The official request for funding was made to the international monetary Fund (IMF) by the Zambian authorities. This was reported by Reuters on December 8.
The official meeting of the President of Zambia, Edgar Lungu, with the head of the IMF’s Africa Department, Abebe Selassie, took place in the capital, Lusaka, on December 8. Zambian officials declined to give details of the meeting or what issues were discussed during it. However, the IMF press service later confirmed that the Zambian authorities had officially requested funding from the organization.
“The Fund is currently reviewing this request,” the IMF press service said in a statement.
Zambia became the first African country to default as a result of the crisis triggered by the coronavirus pandemic. In October of this year, Zambia failed to pay the next payment to investors in the amount of $42.5 million. Missing a payment meant a technical default, and the debt situation could not be resolved.
At the same time, the country’s economy was in a deep crisis even before the pandemic, due to falling prices for copper, which was the main export item in the country. The government of Zambia appealed for help to lenders and under the threat of default demanded that the holders of the bonds, deferral of interest payment until April. However, the request was rejected, citing a lack of transparency about what concessions Zambia receives from other creditors.
Zambia’s total Eurobond debt is $3 billion, but this is not its only debt. The country owes $3.5 billion in bilateral debt, $2.1 billion to multilateral creditors, and $2.9 billion to other commercial creditors.