IMF loan ‘important’ for cheaper and longer financing: Zambian finance minister

Zambia’s new Finance Minister, Situmbeko Musokotwane, has said that it was precarious to agree to a loaning programme with the International Monetary Fund (IMF) because it would give creditors assurance and the government cheaper and longer financing.

Musokotwane, appointed on Friday by recently elected President Hakainde Hichilema, faces the intimidating task of trying to pull the southern African country out of a prolonged debt crisis and has assured to priorities talks with the IMF.

The government has a $750m Eurobond due next year but says it cannot repay it.

“We don’t have the money to pay back. This is why it is important that we get on (an) IMF (programme) so that we can re-arrange not to play next year. I am 100 per cent confident that it will be done,” he said.

Zambia, Africa’s second-biggest copper producer, became the continent’s first pandemic-era sovereign debtor in November when it stopped overhauling its $3bn in Eurobonds along with almost all its exterior debt.

Musokotwane formerly served as finance minister from 2008 to 2011 and supervised the application of Zambia’s last economic programme with the IMF that was determined shortly before he was elected to the post.

He now faces the task of stimulating an economy that has shrank 3 per cent last year, is clipping under nearly $13bn in foreign loans and has rising inflation.