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Monday, January 24, 2022

IMF chief Georgieva says ‘very optimistic’ about reaching loan deal with Zambia

Headlines IMF chief Georgieva says 'very optimistic' about reaching loan deal with Zambia

International Monetary Fund chief Kristalina Georgieva said on Wednesday she was “very optimistic” about reaching a lending arrangement with Zambia, one of just three countries that has sought debt restructuring under a G20 framework.

Georgieva told Reuters on the sidelines of the COP26 UN climate conference that Zambian authorities had done “fantastic” work in terms of debt transparency and engaging with creditors, but more work was needed on financial assurances.

“We are not yet quite there, but they are very determined,” she said. “So I’m very optimistic. (It’s) not quite yet closed, but I’m optimistic that we will have a good arrangement.”

Zambia’s finance ministry on Wednesday said it expected to resume talks with the IMF on Thursday about an agreement mapping out economic reforms and a medium-term macro-fiscal framework that, together with a debt restructuring package, would restore the country’s fiscal and debt sustainability.

Zambia hopes to secure an IMF support agreement by the end of November, but Georgieva declined to give a timetable.

Zambia became Africa’s first COVID-era sovereign default one year ago after years of government over borrowing drove its debt burden above 120% of annual economic output.

An IMF agreement would help advance Zambia’s bid to restructure its broader debt burden under the G20 Common Framework agreed with the Paris Club of official creditors. Chad and Ethiopia are the other countries that have sought such help.

Georgieva said reaching a deal with Zambia would allow the country’s “very determined and progressive leadership” to address its heavy debt burden and other problems. It would also embolden other countries that needed help to step forward and seek debt restructuring under the framework, she said.

Zambia’s 2024 bond gained 0.5 cents in the dollar, rising to just under 80 cents – levels last seen in spring 2019, Tradeweb data showed.

The bonds have risen by 12 cents or more since Hakainde Hichilema secured a landslide win in the August 12 election.

Georgieva said the Zambian process also pointed to the need to reform the Common Framework, to ensure quicker timelines for setting up creditors committees and concluding the process, and finding ways to incentivize countries to seek help.

Georgieva said she and World Bank President David Malpass would continue to push the G20 economies to offer a freeze in debt payments once a country sought help under the framework.

G20 finance ministers failed to add the debt standstill to the framework when they met in Rome last week, but Georgieva’s comments make clear that the issue remains on the table.

19 COMMENTS

  1. Lets us solve the problem without involving former leaders, this will show as if we will also fail. But let us hold the boo with our hands. its our time and will fixed the economy. Bally will do it

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  2. Kristalina what are you saying dear? Not yet there? Don’t you know that we have already put that ‘expected support” in our 2022 budget?

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  3. “Zambia became Africa’s first COVID-era sovereign default one year ago after years of government over borrowing drove its debt burden above 120% of annual economic output.”

    I hope those bloggers who will come on the thread and post comments about IMF this or that understand what unsustainable borrowing is well this is the end result reckless. And before you say no IMF give tangible options were you can get $3 billion at low interest rate.

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  4. “Georgieva said the Zambian process also pointed to the need to reform the Common Framework, to ensure quicker timelines for setting up creditors committees and concluding the process, and finding ways to incentivize countries to seek help.”

    “Georgieva said she and World Bank President David Malpass would continue to push the G20 economies to offer a freeze in debt payments once a country sought help under the framework.”

    Zambia will be used as a role model for a new IMF framework. This indicates a mutual interest in making this work. Those bloggers, the Sean Tembos, The Lubindas, who are trying to alarm and discourage Zambians, think twice.

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  5. An outlier can cause serious problems in statistical analyses. That’s what GRZ has done in our Republic. To be an outlier you have to be connected to it. That’s disturbing.

    “So, as we begin, let us take inventory. We are a nation that has a government — not the other way around. And this makes us special among the nations of the Earth. Our government has no power except that granted it by the people. It is time to check and reverse the growth of government, which shows signs of having grown beyond the consent of the governed”-Ronald Reagan

    IMF please do the right thing UPND not in the position yet. Unless you want to reward them because of removing PF.

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  6. We are ONLY in this mess because Edgar China Lungu thought the Zambian voters would go for the idea of getting unnecessary infrastructure – and bankrupting the country in the process. So now we have unnecessary airports and bridges to nowhere, AND an unsustainable debt! Thank you PF! Not!

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  7. I can only pray to the Almighty that this will not lead to Zambia surrendering the little WEALTH remaining and belonging to us Zambians, in the name of DFI and or RECAPITALISATION
    How I dread losing ZESCO, ZAFFICO, NAPSA, KAWAMBWA TEA PLANTATION, ZAMBIA RAILWAYS etc. including the parent company IDC itself, later on removal of all subsidies on FUEL, ELECTRICITY, FISP, WAGE FREEZE to name just a few thus rendering the 2022 BUDGET A hoax.
    The good intention of creating employment of more than 40,000 in one year may be put on HOLD. We may experience PRICE HIKES of GOODS and SERVICES
    IMF are Capitalist by nature and any mention of the word FREE or SUBSIDY is not in their VOCABULARY.
    God help us.

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  8. Watch what’s happening in Malawi….Zambians you’ve been warned…expect more misery….so IMF is the one that came up with that fictitious budget….kikikikikiki Bally kawalala ZAMBIA HAS BEEN SOLD……WE TOLD YOU

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  9. general Kanene #5

    Really what kind of thinking is that to base “hope” on the suggestion that someone will feel sorry for us and push for a freeze payment?
    Lenders are institution that are profit making machines, they need those payments to dividends & interest rates to investors who fund these organisations.

  10. flag Wow! How Anthony Bwalya came from the backdoor, overlapped and knockout SLUGGISH and SLEEPY established media CRONIES of UPND to become HH’s Right Hand Man & Press Aid.

    <Tarino Orange @4

    Have a spine. What has changed. Below is what you posted November last year. I can extract countless comments you have posted that exposes your hypocrisy from the past and shame you. Isn’t Musokotwane doing the same think?
    ………..
    Tarino Orange November 11, 2020 At 8:43 am
    We told these morons about unsustainable debt but they never listened Fossil Chikwanda called us lunatics…..now look at them begging for extension everywhere. Extensions means more interest but these morons dont care.

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  11. general Kanene #5

    (correction in my earlier statement …)

    Really what kind of thinking is that to base “hope” on the suggestion that someone will feel sorry for us and push for a freeze payment?
    Lenders are institutions that are profit making machines, they need those payments to pay dividends & interest rates to investors who fund these organisations.

  12. Please you don’t dwell on the past mistakes and you are now doing what you condemned in the past government, we thought you were up to the game but you are just complaining about the past, I’m shocked by what I’m hearing from this team upnd.
    We voted for you to fix what was broken and you agreed to fix it at a supersonic speed, now see what you are saying that the indication of your failure.

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  13. Just feeling sorry for those who had pinned their hopes on someone’s promises, someone’s fake budget. This Season 1 Episode 1 just waiting for the next installment in these Serie.

  14. A white man’s dream is to have full control of all our natural resources and they use IMF as a proxy…it’s not rocket science though I dropped from school in grade 3 I know exactly what kaloba can do…campaigning on anti IMF and anti Borrowing now you going to IMF with a much bigger begging bowl….shame on you HH……you just campaigning for ALEBWELELAPO…..your budget has already been dismissed as beans….

  15. Wow ! #12 & Mutafela Mulife # 13

    TARINO ORANGE @@ & GENENE KANENE @@ are spineless guys who have turned around 360 Degrees.
    These chaps were day after day posting comments condemning PF that it was wrong to invest borrowed
    money constructing roads, schools, bridges, hospitals to mention a few. Today they are not condemning
    UPND for committing to build 120 schools, feeder roads using foreign borrowed money.

  16. #5,13 – Mutafela Mulife ; #18 – Yoga
    If you are both objective, I think we can all agree that We are ONLY in this mess because of previous government BORROWING and depletion of reserves from where the MMD governments left. The PF government spent almost 3 years negotiating for a package, and each time after their meeting, IMF / WB walked out, and core issue was non-transparency of the debts. Zambia DEFAULTED on its loans. IF YOU THINK ZAMBIA has the capacity, without using IMF/WB, WHY didn’t the PF implement any such measures instead of DAFAULTING? Now you have a vibrant Government that is talking to stakeholders, You have Stakeholders, that have shown interest to HELP, and going to an extent, of making themselves even more attractive, ISNT THAT POSITIVE & HOPEFUL???

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