister Felix Mutati, but he added this would be done only if favourable terms are achieved.

He declined to say what yield level could be considered favourable.

“We need to see how we can refinance them … Looking at the (2022) $750 million bond is critical. It’s a bullet payment,” he said, referring to an issue whose entire face value is paid upon maturity.

He said a Chinese loan was a possible option but there were no discussions on that yet.

The IMF loan delays have triggered a slide in the kwacha currency to around 10 per dollar, the lowest level since January.

Mr. Yamba predicted the kwacha would stabilise, helped by stronger copper prices and rising exports. He described the current exchange rate as “comfortable”.

Inflation, seen at 6 percent this year, would likely fall under that level next year, he added.


    • This is good news. Please avoid imf loans. There’s no country which has been helped to develop by these shetanist.

    • No apologetic this is early Christmas for our country. Bravo IMF for disqualifying us for more toxic loans. You don’t solve national crisis by compounding oneself with more toxic debts. What kind of economics have our technocrats busy misleading the executives done? If you have failed to correct the mess, please follow the South Korea model where Generals abdicated responsibilities by inviting qualified citizens at home and in the diaspora to drive the economy relegating themselves to National security and politics matters only. This is how modern South Korea of Samsung, Kia Motors, POSCO, Korea Electric Power, LG Electronics, SK Group, Shinhan Financial Group, Samsung Life Insurance, Hyundai Heavy Industries. Indebtedness have zero dividends for Zambians. We are ready to help drive…

    • This is the best news so far this year … we are going to fund this from domestic sources and we are going to control our own destiny

    • IMF cancelled loans to Mozambique for the same reason: Falsifying amount of national debt. Today mozambique economy is in shambles.

      PF00Lish Govt declared $2.3-Billion debt to IMF when the actual debt is $23-Billion. Besides that, PF is reckless & thieves, able to waste/steal $42-million on Wheel-burrows.

      That $1.3 Billion will be looted by PF through over-priced tenders.

  1. This Government is running on fumes. It’s a time bomb. If IMF refuse to lend you money it means you are beyond redemption. The mess is bigger than we ever thought. We’ll only know more when a new Government is voted in and the truth is laid bare. I hope the new administration will do as the new Zimbabwe President has done. Ask the former Minister and leaders to bring back the money within 3 months or face persecution.

  2. “Fiscal Discipline” is the key word.

    Conversely called FISCAL INDISCIPLINE. ‘Eating’ or spending the kaloba anyhow. The curse of the $42m fire fighters is surely coming home to roost.


    • Spot on..you can also replace that word with these; anarchy, ataxia, chaos, clutter, disarrangement, discomposure, disharmony, dishevelment, disorganization, holy mess, indiscipline, jumble, muddle, shambles etc

  3. Thank you IMF, with so much weak controls on public funds, there isn’t any guarantee the funds were going to be utilised in the manner as intended, part of it would have but not all of it.


    Zambia now needs to make sure they grab corruption and people involved by the scruff of their necks.


  4. Zimbabwe will likely trot past us despite having slumbered for close to 15 years.

    Truth is – the lenders are shifting their attention to the prodigal nation, especially given that it is home to a large white population. (Wako ni wako is universal).

    Way out for Zambia is to borrow locally. But this sends the loan interest rates skywards and so ‘crowds out’ the ordinary borrower.

    The dollar is certainly headed towards the K15 rate.

    I see a catch 22 here for the govt.


  5. When we tell you that these PF minions have no credibility, some PF goons go in a rant that we are against anything that they do. How can you lie to your own people that you are on course on acquiring this gigantic loan when you know very well that talks were halted a long time ago? Mutati and his team are a bunch of charlatans without direction and now they have been caught pants down. Did it have to take Rice to disclose this information to us, while you have been lying all along? Debt is the cause and because you have been stealing, the IMF is reluctant to release USD 1.3 billion because it will end in Lungu and your pockets. Shame.

  6. The talks being on hold implies once government produces what is being demanded, the talks may resume. Why not just scrap off these begging talks entirely? There is no fiscal discipline in this government from the president himself down to the least civil servant! Wasteful expenditure, unprofitable international trips,blatant misappropriation of public funds as evidenced in the AG’s report etc, with such a poor fiscal discipline nobody can ever lend you money! Lets have the president lead a honest drive to fight this rampant misuse of public funds not a leader who pleads ignorance to happenings around his OWN people.

    • Can you imagine, President Mnangagwa declined the invitation to attend Kenya’s inauguration citing budgetary constraints! Yet our President feels the need to attend each function he is invited to. This is what they mean when they talk about fiscal discipline.

  7. The stand taken by IMF is encouraging to those of us who advocate and advised PF government to deal with corruption within government. They called us names and bitter. PF should eat the humble pie and repent.
    The world knows what is going on in Zambia and IMF knows too much about mismanagement of resources and financial indiscipline of PF government. Hide the Auditor’s report the world still knows culprits left free. IMF wants Zambia to claw back some money from corrupt leaders and put into national coffers.

  8. U cant fool all the pipo all the time. Yes u fool cadres and tribalists not the whiteman. U tell someone not to dent your dirty worldwide. But ur dirty. What do u expect? Now? U dont run a country ati he is humble, he is appointed by god, he is “poverty” . Not one managerial or leadership record? Oh poor zambians. Continue being poverty!

  9. kikikikikikiki, But ba UPNd. you are very intelligent more than anyone in the World. for u. whatever comes up to the public domin, nitinabauza chabe thats what you know. Surely you have nothing else to do in your life. For u nchito yamene munangena ndiyopedza milandu kubanzanu chabe. Come on, you can do other things better for your benefit. This IMF deal can not make someone happy because its not a must that when u apply for a loan u should get it by all cost. PF is not like UPND chaps who want to be in power by all cost even after losing they are still claiming to have won elections. I don’t even know who told them that all the Zambian people want them rule. No matter how much u insult the President and his gvt, nothing will change at all. He is there as the President of the Republic…

    • Sooo am guessing you have nothing of value to say? I think leave this to the guys who understand economic fundamentals and the implications of this decision. Go find Max Chongu’s page and bwata there, no one will read your nonsense pano. I didn’t. Zero substance kaili 🙂

    • Ndiye by opposition kabili. Checks and balances. When ba Sata was criticising Mwanawasa and later Bwezani it was OK. Nowadays you don’t see opposing views as part of the bigger construct of a Democratic dispensation. That is why na ba IMF bamitana fi money. You are too korraputi…in your heads. Sober up and learn to do the correct things. Not drunken master behaviour all the time. Tatulebuta iyo. People want development.

  10. When you have a government whose leadership is constituted of plunderers and thieves (see the recent FIC report where prominent ministers have been sighted for gross corrupt activities), with no interest in fiscal discipline you begin to understand why IMF feels it is imprudent to loan Zambia the money. A drunken president who spends a lot time in the air and mortgaging the country to Chinamen than micro manage the economy. What is painful and disrespectful is to watch these people mismanage and plunder the resources, believing the generality of the citizenry is too blind and ignorant to know what they are getting up to.


  12. This is fantastic news, we can borrow cheaply elsewhere unlike these imperialists always looking to exchange cash with sovereignty!

    • Even proud of saying borrow cheaply? You think if there were cheaper options they would have bothered with IMF?

    • @ Spaka, if it’s attention seeking you’re looking for them go elsewhere. I’m a Zambian patriot with no political affiliation unlike you bitter job seeking low life. You like to scaremonger and criticise things you don’t even understand. Do you even understand what public borrowing is? Do you really think Zambia will grind to a halt without IMF loaning us $2 Billion? Man you must be some child full of sadness to hate your own country like that…in fact I don’t even believe you are Zambia at all. @Dudelove, tell me a country that does not borrow on this planet for you to make such a silly comment? When Levy built hospitals and stadiums he first approached the west for assistance and when they said no he looked elsewhere so what’s wrong with that?

  13. Lets be factual.IMF have given their reasons for not providing the loan.Among those reasons there is no corruption or plunder.
    Yes there is corruption in every country but in this case the UPND intelligent pipo are misleading themselves as usual.
    What if the loan is given early next-which am praying ?-shall we conclude that corruption would have ended?
    The UPND loose mouths must stop politicizing corruption.As long as the corruption fight keeps on being politicized,little progress will be made.
    Just the other day Kambwili was busy claiming his case is politically motivated.

    • Man you are full of sh!t, I’m sure IMF can speak for themselves. You have been brainwashed to think low of yourself. Name one African country that has benefited from IMF? Africa is where it is today not because of IMF but because of heavy Chinese investment. Since when has IMF been politically correct?

  14. Good news why borrow and borrow and borrow then pocket and pocket and pocket. You cannot have it both ways – no.
    Pf is disaster on borrowing. Too much corruption that we have failed to prove to the powers that be. Ati provide evidence – eeeeiiisshhhhh!
    I hear some salaries may be cancelled next year because we have to give back to the Chinese who have threatened to take over the country – just what I hear. Also administrative powers will be coming from Beijing. Our high office will be reduced to state governor.

  15. This is good news in that these fooools are neither accountable nor transparent…how is it the Kenyans are constructing a 500km road for $600m when we are construct 300km for $1.2B!!

  16. Don’t worry folk, we’ll certainly get the money from China, ‘Soft Loan’ and our friends will increase it to what we require.
    Development is key. Only need is to ensure less chewing!!!

    • Are you sure this has to do with UPND? Remember we are yet to start paying back the money we borrowed and we want to add some more, and when you look at some of our expenditures, they are not justifiable.

  17. This is the best news that can happen to Zambia. IMF loans are a cold. You shall forever be indented if you accept one.

  18. If you can sanction spending $1million on a truck that costs $280k …42 times it is either you don’t need the IMF loan or you are a corrupt irresponsible spender….

  19. Chitotela, Dora Siliya, State House Officials topping the list of those receiving illicit funds!

    The Financial Intelligence Unit, a unit created to monitor suspicious or laundered financial transactions has recorded key officials at State House, and Cabinet Ministers as those involved.

    New banking and financial regulations compels banks to report suspicious unearned income deposited or transactions by politically exposed persons(PeP).

    This report is given to Bank of Zambia( BOZ), Drug Enforcement Commission (DEC) and the Financial Intelligence Unit(FIU).

    Overs Masozi Mufwakawiri Banda, the lawyer for Avic International is topping the list of Zambian lawyers suspected of money laundering as ‘shortlisted’ by the Financial Intelligence Centre (FIC).

    Meanwhile, Infrastructure…

  20. Basically the IMF is stating Zambia’s debt-to-GDP ratio is unsustainable. Don’t be surprised if the IMF and other lenders start to impose strict & painful restructuring programs as a condition to providing loans. The party is over.

  21. God bless Zambia! That $1.something billion they are talking about is actually $8 to 9 billion dollars to pay back and it never ends! It is perpetual. Please Lord help the leadership not to be trapped Hagain! Please consult KK.

  22. ….as the Nigerian would say…. ”i’m finished oooh”…im sure someone in state house is crying the same way….

  23. Zambia has exhausted all channels of borrowing apart from China. The next move is to put the remain half of Zambia to serve as collateral. Well done Lungu. Zambia for sale!

  24. $42 million fire tenders, unnecessary foreign travels by PF leadership, road corruption on tenders, etc..
    IMF does not sit idle and help where you can put your own house in order!!!!
    Dont say you were not warned…
    i told you so.

  25. This is bad news for the govt but good news to the zambian people. Our prayers has been answered. Have seen how people who borrow money suffers. Please live within your means. What is important in ones live is Food, clothing and shelter. Avoid admiring your neighbor’s living style you don’t know what business he does or his job. Zambia can finance all these useless projects only if officials respect the people not stealing from the poor.

  26. I don’t understand the whole fuss about the IMF, Lungu categorically said to hell with the IMF we do not need them.

  27. Next to be auctioned is the national game parks…..we have information of background mummerings in the corridors of statehouse by the corrupt gang lungu is leading that foringe leases of our game parks would generate more money….

  28. This debt problem started immediately MCS stepped into office. He engaged his relative as Minister for Finance who went on a borrowing spree like money was going out of fashion. But he didn’t care because he was forwarding repayments to a time he would probably be dead. As the debt engine began to overheat the old Minister went from envelope to envelope borrowing. Then he pretended he had done his duties and asked to step down. Now enter ECL he saw ‘projects’ not knowing they were funded through debt, so he sang ‘sontapo’ only to realize later the economy was spiraling out of control…without Fiscal discipline no IMF will touch you especially since you are a hipic qualified nation…you will wallow in debt and life is going to be harsh

  29. Civil society and the opposition need to go on full throttle to ask this government to account. There should be a clear break down of how all loans have been used, spent or misused since the PF came into power. Further, all the audit reports point to where revenue has been misappropriated – thus it shouldn’t be difficult to arrest and prosecute all involved. MPs should demand, through freedom of information, a breakdown of how much has been spent on all the trips Lungu has undertaken – and weigh this against the nations financial priorities. This is the only way we can begin to genuinely move forward in dealing with fiscal indiscipline, theft and corruption. We need to create a zero tolerant environment to the atrocious systematic greed at the expense of delivering services.

  30. One day the genes and DNA of Mwansa Kapwepwe, The Zuzes and Zwagendamba will raise and oppose this fiscal indiscipline, theft and corruption. What has happened in Zimbabwe will one day happen in Zambia. The genes and DNA of those fallen heroes is watching and one of these days they will get annoyed and rebel against the order of mismanagement.

  31. Please Zambia do not listen to Satanists here from UPND. This is the best decision. If you want all your achievements to go down the drain embrace those guys! No country with their help EVER succeeds. We will go back to square one and they will stop your new infrastructure developmen! Ask the President, KK. I had a chat with him. Don’t please!

    • Borrow and use the funds prudently. that counts, not borrowing and then squander the money. No that we refuse. Imagine you been a father, you family needs financial help, you go to a friend and lends you some money, the next thing he see,s you drinking and buying beers for people in bars, you stop using public transport, you start booking taxis’s and making tours to see friends and relative. Do you think the next time you go to this person to ask for money, will readily give it to you, The answer is NO. Our financial discipline as a country is bad we all know it, so it will be difficult for the current government to get loans if they do not on the financial indiscipline. It has nothing to do with upnd, believe me.

  32. before approval process IMF told the govt to remove fuel sibsidies, electricity subsidies, bend rules in favour of mining companies,etc etc.
    after govt were arm twisted, they have now refused their loan thereby more suffering to the masses…
    wapya munzi…
    i told you so!

  33. its nothing to be proud of for those who know the various composition of Govern Debt and he Need to restructure to effectively reduce on the portfolio exposure The Government debt is basically composed of 1. Public and Intra Government Debt Now that debt can be marketable or non marketable

    The component of that debt is basically segmented into Public Debt and Intra In Government Debt holdings The composition is basically marketable and non marketable securities of different tenures and exposure So the IMF deal was necessary to restructure the term sheets You have Treasury Bonds Treasury Bills Treasury Notes of different maturity profile held…

  34. by foreigners institutions and local individuals alike

    The issue was not refusal it was the presentation of the Portfolio of debt that IMF needed more disclosure on (Intra and Public debt ) Zambian Debt stock

    For instance there was inadequate information on various Debt composition in Principal discounted or premium or par The unclear term structure of some debt from foreign sovereign The Principal and Interest Component for IMF to really access impact of restructure as to Debt to GDP ratio They failed there was more to be disclosed than was presented on the Zambian debt stock to assess the effectiveness of the Programme It not complete closure of…

  35. of negotiations There countries that have gone back and renegotiated even after failed discussions

    The IMF understands the Beauty of growth to Zambia and that can only be made possible if Investments are made in solid infrastructure projects that would help robust the economy Then if your GDP (REVENUE BASE) is weak it means you have other forms of financing available Remember the typical corporate structure or re-gearing (debt/Equity composition on balance sheet)

    The minister what’s to restructure and create space on the principal and repayment as he works the revenues and expenditures

    There is no Sovereign or Country later on that has developed without…

  36. some MEASURE of debt(macro prudentially contracted) Any well meaning Zambian will see the implication of the failure to obtain the IMF funding

    Remember also that your are pushing the minister to table the Debt Bill without assessing the implication and practically of holding Government to stand still There could be cases of emergency to fund Gov. operations like a major disaster or some impairment of some magnitude Its important to have a debt ceiling or CAP as one would term it but it should be set in the fluidity of the Global Financial happens and allow flexibility in short time for the minister to arbitrage and rebalance It should not just be a refence to GDP…

  37. /Debt ratio NO it should be seem in the opportunity presented to grow and find that growth to increase the repayment and reduce perpetual Debt Financing with diminishing little below super growth Perpetually locked in the Same NDPS plans since 1689

    Thus said the minister has so many options to rebalance move the economy and play market role with or without the IMF But should seriously consider his Debt stock composition and provide adequate disclosure He will get the IMF

  38. The people that prudently borrowed have achieved so much in hospitals schools roads energy human resources growth of the economy and quality of Zambia that the IMF so likes except may be control

    Yes you borrow in line with your GDP but then there is potential and real GDP prospects than the NDPs have anchored on to re-gear than levels to reflect an appropriate Debt to Equity level

    You can understand the thing of people who drew up the infrastructure spend it was to grow using various options and refinance from increased Growth resulted revenues

    Economies need to grow and most flexibility and prudently to reach those heights like the US whose economy is…

  39. viable but yet has debt levels of more than USD 666 Billion in parity to smaller very smaller economies like Zambia

    Debt is also a good component in the well functioning of the economy and to the Contrary IMF like Zambia and Zambia too

    Maybe take time o see how the government Financials and Balance sheet has growth since 1980 Imagine how beautify certain towns and attractive have become Should it have been possible without this debt and purely on GDP partly revenues

    So be proactive and help rebalance effectively to even register superlative growth

  40. There is a huge financial engineering/restructuring for the minister to still run the Zambian Economy with prudent stemming of those debt levels Its not a foregone conclusion he knows

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