The International Monetary Fund is considering a request by the Zambian government for financial assistance to support the southern African country’s reform programme, the Bretton Woods institution said on Wednesday.
The IMF said in a brief statement that the government of President Edgar Lungu had “formally requested a financing arrangement with the International Monetary Fund to support their reform efforts.”
“The Fund is currently assessing this request,” the statement said.
The request comes in the wake of a default by Zambia on its debt repayment commitments two months ago.
Zambia missed the payment of a US$42.5m coupon on one of its dollar-denominated sovereign bonds in October, prompting the government to requested that bondholders grant it a deferral of interest payments until April 2021 as it struggled with the dual burdens of fighting the COVID-19 pandemic and a limping economy.
The request was turned down, setting the stage for a protracted legal battle between the Zambian authorities and bondholders that could see creditors seizing some of the government’s assets, including mines.
The announcement by the IMF followed a meeting with Lungu earlier this week in which he pleaded for support from the Fund.
JN/APA