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Zambia's President Hakainde Hichilema Zambia looks on during a meeting with US Vice President Kamala Harris in the Eisenhower Executive Office Building, next to the White House, in Washington, DC on September 22, 2021. (Photo by MANDEL NGAN / AFP)

Africa

Zambia says IMF bailout talks making ‘progress’

LusakaZambia, October 1 – Zambia’s President Hakainde Hichilema said Thursday he has made progress in talks with the International Monetary Fund on a bailout to resolve the nation’s debt crisis.

The copper-rich country was the first in Africa to default on its debt during the coronavirus pandemic, and requested funding from the IMF in December to finance reforms.

“We explained to them our approach to running the country, we explained that things would be different,” he told a news conference.

“We are very pleased with those meetings and you will see some progress around there,” he said, adding that the finance minister would provide further details on Friday.

Hichilema, elected in August, has vowed to get the southern African country’s ailing economy back on track and finalise difficult bailout negotiations initiated under the previous administration.

He took a six-day trip to the United States last week, where he met representatives from both the IMF and the World Bank.

Hichilema’s predecessor Edgar Lungu is accused of borrowing heavily to splash out on infrastructure projects during his six years as president.

External debt ballooned to almost $12 billion (10 billion euros) in 2020, and the former government missed two eurobond payments before applying to restructure its loans.

Up to $3.4 billion of Zambia’s debt is owed to China and Chinese creditors, according to official figures.

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But a study this week by Johns Hopkins University’s China Africa Research Initiative found that Zambia’s debt to China in reality amounted to as much as $6.6 billion.

The economy contracted by 4.9 percent last year, while the country’s debt burden grew to 104 percent of gross domestic product, according to the African Development Bank.

Talks with the IMF started on a bad footing in February as Lungu focused on curbing the fallout from the coronavirus pandemic and garnering public support ahead of the August poll, which he lost by almost a million votes.

Hichilema promised to “restore Zambia’s credibility” and reach an agreement that would allow him to kickstart “the programmes that we have been wanting to do”.

A team of IMF staff is currently in Zambia on a five-day visit to assess the new administration’s policies and reforms.

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