(Image: iStock) Fallout from the El Niño-induced dry spell prompted the southern African nation to slash its 2024 economic growth forecast by half to 2.5% and appeal for help in closing a $900 million budget shortfall it had caused. The Finance Ministry had already received indicative pledges of support totaling about $500 million from co-operating partners to help deal with the impact.
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Bondholders’ Approval
Hours later, Africa’s first pandemic-era sovereign debt defaulter — which needs the IMF program to rework about $13.4 billion in external loans — won approval from bondholders to finally conclude a $3 billion restructuring. The deal paves the way for it to start servicing the new notes and brings it closer to exit a default that’s ensnared it since 2020.
The government still needs to negotiate individual deals with $3.3 billion in non-bondholder commercial creditors, the largest of which are China Development Bank together with Industrial and Commercial Bank of China.
The IMF said Zambia also has outstanding bilateral agreements for the implementation of its agreed debt treatment with official creditors.
Zambia’s $1.25 billion dollar bond due 2027 was little changed at 76.4 cents on the dollar by 6:19 pm in Lusaka, the capital. Zambia’s kwacha depreciated by 0.9% to 26.20 per dollar.