Following market speculation that Zambia’s $8.7 billion foreign debt could be more than double the official figure, the Ministry of Finance has released a statement calling on those saying it is higher to produce evidence.
Zambia, Africa’s second-biggest copper producer, has held talks with the International Monetary Fund over an aid programme but the IMF rejected its debt management plans in February, and Gregory Smith, Renaissance Capital’s sovereign debt strategist, said in an April report the government appears unwilling to reduce its new loans and infrastructure contracts, according to Reuters.
The country’s economy is expected to grow by more than four per cent this year helped by the mining, agriculture and construction sectors, according to a statement last week by Finance Minister Margaret Mwanakatwe. She added that the Government would complete a detailed debt sustainability exercise within two weeks before re-opening discussions with the IMF.
Reuters reported that Zambia will rearrange loans from Chinese companies and instead look to borrow directly from the Asian giant’s government in a bid to satisfy IMF conditions and unlock a potential $1.3 billion loan from the multilateral lender.