Zambia has reached a long-awaited $1.3 billion bailout deal with the International Monetary Fund, but negotiating the restructuring of a huge debt burden remains a daunting task ahead.
The agreement, which could allow Zambia to rebuild its battered economy, is a space to watch for how IMF will handle a growing number of countries in debt distress, while the upcoming restructuring talks with major creditors such as China will be a key litmus test for how Beijing deals with its most troubled debtors.
Zambian finance minister Situmbeko Musokotwane described the deal as a “happy occasion” after an arduous journey. At a press conference Thursday, he promised to implement a “cushioning effect” based on increased social spending programs, to help people cope with the adjustments, such as a partial lifting of fuel and farm subsidies. He also pledged that going forward, assistance will be better targeted.
About the author
Shabtai Gold
Shabtai Gold is a Senior Reporter based in Washington. He covers multilateral development banks, with a focus on the World Bank, along with trends in development finance. Prior to Devex, he worked for the German Press Agency, dpa, for more than a decade, with stints in Africa, Europe, and the Middle East, before relocating to Washington to cover politics and business.
