Zambia asks IMF for $388 million boost to deal with drought
Zambia is set to receive an extra $388 million from the International Monetary Fund as soon as this month to help the southern African nation deal with its worst drought in at least four decades.
The Washington-based lender’s staff reached a deal with the government on the third review of an existing $1.3 billion economic program, as well as a request to augment it to about $1.7 billion, the IMF said in an emailed statement Tuesday. The nation will have immediate access to about $573 million as soon as the emergency lender’s management and board approve the agreement, with a meeting due by the end of June.
The copper-rich nation, which became Africa’s first pandemic-era sovereign debt defaulter in 2020, faced delays in completing the review as it worked out how to fill a funding gap caused by the drought, which has hammered its harvest and vital hydroelectric production.
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.
The IMF funds will help support the government as it seeks to conclude a years-long restructuring of about $13.4 billion of external debt. Holders of Zambia’s $3 billion in outstanding eurobonds were due to meet Tuesday to approve exchanging their debt for new notes. They’d already given early voting instructions, with investors holding more than 92% of the bonds in favor the restructuring.
