…as IMF executive board to meet to complete the first review of its US$1.3 billion extended fund facility (EFF) program for Zambia.
ZAMBIA’s debts to the Industrial & Commercial Bank of China and Bank of China will be treated as commercial in debt talks, a senior Finance and National Planning Ministry official said yesterday, after a deal was struck with bilateral creditors including China last week.
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And the International Monetary Fund (IMF) executive board will meet on July 12 to complete the first review of its US$1.3 billion extended fund facility (EFF) program for Zambia, according to people with direct knowledge of the matter.
Zambia, which has been in default for nearly three years, reached an agreement last week to restructure $6.3 billion of bilateral debts and its international bondholders expect to strike a restructuring deal in the coming weeks.
According to Reuters, Zambia’s debt of US$4.1 billion is owed to the Export-Import Bank of China, which
co-chaired the bilateral creditor committee is being categorised as bilateral, Secretary to the Treasury Felix Nkulukusa said at an event discussing Zambia’s debt restructuring. China had been accused by Western officials of delaying Zambia’s debt restructuring, something it repeatedly denied.
“The money we owe the Industrial & Commercial Bank of China and other money we owe to the Bank of China will be treated as commercial,” Nkulukusa said.
“So there will be some different treatment and this is why some people are asking why it has been reduced to $6.3 billion from $8 billion,” he said, referring to the bilateral debt to be restructured.
The Attorney General is also reviewing a non-disclosure agreement that will be signed with international bondholders, Nkulukusa said, adding that he thought bondholders would opt for principal haircuts over the maturity extensions preferred by bilateral lenders.
“So far we have seen a lot of positive feedback from them,” Nkulukusa said, referring to the bondholders.
Bilateral creditors have agreed to extend the maturity of debt owed by Zambia by more than 12 years, while “very concessional” interest rates will not exceed 2.5 percent until 14 years have passed, Finance AND National Planning Minister Situmbeko Musokotwane told parliament on Tuesday. And the IMF has announced that its executive board will meet on July 12 to complete the first review of its US$1.3 billion extended fund facility (EFF) program for Zambia, according to people with direct knowledge of the matter The board meeting comes after Africa’s second-biggest copper producers clinched a deal with bilateral creditors such as China and the Paris Club to rework about $6.3 billion of overseas debt. The country will have access to around $188 million after the review is completed.
The IMF reached in April a staff-level agreement on the first review, but a debt restructuring agreement with official creditors was needed before the board could complete the program’s review. An IMF spokesperson didn’t immediately reply to a request for comment. – REUTERS.
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