Press Release No. 24/160

IMF Managing Director Kristalina Georgieva Statement to the Financial Community on Zambia

May 13, 2024

Washington, DC: Ms. Kristalina Georgieva, Managing Director of the International Monetary Fund (IMF), issued the following statement about Zambia to Members of the Financial Community today:

“The Zambian authorities have been implementing an ambitious economic reform program supported by the IMF, which aims to restore fiscal and debt sustainability, create fiscal space for much-needed social spending, and strengthen economic governance and transparency. Zambia’s economic reform program is supported by an SDR 978.2 million (about US$1.3 billion), 38-month Extended Credit Facility arrangement, approved by the IMF's Executive Board on August 31, 2022, and by assistance from multilateral and bilateral institutions. In October 2023, complementing the broader reform agenda, Zambia agreed on a memorandum of understanding with the Official Creditors Committee (OCC) under the Group of Twenty (G20) Common Framework that would deliver a debt treatment by official creditors aimed at restoring debt sustainability consistent with IMF program parameters.

“Building on this progress, and following several months of constructive discussions, the agreement reached between the Zambian authorities and the Steering Committee of the Ad Hoc Creditor Committee of holders of Zambia’s Eurobonds marks a significant step forward. The terms of this agreement have been assessed by the Fund staff as being in line with the parameters of the IMF-supported program taking into account the confirmation by the OCC to the IMF and to the Authorities that the agreed terms are consistent with the comparability of treatment among creditors. Together with the full implementation of the IMF-supported program, the successful implementation of this agreement will provide significant external debt service relief and further contribute to Zambia’s efforts to restore debt sustainability.

“To capitalize on this momentum, rapid completion of the debt operation with high participation would be vital for the success of the program. In parallel, the authorities continue to advance discussions with other external private creditors on a comparable treatment. This collective effort is key to supporting the success of Zambia’s debt restructuring efforts under the G20 Common Framework.

“The Zambian authorities are aware of the challenges ahead and have reaffirmed their determination to persevere with their reform agenda and put the economy on a path of sustained and high growth. The continued support from international financial institutions and other official creditors, together with the participation of bondholders in the proposed bond exchange, is necessary to underpin the success of these reform efforts.”